SouthsideCentral was at Monday’s Danville Utility Commission meeting and we’ll give you the complete recap. This article is now complete.
We got to the meeting a few minutes late, but the only thing that we missed was the approval of the minutes & the review of the financial statements. Mike Nicholas is out today. Ken Larking sits at the table as the acting city manager.
We arrived as Water & Gas Division Director Allen Wiles talks about a proposal to clarify where the demarcation point is for a customer’s water service. Nobody on the commission seemed to like the idea, so nobody makes a motion and that’s the end of that.
Allen Wiles does not look happy.
Here’s today’s studio audience!
(L-R) Clarke Whitfield, Ken Larking, Phillip Smith, Fred Shanks, Bill Donohue.
(L-R) Vanessa Cain, Bob Schasse, Jim Turpin, Meagan Baker, Jason Grey.
We now move to the big issue of the day, the decision to set a rate class for large industrial electricity customers. This is big, because Danville Utilities’ large industrial electric rate is way higher than any surrounding utilities. This is causing serious problems on two fronts. First, Intertape has already cut back some operations at their plant due to electricity costs and the company has strongly hinted that they’d be willing to close the Danville plant and move those operations to other company facilities to save money. Second, with the current relatively high large industrial rate, it’s impossible to get a large industry to consider this area for a new plant.
The best plan is to let the largest industrial customers buy their electricity from somebody other than Danville Utilities. Yes, Danville Utilities would lose some revenue on that but they would still recover costs on the distribution lines to the industry. But let’s face it… if Intertape was to close, Danville Utilities loses all that revenue and the local economy would take a serious hit. And if Intertape was to expand or new factories get built in the area, lots more revenue would be generated. Lots of other utilities use this planned business model.
By the way, this has noting to do with residential electricity rates. It’s extremely doubtful that residential electric rates would go up because of this. And here’s a truth that people just don’t want to hear. Residential electric rates really aren’t that high when compared to other utilities in the area. The reason that they went up last time was because the city took bad advice from a rate consultant and they failed to raise the electric rates to recover costs as prices increased. The city was losing money and is still $14,000,000 in the hole because of taking that bad advice (along with other unpreventable issues).
After about an hour of back-and-forth discussion, the commission votes to ask city council to establish a new rate class for large industrial customers that will allow them to buy electricity at market costs. This is geared to Intertape now, but it’s possible that Nestle, Columbia Flooring and Essel Propack could qualify for this rate.
Next, the commission approves giving Appalachian Power the Berry Hill MegaPark area to add to their service area. Appalachian Power already has transmission lines that can serve the MegaPark, and Danville Utilities would have to build all of that infrastructure. The commission decided not to do the same thing for the vacant property near Blue Ridge Fiberboard because there’s no active economic development efforts going on there now.
They meeting moves to the around the horn session, and acting city manager Ken Larking says that they will have interviews for the director of Danville Utilities in December and he wants Utility Commission chairman Phillip Smith and commissioner Jim Turpin to sit in on the interview panels. Fred Shanks says that although he’s not a voting member of the Utility Commission, he wants one or two city council members to be on the panel too. Nobody says anything about that. When it gets to Fred Shanks’ turn in the around the horn section, he pushes that by pretty much saying that there’s going to be city council input on making that hiring decision. Bill Donohue gets sorta unhappy with that until he is told that the city manager hires the director of Danville Utilities. So, Fred Shanks will get some city council members on the interview panel.
The management team of Intertape and the head of DanChem all talk about getting the large industrial rate class completed as soon as possible.
Finally, the new director of the Power & Light division is introduced. He was hired in October but this is his first Utility Commission meeting. Ladies & Gentleman, meet Greg Disher.
And that’s it. I hope you’ve enjoyed the most detailed recap of Monday’s Utility Commission meeting… only here on SouthsideCentral!
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