HomeMy WebLinkAboutPublic Works - 2001-03-06PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES
MARCH 6, 2001
CITY OF KITCHENER
The Public Works and Transportation Committee reconvened their meeting of Monday, March 5, 2001
this date, commencing at 5:15 p.m., Chaired by Councillor John Smola, with the following members
present: Mayor C. Zehr and Councillors B. Vrbanovic, G. Lorentz and M. Galloway.
Officials Present:
Ms. P. Houston, L. Baillargeon, J. Billett and Messrs. S. Gyorffy, D. Quinn and J.
Shivas.
1. PW-01-027 - NATURAL GAS RATES - COMMODITY AND FUEL COMPONENT INCREASE
The Committee was in receipt of Public Works report PW-01-027, dated March 6, 2001
recommending that the supply price for natural gas commodity be increased to 27.16 cents per
cubic metre effective April 1,2001.
Mr. D. Quinn provided a brief overview of the staff report, emphasizing that the requested increase
relates only to the supply rate for the natural gas commodity. He noted that throughout North
America volatility continues to affect market prices and as prices remain high it is necessary to
increase the supply rate to ensure that the City's program operates on a non-profit/non-deficit
basis. Mr. Quinn further pointed out that while prices have continued to rise, a commitment made
last October to hold the City's rate constant until April 1, 2001 has resulted in cost savings to
customers. He stated that a similar commitment cannot be made this time as the market continues
to be volatile; however, it is hoped that the market will stabilize and at some time in future staff will
be able to come forward with a rate decrease.
In response to questioning from Mayor C. Zehr, Mr. Quinn advised that the commitment to hold
rates was accomplished through good economic strategy and by buying gas at an opportune time.
Staff had contracted for supply ahead of time and were able to hold prices without incurring a
deficit. Mr. Quinn also advised that if a price increase is not approved at this time and supply is
purchased at current prices, it will result in a deficit of approximately $18 million dollars by the end
of March 2002. He further noted that consumers of other gas suppliers have already experienced
higher prices since January of this year and while the City's rate will increase, the program still
maintains a rate of approximately 10% less than others.
In response to Councillor B. Vrbanovic, Mr. Quinn advised that other suppliers operate a cost
based service using different regulatory measures and raise or lower their prices accordingly. The
City's program through good consulting advice, staff management and wise purchasing has had
better success in regulating prices. He noted that having held prices constant since last October
has saved the average system gas customer approximately $150 over the winter months.
In response to Councillor G. Lorentz, Mr. Quinn advised that since it began in 1998, the program
has realised approximately $7 million dollars in savings. He further pointed out that while some
private operators may have a slightly lower rate, staff believe the City's program to be the best
option for consumers.
Mayor C. Zehr advised that he was prepared to move approval of the staff recommendation.
Mayor Zehr and Councillor Vrbanovic then made remarks reflecting the following: the rate
increase is relative only to the supply component and is strictly cost recovery; despite an increase,
prudent management practices have resulted in savings of approximately $7 million dollars since
the program began and more recently, through commitment to hold prices constant during the
winter season, the average customer realized a savings of $150 from the period of October 2000
to end of March 2001; and, the program continues to provide rates at the Iow end of the scale
compared to others.
Councillor G. Lorentz expressed the opinion there is need to educate and provide information to
the public as to why it is important for the City to own its own Utility. Mr. Quinn agreed and
advised that staff are currently working on related initiatives, including placing a half page ad in
The Record. He stated that staff are committed to continuing to provide education and information
to the public.
1. PW-01-027 - NATURAL GAS RATES - COMMODITY AND FUEL COMPONENT INCREASE
PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES
MARCH 6, 2001 - 21 -
CITY OF KITCHENER
(CONT'D)
Mayor Zehr advised that the recommendation approved this date will be forwarded to Council for
consideration at its meeting to be held on Monday, March 19, 2001. In this regard, Councillor
Vrbanovic pointed out that the March 19th Council meeting will be televised and in the interest of
communicating with the public, suggested that staff provide a brief presentation. Mr. Quinn agreed
to do so.
On motion by Mayor C. Zehr -
it was resolved:
"That effective April 1, 2001 the supply price for the natural gas commodity be increased to
27.16 cents per cubic metre from 16.913 cents per cubic metre for system gas customers of
the City of Kitchener."
Councillor J. Smola again reminded those in attendance that this recommendation will be
forwarded to City Council for consideration at its meeting to be held on Monday, March 19, 2001
and extended an invitation to anyone interested to attend the meeting.
2. ADJOURNMENT
On motion, the meeting adjourned at 5:35 p.m.
Janet Billett
Committee Administrator