The annual cost of water services in Guelph is set to rise by $700,000, which is nearly three times more than thought when it was announced earlier this year that city staff will be taking over billing and related services currently done by Alectra.
Alectra, the local electricity distribution company, is set to stop providing water meter reading, billing and collection services on behalf of the municipality at the end of 2025, prompting a decision to handle those things in-house.
The additional $700,000 is due to the end of cost-sharing agreements for postage and meter reading, James Krauter, the city’s deputy treasurer told council during its committee of the whole meeting on Tuesday.
“We were not paying full market rates with Alectra,” he said, noting staff is working to lessen that increase through the implementation of user fees, electronic billing, streamlining existing data and platforms and seeking efficiencies in collections.
Councillors Dan Gibson and Dominique O’Rourke expressed concern about additional user fees.
“This isn’t the public’s doing at all. This is Alectra deciding to get out of this line of business,” said O’Rourke.
In response, Krauter noted a new user fee wouldn’t be applied to all customers, but rather to new ones “just as any other utility would charge.”
When the billing switch was announced in January of 2023, the additional annual cost was pegged at $250,000, though it was acknowledged many of the details still needed to be worked out.
The overall cost is now expected to be $3.1 million, up from the current $2.4 million.
One-time transition costs of $3.5 million are also anticipated.
The city did look at the option of outsourcing the work to a third party, but that would have been even more expensive, council heard.
