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POLICY FIN-ACQ-2052
Gas Supply Rates Category
FIN - Finance
Sub-category
ACQ - Acquisitions
& Dispositions
Approval Type
COUNCIL
Department/Division
Infrastructure
Services/Gas and
Water Utilities
Author and Position
Manager, Gas Supply and Engineering
Date Approved
September 30, 2024
Last
Reviewed/Amended
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enter a date.
Next Review Date
September 30, 2029
Related Policies or Procedures
• FIN-ACQ-560
• FIN-RES-770
1. Policy Purpose
The purpose of this policy is to define the process to review and approve the change to
natural gas supply rates for Kitchener Utilities System Gas customers.
2. Definitions
• Council: City of Kitchener Council.
• Gas Supply Program: The program responsible for the purchase of the gas
commodity and transportation of natural gas to Kitchener Utilities System Gas
customers. It is a pass-through cost program.
• Gas Commodity Purchase: the cost of purchasing the natural gas volumes.
• Gas Transportation: the cost to move the gas from production location to storage
facilities in Ontario.
• Gas Supply Rate: Kitchener Utilities volumetric rate to recover the costs of the Gas
Supply Program in Canadian dollars per cubic meter.
• Kitchener Utilities System Gas Customers: Customers who purchase their gas
from Kitchener Utilities at the defined gas supply rate.
• KU: Kitchener Utilities.
• OEB: Ontario Energy Board.
• Pass-Through program: a non-profit program where the costs are passed directly to
customers without markups or subsidies. For the gas supply program, only costs
related to the purchase and transportation of gas are included in the program and
passed through to customers.
• Staff: Kitchener Utilities Staff.
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• Stabilization Reserve: The gas supply stabilization reserve is a financial reserve
where budget variances are accumulated or withdrawn. Supply stabilization reserve
is governed by City of Kitchener financial policy FIN-RES-770.
3. Policy Scope
This policy applies to the Natural Gas Supply Program and the setting of Natural Gas Supply
Rate for Kitchener Utilities System Gas customers.
Application
☐ Employees (Indicate below which categories apply: All employees, Permanent full-time, Temporary full-time, Continuous part-
time, Casual, Probationary, Student, Management, Non-union)
• Click or tap here to enter text.
☐ Unions (Indicate below which categories apply: All Unions, CUPE 68 Civic, CUPE 68 Mechanics, CUPE 791, IATSE, IBEW, KPFFA)
• Click or tap here to enter text.
☒ Council
☐ Specified Positions: Click or tap here to enter text.
☐ Other: Local Boards and Advisory Committees
4. Policy Content
4.1 Kitchener Utilities (KU) staff shall follow the Council endorsed Gas Purchase Policy #
FIN-ACQ-560 for the procurement of natural gas.
4.2 Staff would review the forward market prices provided by the consultant and the impact
on projected stabilization reserve balance every quarter.
4.3 Staff shall recommend supply rate adjustments based on the projected stabilization
reserve balance by the end of the fiscal year. The supply rate adjustment shall ensure
that the projected stabilization reserve balance remains within the defined thresholds.
4.4 Rates would be adjusted on 1st January, 1st April, 1st July, and 1st October.
4.5 Proposed rates shall be approved by Council through delegated authority.
4.6 City of Kitchener Chief Financial Officer (CFO) or designates will approve the rates on
behalf of the Council.
4.7 Staff shall notify the Council by e-mail at least two weeks prior to effective rate change
date.
4.8 An information report will be brought forward annually during the budget process
summarizing supply rates from the previous year and include projections for potential
rate changes for the upcoming year.
4.9 Staff shall advise KU customers through regular communication options such as KU
website, public notice, and bill message.
4.10 Staff shall inform OEB with proposed rate.
5. Results of Review
☐ No Edits Required
☐ Housekeeping Edits
☐ Substantial Edits
☐ Repeal/Replace
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6. Policy History
Administrative and Housekeeping Changes
Date Nature of Change
yyyy-mm-dd Departmental re-organization/Titling changes/ Standing Committee
restructuring.
Substantial Changes
Date Council/CLT Directive
2024-09-30 As Per Council/CLT Directive - Report INS-2024-383