Danville’s utility commission meets Jan. 27 at 4 p.m. to consider change and hear a presentation on a proposed operating and capital budget for the coming fiscal year.
The city is the only municipality in Virginia that operates all four essential utility services: electricity, natural gas, water and wastewater. It has been in the utility business since 1876 and serves Danville, most Pittsylvania County households and also portions of Henry and Halifax counties.
The commission will vote to recommend approval or denial for an increase in rates across all utilities. The city council will have the final say on the rate increase, following the utility commission’s vote.
This final vote will likely happen in the spring, said Jason Grey, the city’s director of utilities, in an interview.
The cumulative average increase for ratepayers who use all utility services is between $10 and $11 per month. This change would not be in effect until the next fiscal year, which starts July 1.
This increase is based on the 2025 biennial rate study, conducted by Utility Financial Solutions, a Michigan-based utility financial consultant.
The previous biennial study proposed no rate increases for electric, gas and wastewater utilities, and suggested a 5% increase in water.
“Of course since that time, we’ve seen substantial increases in cost, particularly infrastructure costs for utilities,” said Mark Beauchamp with Utility Financial Solutions during his presentation to the commission at the December meeting.
Grey said that the rate increases proposed in the study are “fully attributable to inflationary costs.”
“Materials, transformers, water pipes, gas pipes, all kinds of different things,” are increasing in price, he said.
The largest dollar amount increase in ratepayers’ bills will be for electricity, Beauchamp said. The expected average increase for electricity will be about $4 per month, with gas expected to go up about $3 per month, water expected to rise $1.50 per month and wastewater expected to rise $2 per month.
Grey said this adjustment was calculated using three things: the city utility’s adjusted operating income, cash balances and debt coverage ratio.
“Danville utilities is not immune to the rising costs of doing business that everyone is experiencing,” said City Manager Ken Larking, who also serves on the utility commission, at the December meeting.
Larking also said that Danville’s utility rates are “either average or below average in cost when compared to our neighboring utility providers.”
The utility commission will also consider a proposed budget for the 2026 fiscal year at its Jan. 27 meeting.
The budget projects operating expenditures of $175 million and revenues of about $190 million. This revenue projection is an $11 million increase compared to the 2025 fiscal year.
“The budget is based on projected revenues using utility rates approved by the City Council,” according to the proposed budget, included in the meeting’s agenda packet.
It outlines proposed expenditures and revenues for each of the five utility areas.
After the proposed budget is presented to the utility commission, the nine-member body will vote whether to approve it.
