HomeMy WebLinkAboutINS-2023-508 - Phase 1 report and guiding principles for the Kitchener Utilities Clean Energy Transition Strategy
Infrastructure Services Department www.kitchener.ca
REPORT TO: Special Council
DATE OF MEETING: December 11, 2023
SUBMITTED BY: Greg St. Louis, Director Gas & Water Utilities, 519-741-2600 ext. 4538
PREPARED BY: Kate Daley, Senior Strategist, Carbon and Energy Planning, 519-741-
2200 ext. 4246
WARD(S) INVOLVED: All
DATE OF REPORT: November 10, 2023
REPORT NO.: INS-2023-508
SUBJECT: Phase 1 report and guiding principles for the Kitchener Utilities Clean
Energy Transition Strategy
RECOMMENDATION:
That Council endorse the guiding principles for the project, as outlined in Table 2 of report
INS-2023-508.
REPORT HIGHLIGHTS:
The purpose of this report is to conclude Phase 1 of the KU Clean Energy Transition
Strategy project, and to seek Council endorsement of the guiding principles identified in
Table 2.
The key finding of this report is that extensive engagement has led to a set of guiding
principles for the project. The guiding principles are: \[1\] Make responsible, accountable, and
financially rewarding business decisions; \[2\] Serve customers as an affordable and reliable
partner in the energy transition; \[3\] Contribute to a thriving community; and \[4\] Plan for
multiple energy futures with flexibility and focus. Each guiding principle is accompanied by
a stated intention and three more specific objectives. These principles will form the
foundation of future project phases.
There are no financial implications for the Operating Budget or Capital Budget of the
recommendations.
Community engagement included extensive consultation with customers, community
members, stakeholders, Kitchener committees, staff, and councillors, through workshops,
an online survey, meetings, and drop-in sessions, as outlined in Attachment A.
This report supports Cultivating a green city together by developing a clean energy transition
strategy.
BACKGROUND:
both to respond to ongoing
changes in the global, national, provincial, and local energy context as the clean energy
commitments. As part of its endorsement of the TransformWR community climate action
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
strategy, Council devoted staffing resources toward developing a strategy to guide Kitchener
Utilities through the energy transition.
The phases of the Kitchener Utilities Clean Energy Transition Strategy Project were endorsed
by Council on May 15, 2023 (INS-2023-199), as outlined in Table 1.
Table 1: Project Phases
Project Timing Achieved
Phase
Phase 1 2023 building relational Ώ Engagement summary results
relationships engagement with
Ώ Discussion paper framing results
and Council, staff,
and next steps
understanding stakeholders,
Ώ Preliminary option evaluation
around values, community
framework for Phase 2
goals, and members, and
Ώ Progress report to Council
scope of the customers
strategy
Phase 2 2024 determining the detailed,
Ώ Public report assessing the full
way forward collaborative option
range of options and identifying a
together assessment and
recommended approach
recommendation of
concurrently
an approach
Ώ Summary of Phase 2 engagement
results
Ώ Report to Council recommending an
approach and next steps, including
2025 budget needs
Phase 3 2025 building developing a Ώ Phased long-term implementation
consensus on phased long-term
strategy to 2050, including outlining
the implementation
phases of work to 2050, and key
implementation strategy to 2050
metrics and approaches to
plan to 2030 and a detailed first
adjusting and course corrections
phase
Ώ Detailed first phase implementation
implementation
plan with details to 2030
plan to 2030
REPORT:
This report concludes Phase 1 of the Kitchener Utilities Clean Energy Transition Strategy project.
Since relational engagement has been the primary focus of this phase, staff conducted extensive
engagement with customers, community members, stakeholders, Kitchener committees, staff,
and councillors. Engagement tools were focused on real-time workshops, an online survey,
meetings, and drop-in sessions, as summarized in the section below and as outlined in detail in
Attachment A.
Based on this engagement, as well as a high-level environmental scan, the Project Team has
developed and refined the following guiding principles, which areeach accompanied by an
overarching intention and three more specific objectives.
Table 1: Guiding Principles
As we evolve our energy business to continue to be financially successful and provide
Guiding Principles Our intention Objectives
1: Make responsible, work to responsibly 1.1: Follow sound business practices
accountable, and position our community-1.2: Take action quickly to manage risk and
financially rewarding owned business for success maximize opportunity
business decisions 1.3: Assess value holistically to find our
best contribution
2: Serve customers 2.1: Pursue affordable, reliable, and
as an affordable and customers and community predictable energy services
reliable partner in the members as their trusted 2.2: Empower customers with choice and
energy transition partner in the energy with trustworthy, accessible information
2.3: Bring people along as things change
3: Contribute to a 3.1: Collaborate with partners
thriving community 3.2: Do our part to address climate change
3.3: Use clear metrics and align them with
community-scale goals
4. Plan for multiple 4.1: Rely on safe bet technologies and
energy futures with solutions that can adapt to prepare for long shot technologies
flexibility and focus and provide value in all 4.2: Prepare for a broad range of net-zero
energy carbon futures
4.3: Iterate, experiment, and learn
These guiding principles will form the foundation of future phases of the project and guide the
evaluation of specific business options in Phase 2. The principles are discussed in detail, along
with a high-level environmental scan, in Attachment B.
STRATEGIC PLAN ALIGNMENT:
This report supports Cultivating a green city together by developing a clean energy transition
strategy.
FINANCIAL IMPLICATIONS:
The recommendation has no impact on the Capital Budget or Operating Budget.
COMMUNITY ENGAGEMENT:
of the council /
committee meeting. This report, and all of its appendices, have been shared on the Engage
Kitchener page for the project, which can be found at engagewr.ca/KUtransition.
Extensive consultation has taken place with customers, community members, stakeholders,
Kitchener committees, staff, and councillors during Phase 1 of the project. Public engagement
included workshops with self-selected participants, and workshops with participants who were
recruited to be demographically representative, as well as a public drop-in session and an online
survey hosted on the Engage Kitchener platform. Engagement was also conducted through
meetings, workshops, or drop-in sessions with stakeholders, Kitchener committees, staff, and
councillors.
The key themes that were identified within engagement discussions were:
Cost and affordability
Reliability
Change
Kitchener Utilities as a business
Information, education, and awareness
Trust and responsibility
These themes, and the engagement activities within which they emerged, are reviewed in detail
in Attachment A.
PREVIOUS REPORTS/AUTHORITIES:
INS-2023-199 Kitchener Utilities Clean Energy Transition Strategy Update
DSD-2021-94 Community Climate Action Plan TransformWR Strategy
APPROVED BY: Denise McGoldrick, GM Infrastructure Services
ATTACHMENTS:
Attachment A What we heard: Phase 1 engagement summary for the Kitchener
Utilities Clean Energy Transition Strategy project
Attachment B Guiding principles: Phase 1 discussion paper for the Kitchener Utilities
Clean Energy Transition Strategy project
for the Kitchener Utilities Clean Energy Transition Strategy project
November 2023
Acknowledgements
This engagement summary was created by the KU Clean Energy Transition Strategy Project Team and
Project Team members are subject matter experts providing critical support to advance this project.
Members of the Project Team are:
Greg St. Louis, Director, Gas and Water Utilities
Khaled Abu-Eseifan, Manager, Gas Supply and Engineering
Adam Hustwitt, Manager, Business Development and Customer Experience
Tammy Gerber, Marketing Strategist
Michele Kamphuis, Business Development and Conservation Strategist
Ruth-Anne Goetz, Budget Analyst
Anna Marie Cipriani, Corporate Sustainability Officer, Development Services
Kate Daley, Senior Strategist Carbon and Energy Planning (project manager)
Advisory Team members represent key City departments and provide feedback and advice at key
milestones of the project. Members of the Advisory Team are:
Denise McGoldrick, GM Infrastructure Services
Justin Readman, GM Development Services
Jonathan Lautenbach, CFO & GM Financial Services
The public engagement consultant has provided considerable expertise and support for Phase 1 of the
project. The consultant is Patrick Boot of VCT Group, with graphic design support provided by other
members of the VCT Group team.
The Project Team, Advisory Team, and consultants would like to thank staff, customers, residents,
stakeholders, partner organizations, committee members, and councillors for their thoughtful
engagement throughout Phase 1 of the project. The insights in this paper and the Guiding principles
document are built on their diverse perspectives.
What we heard: Phase 1 engagement summary p. 2
Contents
Acknowledgements ................................................................................................................................... 2
Introduction .................................................................................................................................................. 5
Section 1: Engagement details and profiles .................................................................................................. 5
Public Workshops...................................................................................................................................... 5
Recruited Workshops ............................................................................................................................ 6
Self-Selected Workshops ...................................................................................................................... 6
Public Drop-In Session .............................................................................................................................. 7
Public Online Survey ................................................................................................................................. 7
Stakeholder engagement workshop ......................................................................................................... 7
Kitchener committee engagement ........................................................................................................... 8
Staff Engagement ...................................................................................................................................... 8
Councillor engagement ............................................................................................................................. 9
Section 2: Engagement results by theme ..................................................................................................... 9
Theme 1: Cost and affordability ................................................................................................................ 9
On customer costs ................................................................................................................................ 9
On personal benefit and future generations ...................................................................................... 10
On equity and affordability ................................................................................................................. 11
Theme 2: Reliability ................................................................................................................................ 12
On consistent energy supply ............................................................................................................... 12
On reliability of the energy system ..................................................................................................... 12
On reliability of service for individuals................................................................................................ 12
On reliable utility providers ................................................................................................................ 13
Theme 3: Change .................................................................................................................................... 13
On financial costs of change ............................................................................................................... 13
On complexity and cognitive costs of change ..................................................................................... 13
On the pace of change ........................................................................................................................ 14
On the changing role of natural gas .................................................................................................... 15
On reconciling things that seem to be at odds ................................................................................... 16
On mindset .......................................................................................................................................... 16
On buy-in ............................................................................................................................................. 16
On staff ................................................................................................................................................ 17
What we heard: Phase 1 engagement summary p. 3
Theme 4: Kitchener Utilities as a business .............................................................................................. 17
On the risks of not changing ............................................................................................................... 17
On leadership ...................................................................................................................................... 18
On assets and infrastructure ............................................................................................................... 18
On partnerships .................................................................................................................................. 19
Theme 5: Information, education, and awareness ................................................................................. 19
On trusted and timely information ..................................................................................................... 19
On divisiveness .................................................................................................................................... 20
On accessible information .................................................................................................................. 20
On accurate technical information ..................................................................................................... 21
Theme 6: Trust and responsibility .......................................................................................................... 22
Community trust ................................................................................................................................. 22
Staff responsibility for community trust ............................................................................................. 22
Policy responsibility ............................................................................................................................ 23
Conclusion ................................................................................................................................................... 23
What we heard: Phase 1 engagement summary p. 4
Introduction
This document summarizes what we heard during Phase 1 of the Kitchener Utilities Clean Energy
Transition Strategy project. In this first phase of the strategy project, in 2023, we have focused on
engagement and building relationships and understanding around values, goals, and scope of the
strategy. This part of the process has been about inviting everyone into a problem-solving conversation
with us.
As outlined in detail in Section 1, our engagement has taken place through a number of formats, in
order to include and accommodate a broad range of voices. Specifically, we have facilitated:
demographically representative recruited public and customer workshops;
self-selected public and customer workshops;
a public drop-in session;
a public online survey;
a stakeholder workshop;
agenda items at Kitchener committees;
staff engagement through meetings and drop-in sessions, and;
councillor engagement meetings.
With the support of the Phase 1 public engagement consultant, we have identified six main themes that
encompass what we heard in Phase 1. These themes are based on what arose in the discussions, rather
than using a pre-identified list of categories, and are outlined in Section 2 of the document. We have
also identified and included illustrative comments from the public engagement under each theme, to
give a flavour of the varied conversations and ideas that arose across different groups.
This document is a companion to the document Guiding Principles: Phase 1 discussion paper for the
Kitchener Utilities Clean Energy Transition Strategy project. What we have heard in Phase 1 engagement
has been critical to the development of those guiding principles for the project.
We are grateful for thoughtfulness of engagement across all groups that were consulted. In Phase 2 of
the project, scheduled for 2024, we will be identifying and evaluating specific options for our business.
We look forward to continuing to engage with customers, community members, stakeholders, Kitchener
committees, staff, and councillors through future phases.
Section 1: Engagement details and profiles
We used a diversity of engagement mechanisms, in order to include and accommodate a broad range of
voices. These mechanisms are outlined in this section.
Public Workshops
Four public workshops were held. All of them included a presentation by the engagement consultant of
some contextual information, followed by group-based discussion. Participants were asked about their
concerns about the clean energy transition, opportunities connected to the transition, and about their
broader perspective as discussion developed.
What we heard: Phase 1 engagement summary p. 5
To begin and end each session, participants were encouraged to capture their thoughts on a worksheet,
and both physical and digital options were available.
In order to allow for fulsome discussion and participation, each session was limited to a maximum of 15
participants, and the sessions lasted approximately 1.5 hours.
Different formats and recruitment approaches led to different profiles of each discussion.
Recruited Workshops
Two sessions were recruited by a research consultant agency to be a demographically representative
mix of Kitchener Utilities customers, as would be done for a more traditional focus group.
Recruited workshops were held:
September 19, 2023 5:30-7:00pm (in person - 15 participants)
September 19, 2023 7:30-9:00pm (in person - 14 participants)
Participants represented a range of ages and neighbourhoods, and there was a mix of home owners and
renters. The two recruited sessions were both visually and socio-economically diverse. In the first
session, everyone spoke at least once, and about half of participants engaged consistently. In the second
session, there were 4 or 5 participants who quietly took in the information while others participated.
Self-Selected Workshops
The other two workshops were comprised of people who decided to attend the workshop after hearing
about it on Engage Kitchener or through print or online advertising. One was held in-person, and
another was held online, to allow for people to choose the option that was most accessible to them.
Self-selected workshops were held:
September 21, 2023 7:00-8:30pm (in person - 10 participants)
September 26, 2023 7:00-8:30pm (online - 9 participants)
Demographics were less diverse in the self-selected sessions than they were in the recruited sessions.
While a demographic survey was not administered, it appeared the majority of participants in the in-
person session were male-identified, and appeared to be older, on average, than in the recruited
sessions. This group seemed more informed and knowledgeable than recruited participants, and were
looking for action. Participants routinely referenced professional or academic experience, which was
overlayed onto individual personal experiences and perspectives. Everyone spoke at least once, and six
or so participants did most of the speaking.
While gender appeared to be more evenly mixed in the online session, a few participants shared and
turned their cameras on when speaking, and a few remained muted with screens off throughout. This
group also seemed to possess more subject matter knowledge than recruited participants, though
participation seemed to come from .
What we heard: Phase 1 engagement summary p. 6
Public Drop-In Session
As a more informal in-person engagement opportunity, a drop-in session was held on September 28,
2023 from 3:30 to 6:30 pm at the Downtown Community Centre. This session was advertised on the
Engage Kitchener platform, as well as through Kitchener Utilities bill inserts and a newspaper ad.
Contextual information was displayed on the walls for attendees to review. During the session,
participants were encouraged to capture their thoughts on a worksheet package, for which physical and
digital options were available.
Guests engaged with staff and the consultant on a one-to-one basis. We heard from those living in both
detached homes and condos. While attendance numbers were low, totaling about 5 attendees, those
who did attend had in-depth discussions with the consultant and members of the project team, and
their engagement level was generally high.
Public Online Survey
A public survey was live and open for responses from August 15 to October 1, 2023 on the Engage
Kitchener platform. Links to the survey were promoted through the City of Kitchener social media
accounts, and responses were open to registrants and non-registrants of the Engage platform. In total,
255 responses were received. Most responses (219 in total, or 85.9% of responses) were from people
who identified themselves as Kitchener Utilities customers.
The following supporting text was provided to frame the survey to possible participants:
We want to know what you believe is important to consider when thinking about the
future of energy. The comments you share as part of this survey will be considered as part
of the feedback from a range of online and in-person conversations happening throughout
Phase 1 of the Kitchener Utilities Clean Energy Transition Strategy work. Should you
choose to take part in this survey, you have the option of doing so anonymously.
The tone of the online survey differed from the real-time workshop sessions. In some instances, the
tone of the responses in this online, anonymous engagement format enabled more emboldened,
aggressive, and abrupt language from a variety of perspectives.
Stakeholder engagement workshop
th
A workshop for key stakeholders was held on June 16, 2023 from 1:00 to 4:00 pm. Throughout the
session, participants were encouraged to capture their thoughts on a worksheet package. The session
included presentation of contextual information, and focused on table-based group discussion of: risks
and opportunities; assets and obstacles, and; relevant vision and values for tackling the clean energy
transition.
Attendance was limited in an effort to provide opportunities for in-depth discussion. Attendees included
representatives from the following organizations:
Aire One Heating and Cooling KW
City of Kitchener
Conestoga College
What we heard: Phase 1 engagement summary p. 7
Enbridge Gas
Enbridge Sustain
Enova
Giant Factories Inc.
Grand River Energy
Kitchener Housing
Kitchener Utilities
Reep Green Solutions
Region of Waterloo
Sustainable Waterloo Region
Waterloo Region District School Board
Waterloo Region Home Builders
WR Community Energy
Kitchener committee engagement
We attended a number of meetings with the diverse and thoughtful advisory committees within the
City. We delivered a brief presentation in advance of discussion. Specific meetings were:
Climate Change and Environment Advisory Committee (June 2023)
Economic Development Advisory Committee (June 2023)
Homebuilders Liaison Committee (July 2023)
Equity and Anti-Racism Advisory Committee (September 2023)
Staff Engagement
Engagement with Kitchener Utilities staff in the Gas and Water Division during Phase 1 of the project has
included:
April 2023
o Presentations to each team to introduce the project
o Meeting with union representatives
July 2023
o Dedicated meeting with managers
August 2023
o Dedicated meeting with supervisors and managers
September and October 2023
o Discussion with the Director of Gas and Water Service and General Manager of
Infrastructure Services for each team
o Dedicated meeting of staff representatives from each area
o Two informal staff drop-in sessions with the Project Team
Since we have been able to attend individual team meetings focused on different roles within Kitchener
Utilities, and also provide additional options like the meeting of representatives and drop-in sessions for
What we heard: Phase 1 engagement summary p. 8
those who wished to attend, discussions have been possible with a diverse mix of staff across the Gas
and Water Division.
An internal repository of information for staff has also been created
intranet system.
Councillor engagement
We brought a report to Council on May 15, 2023. This was an opportunity for councillors to ask
preliminary questions of staff regarding the project.
We held individual and small-group meetings with councillors over the summer, to provide an additional
opportunity to share their insights with staff to inform the development of the Phase 1 deliverables.
Section 2: Engagement results by theme
This section focuses on themes of the Phase 1 engagement. Since Phase 2, in 2024, will be focused on
identifying specific solutions, an exhaustive list of suggested business approaches and options have not
been included here, though suggestions made in Phase 1 will be a resource for us in the next phase of
work. We expect to conduct further engagement on more specific options as part of Phase 2.
In this section, we have included illustrative comments from the public engagement under each theme,
where appropriate, to give a flavour of the varied conversations and ideas. These comments should not
be interpreted as the full list of comments received, but all comment submitted have been recorded and
reviewed, and will be considered as the project moves forward.
Theme 1: Cost and affordability
On customer costs
The most common thing we heard in the engagement was concern that changing where the community
gets its energy from will cost a lot, and that customers will bear the brunt of those costs. Across all
groups, there was significant concern for the dire financial situations many community members are
facing due to current economic conditions, and for any negative financial impacts that this work could
have on them. Many people told us they want transparency on these costs, and some community
members feel this transparency would be enough to feel included and on board with the change.
For staff, a primary concern was the costs to customers of any changes that may be made, particularly
with current rates of inflation and the rising cost of living and the strain that these are putting on many.
This was connected to the importance that staff place on serving customers and community members.
At the same time, stakeholder and committee groups, in particular, also told us that the status quo can
also be a challenge for affordability, particularly due to policy and regulation, and changing industry
conditions.
From the public:
o barbecue! Do we need to
What we heard: Phase 1 engagement summary p. 9
o
cost premium. If the cost of transition really reduced the premium to where the heat
o
o ake a personal clean energy transition.
o
cost of living. My wife and I were priced out of affording a home several years ago and
assumed we'd be renting until we died. Now, we're unclear on how long that will last
and it becomes a question of when, not if, we become homeless despite having two full-
time jobs.
o
increase rates in response to demand increases\]
o -reliant. We have gas hot-water radiators, gas stove, and
gas fireplaces, gas water heater (Kitchener rental). My biggest concern is definitely the
cost of switching over our Veissman boiler to something electric. We'd like that change,
On personal benefit and future generations
Even though, cognitively, community members tended to understand the need to do better for the
environment and were concerned about recent wildfires and other effects of climate change, many
participants largely seemed to think the fruits of a transition to clean energy would be felt by their kids,
future generations, or simply not them. They told us that people are interested in change that benefits
them personally, and it is more difficult to foot the bill for a change they do not think they will
experience. Within the overwhelming collection of all the things one must care about and take care of,
there was a perception that embracing and taking action on clean energy will require tools like
incentives and reminders. This also resonated with some staff, who told us that financial strain and the
costs of change takes priority for customers over any other concerns they might have, such as
environmental concerns.
Some members of the public also told us that they feel a sense of responsibility to future generations,
such as their grandchildren, despite the challenges of making changes.
From the public:
o
o
o
o ntivize using less gas? Eg. when your cell phone provider sends you a
o Give customers a dividend as a rebate, and it could help customers invest. Or give them
a consumer points card or kickbacks.
What we heard: Phase 1 engagement summary p. 10
o
o
participa
o
o
to make these updates without me nagging or it being "too expensive" for his rental
o
o
On equity and affordability
We also heard about considerations beyond financial cost and future benefits for community members.
Kitchener committees, in particular, had rich discussions on quality of life considerations related to
energy. In particular, we heard that energy equipment and building design are connected to comfort
and safety and have mental and emotional costs when threatened, and that this is more of a concern for
those whose financial resources are limited.
Both community members and stakeholders expressed concerns about the impact the transition will
have from an equity lens. Some noted the intersectional nature of this work, particularly as it relates to
housing affordability, which reinforced the necessity of continuing to bring people with diverse
expertise, perspectives, and considerations to the table.
Committees also told us that renters need to be included in the public engagement process, since they
form a significant part of the community. Members saw the different needs of those groups, and urged
us to consider transition needs for rental properties. More specifically, multiple groups also raised the
but renters or homebuyers usually pay the utility bills. This means that renters and homebuyers have
more limited control over their current and future energy costs, as they cannot make the decision to
benefit from long-term savings in exchange for higher up-front equipment costs.
Some staff also told us about complex equity concerns regarding long-term cost implications of
decisions made during the strategy development process. They told us it is important to consider
possible future increases in the cost of natural gas, as well as the impact of changes on rates over time,
and that we need to make sure that rates today are equitable and not disadvantaging future customers
in favour of current ones.
From the public:
o
to transition. This shrinking user base could be left to pay higher prices to finance the
What we heard: Phase 1 engagement summary p. 11
o The first people to switch off gas are the affluent people; and then the people left
paying the future higher gas prices with carbon taxes are the lower class whose rates
will increase, and w
o -income families and how
an already high cost of living is affecting so many residents. Looking forward to the
o
Theme 2: Reliability
On consistent energy supply
Consistent with our longstanding priorities, both customers and staff told us that energy reliability as a
central concern. Space heating and water heating, and increasingly space cooling in light of a changing
climate, are critical for both comfort and life safety, and we heard that significant interruptions to
energy supply are not an acceptable outcome of changes in our systems.
On reliability of the energy system
From a system reliability perspective, some members of the public and staff expressed concern for
whether the electricity grid would be capable of handling the major increase in electricity use resulting
from electrification of more of our energy uses.
From the public:
o
o and everything to
electrify. That we can have AC or we can have EVs, but not both.
o
output from renewable energy sources like solar and wind. It is critical that Alberta add
more base-load power from natural gas and other sources to our electricity grid to
protect the reliability and affordability of power for Albertans. This is a warning for us.
On reliability of service for individuals
From an individual reliability perspective, several groups told us they were concerned about the
reliability of electricity, and about the potential for interruptions to electricity service to disrupt their
home heating if electric equipment like heat pumps is used. Many staff and some customers told us that
they prefer to rely on a range of sources of energy, rather than just on one source like electricity. Many
told us they saw value in having natural gas for reliability purposes, or as a backup fuel. Some noted that
the cost of retaining natural gas for backup purposes only may be substantial, since the cost of providing
the distribution system to those customers cannot be covered through their fuel use.
What we heard: Phase 1 engagement summary p. 12
We also had a few conversations where the possibility of improving reliability were raised. Some told us
about the benefits of newer clean energy technologies, such as smart systems and battery storage, for
improving energy reliability. Some staff told us that they are currently aware of households whose
energy needs are not being well met, such as due to crowding in some rental accommodations, and
were concerned about what could be done for them.
From the public:
o
o
$12,000 for it. My wife has health concerns, so we need reliable power. If there is no
n
On reliable utility providers
We also heard from stakeholder groups that reliability of utility governance structures is an important
aspect of the reliability of energy. This was seen as a priority by homebuilders, in particular, who told us
they want a reliable utility provider for any new types of utilities that might serve new neighbourhoods,
such as district energy system providers. They felt that that this is a gap that the public sector could fill.
Theme 3: Change
On financial costs of change
Overall, people most often associated change with cost, and had substantive questions about who will
be financing the upfront financial costs of the energy transition. They also mentioned structural and
considerations that reinforce the status quo and high energy usage, with its associated costs.
From the public:
o
o
e prices get better, then have plans and ease
o
o
On complexity and cognitive costs of change
We also heard that costs are not just financial, but include the effort required to change behaviour or
disrupt western societal perspectives. Across groups, the people we spoke with were at various stages
of their change journey on this topic. For many community members, this topic was not top of mind,
especially when life seems to have gotten more overwhelming, complex and challenging. For those
thinking about it, the scale of this change in our energy systems is challenging. Some found it very
difficult to imagine a future as different as the futures we are anticipating.
Some told us that the complexity of this topic makes it confusing. For some, a clean energy transition is
off their radar of things to considerespecially when life seems to have gotten more overwhelming,
complex and challenging.
What we heard: Phase 1 engagement summary p. 13
From the public:
^
o
o
o
o
o
about. Global warming always gave \[me\]
o
it a
o
o Do you not have MUCH better things to work on? How about the homeless situation
you are ignoring as hard as you can? Obviously y'all have too much time on your hands -
or you're too busy thinking of ways to WASTE money doing everything except
*
On the pace of change
A lot of discussion, particularly with staff, focused on the pace of change. Many people, especially staff,
emphasized the gradual nature of these changes. They noted that 2050 is a long time from now, and
that Some community members told
us that the next generation would address this change. Others were focused on the decision points that
arise for making these sorts of shifts, such as when their furnace reaches the end of its life.
At the same time, we heard that there are two main reasons for acting quickly. A number of members of
the public told us that urgent action was important to avoid the worst impacts of climate change. Many
It was noted that the conversation is changing quickly in the gas industry and elsewhere, and that it
needs to be clear that planning for these changes in our energy systems is critical for protecting our
business.
From the public:
o to start now so the policies
o
o
+
o ange effects now, which we thought may actually happen 20
to see \[the effects of climate change\] but the last generation to be in a position to do
What we heard: Phase 1 engagement summary p. 14
o My biggest concern is all this time you're wasting with consultations and surveys and
presentations instead of *actually doing what's needed*. You're a decade or more
behind where you should be on transitioning to low-carbon alternatives, and you do not
have time to be slow-walking it now. The lack of leadership from municipal leaders is
o
o ) at lowest
2
On the changing role of natural gas
One aspect of change that was discussed across groups was the changing role of natural gas in a clean
energy transition. This topic seemed to be unsettling for some, particularly in the first recruited
customer session. It was perhaps their first time wrestling with the cognitive dissonance that this
situation presents, since natural gas is deeply integrated into our ways of life without being overtly
obviously present, and it is an energy source that helps us while also causing harm.
A few participants expressed concern about the health impacts of natural gas, and more broadly, CO.
2
Some participants expressed their love of using gas and of the gas-powered products they use. Based on
the discussion, the engagement consultant believes this is partially about the sunk cost into these items,
also about the cognitive weight of undertaking a switch, and finally about a belief in the superior quality
and reliability gas provides.
From the public:
o
o
o
o
o
second consideration is the impact it has on my family's health. I hate having to use
natural gas because I know we're breathing it and that it will cause respiratory
o
o and recyclability! Hydro bills will
^
o -
o
dependent. Natural Gas brings in $$$ to City treasury and helps finance some city
obligations. It is wrong and totally irresponsible of City Council to have voted to scrap
Natural Gas plants. Wind and solar can NEVER replace reliable caseload like nuclear or
What we heard: Phase 1 engagement summary p. 15
On reconciling things that seem to be at odds
Many members of the public were juggling and reconciling aspects that seemed to be at odds with each
other. This was particularly evident in online survey responses to the survey question about what is
important to you when you think about heating in your home.
From the public, on what is important to them about home heating:
o
o -
o ing a comfortable heat level, both day and night, while using the greenest
o
o
o ize these two things are currently
o
o
^
include purchase of furnace/fuel
On mindset
We also heard varied discussion about the role of mindset in this kind of change. Stakeholders, in
particular, told us that a lot of the success of energy transition work comes down to mindset, and to and
how opportunities and risks are framed. Some members of the public stressed the importance of
involving youth in this process, because they seem to be quite inspired by environmental sustainability,
resistant to change.
From the public:
o
o
Capitalize on their energy and kno
o
On buy-in
Many groups shared their perspectives with us on the importance of public buy-in. Committees, in
particular, told us that government mechanisms like building standards are key tools. To enable broader
public buy-in, many people across groups told us about the importance of story-telling and examples, as
discussed under Theme 4. They also told us that they needed timely support when faced with decisions
about their heating and cooling options, and that it is important to foster a sense of self-worth and
agency. Staff also discussed barriers to public buy-in, including provincial, national, and international
political movements and GHG emissions profiles. At the same time, some noted that we have already
seen a few customers making the switch off gas.
What we heard: Phase 1 engagement summary p. 16
On staff
We heard a lot of concerns, from staff and for staff, about how these changes will impact the work that
our staff members do. This ranged from broad concerns about the potential for job losses, to specific
concerns such as the training and trades ticket requirements for work in other related specialties that
may become more relevant to our future business offerings
work, staff consistently expressed the importance of clear communication throughout the strategy
development process. It needs to be clear to staff that we are committed to continuing to be a trusted
energy provider well into the future, and to bring staff along with us. We heard that staff need to hear
this from senior leaders in the organization, and that consistent channels of communication are
important throughout the project.
Theme 4: Kitchener Utilities as a business
On the risks of not changing
A number of community members, and other groups,
the business could decline. There was concern, particularly from community members/customers and
for costs. We heard that we should be agile and focus on opportunities and not just risks while we
assess future potential business lines. This flexibility is supported by our unique position as a small
community-owned utility.
From the public:
o
t
operate a company.
o There will be a point not to even operate as a company that d
o
want to put themselves out of business? They need to start selling heat pumps and
o
o
2030. Could
o -
have a lot of time to pportunity
for KU to move forward and help the community move towards a net zero future.
o
appliances. Extend to electrical appliances and switch out to electrical water heaters,
and replace gas furnaces with heat pump. Arrange for bulk purchasing of units and
make it easier and more convenient for customers. Take similar activities in the gas
world and switch it over to electrical appliances and leverage that opportunity. Focus on
What we heard: Phase 1 engagement summary p. 17
research.
On leadership
We heard across groups that many see us as potential leaders in the energy transition. There was
considerable discussion of the positive and unique role Kitchener Utilities could play in new energy
opportunities. Some community members suggested that they would look to us for guidance about
what they should be doing as part of the transition.
By-and-large, participants across the sessions seemed encouraged that KU is thinking about this and
planning in this way. There was a sense that KU and the City of Kitchener could take a lead, be a model
for other cities, and that this could potentially lead to new revenue.
From the public:
o
time and planning to try to help the environment. I think they are a great company and
o
o
o
or kickbacks wo
o
o - climate emergency req
o
o
change
o leader, both in renewables, but also in equity and
ensuring those most affected by climate change and already marginalized can be well
supported. There is so much opportunity to invest in long term lower cost heat and
equitable pricing. There is also an opportunity for Kitchener Utilities to demonstrate the
business case for the necessary energy transition to utilities across Canada and around
On assets and infrastructure
We heard several times, in our conversations with staff, about the connections between asset
management, rates, and capital planning for our infrastructure. These are critical elements of utility
business planning that could be affected by the clean energy transition. We heard we need to innovate
on our existing practices to prepare for changing future needs.
What we heard: Phase 1 engagement summary p. 18
On partnerships
We heard a lot of support across all groups for partnerships with other organizations, such as utilities,
governments, industry, research, and community organizations. There was particular interest in
partnerships with Enova, the local electricity distributor. There was also
related to the energy transition, as well, given their central role in distributing natural gas in the
province and to Kitchener Utilities directly. This was, in part, a recognition of the fact that the energy
services we provide are part of a broader energy system, with a range of important capacity holders,
such as electricity system planners, that influence how the system will work in the future.
Theme 5: Information, education, and awareness
On trusted and timely information
We consistently heard across groups that there is concern about a lack of trusted information related to
the energy transition. Some participants told us they were uncertain about various alternative energy
sources and technologies, or skeptical about their reliability and ability to meet our energy demands,
and that they were therefore hesitant to put money into these courses of action for fear of the
opportunity costs of being wrong. There seemed to be a hunger for real, honest information.
While conversations with community members often included an openness to embracing change, some
feel they do not have the right information at the time when these decisions happen, such as when a
furnace fails and needs to be replaced quickly.
From the public:
o
o
see X, Y
o
o
o
o
o
environment? Provide info on long-term savings AND impact
o
o gy transition will be difficult at the local level, when most electrical
What we heard: Phase 1 engagement summary p. 19
On divisiveness
Of course, it was also clear in public engagement that the energy transition, and its connections to
climate change, can be a divisive topic. Subtly in a few of the in-person workshops, and more directly in
the online survey and social media contributions, some suggested that they do not believe that climate
change exists, or that it is not human caused. Some were suspicious about the global forces and
motivations behind the energy transition.
o
like the Ontario libera
o
yet. Be a leader in reliable and affordable energy. Tell the truth about the costs and use
science to back up every idea. Black outs and brown outs will be you failing the people
o
contribute to climate change and stop all this nonsense. Solar flares are the main thing
o
o
o
On accessible information
Members of advisory committees identified a number of opportunities for education and literacy,
particularly around home heating and cooling systems and options for adjusting them. One committee
highlighted the importance of providing information in multiple languages, and providing support for
newcomers adjusting, in some cases, to very different climate control systems than they may be used to
from other parts of the world.
People across groups told us about the importance of telling a compelling yet educational story. People
are eager to see case studies and hear from people with direct experience of newer energy
technologies. This kind of storytelling was seen as a key tool for bringing people along with changes in
our energy systems. People were also interested in seeing the impacts of changes they make in a
concrete way.
From the public:
o
happens if you do change. Send us information on how we contributed to a positive
o
themselves for converting to electricity-powered equipment. Use metrics that people
What we heard: Phase 1 engagement summary p. 20
o
o Tell the story about how we invest more in the city.
o The story
On accurate technical information
Staff conversations about information gaps often focused on technical questions. Some indicated that
they did not have the information they needed to believe that non-emitting energy sources could meet
.
By far, the most common area of technical interest for staff was heat pumps, particularly air-source heat
pumps, given their growing role in space heating. Some expressed that they want to see real-world case
studies with data on energy costs, with some suggesting that Kitchener Utilities should do local tests of
these technologies ourselves. There was also consistent interest in low-carbon gaseous fuels, and how
changes in gaseous fuel mixes might impact our operations and the gas delivery system. This was an
interest shared with some members of committees.
These technical considerations also arose with members of the public. Some participants expressed
uncertainty about various alternative energy sources and technologies, related skepticism about their
reliability and ability to meet our energy demands, and related hesitancy to put money into these
courses of action for fear of the opportunity costs of being wrong.
When people told us that they lacked reliable information on clean energy alternatives, it was often
connected to their hesitation about the technical and practical feasibility of those solutions.
Broadly, we heard that many in the public are looking for information and guidance about the changes
they can make. From staff, we heard that providing accurate and reliable information to customers
regarding their heating and water heating options was extremely important to them.
From the public:
o
o
o
o
o
o
o E NOT SUSTAINABLE OR VIABLE NOR ARE THEY PROVEN TO BE
o
energy you're already using clean energy. Whereas th
What we heard: Phase 1 engagement summary p. 21
Theme 6: Trust and responsibility
Community trust
Many participants indicated that they see us as a reliable provider of energy services, and that they
value this role that Kitchener Utilities plays. A number of customers told us they see Kitchener Utilities
as a trusted provider of information, and would look to us for guidance about their energy decisions,
especially since trusted information is hard to find.
At the same time, we heard some mistrust, especially arising out of questions about our motivation
behind transition work, especially at this early stage where we have questions rather than answers. As a
community owned business, the community is literally invested, and this means that these public
conversations about the future of the utility need to happen long before decisions have been made.
Some members of the public seemed to engage differently when they processed that Kitchener Utilities
is part of the City of Kitchener, and understood the reality of community ownership.
From the public:
o
o ed
customer following
o
are concerned about the future of your company and our supply of gas and water
o
o
make money now, so why do they want to do this?
o you take out of my pocket while pretending
o
o
o
Staff responsibility for community trust
Arising from the trust that many in the community have in us, staff consistently prioritize the value of
the trust customers place in them and Kitchener Utilities, and are committed to honouring that through
words and actions. This was seen to be important to maintain confidence in Kitchener Utilities as a
brand, as well.
Staff
make meaningful choices to help them meet their diverse needs. There was a lot of apprehension about
the possibility of forcing customers to make changes that they do not want or that are not in their best
interest. Some staff also mentioned the importance of ensuring we provide options that customers are
looking for, such as with the rental program.
What we heard: Phase 1 engagement summary p. 22
Policy responsibility
All groups highlighted the various policy tools that are needed to enable clean energy while addressing
climate change, and the responsibility that means for different levels of government. Examples included
changes to the building code, incentives for builders, and infrastructure policies.
From the public:
o Build my home correctly! Who is holding the
o
o
o
o why build out
the infrastructure to new neighbourhoods if the goal (the plan?) is to get everyone off
^
o Building code is antiquated and needs to move into a Step Code like Vancouver which is
progressive on how much energy you can use, similar to Europe. Provide a maximum
amount of energy per property, Sweden has something similar to this leads to super
o NO. No more gas hookups, eliminate sales of
+
Conclusion
These discussions about cost, reliability, change, business, information, and trust will continue through
future phases of the project. What we heard in Phase 1 engagement has been critical to the
development of guiding principles for the project, which are available in Guiding principles: Phase 1
discussion paper for the Kitchener Utilities Clean Energy Transition Strategy project.
We are incredibly grateful to everyone who shared their time and their insights with us in the first phase
of the project. In Phase 2, scheduled for 2024, we will be identifying and evaluating specific options for
our business. We look forward to continuing to engage with customers, community members,
stakeholders, committees, staff, and councillors through future project phases.
What we heard: Phase 1 engagement summary p. 23
for the Kitchener Utilities Clean Energy Transition Strategy project
November 2023
Acknowledgements
This discussion paper was created by the KU Clean Energy Transition Strategy Project Team, under the
guidance of the Advisory Team.
Project Team members are subject matter experts providing critical support to advance this project.
Members of the Project Team are:
Greg St. Louis, Director, Gas and Water Utilities
Khaled Abu-Eseifan, Manager, Gas Supply and Engineering
Adam Hustwitt, Manager, Business Development and Customer Experience
Tammy Gerber, Marketing Strategist
Michele Kamphuis, Business Development and Conservation Strategist
Ruth-Anne Goetz, Budget Analyst
Anna Marie Cipriani, Corporate Sustainability Officer, Development Services
Kate Daley, Senior Strategist Carbon and Energy Planning (project manager)
Advisory Team members represent key City departments and provide feedback and advice at key
milestones of the project. Members of the Advisory Team are:
Denise McGoldrick, GM Infrastructure Services
Justin Readman, GM Development Services
Jonathan Lautenbach, CFO & GM Financial Services
The Project Team and Advisory Team would like to thank staff, customers, residents, stakeholders,
partner organizations, committee members, and councillors for their thoughtful engagement
throughout Phase 1 of the project. The insights in this paper and the What we heard document are built
on their diverse perspectives.
Guiding principles: Phase 1 discussion paper p. 2
Table of Contents
Acknowledgements ................................................................................................................................... 2
Executive summary ............................................................................................................................5
Part 1: Project context .......................................................................................................................7
1.1: Project background ............................................................................................................................ 7
1.1.2: Project initiation.......................................................................................................................... 7
1.1.3: Project scope and related work at the City of Kitchener ............................................................ 7
1.1.4: Project Phases ............................................................................................................................. 8
1.2: High-level environmental scan .......................................................................................................... 9
1.2.1: Evolving climate science and commitments ............................................................................... 9
1.2.2: Evolving policy and regulatory environment .............................................................................. 9
1.2.3: Evolving industry environment and consumer options ............................................................ 10
1.2.4: Evolving energy reliability context ............................................................................................ 11
1.2.5: Evolving costs and cost trends .................................................................................................. 11
1.2.6: Evolving City of Kitchener policy context .................................................................................. 12
1.3 Key Characteristics of Kitchener Utilities .......................................................................................... 12
1.3.1: Current energy services ............................................................................................................ 12
1.3.2: Structure and oversight ............................................................................................................ 13
1.3.3: Values and commitments ......................................................................................................... 13
1.3.4: Strengths and opportunities ..................................................................................................... 14
1.3.5: Vulnerabilities and risks ............................................................................................................ 14
Part 2: What we heard in Phase 1 ..................................................................................................... 16
2.1: Engagement activities and audiences .............................................................................................. 16
2.2: Key insights from Phase 1 engagement ........................................................................................... 17
2.2.1: Cost and affordability ................................................................................................................ 17
2.2.2: Reliability ................................................................................................................................... 17
2.2.3: Change ...................................................................................................................................... 18
2.2.4: Kitchener Utilities as a business ................................................................................................ 18
2.2.5: Information, education, and awareness ................................................................................... 18
2.2.6: Trust and responsibility ............................................................................................................. 19
Part 3: Guiding principles for future phases ...................................................................................... 20
Guiding principles: Phase 1 discussion paper p. 3
Guiding Principle 1: Make responsible, accountable, and financially rewarding business decisions .... 20
Objective 1.1: Follow sound business practices ................................................................................. 20
Objective 1.2: Take action quickly to manage business risk and maximize opportunity ................... 20
Objective 1.3: Assess value holistically to find our best contribution ................................................ 21
Guiding Principle 2: Serve customers as an affordable and reliable partner in the energy transition .. 21
Objective 2.1: Pursue affordable, reliable, and predictable energy services for our customers ....... 21
Objective 2.2: Empower customers with choice, and with trustworthy, accessible information ...... 22
Objective 2.3: Bring people along as things change ........................................................................... 22
Guiding Principle 3: Contribute to a thriving community ....................................................................... 22
Objective 3.1: Collaborate with partners ............................................................................................ 23
Objective 3.2: Do our part to address climate change ....................................................................... 23
Objective 3.3: Use clear metrics and align them with community-scale goals .................................. 23
Guiding Principle 4: Plan for multiple energy futures with flexibility and focus .................................... 24
Objective 4.1: Rely on safe bet technologies and prepare for long shot technologies ...................... 24
Objective 4.2: Prepare for a broad range of net-zero carbon futures ................................................ 25
Objective 4.3: Iterate, experiment, and learn .................................................................................... 25
Part 4: Next steps ............................................................................................................................. 26
4.1: Expected components of Phase 2 .................................................................................................... 26
........................................................................................................................ 26
Guiding principles: Phase 1 discussion paper p. 4
Executive summary
In this discussion paper, we summarize what we have learned this year, through Phase 1 of the
Kitchener Utilities Clean Energy Transition Strategy project. The global clean energy transition brings
both risks and opportunities for the City of Kitchener as an energy provider, as well as for customers and
community members. This strategy will guide us as we evolve our energy business to continue to be
financially successful and provide valued services throughout the energy transition.
The first phase of the strategy project in 2023 has focused on engagement and building relationships
and understanding around values, goals, and scope of the strategy. In this phase, we have worked to
invite people into a problem-solving conversation with us. During Phase 2, in 2024, we will assess
possible approaches and make recommendations, and Phase 3 will be focused on accelerating
implementation planning in 2025.
This project foc
Gas and Water Division of the Infrastructure Services Department. The discussion paper is therefore
written from the perspective of Kitchener Utilities as the community energy service provider at the City,
but it considers the broad context of work happening across City divisions and departments to related to
In Part 1 of this discussion paper, we summarize the project context, provide a high-level environmental
scan, and describe key characteristics of Kitchener Utilities that inform this work.
In Part 2 of the paper, we briefly describe what we have heard through public engagement during Phase
1 of the project, which is outlined in more detail in a companion document, called What we heard:
Phase 1 engagement summary for the Kitchener Utilities Clean Energy Transition Strategy. We have had
in-depth conversations with customers, community members, stakeholders, Kitchener committees,
staff, and Council, through a variety of formats. In those conversations, we have heard diverse insights
about the importance of cost and energy reliability, as well as the role that information, education, and
awareness plays in supporting customers through the changes that are underway. We also heard
important insights about Kitchener Utilities as a business, and about the trust that customers and the
community have in us. This adds to our responsibility to our community to live up to that trust.
These diverse conversations have led us to develop a set of guiding principles to form the basis of future
phases of work on this project, and these are the focus of Part 3 of the discussion paper. We have four
guiding principles, and each of those has a stated intention, as well as three more specific objectives.
These principles are discussed in depth in the paper, but a summary table is provided here for ease of
reference:
Table 1: Guiding principles
Guiding principles: Phase 1 discussion paper p. 5
As noted in Part 4, preliminary project planning for Phase 2 of the project is underway, and in that
As we evolve our energy business to continue to be financially successful and provide valued services throughout
the energy transition
Guiding Principles Our intention Objectives
1: Make responsible, 1.1: Follow sound business practices
accountable, and position our community-owned 1.2: Take action quickly to manage risk and maximize
financially rewarding business for success as things opportunity
business decisions 1.3: Assess value holistically to find our best contribution
2: Serve customers 2.1: Pursue affordable, reliable, and predictable energy
as an affordable and customers and community services
reliable partner in members as their trusted partner 2.2: Empower customers with choice and with
the energy transition trustworthy, accessible information
2.3: Bring people along as things change
3: Contribute to a 3.1: Collaborate with partners
thriving community community even stronger 3.2: Do our part to address climate change
3.3: Use clear metrics and align them with community-
scale goals
4. Plan for multiple 4.1: Rely on safe bet technologies and prepare for long
energy futures with solutions that can adapt to and shot technologies
flexibility and focus provide value in all energy 4.2: Prepare for a broad range of net-zero carbon futures
4.3: Iterate, experiment, and learn
phase, our work will include identifying and assessing new potential business offerings or program
expansions. It will also include assessing our existing businesses under a broad range of potential future
conditions and scenarios, including the range of potential impacts on our assets, rates, and revenues.
We are expecting to bring recommendations arising from Phase 2 of the project to Council in late 2024
or early 2025.
Guiding principles: Phase 1 discussion paper p. 6
Part 1: Project context
1.1: Project background
, to respond to ongoing changes in the
global, national, provincial, and local energy context as the clean energy transition continues, and to
.
These changes bring risks and opportunities for Kitchener Utilities, its customers, and community
members. As a community-
transition.
This project aims to develop a multi-decade business strategy that will guide us as we evolve our energy
business to continue to be financially successful and provide valued services throughout the energy
transition.
TransformWR, including achieving transformational change to accomplish the energy transition through
work that will also build an equitable, prosperous, resilient low-carbon community.
1.1.2: Project initiation
Through active participation in the ClimateActionWR collaborative of municipalities and non-profit
organizations, in 2021, Kitchener committed to reduce community greenhouse gas emissions 50 per
cent by 2030, and 80 per cent by 2050. As a partner in the ClimateActionWR initiative, the City has also
endorsed the TransformWR community climate action strategy, which is centred on Six Transformative
Changes that must be made by 2050 to address local GHG emissions while building an equitable,
prosperous, resilient low-carbon community through the transition off fossil fuels.
A key transformative change that will impact Kitchener Utilities significantly in TransformWR is that,
2050, businesses and homes no longer use fossil fuels for space heating and cooling, and water heating.
As part of its endorsement of TransformWR, Council devoted staffing resources toward developing a
strategy to guide Kitchener Utilities through the energy transition.
unique collaborative partnership between the three cities, the Region of Waterloo, and local electric and
1.1.3: Project scope and related work at the City of Kitchener
This project focuses on preparing Kitchener Utilities, as the , for the clean energy
transition.
Other key City divisions and departments are conducting critical work related to the energy transition
that is proceeding in parallel. This includes:
Table 2: Related work
Guiding principles: Phase 1 discussion paper p. 7
Project Lead Lead Division Status
Dept.
Corporate Climate Action Plan DSD Office of the GM of Development Part 1 in Progress
(CorCAP) 2.0 Services/Sustainability Office
Downtown Kitchener District DSD Planning In Progress
Energy Feasibility Study
Green Development Standards DSD Planning (with WR Community Energy In Progress
partnership)
Dividend/Reserve Fund Reviews FIN Office of the CFO Upcoming
Various external partnership Various WR Community Energy; Various
initiatives ClimateActionWR; Enova
Since this strategy project he KU Transition
Strategy is also a
work to implement the TransformWR strategy, as outlined in Figure 1.
Figure 1: Community and corporate responsibility for climate change mitigation and adaptation
1.1.4: Project Phases
The first phase of the strategy project, in 2023, has been focused on engagement and building
relationships and understanding around values, goals, and scope of the strategy. This part of the process
has been about inviting everyone into a problem-solving conversation with us.
Phase 1 of the project is intended to inform Phase 2 of the project in 2024, which will assess possible
business options and recommend an integrated approach.
Project Phase Timing
Guiding principles: Phase 1 discussion paper p. 8
Phase 1 2023 building relationships and relational engagement with Council,
understanding around values, staff, stakeholders, community
goals, and scope of the members, and customers
strategy
Phase 2 2024 determining the way forward detailed, collaborative option
together assessment and recommendation of
an approach
Phase 3 2025 building consensus on the developing a phased long-term
implementation plan to 2030 implementation strategy to 2050 and a
detailed first phase implementation
plan to 2030
While developing a robust strategy to guide Kitchener Utilities for the next 30 years will take some time,
during the strategy develop
and act on time-sensitive items.
1.2: High-level environmental scan
The discussions we have had in Phase 1 of the project have taken place as the context around us
continues to evolve. Decisions that we make as a community-owned business are heavily informed by a
variety of factors, particularly those related to industry conditions and government policies. We review a
number of the ways that these contexts are evolving, as this provides critical context for the decisions
that will be under consideration in future phases of this project.
1.2.1: Evolving climate science and commitments
Cross-
participation in corporate and community climate and energy transition work has progressed. There is
broad global agreement on the need to achieve net-zero emissions, where we no longer add more and
more GHGs to the atmosphere from human activities, by mid-century. Canada has also joined countries
around the world that have committed to achieving net-zero carbon emissions by 2050, and to reduce
emissions to 40-45% below 2005 levels by 2030.
1.2.2: Evolving policy and regulatory environment
In the context of federal and international commitments, as well as industry changes, climate- and
emissions-related policies are likely to be a continuing and growing feature of the policy and regulatory
landscape in the coming decades. Policies are expected to evolve over time, which highlights the need to
be adaptable as the regulatory environment changes.
The federal carbon pricing pollution benchmark is arguably the most influential of current policies for
because it applies to our customers. Kitchener Utilities is required to collect
the relevant amount through utility bills and transfer it to the federal government. Current carbon
pricing is $65 dollars per tonne of GHGs, and it is scheduled to rise by $15 dollars per year, reaching
$170 dollars in 2030. We estimate that a typical residential customer using 2000 cubic metres of natural
gas per year will spend about $248 dollars this year on federal carbon pricing. The federal government
Guiding principles: Phase 1 discussion paper p. 9
currently provides direct rebates on carbon pricing to individuals and families in Ontario, intended to
offset the cost of the charges on fuels such as natural gas and gasoline, and to help support investment
in clean energy options.
Polluter-pay approaches to emissions, such as the federal carbon charge, are generally considered by
the federal government to be among the most efficient and therefore low-cost policy approaches to
addressing GHG emissions. This is because the policies price the impacts of current environmental
practices while incentivizing the use of alternatives. While other policy approaches are possible in
different contexts or under future governments, the costs to natural gas customers from addressing
GHG emissions under alternative policy regimes are unknown, and they may be higher than they are
under the current pollution pricing system.
At the same time as pollution pricing policies have become a more significant factor in the energy
sector, governments at various levels are increasingly investing in and funding the transition. Clean
energy technology development has become more of a factor for various levels of government.
Provincial policies and investments enabling the development of clean tech industries, such as EV
battery manufacturing, have been increasing as well.
There have also been changes in other jurisdictions to the regulatory landscape of natural gas delivery
businesses. Some jurisdictions in North America, including and Montreal and New York State, are
prohibiting new natural gas connections after specified dates. Other jurisdictions, such as the Province
of Quebec and Nanaimo, BC, are prohibiting the installation of new fossil fuel-based heating equipment
on announced timelines. While the number of jurisdictions with constraints on fossil fuel heating are
growing, at this time there are no similar rules in place affecting the Kitchener Utilities service territory.
1.2.3: Evolving industry environment and consumer options
changes in technology and efforts to achieve net-zero emissions. The Independent Electricity System
Operator (IESO) is beginning planning for the simultaneous decarbonization and considerable expansion
of the provincial electricity system. The Ontario branch of Enbridge Gas has recently identified pathways
to a net-zero carbon future, emphasizing a diversified approach that relies on electrification tied with
deployment of low- or zero-carbon gases, including renewable natural gas (RNG), hydrogen, and natural
gas with carbon capture.
From a consumer standpoint, competitive electric options for space and water heating are becoming
increasingly available, and this is a significant factor in the shifting business landscape for Kitchener
Utilities. In particular, over the last number of years, there have been significant developments in heat
pump technologies that are used for space and water heating. Heat pumps work on the same premise
that refrigerators and freezers do, and they use electricity to move heat energy instead of generating
directly. Recent analyses found that air source heat pumps, which run on electricity, are cost-
competitive in most parts of the country for most residential buildings. Despite higher initial equipment
and installation costs, the high efficiency that comes from moving heat with electricity instead of
generating it means that, in many buildings, there are cost savings over the full lifecycle of the
Guiding principles: Phase 1 discussion paper p. 10
equipment from installing a heat pump with electrical or natural gas back up heat instead of a standard
furnace and air conditioner.
A number of Kitchener Utilities customers are beginning to install heat pumps, particularly in light of
current federal Greener Homes Grant funding, which reduces up-front costs for homeowners. While
some customers are disconnecting gas service to their homes, it is much more common to maintain
natural gas service. Many heat pumps are being installed as part of hybrid systems, where heat pumps
serve primarily as a more efficient replacement for an air conditioner. In these cases, the furnace system
is maintained to provide heating below a particular set temperature, and the heat pump provides
heating above that temperature.
Heat pump water heaters are also becoming more available, and provide options to electrify water
heating with more efficiency than standard electric water heaters.
1.2.4: Evolving energy reliability context
The context in which our energy systems must provide reliable, stable services is changing as well, both
with regards to service interruptions and supply chain exposure.
For all providers of energy services, it is a high priority to avoid interruptions to service, given the critical
role that electricity and natural gas play in , productivity, and safety. System
reliability is expected to be challenged by the increasing frequency of extreme weather events as a
result of climate change, with the potential for disruptions from more ice storms affecting electric
infrastructure, for example.
At the same time, both electricity and natural gas service are generally fairly reliable in Waterloo Region.
Though natural gas experiences fewer interruptions than electricity, overall interruptions in supply are
rare and short when they do occur, and while they affect convenience, their short duration means that
they do not typically affect safety from heat or cold temperatures. Because natural gas infrastructure is
underground, it is less vulnerable to damage and disruption from weather conditions.
While there are considerably more interruptions in electricity service than gas service, these two energy
sources have different geographic risk profiles. Like other fossil fuels, natural gas is provided from
outside of Ontario, and subject to national and sometimes international market pressures. These led, for
example, to a spike in rates for Kitchener Utilities gas customers in 2022, since natural gas supplies were
more expensive due to global forces. While electricity generation equipment is subject to potential
global supply chain disruptions, such as were experienced at stages of the recent pandemic, increasing
diversity of smaller scale options for locally generating and storing electricity, such as solar panels and
battery storage, mean that there is growing potential for building increased resilience to global market
forces.
1.2.5: Evolving costs and cost trends
Currently in Ontario, natural gas prices are lower than in many jurisdictions in Canada, and electricity
prices are higher. These prices are, however, subject to change over time, depending on changing
conditions. Recently, natural gas supply costs have fluctuated significantly due to continental and global
supply chain factors, and natural gas prices are forecast to increase somewhat in the coming years in the
Guiding principles: Phase 1 discussion paper p. 11
exposure to global gas market trends.
There are also more explicit price changes scheduled as part of the phase-in of federal carbon pollution
pricing. Pollution pricing is planned to increase from 12.39 cents per cubic metre of natural gas today to
32.4 cents per cubic metre in 2030. This means that, while a residential customer expecting to use 2,000
cubic metres of natural gas per year would pay $248 this year on pollution pricing, this number would
increase to $648 in 2030.
These changes mean that, while future gas costs continue to be uncertain, changing costs may be a
significant factor for customers considering different energy sources for their space and water heating.
1.2.6: Evolving City of Kitchener policy context
In addition to the energy services it provides to the community through Kitchener Utilities, the City of
Kitchener is also the largest shareholder in Enova, the electricity distribution utility serving Kitchener,
Waterloo, Wellesley, Wilmot, and Woolwich, and has oversight roles through board representation and
receives dividends as a shareholder.
community wellbeing. highlights five strategic
goals for 2023-2026 and related work under each goal, specifically:
1. Building a connected city together (housing, transportation, active transportation, land use
planning)
2. Cultivating a green city together (CorCAP 2.0, this strategy, district energy, tree canopy, parks
strategies, parkland acquisition)
3. Creating an economically-thriving city together (business approvals, innovation campus, creative
industries school, events and festivals strategy, entertainment venue management, Arts and
Culture Master Plan)
4. Fostering a caring city together (Truth and Reconciliation, municipal newcomers strategy,
engagement practices, community center operating model, recreation and leisure program
review, Leisure Facilities Master Plan update, community grants review)
5. Stewarding a better city together (Digital Kitchener strategy, city-wide data strategy, employer
identity/value proposition, psychologically safe workplace, procurement innovation)
1.3 Key Characteristics of Kitchener Utilities
1.3.1: Current energy services
Kitchener Utilities is a division of the City of Kitchener and is one of two gas utilities in Ontario that is
municipally owned. For 120 years, Kitchener Utilities has delivered water and gas services to our
community.
Our services include water delivery, natural gas delivery, stormwater and sewer services, and rental
water heaters. While water, sewer, and stormwater operate on a cost recovery basis, profits from the
natural gas delivery and rental water heater programs are reinvested into City of Kitchener services.
Guiding principles: Phase 1 discussion paper p. 12
The natural gas provided through Kitchener Utilities is primarily used for two, very different, purposes.
About 85% of the natural gas sold goes to residential and commercial customers, and is primarily used
to produce low-temperature heat for space and domestic hot water heating. The remaining natural gas
is used by industrial customers, who may use some natural gas for space and domestic water heating,
but who often use significant amounts of natural gas to produce high-temperature heat as part of
industrial processes.
Kitchener Utilities owns and operates approximately 1,118 kilometres of gas infrastructure, and delivers
reliable fuel for space and water heating to approximately 73,300 homes, 4,140 businesses, and 385
industrial customers.
In 2002, our customers used 270,000,000 cubic metres (m3) of natural gas. Using this gas produced
about half-a-million tonnes of greenhouse gas emissions. Natural gas use contributes about 1/3 of the
annual community GHG emissions from within Kitchener.
1.3.2: Structure and oversight
Kitchener Utilities is one of two gas utilities in Ontario that is municipally owned. Natural gas delivery
and rental water heaters provided by Kitchener Utilities operate within the Gas and Water Utilities
division of the City, housed within the Infrastructure Services Department. 124 FTEs provide planning,
operations, maintenance, and capital services to ensure the safe and reliable provision of gas and water
services to customers.
As part of a City division, oversight and accountability to the public on utility decisions, such as setting
annual natural gas rates, is provided by Council. Other natural gas and electric utilities,
operating as separate business entities, do not have this form of oversight, and they are instead
regulated through the Ontario Energy Board through a different administrative process.
The profits provided by the natural gas delivery and rental water heater programs contribute revenues
to the annual operating and capital budgets. For 2023, for example, approximately $17.7 million in
revenue from the gas and water heater rental businesses was used to fund tax-based operating
programs and capital programs. These contributions to City finances reduce reliance on property taxes
to fund City services.
Kitchener Utilities operates with the support of staff from across the City, including diverse business
units such as Finance, Fleet, and Corporate Communications.
1.3.3: Values and commitments
core principles from 1903 remain the same: to deliver reliable, safe services at a fair
price to meet needs.
Our longstanding formal vision statement has been to
The mission
statement has been that experienced team who
provide a continuous and safe supply of water and gas services that exceed the expectations of our
Guiding principles: Phase 1 discussion paper p. 13
As these statements were developed many years ago, and in light of the changes made during a
2018/2019 review , work began a few years ago to begin updating the
vision and mission statement. While this work is not yet complete, draft text developed through that
process identified a revised approach, centered on the role that energy and water services play in the
quality of life of the community.
-
safe, reliable energy and water services at stable, affordable rates; consistently exceeding customer
1.3.4: Strengths and opportunities
our skilled staff dedicated to customer service, who are the
foundation of the strong relationships that we have built with customers and the community. With our
location inside the City, Kitchener Utilities is in a unique position to build on its strong foundation and
enable energy opportunities that are ideal for multi-
strengthen the community in various ways, as outlined in the recent Strategic Plan highlighted above.
Through recent participation in WR Community Energy, an innovative collaboration between
municipalities and electric and natural gas utilities in Waterloo Region, both the City of Kitchener and
Kitchener Utilities have built strong relationships with local partners working to advance community
energy goals.
Kitchener Utilities has a long history of energy innovation through change, and has served people in
Kitchener for more than a century through considerable changes in energy systems. When the Town of
Berlin purchased in the Berlin Gas Company in 1903, it had just over 500 customers, and generated its
gas from coal. The gas was used for street lighting, and the company generated electricity with it to sell,
in addition to providing flammable gas directly to customers. Over the next century, the utility oversaw
-electric power, and the transition from its original
coal gas production to more reliable carburetted water gas production, and eventually to providing
more efficient natural gas.
The energy transition brings significant opportunity for new business offerings, services, and revenue
streams for energy utilities. Kitchener Utilities is in a strong position to provide leadership in local efforts
to advance the energy transition while building an even stronger Kitchener. Potential business
opportunities for Kitchener Utilities that provide new services could add considerable value for the
community. We could play a significant role in supporting customers and community members with
transitioning their energy use in the future, in order to achieve their climate goals while future-proofing
their energy use.
1.3.5: Vulnerabilities and risks
Natural gas distribution utilities are recognizing a variety of business risks associated with the clean
energy transition. As the energy transition progresses, it is expected that more customers will select
higher more efficient and increasingly available decarbonized options, such as electric heat pumps, to
Guiding principles: Phase 1 discussion paper p. 14
meet their low-
customers are using natural gas for low-temperature needs, Kitchener Utilities and other gas
distributers could face significantly lower revenues and increasing operating and capital costs from a
smaller customer base. Since the costs of natural gas delivery are paid by current natural gas customers,
fewer customers could mean higher distribution costs per customer, which along with rising carbon
costs could affect affordability, and also influence customer fuel switching decisions.
All of the different ways that net-zero emissions could be achieved over the next few decades include a
significant decrease in the amount of conventional natural gas used within building space and water
heating applications. Low-carbon gaseous fuels, such as hydrogen and renewable natural gas, are
expected to play an important role in different energy futures, particularly to meet high-temperature
heat needs in industrial settings. There are significant limitations on the availability of these fuels,
however, and so they are not expected to replace current levels of natural gas use. This means that
natural gas, and likely gaseous fuels in general, are expected to play a very different role in a net-zero
future than they play today.
For high-temperature uses, industrial customers will continue to need reliable means of sourcing high-
temperature heat. This will require different solutions than those used for low-temperature heat, and is
likely to include a continuing need for low-carbon gaseous fuels such as renewable natural gas and low-
carbon hydrogen. Meeting these evolving industrial energy needs while addressing future changes in
residential and commercial gas usage is a significant consideration for natural gas utilities.
Guiding principles: Phase 1 discussion paper p. 15
Part 2: What we heard in Phase 1
In this section, we briefly describe what we have heard through public engagement during Phase 1 of
the project. For an in-depth assessment of engagement results, please see What we heard: Phase 1
engagement summary for the Kitchener Utilities Clean Energy Transition Strategy project.
2.1: Engagement activities and audiences
The engagement we conducted in Phase 1 has included conversations with staff, stakeholders, Council,
customers, and members of the public. In particular, engagement was comprised of:
Customers and members of the public
o Engage Kitchener online survey (August 24 to October 1 256 responses)
o Demographically representative recruited in-person workshops (September)
o Self-selected in-person workshop (September)
o Self-selected virtual workshop (September)
Stakeholders
o In-depth stakeholder workshop (June)
Kitchener committee meetings
o Climate Change and Environment Advisory Committee (June)
o Economic Development Advisory Committee (June)
o Homebuilders Liaison Committee (July)
o Equity and Anti-Racism Advisory Committee (September)
Council
o Council report (May)
o Meetings with councillors (July to September)
Staff
o Team project introduction presentations (April to May)
o Meeting with union representatives (April)
o Managers meeting (July)
o Managers and supervisors meeting (August)
o Team meeting discussions with Kitchener Utilities leadership (General Manager and
Director September and October)
o Staff meeting of representatives from each area (September)
o Staff drop-in sessions (September)
An Engage Kitchener page was created to serve as the central online presence for the project. A project
As part of the engagement, three key resources were developed to help build the conversation. These
resources were made available on the Engage Kitchener page, and were used as supporting resources in
various engagement workshops and meetings. They are:
A PDF resource on Preparing for a Net-Zero Future, explaining the project context
An infographic-style timeline 120 Years of Energy Innovation
Guiding principles: Phase 1 discussion paper p. 16
An infographic-style resource highlighting key features of Possible Pathways to Clean Energy in
our Community
2.2: Key insights from Phase 1 engagement
Throughout our engagement, we heard a range of diverse insights focused on six main themes: \[1\] cost
and affordability; \[2\] reliability; \[3\] change; \[4\] Kitchener Utilities as a business; \[5\] information,
education, and awareness; and \[6\] trust and responsibility.
2.2.1: Cost and affordability
The most common concern expressed, from both community members and staff, was that that changing
where the community gets its energy from will cost a lot, and that customers will bear the brunt of
those costs. There was significant concern for the dire financial situations many community members
are facing due to current economic conditions. There was also concern expressed, particularly in
stakeholder groups, that the status quo could also be a challenge for affordability, particularly due to
policy and regulation, and changing industry conditions.
There were also equity concerns expressed by all groups. This included concerns about the inclusion of
renters and transition needs for rental properties. This is because both renters and homebuyers face the
homebuilders select and pay for the heating equipment,
but renters or homebuyers usually pay the utility bills, and cannot choose to benefit from long-term
savings in exchange for higher up-front cost.
Some staff also highlighted the connection between equity and utility rates, highlighting long-term cost
implications of decisions made during the strategy development process. This includes considering
possible future increases in the cost of natural gas, as well as the impact of changes on rates over time,
and the importance of ensuring that rates today are equitable and not disadvantaging future customers
in favour of current ones.
2.2.2: Reliability
rities, both customers and staff identified energy
reliability as a central concern. Space heating and water heating, and increasingly cooling in light of a
changing climate, are critical for both comfort and life safety, and significant interruptions to energy
supply are not an acceptable outcome of changes in our systems.
In particular, there was concern across groups about the reliability of electricity, and the potential for
interruptions to electricity service to disrupt home heating if electric equipment like heat pumps is used.
Many staff and some customers indicated that they prefer to rely on a range of sources of energy, which
for them meant not relying exclusively on electricity as a sole source of heating in homes. Others
highlighted benefits of newer clean energy technologies, such as smart systems and battery storage, for
improving reliability. Concerns were also raised about customers whose energy needs are currently not
being met for reasons such as crowded housing conditions, and how further changes would affect them.
Guiding principles: Phase 1 discussion paper p. 17
2.2.3: Change
People most commonly associated change with additional cost. While there was often a desire to do
better for the environment, and concern about recent wildfires and other effects of climate change,
many saw the benefits of the transition as coming long into the future for future generations, rather
than for current customers. This was often seen as a barrier to action.
People we spoke with were at various stages of their change journey on this topic. Some found it very
difficult to imagine a future as different as the futures we are anticipating. At the same time, many were
encouraged that we are undertaking this planning to prepare for those different futures.
There was also considerable discussion of the pace of change. Some highlighted the importance of
urgent action, either because of the climate emergency or because of the need to protect Kitchener
Utilitiesfuture
energy system become more clear.
Stakeholders were the group that most significantly highlighted the importance of mindset and how
opportunities and risks are framed for the success of energy transition work.
2.2.4: Kitchener Utilities as a business
There was concern, particularly from community members/customers and stakeholders, that changes in
our energy context could mean our business would decline, and that this would have negative effects on
create community liability for costs. It was suggested that we should be agile and
focus on opportunities and not just risks, in assessing future potential business lines.
Connections between our assets, our rates, and our infrastructure maintenance and capital planning
were a theme highlighted by some staff, since these are critical elements of utility business planning
that could be affected by the clean energy transition.
All groups were eager to support partnerships, and favoured working collaboratively with other
organizations such as utilities, governments, industry, and community organizations. This was, in part, a
recognition of the fact that the energy services we provide are part of a broader energy system, with a
range of important capacity holders, such as electricity system planners, that influence how the system
will work in the future.
2.2.5: Information, education, and awareness
Concern about a lack of information, and particularly trusted information, was a consistent theme
across groups. There was concern about health impacts of natural gas, and also concern that there are
not practical alternatives to fossil fuels for space heating and water heating. While some expressed an
openness to change, many indicated that they lacked the right information at the right decision points.
There was widespread skepticism across groups around the costs of alternatives, and deep concern
about being wrong.
Broadly, we heard that many in the public are looking for information and guidance about the changes
they can make. Staff were consistently concerned about the accuracy of information provided to
Guiding principles: Phase 1 discussion paper p. 18
customers and were often focused on technical concerns, such as the details of air source heat pumps
or hydrogen blending.
Across groups, the importance of effective storytelling was highlighted. People are eager to see case
studies and hear from people with direct experience of newer energy technologies. This kind of
storytelling was seen as a key tool for bringing people along with changes in our energy systems.
2.2.6: Trust and responsibility
Many customers and community members told us that they see Kitchener Utilities as a reliable provider
of energy services, and that they value this role that KU plays. Staff, as a result, consistently prioritize
the value of trust customers place in them and Kitchener Utilities, and are committed to honouring that
through words and actions. The best interest of customers and giving them meaningful choices was
paramount.
At the same time, some were unsure about the motivation behind transition work, particularly at this
early stage where we have questions rather than answers. This also relates to the implications of
community ownership of the business, as the community is literally invested, and this means that these
public conversations about the future of the utility are necessary long before decisions have been made.
A number of customers indicated that they see Kitchener Utilities as a trusted provider of information,
and would look to us for guidance about their energy decisions, especially since trusted information is
hard to find.
Guiding principles: Phase 1 discussion paper p. 19
Part 3: Guiding principles for future phases
Principles can be described, as they were in the TransformWR strategy, a set of considerations for
This section outlines four guiding principles, each of which are accompanied by a stated intention and
three more specific objectives. We want the principles we have identified in this section to help us
connect what we care about to our actions. They will form the foundation of the decisions made in the
second phase of work for this project and will serve as a framework to develop evaluation criteria in
Phase 2 to apply to different business options.
Guiding Principle 1: Make responsible, accountable, and financially rewarding business
decisions
hǒƩ źƓƷĻƓƷźƚƓʹ ƩĻƭƦƚƓƭźĬƌǤ ƦƚƭźƷźƚƓ ƚǒƩ ĭƚƒƒǒƓźƷǤΏƚǞƓĻķ ĬǒƭźƓĻƭƭ ŅƚƩ ƭǒĭĭĻƭƭ ğƭ ƷŷźƓŭƭ
We know that the energy services we provide for the community and the financial role we play at the
City are both key contributions make responsible, accountable,
and financially rewarding business decisions throughout the energy transition.
Objective 1.1: Follow sound business practices
We know that the success of Kitchener Utilities and the City as an energy service provider will depend
on following sound business practices.
For potential new business lines, following sound business practices means thoroughly evaluating and
examining any new business options with a critical lens, and with the support of the right business
expertise.
For our existing business, following sound business practices means modelling out how changes to our
customer base could affect our business model. This is also a critical part of planning responsibly for our
current infrastructure and assets, and the work needed to maintain and replace them over the long
term, since utility rates are often closely connected to the cost of infrastructure to provide that utility.
It also means prioritizing safety. Of course, Kitchener Utilities has always worked to keep the community
safe while meeting its energy needs. We commit to continuing to prioritize and strengthen safety
throughout changes to our business, and make sure that we continue to align with safety best practices.
Similarly, as an energy business, it is critical that our work meets our regulatory compliance obligations.
Since regulatory environments can change over time, we will also consider regulatory risks that could
arise as things change in the future.
Objective 1.2: Take action quickly to manage business risk and maximize opportunity
Guiding principles: Phase 1 discussion paper p. 20
We know that our energy business in its current form faces risks from the clean energy transition. This,
in turn, creates risks for City finances more broadly, and for the community that supports the City
financially.
impacts of climate change on our community is one reason, it is especially critical to protect and nurture
our business. While the industry changes affecting our customer base will have long-term effects, the
things we might need to do in preparation can also have long time horizons. Proceeding quickly helps us
to preserve our business op
We will take action quickly, by advancing the strategy development project carefully but with urgency,
while continuing to advance related work such as that outlined above.
We have an obligation to manage business risk through this work. As part of that, we need to consider
both likely and unlikely changes and events that could affect our work and our energy systems.
Objective 1.3: Assess value holistically to find our best contribution
, and filling in the
gaps that we are best suited to fill. As part of this, we will consider what contributions the City and
Kitchener Utilities are in the best posi
be more effectively played by other capacity holders in the community, as part of our commitment to
partnerships. We also need to focus on solutions that can practically be implemented by the City.
While risks and costs will be critical considerations as we decide on our path forward, we have a unique
opportunity to also focus on the broader benefits of various solutions, and the full value proposition
that those solutions could bring to the community and our customers, now and well into the future. We
will evaluate the scale of the risks and costs of potential approaches in light of the scale of the potential
value that they could bring.
Guiding Principle 2: Serve customers as an affordable and reliable partner in the energy
transition
hǒƩ źƓƷĻƓƷźƚƓʹ ğƓķ ĭƚƒƒǒƓźƷǤ ƒĻƒĬĻƩƭ ğƭ ƷŷĻźƩ ƷƩǒƭƷĻķ ƦğƩƷƓĻƩ źƓ
We heard throughout our community engagement that many customers have a lot of trust in Kitchener
Utilities. We are proud of the strong relationship we have built with the community, and we want to put
this trust at the centre of our decision-making as we look to the future.
Objective 2.1: Pursue affordable, reliable, and predictable energy services for our customers
We know that the affordability of energy is critical to people and businesses across Kitchener. We want
to find solutions that can help to ensure people across our community can afford the energy they need
to support a high quality of life. As an important part of this, we will consider the different energy
affordability needs of people with very different circumstances across our community, including renters,
newcomers, those living with low incomes, and those who speak a variety of languages.
Guiding principles: Phase 1 discussion paper p. 21
We know that reliable access to energy and the day-to-day life that it supports is critical in our homes,
businesses, and industrial facilities. We want to find energy solutions that make our energy services and
broader energy systems even more reliable. This is particularly important in light of the potential for
global changes in fuel markets, and the more frequent exposure to extreme weather events like
extreme heat as a result of climate change.
As things change over the next few decades, we know that customers and community members want to
know what to expect. Predictability has value. As we pursue solutions and make related long-term
changes to our business and services, we will work to make sure that people can see what is coming, so
that they can plan ahead with confidence.
Objective 2.2: Empower customers with choice, and with trustworthy, accessible information
We know how important customer choice is. We will work to empower customers throughout the
energy transition, so that they have what they need to make meaningful choices on the things that
affect them most. This means making sure that people always have options for how best to meet their
own energy needs, so that they can customize for their own circumstances.
At the same time, we know that our community members will be key actors and decision-makers in
achieving local climate goals, and that many of our customers are looking for information, support, and
guidance as they consider changes to their own energy use. We will work to support customers as key
implementers of their own clean energy transitions, as part of meeting customer needs as well as
We know that, now more than ever, it can be hard to know what information to trust about the big
changes that are happening in our society, including in our energy systems. We will position Kitchener
Utilities to continue to provide trustworthy information and advice to customers and community
members. This includes sharing stories and reliable data in a way that is accessible to people with
diverse needs across the community, including through relatable case studies and through materials
written in multiple languages.
Objective 2.3: Bring people along as things change
We know that people are at different stages of their own energy transition journeys. Some people are
eager for these changes. Others have concerns. And others are just starting to hear about this, or are
not yet sure what to think. This is true for both our customers and our staff.
We will work to bring people along with the changes that are planned. This means working to meet
may be happening. It also means making sure that our staff have what they need to fully contribute to
future business directions, such as relevant training and certifications.
Guiding Principle 3: Contribute to a thriving community
hǒƩ źƓƷĻƓƷźƚƓʹ
We know the critical role that energy, and the energy provided by Kitchener Utilities, plays in the lives of
community members and customers across Kitchener. We want to help make sure that changes in our
Guiding principles: Phase 1 discussion paper p. 22
happening as part of the clean energy transition, leave us with
an even better energy system and an even stronger community than we have today.
-owned energy business means that we need to
satisfy two related goals. First, as an energy business and as outlined in Guiding Principle 1, we need to
prepare for the energy changes that are happening in the energy industry, to make sure our business
can continue to thrive in the future. Second, as a municipal government service, we need to consider
and advance community goals and wellbeing as part of the energy transition.
Objective 3.1: Collaborate with partners
We know that energy is part of a larger system, and that the changes happening as part of the energy
transition involve capacity holders and stakeholders from across the community and beyond. To help
the community to thrive in a net-zero carbon future, collaboration with governments, utilities, industry,
and other organizations will be critical. We will coordinate with and account for a range of partners, to
help make sure that our energy system and the services we provide that support it meet the
Objective 3.2: Do our part to address climate change
We know that one-third of GHG emissions released within Kitchener are the result of natural gas use,
and that much of this gas is supplied by Kitchener Utilities. Based on climate science and the guidance of
organizations like the Intergovernmental Panel on Climate Change (IPCC), we acknowledge the
imperative to achieve net-zero emissions globally by mid-century to avoid the worst impacts of climate
change, and that this means that the role of natural gas will change, in Kitchener and across the world.
As an energy provider, we are committed to doing our part to help the community in the transition to
clean energy, and to making plans that align with the broad range of ways we could get there.
Objective 3.3: Use clear metrics and align them with community-scale goals
we will know if we are achieving our goals. This is even more important for Kitchener Utilities as a
community-owned business, where our community is both our customers and our decisionmakers,
through the Council that represents them. We will develop and report on clear and transparent metrics
throughout this work. These metrics will consider a range of financial, energy, and environmental
outcomes, such as tonnes of GHGs reduced per dollar spent, or amount of energy used per unit of work.
While energy and business outcomes will be critical for this strategy, we know that we also need to
consider a broad range of outcomes for the community in our work. Our unique positioning as a
community-owned business means that the wellbeing of our community is at the centre of our work,
and this extends far beyond our energy-related services.
We know that the energy transition is a critical opportunity for multi-solving, where work to address one
problem can be designed to address other problems. As we heard from our engagement, we know that
many in our community are struggling, and that we share many challenges with communities across
Canada and the world around affordability, equity and fairness, prosperity and economic development,
resilience in the face of shocks (such as supply chain problems or extreme weather events), and
Guiding principles: Phase 1 discussion paper p. 23
environmental impacts. These issues are integrally connected with each other and the ways our society
uses energy, and so all of these must be addressed together. Communities that thrive in a low-carbon
future will be those that use the energy transition as an opportunity to build a stronger community and
ensure that no one is left behind.
We are committed to advancing approaches that help our community to address a broad range of
issues, including affordability, equity and fairness, prosperity and economic development, resilience,
and the environment. We are also committed to making sure our metrics assess this broad range of
goals.
Guiding Principle 4: Plan for multiple energy futures with flexibility and focus
hǒƩ źƓƷĻƓƷźƚƓʹ ƦƩƚǝźķĻ ǝğƌǒĻ źƓ ğƌƌ ĻƓĻƩŭǤ
For success in the energy transition, we know we will need to be flexible while also being focused.
and used in different sectors of the economy, or exactly when they will be used. At the same time, focus
is needed, because we know that there are common elements across all the different scenarios where
we reach net-zero emissions. We need to focus on elements that will play a role in different potential
futures.
Objective 4.1: Rely on safe bet technologies and prepare for long shot technologies
The Canadian Climate Institute has modelled a broad range of scenarios, which show diverse ways we
could achieve net-zero emissions at different scales. In their 2021 report, they categorize climate
.
are emission-reducing technologies and solutions that are already commercially available
and face no major constraints to widespread implementation. These technologies are expected to do a
lot of the work to achieve net-zero emissions, and play an especially important role in near-term
emissions reductions. We will rely on safe bet technologies in developing our approach, as a critical part
of ensuring that our approach is practical and achievable, will have value to the community, and will
limit risk to the City.
high-risk technologies and solutions with potentially high rewards that are still in early
stages of development, and there are many of them in Canada and around the world. Some of these
technologies will need to work in the long-term to enable net-zero emissions, but it is not yet clear
which of these technologies will prove to be effective, affordable, and scalable down the road. Some of
these technologies, for example those that could allow for high levels of hydrogen to be provided for
home heating through the gas distribution system, could have significant impacts on our operations.
This means that we must consider a broad range of potential long shot technologies, and take sensible
steps to prepare to seize new opportunities and respond to technology changes and related changes in
the industry that could affect our work as an energy utility in the coming decades.
Guiding principles: Phase 1 discussion paper p. 24
Objective 4.2: Prepare for a broad range of net-zero carbon futures
We know that there are different ways that our community, Ontario, Canada, and the world can reach
net-how things will develop. Given this uncertainty, we need
to prepare for a broad range of possible net-zero futures, as part of efforts to future-proof the utility.
We will consider the effects of a broad range of potential net-zero pathways.
While there are significant energy changes underway in our society, transformational changes happen as
a series of incremental steps. This means keeping our eye on the ball for where we want to be well into
the future, while building near-term steps to get there that are flexible and can be adjusted as
circumstances evolve. Part of this dual positioning means considering both the near-term and the long-
term impacts of our work. For example, part of the preparing for the long-term and the short-term
includes considering issues of intergenerational fairness. We want our services to be affordable and to
. This means we need to make sure that
we are not putting heavy costs on future customers to benefit current customers, or vice versa.
Objective 4.3: Iterate, experiment, and learn
We know that, to prepare our business to thrive in multiple possible futures, we need to be prepared to
try new things, and to do some things differently than we did before. This comes with uncertainty, and
We
will build opportunities to prudently experiment into the work planned through this strategy. As we
have throughout the first phase of the project, we will see doing, learning, and adjusting what we do in
response as a key iterative process for enabling success. This flexibility will help us to adapt to changing
policy and regulatory environments as they continue to evolve.
Guiding principles: Phase 1 discussion paper p. 25
Part 4: Next steps
In Phase 1 of the Kitchener Utilities Clean Energy Transition Strategy, we have sought to invite
customers, community members, stakeholders, Kitchener committees, staff, and Council into a
problem-solving conversation on the changes that we are facing and the opportunities they might bring.
The discussions we have had in this first phase have formed the basis of the guiding principles to inform
future phases of the work.
4.1: Expected components of Phase 2
Phase 2 of the project, scheduled to commence at the start of 2024, is focused on determining the way
forward together through detailed, collaborative option assessment and recommendation of an
integrated approach.
We need to do two related aspects of work to recommend an approach. The first is to look at new
potential business offerings or program expansions, in light of the opportunities for energy utilities that
arise from these changes in our energy systems. The second is to assess our existing business, such as
our assets, rates, and revenues, under a broad range of potential future conditions and scenarios. This
work involves stress testing our business model against various situations that could arise, and
considering opportunities to adjust what we do to prepare for those different possibilities.
To be able to assess options for both potential businesses and our current business, we will need to
develop detailed evaluation criteria that address all the guiding principles and objectives outlined in this
paper.
Expected outputs of Phase 2 include: a public report assessing the full range of options and identifying a
recommended approach concurrently; a summary of Phase 2 engagement results, and; a report to
Council recommending an integrated approach and next steps.
4
This discussion paper is being shared back with customers, community members, stakeholders,
Kitchener committees, staff, and Council as part of continuing to build relationships and work
collaboratively across groups to shape the future of our community utility.
While detailed timelines are under development for Phase 2 of the project, informal conversations are
continuing with all groups, and a stakeholder brainstorming workshop is planned for early 2024.
We expect to bring the results of Phase 2 work and further engagement back to Council, staff, and the
public in late 2024/early 2025.
Guiding principles: Phase 1 discussion paper p. 26