At its regular meeting at 7 p.m. Tuesday, the Danville City Council will hear three energy-related items, after two recent announcements that large industrial developers are locating in the region.
First, the council will consider a resolution allowing the city manager to enter a purchase agreement with American Municipal Power for 10 megawatts of natural gas generation.
The natural gas energy will come from the Potomac Energy Center in Loudoun County, according to the staff report in the meeting’s agenda packet. The agreement is a 15-year term starting in June.
Second, the council will consider a similar resolution to purchase 5 megawatts of solar energy generation.
The solar energy would come from Avangrid Bright Mountain Solar in eastern Kentucky, within the American Electric Power transmission zone, the staff report says. This purchase agreement “provides a long-term capacity resource that is expected to generate savings for electric customers over the 25-year contract term,” which begins in January 2028, it says.
“Due to recent industrial growth and the expiration of several short-term energy block purchases, the city will have increased exposure to the hourly market beginning in 2026,” say the staff reports for both items in the agenda packet.
The hourly market is a structure for pricing where electricity costs change every hour based on real-time supply and demand. This means that customers pay fluctuating rates rather than a fixed rate.
“The proposed power purchase agreement will provide a stable source of energy and capacity for customers,” say the staff reports for both items.
The purchase of natural gas and solar energy “will reduce hourly market exposure and mitigate the risk of price spikes during periods of extreme heat and cold,” they say.
Two economic development announcements in as many weeks will lead to increased energy demand in the region.
In late February, Italian rocket manufacturer Avio announced that it would build a facility at the Southern Virginia Multimodal Park, an industrial park in Hurt in the northern part of Pittsylvania County. This project is expected to bring more than 1,500 jobs and $500 million in investment.
Last week, the local Regional Industrial Facilities Authority approved a purchase agreement to sell almost 3,000 acres at the Southern Virginia Megasite at Berry Hill to a Colorado-based company with ties to a data center developer.
It’s not a done deal yet, officials say. The purchase agreement still needs to be signed, but if expectations laid out in a performance agreement are met, this would be the largest project in terms of job creation and investment dollars in Southside Virginia’s history. It could bring $73 billion in investment and 2,050 jobs over 30 years.
In November 2024, the megasite landed its first tenant, Tennessee-based Microporous, a lithium-ion battery separator manufacturer. That facility plans to bring $1.3 billion in investment and 2,015 jobs to the region.
The Berry Hill megasite is involved in the third energy-related item on Tuesday’s agenda.
The council will consider a budget amendment to allow for a $459,000 grant and $2 million loan from the Tobacco Region Revitalization Commission to extend a local natural gas pipeline to the megasite.
The city also received a grant from the Virginia Economic Development Partnership to fund the construction of the 3.5-mile extension. Staff expects engineering to be complete by May and construction to start in July, the staff report says.
“The city has been working with Southwestern Virginia Gas in partnering to bring natural gas service” to Berry Hill, it says. “The city plans to transport natural gas from the Williams Transcontinental pipeline to SWVG to be able to serve Microporous and other tenants inside the industrial park.”
Staff recommends that the council approve all three items.
The council meeting will be followed by a work session. Also meeting this week is the board of zoning appeals at 10 a.m. Thursday and the transportation advisory committee at noon Thursday.
In Pittsylvania County, the planning commission will meet at 4:30 p.m. Tuesday for a work session, followed by a regular meeting at 7 p.m. The finance committee will meet at 7 p.m. Tuesday.