HomeMy WebLinkAboutFIN-10-077 - Domestic NG Meter Replacementsl
REPORT
REPORT TO
DATE OF MEETING
SUBMITTED BY:
PREPARED BY:
WARD(S) INVOLVED:
DATE OF REPORT
REPORT NO:
SUBJECT:
RECOMMENDATION:
Mayor Carl Zehr and Members of Council
June 28, 2010
Dan Chapman, General Manager of Financial Services
& City Treasurer
Barry Nash, Manager Customer Relations
All
June 16, 2010
FIN -10-077
Domestic Natural Gas Meter Replacement Program Contract
Extension
That the value of the Domestic Natural Gas Meter Replacement Program contract with Lakeside
Performance Gas Services Limited, be increased by $185,000 including G.S.T., to comply with
Measurement Canada's requirement to replace an additional 1,500 gas meters before the end
of August 2010
BACKGROUND
Kitchener Utilities has successfully completed the replacement of the initial 3,000 meters and is
now required by Measurement Canada to replace an additional 1,500 prior to the end of August,
2010 as a result of recent natural gas meter testing. The original value for the 2009/2010
contract year is exhausted and thus, an extension is required to complete this work prior to
August 2010 to meet Measurement Canada requirements.
REPORT:
Kitchener Utilities is committed to maintaining the safety of their natural gas infrastructure, while
at the same time being compliant with Measurement Canada Regulation B-18, and the TSSA
Act 2000. Aging natural gas meters and regulator replacements are part of Kitchener Utilities
on-going infrastructure renewal program to maintain the integrity of the natural gas distribution
system.
Kitchener Utilities is governed by Measurement Canada to change residential and small
commercial meters for consumption accuracy. Kitchener Utilities is also regulated by The
Technical Safety Standards Authority (TSSA) to complete in home natural gas appliance
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inspections to ensure they are operating safely and are compliant to applicable natural gas
codes.
At the September 21, 2009 meeting, Council approved the Report on Domestic Natural Gas
Meter Replacement Program T09-074. The Tender was awarded to Lakeside Performance Gas
Services Limited, Mississauga, for the efficient replacement of aging Domestic Natural Gas
Meters based on requirements set out by Measurement Canada.
The value and term of the contract award was as follows: Replace 3,000 meters for $208,719.,
including G.S.T., with an option to extend the contract for two (2) additional one (1) year
periods, subject to mutual agreement.
The process of changing natural gas meters is often complicated by the age of the above
ground infrastructure; asimple meter change can often become a complete rebuild of the meter
set; including replacing regulators, fittings, and repairing gas leaks.
It became apparent in the early stages of the natural gas meter replacement program that a
high percentage of the meter sets had additional faults such as gas leaks, faulty regulators,
and/or corrosion. To ensure the meter sets were safe and compliant with all regulated codes,
numerous meters had to be completely rebuilt which created a higher program cost than
planned and budgeted. These increased replacement costs, which where essential to ensure
the safety and reliability of our natural gas meter infrastructure, produced program costs that
exceeded the approved tender amount by approximately 40 percent.
The following is a summary of the repairs costs as a percentage from the 3000 sampled:
a. Natural gas meters changed 60%
b. Natural gas leaks repaired 5%
c. Natural gas regulators replaced 30%
d. Complete natural gas meter rebuilds 5%
In conclusion, 40 percent of this survey required additional maintenance which produced
increased program costs.
It is important our natural gas meter infrastructure is properly maintained to ensure reliable
meter reads and to reduce natural gas leakage and to minimize revenue loss.
FINANCIAL IMPLICATIONS:
Funding will be provided from Work Orders 56000207 -New Small Meter Set Replacements,
56000208 -New Small Meter Set Installations and 131 -New Installations -Gas Meters
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Financial Report is below:
NATURAL GAS METERS
Financial Summary as of June 22, 2010
Existing Funding
Current Balance "Replacement Gas Meters"
internal order group 56,945.78
Current Balance "New Small Meter Sets
Replacements" internal order group (251,833.81)
Additional Revenue Projected -
Total Funding/(Deficit) (194,888.03)
Projected Expenditures
Tender Request 176,190.48
Existing Encumbrances 5,975.67
Projected Expenses (Unencumbered) -
Total Expenditures Projected 182,166.15
Projected Deficit (377,054.1
Note: Tender cost includes all taxes less any applicable rebates.
Deficit to be funded in 2011.
ACKNOWLEDGED BY: Dan Chapman, General Manager of Financial Services and City
Treasurer
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