HomeMy WebLinkAboutINS-19-015 - Natural Gas RatesREPORT TO:Finance and Corporate Services Committee
DATE OF MEETING:September 30, 2019
SUBMITTED BY:Greg St. Louis,Director of Utilities, 519-741-2600 ext. 4538
PREPARED BY:Greg St. Louis, Director of Utilities, 519-741-2600 ext. 4538
WARD(S) INVOLVED:All
DATE OF REPORT:September 19, 2019
REPORT NO.:INS-19-015
SUBJECT:NATURAL GASRATES
___________________________________________________________________________
RECOMMENDATION:
That Kitchener Utilities’ natural gas rates be approvedas proposed in report INS-
19-015 - Appendix A, for all Kitchener delivery customers effective November 1,
2019.
BACKGROUND:
Kitchener Utilities provides safe, reliable and economical natural gas. A balanced
approach to mitigate rate risks and provide rate stability for the gas supply program is
followed. Kitchener Utilities natural gas rates have twocomponents: gas supply,andgas
delivery.The gas supply program is responsible for the purchase of the gas commodity
and transportation of natural gas to Kitchener andis a pass through costprogram. The
delivery program is responsible for delivery of natural gas to customers. This includes
billing, meter reading, capital, maintenance and operating costs of the distribution system.
The following are key highlights of this natural gas ratechange report:
Kitchener Utilities is able to keep the natural gas supply rate stable at the
current rate for system gas customers;
The delivery components of the proposed natural gas rates will bechanged as
proposed in Appendix A;
An average residential customer will see an overall rate increase of less than
stst
1%,for the period November 1, 2019 to October 31, 2020.
REPORT:
Kitchener Utilities’ natural gas rates are set annually.
Gas Supply:
The gas supply rates are impacted by natural gas supply, demand, and the weather.The
purchase price of gas was forecastedto increase in 2019. Based on this, the gas supply
rate wasprojectedto increase to 14.5 cents per cubic metreduring the 2019 budget
process.However, production of naturalgas in North America rose above expectations
lowering the cost to purchasegas. As a result, staff were able to secure natural gas at a
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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lower priceand the natural gas supply rate is being held constant at the current rate of
13.5cents per cubic metreinto 2020.
Gas Delivery:
The gas delivery rate has remained unchanged since November 2017 for all customer
delivery rate groups. There is a requirement to raise the delivery rate toaddress
inflationary impacts and additional capital requirementsfor gas pipeline replacement.
There are two components to the delivery charges: a daily fixed charge, and a variable
rate. There are four Delivery Rate Groups: M1, M2, M4 and M5. These rates service
customers of different volumetric requirements.The delivery components of the proposed
natural gas rates are shown in Appendix A.As illustrated in Appendix A, the fixed rate per
day remains unchanged and the net M1 rate is proposed to change from 20.3371cents
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per mto 20.5871cents per m, representing less thana1% netimpact to customers in
the M1 Rate Group.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The recommendation of this report supports the achievement of the city’s strategic vision
through the delivery of core service.
FINANCIAL IMPLICATIONS:
For an average system gas residential customer consuming 2,100 cubic meters annually,
theproposed natural gas rates result in an increase tothe overall annual bill by $5.25for
the period November 1, 2019 to October 31, 2020.
COMMUNITY ENGAGEMENT:
Kitchener Utilities will work with the Corporate Communicationsand MarketingDivision
to ensure that media outlets are provided with a press release to inform customers. An
insert is being prepared to be distributed with utility bills in Novemberand information will
be posted ontheKitchener Utilities’ and City website. An on-bill message will also appear
on Novembernatural gas bills.
INFORM – This report has been posted to the City’s website with the agenda in advance
of the councilmeeting.
ACKNOWLEDGED BY: Denise McGoldrick,General Manager,
Infrastructure Services
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APPENDIX A
CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
GENERAL SERVICE RATEM1
Applicability
To residential and non-contract commercial and industrial customersthat consume less than 50,000 m³ per year.
Rate
Daily Fixed Charge $ .7300
And
VARIABLE DELIVERY
SUPPLY COMMODITY NET RATE
RATE
333
¢/m¢/m¢/m
13.50007.087120.5871
Meter Readings
Gas consumption by each customer under this rate schedule shall be determined by periodic meter readings, provided that in
circumstances beyond the control of the Corporation, such as strikes or non-access to a meter,The Corporation may estimate
the monthly consumption between the meter readings and render a monthly bill to the customer.
Effective
November1, 2019
Policy Relating to Terms of Service
1)Gas purchased under this rate schedule shall not be resold, directly or indirectly by the customer, unless resold as “motor
vehicle fuel gas”, as that term is defined in Ontario Regulation 805/82.
2)Customers who temporarily discontinue service during any twelve consecutive months without payment of the monthly
fixed charge for the months in which the gas is temporarily disconnected shall pay for disconnection and reconnection.
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CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
GENERAL SERVICE RATE – M2
Applicability
To residential and non-contract commercial and industrial customers that consume 50,000 m³ and more per year.
Rate
Daily Fixed Charge $2.3000
And
SUPPLY COMMODITY VARIABLE DELIVERY NET RATE
RATE
333
¢/m¢/m¢/m
13.50006.437319.9373
Meter Readings
Gas consumption by each customer under this rate schedule shall be determined by periodic meter readings, provided that in
circumstances beyond the control of the Corporation, such as strikes or non-access to a meter,The Corporation may estimate
the monthly consumption between the meter readings and render a monthly bill to the customer.
Effective
November1, 2019
Policy Relating to Terms of Service
2)Gas purchased under this rate schedule shall not be resold, directly or indirectly by the customer, unless resold as “motor
vehicle fuel gas”, as that term is defined in Ontario Regulation 805/82.
3)Customers who temporarily discontinue service during any twelve consecutive months without payment of the monthly
fixed charge for the months in which the gas is temporarily disconnected shall pay for disconnection and reconnection.
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CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
FIRM INDUSTRIAL AND COMMERCIAL CONTRACT RATE – M4
Applicability
To a customer who enters into a contract for a minimum term of one year, that specifies a daily contracted demand (CD)as follows:
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Between 2,400 m
and 140,870 m.
Rate
1.Bills will be rendered monthly and shall be the total of:
i)AFixed Demand Charge:
33
First8,450 mof the daily contracted demand,52.9000¢/m
33
Next19,700 mof the daily contracted demand,19.8000¢/m
333
All mover28,150mof the daily contracted demand,16.8000¢/m
ii)A Variable Delivery Charge(incl. storage):
3
First 422,250 m3 delivered per month1.4000 ¢/m
3
Next volume equal to 15 days use of CD1.4000 ¢/m
3
Remainderof volumes delivered in the month1.4000 ¢/m
iii)A Monthly Gas Supply Charge:
3
Supply Commodity 13.5000¢/m
2.Over-run Charge
Authorized overrun gas is available provided that it is authorized by the Corporation in advance.The Corporation will not
unreasonably withhold authorization.Overrun means gas taken on any day in excess of 103% of contracted daily demand.
3
Authorized overrun will be available April 1 through October 31, and will be paid for at the rate of 3.5745¢/mfor the delivery
3
and, if applicable, totalgas supply rate of 13.5¢/m.
3
Unauthorized overrun in any month shall be paid for at the rate of 6.4373¢/mfor the delivery and total gas supply charge for
3
system-suppliedvolumes at the rate of 13.5¢/m.
3.Minimum Annual Charge
In each contract year, the customer shall purchase from the Corporation or pay for a minimum volume of gas equivalent to
150 days use of contracted demand.Overrun gas volumes will not contribute to the minimum volume.In the event that the
customer shall not take such minimum volume, the customer shall pay an amount equal to the deficiency from the minimum
33
volume times a rate of 1.833¢/m, and if applicable, a total gas supply charge of 13.5¢/m.
In the event that the contract period exceeds one year, the annual minimum volume will be pro-rated for any part year.
Effective
November1, 2019
Policy Relating to Terms of Service
Gas purchased under this rate shall not be resold, directly or indirectly by the customer.
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CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
INTERRUPTIBLE INDUSTRIAL AND COMMERCIAL CONTRACT RATE – M5
Applicability
To a Customer who:
3
A)Enters into a contract for a minimum term of one year that specifies a daily contracted demand between 2,400 mand 140,870
3
minclusive and,
B)Has an alternate fuel supply and combustion system available.
Rate
1.The price of all gas delivered shall be determined on the basisof the following schedules:
i)Monthly Fixed Charge$620.00
a.and
ii)Delivery Charge (incl. storage):
Daily Contracted Demand Level (CD)
333
2,400 m<CD <17,000 m3.0539¢/m
333
17,000 m<CD <30,000 m2.7611¢/m
333
30,000 m<CD <50,000 m2.6859¢/m
333
50,000 m<CD <70,000 m2.6332¢/m
333
70,000 m<CD<100,000 m2.5955¢/m
333
100,000 m<CD <140,870 m2.5584¢/m
iii)A Monthly Gas Supply Charge:
3
Supply Commodity 13.50000¢/m
2.Over-run Charge
Authorized overrun gas is available provided that it is authorized by the Corporation in advance.The Corporation will not
unreasonably withhold authorization.Overrun means gas taken on any day in excess of 105% of contracted daily demand.
3
Authorized overrun will beavailable April 1 through October 31, and will be paid for at the rate of 3.5745¢/mfor the delivery
3
and, if applicable, totalgas supply rate of 13.5¢/m.
3
Unauthorized overrun in any month shall be paid for at the rate of 6.4373¢/mfor the delivery and total gas supply charge for
3
system-suppliedvolumes at the rate of 13.5¢/m.
Unauthorized Overrun Non-Compliance Rate:
Unauthorized overrun gas taken any month during a period when a notice of interruption is in effect shall be paid for at the
rate of 233.8800 ¢/ m³ ($60 per GJ) forthe delivery.
3.Minimum Annual Charge
In each contract year, the customer shall purchasefrom the Corporation or pay for a minimum volume of gas equivalent to
3
150 days use of contracted demand which will not be less than 350,000 mper annum.Overrun volumes will not contribute
to the minimum volume.In the event that the customer shall not take such minimum volume, the customer shall pay an amount
3
equal to the deficiency from the minimum volume multiplied by1.833¢/mfor the delivery charge and if applicable, a gas
3
supply charge of 13.5¢/m).
Effective
November1, 2019
Policy Relating to Terms of Reference
Gas purchased under this rate shall not be resold, directly or indirectly by the customer.
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