2014 SaskEnergy Annual Report

2014 SaskEnergy Annual Report

2014 ANNUAL REPORT

To create a competitive advantage for Saskatchewan through safe, innovative energy solutions. Vision

Our team of engaged employees and business partners develops and delivers safe, reliable natural gas solutions that benefit our customers and Saskatchewan. Mission

Values

SAFETY We never compromise the safety of our employees and the public. RECOGNITION We take time to recognize the individual and team contributions of our employees. ACCOUNTABILITY We are accountable for our decisions, our actions and the results.

Communication We have open, honest and respectful communication that builds strong relationships. COMMUNITY We are leaders in developing a diverse workforce, supporting our communities and environmental stewardship.

SPIRIT We create a positive and dynamic work environment that enables personal achievement, work life balance and business success.

INTEGRITY We are honest, respectful and apply high ethical standards.

Corporate Profile

4

Letter of Transmittal

7

Minister’s Message

8

Chair’s Message

9

President’s message

10

Financial and Operating Highlights

13

Corporate Highlights

16

Management’s Discussion & Analysis

19 19 19 25 31 32 34 35 36 36 37 38 39 40 41 42 43 66 66 70 72 80

Introduction

Strategic Scorecard Measures Consolidated Financial Results Liquidity And Capital Resources Risk Management And Disclosure

Critical Accounting Policies And Estimates

Accounting Policy Changes

Consolidated Financial Statements

Management’s Responsibility For Consolidated Financial Statements Management’s Report on Internal Control Over Financial Reporting

Independent Auditor’s Report

Consolidated Statement of Financial Position Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements

Corporate Governance

Board of Directors Executive Committee

Corporate Governance Disclosure

Stakeholder Engagement

Glossary of Key Success Measures

82

Supplementary Information

85

2014 Annual Report SaskEnergy

Corporate Profile

Crown Investments Corporation of Saskatchewan

SaskEnergy Incorporated

Many Islands Pipe Lines (Canada) Limited

Saskatchewan First Call Corporation

TransGas Limited

Bayhurst Gas Limited

Transmission and Storage

Natural Gas in Storage/ Royalty Interest

Interprovincial Transmission

Underground Facility Screening and Notification Service

Bayhurst Energy Services Corporation

BG Storage Inc.

Energy Services Company

Storage Joint Arrangements

SaskEnergy’s main business is the natural gas Distribution Utility. SaskEnergy owns and operates the Distribution Utility, which has the exclusive legislated franchise to distribute natural gas within the Province of Saskatchewan. The Provincial Cabinet regulates SaskEnergy’s delivery and commodity rates. All rate changes are subject to review by the Saskatchewan Rate Review Panel, an independent body, prior to receiving Provincial Cabinet approval.

SaskEnergy Incorporated (SaskEnergy or the Corporation) is a Saskatchewan Crown corporation governed by The SaskEnergy Act . It is a designated subsidiary of Crown Investments Corporation of Saskatchewan (CIC). CIC is also a Crown corporation and effectively operates as the Province’s holding company for commercial Crown corporations (such as SaskEnergy, SaskPower, SaskTel and SGI) and various commercial investments.

4

SaskEnergy’s corporate structure includes four wholly owned and two indirect wholly owned operating subsidiaries, as follows: Bayhurst Gas Limited (Bayhurst) owns, produces and sells natural gas from its storage facility in the west-central area of Saskatchewan. Bayhurst also owns a gross overriding royalty on several properties in Saskatchewan and Alberta. Bayhurst Energy Services Corporation (BESCO) , a wholly owned subsidiary of Bayhurst Gas Limited, is an energy services company. BESCO owns a 50 per cent interest in a natural gas processing plant in southeastern Saskatchewan, which is operated through an unincorporated joint arrangement with ATCO Energy Solutions. BG Storage Inc. (BGSI) , a wholly owned subsidiary of Bayhurst Gas Limited, owns a 50 per cent interest in a natural gas storage business, which is operated through an unincorporated joint arrangement with Faro Energy Ventures Ltd. Many Islands Pipe Lines (Canada) Limited (MIPL) is a transmission company that owns nine transmission pipeline interconnections to Alberta, two into the United States, and one into Manitoba, all of which connect to the TransGas system. MIPL is regulated by the National Energy Board.

Saskatchewan First Call Corporation ( Sask 1st Call ) provides a centralized “Call Before You Dig” underground facility screening and notification service. Sask 1st Call was established primarily for safety reasons to maintain a >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88

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