Radford council approves developer-owned battery storage agreement to reduce peak electricity costs

The Radford City Council voted Dec. 30 to authorize staff to negotiate an energy storage services agreement with DeLorean Power, doing business as LifeShift Energy, after a multi-year evaluation of battery-storage options for the city’s electric system.

Utilities staff said the agreement would be a developer-owned, 20-year arrangement in which the developer finances, owns, operates and maintains the batteries while the city subscribes for peak shaving services. The project would sit adjacent to a substation on property managed by the Economic Development Authority.

A consultant presented projected economics for two sizing options. The presentation cited a cumulative peak-shaving benefit of more than $20,000,000 over 15 years against an approximate cost to the city of $9,100,000, with a quoted payback of roughly six years for the modeled scenario. The consultant recommended starting with a 4-megawatt system and preserving an option to expand to 8 megawatts if performance warrants it. Council discussed risks and timing; staff said construction could occur in 2026 with operations beginning in 2027.

Council members favoring a cautious approach said starting at 4 megawatts reduces project risk while preserving upside. The council moved, seconded and approved the resolution by voice vote, directing the city attorney to negotiate required interconnection and site agreements.

The project is intended to lower the city’s capacity and transmission obligations after the city’s purchase power contract ends, and to capture both avoided cost savings for utility customers and revenue opportunities for the developer when the system is not used for Radford’s peak shaving.