Dive Brief:
- The city of Danville, Virginia, is considering how to best serve its electric customers, but for now an advisory committee is recommending against selling the local municipal utility.
- The study group will meet again next week to finalize recommendations for the Danville City Council and Utility Commission.
- The committee began meeting about six months ago after large industrial customers complained the city's rates were not competitive with investor-owned utilities.
Dive Insight:
Consensus out of the Danville Electric Services Assessment Steering Committee was that the city should not sell its utility, but instead should consider offering large customers a choice of providers and hiring a consultant to find ways to reduce congestion charges on the system.
The committee, made up of three members each from the City Council and Danville Utility Commission, will meet again on April 20 when it expects to formally adopt recommendations. The city delivers power to approximately 42,000 customers.
Though no recommendations have been finalized, the group is also considering proposals that could include: reducing annual coincidental peak demand; installing local generation facilities; and studying how the state's Electric Fund contribution to the General Fund is determined.
The group also considered making the Utility Commission an independent governing body.
Meetings began in October following complaints from large industrial customers that the city's rates last summer were higher than investor owned utilities in the state and the national average.
"While the city’s electric rate for residential customers is competitive with other power utilities, City Council members last September expressed concerns about future costs associated with purchasing power and transmitting that power to Danville," the steering committee said in a statement. "Those costs could affect current rates."
The Danville Register & Bee notes that Utility Commission Chairman Philip Smith, who also chairs the steering committee, wants greater clarity on how the body operates regardless of whether it becomes an independent body. “We need a clearer structure,” the Register & Bee quoted Smith.
