SASKENERGY 2018-19 ANNUAL REPORT
PRESIDENT’S MESSAGE
SaskEnergy enjoyed many successes in 2018-19 and posted strong results across our focus areas. To the outside observer, this performance will add to the narrative of SaskEnergy as a steady, reliable and generally ‘un-noticed’ utility — a reputation we have earned since our inception 30 years ago. Behind the scenes, SaskEnergy is in the midst of a significant transformation. While the traditional load growth of cities and towns is slowing, there is tremendous demand for natural gas in power generation and other industrial sectors in the province. At the same time, the origin of the gas supply to meet customer requirements has changed dramatically. In 2018-19, approximately
65 per cent of that supply was sourced from Alberta — with the percentage forecasted to increase each year. Within this context, SaskEnergy’s 2018-19 successes take on even greater meaning, and I thank the various SaskEnergy work teams across the province for their fine work. Continuing to achieve our targets will require us to adapt many of our business models and processes to meet the demands of today’s markets and customer expectations. Overall affordability means money in the pockets of consumers — for families to apply to their household, or for businesses to become more competitive and to expand. While natural gas is currently the most affordable source of energy for homes, businesses and industrial plants, it must remain so while maintaining or increasing levels of comfort, service or production output. In this regard, SaskEnergy needs to develop a deeper knowledge of our customers’ value propositions. We must also understand how current and planned policies could affect SaskEnergy’s capital expenditures. Through effective rate structure design and meaningful communication, SaskEnergy customers will continue to have confidence in natural gas as their fuel of choice. So why does any of this matter and why does it matter right now? The most obvious answer is the rate of change in our world is accelerating — with no indication of a slowdown. Decisions made today are all part of extended timeline, with future impacts across every aspect of our business. The time to react to these factors is now. To continue to be relevant into the future and to be a strong and vibrant company, SaskEnergy needs to develop a very tight focus on how we add value for our customers. Our near-term strategic priorities will include: • Safe and reliable operation. The safety and reliability of our operations remains our number one priority. We will continue to strive for industry-leading safety and reliability, and drive a strong, performance-based safety culture. • Capital program. Over the next three to five years, SaskEnergy needs to invest $250-$300 million annually for growth opportunities, along with required system maintenance and upgrades. Project execution will be integral to our near- term financial performance and balance sheet strength, but also in positioning the business for the long term. • Complete integration and transformation. Our future success will require a concerted effort to optimize our systems and processes, and drive cost efficiencies to ensure we remain highly competitive and effective in the future. Marking SaskEnergy’s 30 th year as a company served as an opportunity to reflect on the significant changes we have seen, and celebrate all that we have accomplished as a team. These same attributes — adaptability and teamwork — will guide us in the coming years as we continue to fulfill our mission of delivering natural gas to customers in a safe, reliable and affordable way. Sincerely, [Original signed by K. From] Ken From President and Chief Executive Officer, SaskEnergy
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