Gas customers in Sundre will receive a negligible reimbursement on their December natural gas bill.
Council discussed during the Nov. 19 meeting whether to redistribute a gas refund to customers or to transfer about $14,000 into a surplus account.
Linda Nelson, chief administrative officer, told elected officials the municipality was receiving the modest refund from Gas Alberta Inc., which is the Town of Sundre’s supplier. As a result of gas management and hedging activities during the fiscal year ending on June 30, 2018, the company is refunding $2 million to its shareholders, which includes Sundre, she said.
“As a shareholder, the town customers have benefited from lower gas rates than if the town purchased gas from investor-owned utility companies,” she said.
“In addition to this ongoing savings, the town has received a gas cost refund of $14,609.09 based on Town of Sundre gas purchases from Gas Alberta Inc. between July 1, 2017 and June 30, 2018.”
In 2017, the municipality had also received a refund that was passed on to the town’s utility customers through a per gigajoule rebate based on the December 2017 utility bills, she added.
Outlining council’s potential options, Nelson said administration could be directed to record the refund as gas revenue received in 2018. The amount would be included as part of the gas department’s budget, with any surplus arising from the additional revenues being administered according to the restricted surplus account policy.
“Such an approach would provide the greatest latitude in determining the best use of the refund for 2018 expenses. However, the town’s gas customers would receive no gas refund on their bill this year.”
Alternatively, council could have the funds transferred to the gas department’s Lifecycling Restricted Surplus Account to be used for future gas projects, she said.
“The additional funds would continue to be used for gas projects, reducing the need to increase gas rates to fund future gas projects,” she said, adding gas customers would in this case also receive no refund.
The third option, she said, was to credit utility customer accounts with a one-time per gigajoule rebate on the December 2018 bills, which would have an “insignificant impact on the gas budget.”
On average, residential customers would see approximately $10 rebated on their gas bills, which depends largely on their level of consumption, she said. Administration recommended passing on the refund to the town’s utility customers through a one-time per gigajoule credit associated with the number of gigajoules used during November 2018.
Coun. Cheri Funke said since the rebate represents a rather insignificant refund for customers, the funds should instead go to the restricted surplus account.
Jim Hall, Sundre’s manager of operations, said forgoing the refund would not represent a substantial impact on the department’s budget.
“Gas costs are pretty low as is, even with the carbon tax,” he said.
“But money going into special projects for pipeline replacement would be a pretty suitable motion.”
Mayor Terry Leslie, who joined the meeting by phone, favoured supporting a motion similar to last year for consistency’s sake.
Coun. Rob Wolfe motioned the recommended action for council to approve a per gigajoule credit to be applied on utility bills issued in December 2018 for natural gas consumption used in November 2018, with the per gigajoule rebate rate being dependent upon the total number of gigajoules sold.
Coun. Paul Isaac, who chaired the meeting as deputy mayor, spoke in favour of the motion.
“It is not a very large amount, and I do think it’s a good gesture to give that back to the residents,” he said.
“I don’t think it’ll affect us as to our procedures going forward.”
The motion carried with Funke and Coun. Todd Dalke opposed.
