An old mill building in Danville. (Sarah Vogelsong/Virgnia Mercury)
Virginia’s Tobacco Region Revitalization Commission is considering how to spend $12 million for energy projects as part of a legislative mandate to revitalize the economy of two regions no longer reaping the economic benefits of the tobacco industry.
At a meeting last week, the commisisons’ Energy Ingenuity Committee discussed applications it has received for two rounds of the funds that opened up this year. A third round is expected to open after the next meeting in September.
“We rolled it out earlier this year,” said Jerry Silva, director of regional energy development and innovation at the commission, during the meeting . “We really did not know what the application level would be.”
The Energy Ingenuity Fund was recently created by the commission to spur economic activity around energy development projects, and join a suite of other funding programs for Southside and Southwest Virginia.
The commission was formed in 1999 with 28 legislative and citizen members who represent the two regions and allocate funds from what is called the 1998 Master Settlement, which forced tobacco companies to compensate localities in several states for the health and economic costs associated with smoking, but also sparked the demise of the industry’s footprint in the two Virginia regions.
The Energy Ingenuity Fund allocated $6 million to each region and solicited projects. Requirements include applicants be a government entity or nonprofit, have one-for-one matching funds and identify the number of jobs that could be created. Private companies can apply for the funds as long as it partners with a locality to create economic incentives.
The applications
The fund works with a “pre-application” phase, in which applicants present ideas to Silva on what funding could go toward, before staff determine what needs more information and what can be submitted as a full application.
In round one, announced in January, Silva said he received 17 pre-applications requesting a total of $27 million. Three moved forward for a full commission vote in May.
The Agricultural Technology Innovation Partnership Foundation (ATIP), an agricultural group focused on technology development, was awarded $50,000 to plan for future biomass operations in Southwest Virginia.
The commission also awarded a $2 million loan to Hitachi, which manufactures transformers in South Boston and had submitted the application to upgrade equipment and avoid outsourcing. The company, which in 2022 announced a $37 million investment that included other commission funds, said 30 jobs would be created in its application.
“ Hitachi Energy has a long and productive relationship with the Commonwealth of Virginia and we are grateful for this collaboration,” said Hitachi spokesperson Kurt Steinert, who declined to share more specifics and if the offer was accepted.
Among the applicants that didn’t advance to a commission vote in round one, was Appalachian Voices, an environmental nonprofit that’s been staunchly opposed to the Mountain Valley Pipeline delivering natural gas into Pittsylvania County and is a proponent of renewable energy development.
In round two , 11 organizations put in requests for a total of about $4.5 million. About four projects, including an electric vehicle charging demonstration and a waste to energy proposal are expected to be passed to the commission on Thursday, which will vote in September after the public has had an opportunity to review proposals, Silva said.
The waste to energy proposal, from ATIP again, is a $1 million request for a live demonstration of mobile technology that could convert cow manure into natural gas, similar to what Roanoke Gas Company is doing.
“We go into regions, we help educate,” said Wes Jurey, president and CEO of ATIP, in an interview on his organization’s work to study what’s needed for a biomass industry in the regions.
What type of energy?
The use of the funds come amid concerns that there are not enough sources of energy generation as demand from data centers and electric vehicles grow. At the same time, the state’s decarbonization goals, including the Virginia Clean Economy Act, is leading to the retirement of fossil fuel generation.
“I can’t stress enough the importance of what we’re going to face in the Commonwealth in the coming five to 10 years,” said James Campos, executive director of the commission, during the meeting.
As part of a transition to electric vehicles, Downtown Wytheville, a community development organization, is seeking a $30,000 grant to continue the EV charging demonstration plans it had as part of a downtown revitalization.
The town is also seeking a $50,000 planning grant for a contractor who can evaluate energy efficiency improvements, ranging from potential upgrades of sewer pumps, creation of a town electric grid or activating an old landfill to capture methane gas , said Charlie Jones, administrative and events coordinator with Downtown Wytheville.
Those efforts could combat the town’s rising Appalachian Power Company electricity bills. The bills were about $900,000 in 2021 to 2022, increased to about $1.2 million the following year and had already reached that amount in the July 1, 2023 to March 2024, timeframe, Jones said.
“There’s a lot of Inflation Reduction Act [money coming] into rural areas now,” Jones said. “We’re trying to set us up,” to be “intentional.”
Silva said projects sought after are those fitting an “All of the Above” approach.
“These are projects that we’re trying to help bridge opportunities that would normally not be opportunities unless we helped them,” Silva said. “We’re trying to make sure we’re the best stewards of the commission’s money and dollars. We want to fund viable projects.”
In an interview, Del. Thomas Garrett, R-Goochland, who chairs the Energy Ingenuity Committee, said his work on the committee is not about “favoring” an energy project “over another.”
“My job on the commission is to create jobs and economic opportunity inside the footprint,” Garrett said, referencing the historical downturn of other industries in the region including furniture and coal.
In general, the fund’s dollars provide “an opportunity to further enhance the energy infrastructure and supply chain across the Commonwealth,” said Braden Croy, program director at The Dominion Energy Innovation Center, which hosted a webinar about the process with Silva.
“As an organization focused on helping Virginia achieve a net-zero carbon economy, we’re pleased that the Tobacco Commission has earmarked funding to high-impact energy projects, and we’re looking forward to seeing the community benefits from this program,” Croy said.
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