During Thursday evening’s meeting of Danville City Council, a motion to sell the city’s Pinnacles Hydroelectric Complex to Northbrook Energy failed.
Northbrook Energy proposed the purchase of the 10-megawatt Pinnacles facility in Patrick County, Virginia for $8.2 million, as well as the selling of the energy, capacity and renewable energy credits back to the city for $58.31/megawatt-hour with a 2 percent annual escalation.
The contract also would have allowed for the city to sell renewable energy credits on the asset, which would have further reduced costs for rate payers.
The 3,600-acre complex had two 120-foot dams that store water for the city’s power generation. The Talbott Dam consists of a 1.4 mile penstock that brings water to a 10-megawatt power house.
The facilities were constructed in 1938 to supply 100-percent of Danville’s electric needs. Today, it is used as a peaking resource during periods of high demand and provides approximately 2.5 percent of the city’s electric needs.
Before the vote, Councilman Fred Shanks, who serves on the city’s Utility Commission, spoke in support of the sale after originally being opposed.
“After hearing of all the issues involved, including [with the] Federal Energy Regulatory Commission (FERC), they have regulations that are going to require a lot more work to meet their standards, and it’s going to be a very costly process if we adhere to those administrative regulations,” Shanks said. “In the meantime, this power plant has some value to someone else and they would sell that electricity back to us and we would not have to have that cost of going through the FERC process.”
Shanks said the $8.2 million could help the city with other utility projects.
Since the action item related to a sale, City Attorney Clarke Whitfield said the item required seven affirmative votes to pass, instead of a majority.
With Councilmen Madison Whittle, Adam Tomer and James Buckner voting against the motion, the sale was not approved.
Danville Mayor Alonzo Jones asked for a work session to discuss the sale in more detail.
In addition, city council also approved the budget of Danville Public Schools (DPS) for fiscal year ending June 30, 2021, with a vote of 7-1, with Tomer voting against the budget and Jones abstaining.
This budget includes $22.8 million in local support, which is a $150,000 increase in last year’s budget for the city.
City Manager Ken Larking said the $150,000 equals the additional revenue amount that the increased personal property taxes from last year will generate in the next year.
“That’s really what I used as a benchmark to calibrate an increase for the school system because that personal property tax increase was targeted for salary increases for personnel in Danville Public Schools,” Larking said. “That’s what they do plan on using these funds for.”
Following a meeting with school board members and Superintendent Dr. Stanley Jones, Larking said the Education Compact committee was discussed at the meeting, along with the possibility of the system creating a five year plan, which would include an evaluation of all capital needs.
Councilman Sherman Saunders said this plan could be an opportunity for city council and the school board to collaborate about the system’s future for consistency.
“For whatever reason, we’ve had turnover in superintendents, school board members, and I have to ask the question about consistency,” Saunders said. “If you have a five year plan that all parties agreed to, whatever happens in regards to turnover, you still have that plan and have some feel that certain things will remain in place.”
Larking added that the school division would be evaluating its downtown school board office location at the end of the lease term, a topic that has been a question with city council before. The division currently pays $6.15/square foot, which is below market value in the River District.
In other business, city council approved the appointment of Katherine Waller to the Danville Community Policy and Management team as the Danville Health Department representative.
They also approved two budget appropriation ordinances for a Domestic Violence Victim Program grant as well as a Victim Witness Program grant.