Municipality grapples with natural gas agreement
By Liz Dadson


Kincardine council

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Kincardine council struggled with the wording in a Memorandum of Agreement with Huron-Kinloss and Arran-Elderslie, pertaining to the proposed natural gas project, before finally agreeing to sign it.

The memorandum came before council Wednesday night (May 7) to be given three readings and approved. 

However, councillor Candy Hewitt said she was concerned about a clause that states the agreement is for a three-year term and asked for clarity on that wording.

Chief administrative officer Murray Clarke said the timeline of the agreement does not extend beyond the timeline of the Phase 1 project document and there is ample opportunity for an off-ramp for council if it decides not to proceed with the project.

Hewitt argued that there is nothing in the agreement stating, for example, that if mayor Larry Kraemer cannot continue as the municipality's representative, how another representative would be appointed to join the other two mayors on this project.

"Council would likely appoint that person," said Kraemer.

Councillor Maureen Couture suggested deferring the issue to May 14 and bringing a proper bylaw forward. In the meantime, council should discuss this in committee-of-the-whole at that night's meeting.

"This is the first time this issue has been discussed in public and I also have a number of concerns with that clause," she said.

In committee-of-the-whole, Couture said the clause is quite ambiguous.

"The wording should be clear," she said. "This is too big of a project to have one person representing the Municipality of Kincardine, on the board. The principle of trust is in jeopardy."

She said an open house should be held as soon as possible, regarding the natural gas project, so the public's questions can be answered.

"If natural gas is so profitable, why is Union Gas not doing it? We need to see the numbers before we are forced to sign on the dotted line. We also have to address the funds spent from Bruce Telecom, and how we are going to finance this project."

Kraemer said there was a public meeting held in the fall to address these questions.

"But not in the question-and-answer format that I'm suggesting," said Couture.

Kraemer said Kincardine, along with its partner municipalities, has already approved Phase 1 of the project which involved retaining Mark Rodger, a senior partner at the law firm of Borden Ladner Gervais, and a specialist in the energy and utility sectors.

Rodger has been authorized to undertake a preliminary analysis of key elements that must be addressed prior to determining if the natural gas initiative should be pursued.

Those elements include:

  • Developing a document to lay out the terms of the municipal partnership
  • The legal authority available to the municipalities
  • The regulatory and approvals requirements
  • Potential shareholder and governance issues
  • Determining a preferred delivery option and whether a preliminary business case can be determined for that option
  • The development and execution of a public and stakeholder engagement and consultation process

Key considerations in this regard are predicted loads (i.e. potential residential, commercial and industrial customers), and the anticipated cost for the service to householders and businesses.

Each of the key elements in this preliminary investigation would provide an opportunity to abandon the initiative or for a partner or partners to withdraw if deemed prudent, and no decisions to proceed would be taken until all financial implications are understood and only after a full and complete community and stakeholder consultation process.

"By the end of June, the project will be a Go or No-Go," said Kraemer. "If it's a Go, then we will initiate a detailed public consultation."

He asked council if it felt that Kincardine was in any way treated differently in this agreement, compared to the other municipalities?

"I don't believe this is the case, since the other two have already signed the agreement," he said.

"I'm just bringing forward the public's concerns," said Couture. "I understand the process, but all discussion has been done in-camera."

"But we can't tell them the answers yet," said Kraemer.


Councillor Jacqueline Faubert agreed that it's difficult for the public to understand the process when they have no answers to their questions.

"The project is still at such a preliminary stage," she said. "This agreement is a binding handshake to get us to June 30."

"I realize there are questions we can't answer," said Couture. "But the people want to know how much the project will cost and how it will be financed."

"I have no concern about the intent of this agreement," said Hewitt, "but that clause about the change in representation needs to be more specific."

Clarke clarified that council is committing to the end of Phase 1 of the project, not a three-year agreement.

"We basically take this to the end of June and if it's a No-Go, then the project is dead," said Kraemer.

"If Phase 1 is just until the end of June, then why is the agreement for three years?" asked Faubert. "Perhaps we should indicate that our commitment is just to the end of Phase 1?"

"I would agree with that," said Hewitt.

Councillor Kenneth Craig put forward a motion to make that change which would then have to be accepted by the other two municipalities.

"This is not a feel-good motion," said Couture. "We need to do something to satisfy the public's concerns."

"I know you've been opposed to this project all along," said Kraemer.

"I am not opposed," argued Couture, "and I take great offence to that."

"I apologize," said Kraemer.

Committee-of-the-whole agreed with the amended Memorandum of Agreement, and it was later approved in council session.

Earlier in the meeting, in a notice of motion, Kraemer said Kincardine should strongly urge the Ontario government to provide direct funding assistance to support expansion of natural gas service to this region and other unserviced regions of the province; promote a new more flexible regulatory framework for natural gas infrastructure capital financing; and establish a specific timeline to accomplish this important economy-strengthening initiative.

That motion will be discussed at the May 14 council meeting.

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Monday, May 12, 2014