SASKENERGY 2018-19 ANNUAL REPORT
6. NATURAL GAS IN STORAGE HELD FOR RESALE
(millions)
2019
2018
$
40 (14)
$
70 (33)
Cost Revaluation to net realizable value
$ 26 $ 37 With the decline in natural gas market prices over recent years, the net realizable value of natural gas in storage as at March 31, 2019 was $14 million below cost (2018 - $33 million). As at March 31, 2019, the Corporation expects that $20 million of the current inventory value will be sold or consumed within the next fiscal year and $6 million of the current inventory value will be sold or consumed after more than one fiscal year.
7. DEBT RETIREMENT FUNDS
(millions)
2019
2018
$
105 10 - 3 118
$
101 9
Balance, beginning of year Installments Redemptions Earnings
(7) 2
Balance, end of year Less: Current portion of debt retirement funds
105 - 105
(3)
$
115 $
3
Change in fair value through OCI
1
$
118 $
106
The investments held in debt retirement funds are primarily Federal and Provincial Government debt instruments. The average return on these investments was 2.4 per cent for the period (2018 - 2.1 per cent). As at March 31, 2019 approximately $11 million is required to be invested in debt retirement funds on an annual basis. 8. FINANCIAL AND DERIVATIVE INSTRUMENTS For recurring and non-recurring fair value measurements, the Corporation estimates the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the reporting date under current market conditions. This requires the Corporation to make certain assumptions, including the principal (or most advantageous) market, the most appropriate valuation technique and the most appropriate valuation premise. The Corporation’s own credit risk and the credit risk of the counterparty have been taken into account in determining the fair value of financial assets and liabilities, including derivative instruments. In measuring fair value, the Corporation classifies items according to the fair value hierarchy based on the amount of observable inputs. Level 1 valuations use quoted prices (unadjusted) that are available in active markets for identical assets or liabilities as at the reporting date. Active markets are those in which transactions occur in sufficient frequency and volume to provide ongoing pricing information. Level 2 valuations are based on inputs that are either directly or indirectly observable for the asset or liability as at the reporting date. Inputs include quoted market prices, time value, volatility factors and broker quotations which can be substantially observed or corroborated in the marketplace. Level 3 inputs are unobservable for the particular assets and liabilities as at the reporting date. The Corporation did not classify any of its fair value measurements within Level 3.
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