On Tuesday, Sep. 19, 2023, Kingston City Council received an information report from Utilities Kingston regarding the costs of disconnecting from natural gas services. The report was first ordered in May, when councillors asked staff to review the fees residents face when they choose to disconnect from the service.
While the report indicated that instances of residents permanently disconnecting their natural gas are rare, if a homeowner does elect to withdraw their service, they have two options:
- Leave the meter on the building, providing a visual clue of natural gas being delivered to the building and a source to locate the underground pipe should digging or excavation be required. This option requires a minimum monthly fee to the customer to account for the meter remaining in service and Utilities Kingston’s ongoing responsibility for, and amortization of, that meter.
- Remove the gas connection at the main in the street (cut and cap), purge the gas service line to the house, and remove the gas meter at the expense of the owner. The pipe remains buried on the property, but empty of any combustible fuel.
According to City staff, the minimum monthly fee for customers who opt to leave the meter in place is around $20, while the cost to permanently remove the service ranges anywhere from $2,350 to $18,810, depending on the material and type of the service, as well as the location of the “tap” where the service lateral connects to the gas main.
During Tuesday’s meeting, councillors had the opportunity to ask staff additional questions about natural gas disconnection and the fees related to ending the service. When asked how many customers are currently attempting to end their natural gas service, James Miller, Chief Operating Officer of Utilities Kingston, confirmed the number is rather small.
“At this point, we have not seen a large number of disconnects of natural gas. Right now, we have two or three that are pending. However, I believe those costumers have not yet made a decision [as to] whether they will have their service removed completely… or whether or not they’d like to leave the meter hanging,” he said.
“The more frequent thing we see from our customers are individuals who are doing renovation work, and so they will want the gas shut down. They will leave the meter hanging, pay the monthly service charge, complete all of the interior renovation work that they want to do, and then reinstate gas… We don’t have a lot of customers who have completely disconnected, that have left the meter hanging.”
As homeowners face costs both to maintain the system infrastructure or permanently disconnect from the service, David Fell, President and CEO of Utilities Kingston, confirmed the charges are meant to recoup the costs of service installation, which is normally paid off through ongoing system billing.
“When a new home is built or a new service is established, there is no additional upfront cost to the homeowner, that is factored into their monthly recurring costs over time,” he said, as he confirmed the monthly bills also account for system maintenance and service checks.
With the staff report simply providing information to councillors, it will be up to City Council to eventually provide further direction to staff. Kingscourt-Rideau District Councillor Brandon Tozzo asked what sort of direction staff would be looking for.
“There are still constituents, albeit three, who are paying a $20 a month fee for nothing,” he commented. “There has got to be a solution to this, right?”
Fell responded, “We just want to point out that these are real costs, it’s not a fee for nothing. When the meter is installed, the meter could be worth hundreds of dollars. We don’t charge you for that. The costs of that are amortized into the monthly payments, so there is a cost to that. What we’re trying to point out in the report is that there is a real cost, someone has to pay it, and the utilities system [is] a user-pay system.”
He noted that staff do not typically suggest what sorts of direction councillors should provide them with.
While the report did not provide any specific recommendations, staff did note some important questions councillors will have to consider should members eventually opt to offer natural gas disconnection as part of wider environmental sustainability efforts. If Council eventually goes in that direction, members will need to decide whether such expenses will be addressed through property taxes or the rate base.
Should Council opt to cover the costs of natural gas disconnection through the rate base, the report indicated such a move could have a negative effect on the Municipal Capital Reserve: “The use of rate base funding would negatively impact the yearly gas utility’s contribution to the Municipal Capital Reserve Funds by reducing those contributions by costs incurred to abandon a gas service.”
A “hybrid option” could also be considered, which could see restoration costs covered by the municipal tax base while individual disconnection expenses are covered by the customer or rate base.
While Tuesday’s meeting provided an opportunity for councillors to question staff on the contents of the report, it was not intended to be a debate on whether the City should continue charging for natural gas disconnection, Mayor Bryan Paterson warned.
“We could easily slip into a really extensive debate on what we should or should not do here, but that’s outside of the bounds,” he said. “If Council wants to do something then, obviously, we could have that debate at that time.”
With Council having received the information requested back in May, it remains to be seen what action, if any, members will take with respect to the costs of natural gas disconnection. The contents of the report could inform a future new motion or other directions from Council.
Members of the public can view the full agenda from the meeting on the City of Kingston’s City Council meetings webpage, and the meeting can be viewed in full on the Kingston City Council YouTube channel.