Kingston Council discusses report on natural gas disconnection fees
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.
OR
- 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.
– Typos fixed –
Interesting. I wonder if I am one of the 2-3 people, or if Utilities Kingston aren’t counting inquiries like mine. We disconnected our gas from the house back in June. It’s capped at the meter. We are still paying $27/month for the privilege. We bought our home ~20 years ago, and the gas line wasn’t new when we did. Surely the amortized cost of the meter has been recovered already.
As a homeowner, since I am definitely not using gas anymore, I would like to stop paying this fee. I’d rather not pay the ~$3000 fee that Utilities Kingston estimated that it would “cost” to save the $27/month.
I was told when I asked in June that gas customers from service providers other than Utilities Kingston can simply cap at the meter, leave the line buried in case there is a reason to reverse this in the future, and aren’t charged monthly for the idle line. That seems reasonable to me.
The City has done an outstanding job of leading the way on climate action in many areas, from BHK to EV chargers at City facilities. Either covering the removal fee or at least forcing Utilities Kingston to change their current policy to be more in line with other providers seems like the logical next step to me.
In the meantime, we will wait to see if the situation changes, and will continue to pay our $27/month for what is now a vestige for us.
This is likely a fee grab built in. Otherwise, why would isn’t it there a universal fee standard?
And the utility companies can play hard ball one customer at a time when it is a mere trickle at this stage.
What if thousands of customers were banging at their door?
This needs to be solved now before this trend involves mass disconnections of gas service.
Why can’t they cap the line at the house on the line side of the meter, and then remove the meter? They get their meter back and the line has already been paid for most likely by the monthly fees over the years of prior use.