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SaskPower, SaskEnergy release annual reports as SaskPower reveals substantial net income decline

SaskPower reported a net income of $11 million during the 2021-2022 fiscal year, a drop from $160 million in 2020-2021. File / Global News

The 2021-2022 annual reports for SaskEnergy and SaskPower have been released with the spotlight focused on the latter’s financial performance in the previous fiscal year.

SaskPower’s annual report, which was presented on Wednesday, shared that the company recorded a net income of $11 million — a substantial decrease from 2020-2021’s $160 million net income.

Officials say the drop is largely resulting from rising fuel costs, increased purchase power costs and low water levels in Lake Diefenbaker that were not enough to create much hydroelectricity.

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As a result, SaskPower purchased more natural gas and coal as the demand for electricity grew by 4.1 per cent in the province.

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“I think it shows the vulnerability we have to weather conditions as well with the good work SaskPower and its partners have done with regards to diversifying the electrical supply,” said Morgan on Wednesday at the legislative building.

Morgan added there will be additional financial pressures over the coming months or years — due to new power sources going online — if the province has to rely on coal while waiting for other options to be brought online.

SaskPower’s 2021-2022 annual report was presented on Wednesday by SaskPower CEO Rupen Pandya (left), minister responsible for SaskPower Don Morgan (middle) and SaskPower CFO Troy King (right). Moises Canales-Lavigne / Global News

SaskPower anticipates power demand will increase another 1.4 per cent in this fiscal year.

“Most of the new sources that will come online will be more expensive than coal or natural gas,” said Morgan.

Revenue was reported at $2.885 billion in 2021-22, a jump from $2.771 billion last fiscal year.

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Expenses came in at $2.874 billion, up from $2.611 billion in 2020-2021.

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An investment of $922 million was made towards SaskPower projects in the previous year, a major increase from $693 million last year.

The Crown corporation put aside $490 million for growth projects such as new generation facilities and expanded grid capacity, while $385 million went towards repairs and upgrades for aging generation, transmission and distribution infrastructure.

“In 2021-22, SaskPower made significant strides toward a cleaner energy future for Saskatchewan,” stated SaskPower CFO Troy King.

“We expanded our company’s zero-emission wind power capacity by 385 megawatts and commissioned Saskatchewan’s first utility-scale solar facility. All low-and non-emitting generation options are still on the table as we work to significantly reduce greenhouse gas emissions.”

SaskEnergy annual report

The previous fiscal year saw SaskEnergy focus on customers and the environment, the company presented in its annual report on Wednesday.

Net income from operations was recorded at $82 million, which is an additional $23 million when compared to SaskEnergy’s 2020-2021 performance.

SaskEnergy said the increase was due to “a one-time accounting adjustment related to the conclusion of litigation that awarded SaskEnergy title to its head office building in Regina.”

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“(Litigation) was concluded in this current year, and as a result of the conclusion and the awarding of the building to SaskEnergy, the accounting rules required us to report a non-cash accounting adjustment that really reflected lease payments that we made during the period of time it was under litigation,” explained Christine Short, who serves as CFO of SaskEnergy.

The company said a colder-than-normal winter, along with more demand for natural gas from industrial customers and the addition of over 2,800 new distribution customers, also contributed to higher net income from operations.

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A dividend of $22 million was declared by SaskEnergy to Crown Investments Corporation, up $1 million from last year. SaskEnergy mentioned that the dividend will go into the province’s general revenue fund to support public services like health-care and education, and help pay for provincial infrastructure such as schools and roads.

Revenue finished at $553 million, an increase from $526 million last year.

The expense side also saw an increase from $467 million last year to $471 million in 2021-2022.

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