SASKENERGY 2018-19 ANNUAL REPORT
Interest Groups Public objection to industry infrastructure development from a cultural, safety, environmental, or societal perspective exposes SaskEnergy to the risk of higher costs, delays or even project cancellations. In recent years, the ability of landowners and interest groups to make claims and oppose projects in regulatory and legal forums has increased. This “not in my backyard” philosophy could impact the Corporation’s ability not only to develop new facilities, through delays and additional costs, but also to operate existing facilities, and could potentially affect the integrity and reliability of the natural gas system. Through various programs and strategies, including stakeholder engagement, Indigenous consultation, environmental assessments and public awareness, SaskEnergy works with landowners and other interest groups to identify and develop appropriate responses to concerns regarding expansion and development of infrastructure. Regulatory Intensification An increasingly onerous regulatory environment may make an industry or company stronger in the long run, but may be counterproductive to efficiency and service quality in the short term. Greater transparency requirements, enhanced protection for stakeholders and the environment, as well as additional oversight for an industry are potential reasons behind the focus on regulation. Increasing regulation creates additional sensitivity to a company’s reputational risk if noncompliant. The Corporation is confident in its adaptability to the evolving regulatory environment, with continuing efforts toward improving efficiency and enhancing service. Focusing on data management through the Unified Management System can enhance the use of data to make more informed investment decisions plus improve the ability to anticipate client needs. Supply Reliability As natural gas demand increases and production within Saskatchewan continues to decline, SaskEnergy becomes increasingly reliant on importing natural gas from outside the province. This creates a reliance on interconnecting gas lines, which becomes more critical as the amount of imported gas increases. It also increases the complexity of supply planning, increases operating costs, and has potentially negative impacts on Saskatchewan end users. SaskEnergy manages this risk through long-term supply and demand forecasting, and consultation with large existing and potential customers. For the distribution utility, declining provincial
natural gas production adds complexity to the supply planning process that is managed through the natural gas procurement strategy. Specific strategic initiatives undertaken to mitigate this risk include an operations risk management oversight process, utilization of storage facilities to support transmission capabilities, development of a flare gas capture strategy, and utilization of liquefied natural gas to meet peak demand. Business Process Execution and Oversight Business process execution and oversight is a way of observing and then governing processes. Processes that are efficient and effective will result in a better and more effective organization, and ultimately will increase customer value. Business processes are analyzed, identified, changed, and monitored to ensure they run smoothly and continue to be improved over time. This allows for identifying and modifying existing processes so they align with a desired, presumably improved, future state of affairs. It is about initially ensuring the work gets done and secondly, formalizing better ways for work to get done. It is an ongoing exercise and involves a continuous evaluation of processes and includes taking actions to improve the total flow of processes. This will lead to a continuous cycle of evaluating and improving the organization. The Corporation has a performance management system in place, as well as a strong control environment, a leadership network, Key Performance Indicators (KPIs) and balanced scorecard measures to aid in business process execution and oversight. Recruitment, Development and Retention of Skilled Employees With Saskatchewan’s changing economy, competition to attract and retain skilled employees has changed. It is extremely important to have the right people, in the right place at the right time; however, how this risk is managed and the effort required by management has also changed. The Corporation has effective processes in place to manage turnover and is able to attract and retain a sufficient number of appropriately skilled, diverse and engaged people through its recruitment, hiring and training processes. The Corporation also conducts a semi-annual succession planning assessment, utilizes a cross training strategy, conducts employee engagement surveys and utilizes a leadership network. In addition, SaskEnergy monitors, and adjusts when appropriate, compensation and benefits as part of the job evaluation process, utilizing industry comparisons.
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