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April 21, 2008
Significant Customer Growth and Effective Service Delivery Highlight 2007 Performance
In 2007, SaskEnergy experienced the strongest customer growth in this decade and participated in new Saskatchewan-based business directions, while delivering effective service to its consumers. The Corporation, which tables its 2007 annual report in the legislature today, recorded net income of $88 million, with a dividend declared to Crown Investments Corporation of $53 million.
"The energy industry is a key backbone to the ongoing record economic growth in Saskatchewan," Crown Corporations Minister Ken Cheveldayoff said. "SaskEnergy has done well to meet the demands of an ever-growing population while keeping its quality of service at a very high level. The Corporation is well positioned to work with the private sector to participate in new environmentally-based growth opportunities occurring in our Province."
SaskEnergy, through a newly formed subsidiary Bayhurst Energy Services Corporation (BESCO), partnered with ATCO-Midstream in 2007 to purchase a flare gas gathering and processing facility near Kisbey. The project will eventually capture approximately 10 per cent of natural gas that is normally flared into the atmosphere during oil production in Saskatchewan. This initiative will not only turn the captured natural gas into a viable energy source for customers, but it will remove from the atmosphere the equivalent greenhouse gases produced daily by 6,300 homes.
Cheveldayoff said this initiative may lead to other flare gas partnership initiatives and the potential transport by SaskEnergy of other non-traditional commodities like carbon dioxide.
"This new profitable environmental-based initiative builds on SaskEnergy's existing track record in helping its customers reduce their energy consumption and footprint," Cheveldayoff said. "For example, in 2007, another 7,840 customers took advantage of SaskEnergy's industry-leading energy efficiency programs, bringing the total to more than 20,000."
Other 2007 operational and financial highlights include:
Looking forward to 2008, the Corporation will need to keep searching for operational efficiencies to help it mitigate the severe cost pressures that are affecting all natural gas and power utilities across Canada. The Corporation will be building off initiatives like joint line locating between SaskEnergy and TransGas and a soon-to-be-completed truck office project which will help increase efficiency and lower kilometres driven.
"This is a company with a strong record of frugal cost management, with just one increase to its internal costs as represented by the delivery charge, since 1997," Cheveldayoff said. "However, we will continue to look at the appropriateness and competitiveness of these rates as we move forward. As consumers will know, SaskEnergy also has performed well in managing volatile open-market commodity costs, and currently these costs for summer and fall are well above the Corporation's current commodity rate of $6.57/GigaJoule."
Commodity costs are a pass-through cost for the Corporation and its customers. As per normal Canadian utility practice, SaskEnergy is mandated not to profit over time from the commodity rate.
To view a copy of the 2007 SaskEnergy Annual Report, please visit http://www.saskenergy.com/about_saskenergy/annual_report/default.asp.
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