Clearwater takes another step toward dumping Duke

Clearwater will begin appraising the costs associated with acquiring Duke Energy’s equipment, a move that could have a domino effect in St. Petersburg.

Mayor Bruce Rector and Clearwater City Council members made the unanimous decision Monday night after hearing the results of a long-awaited feasibility study. Consultancy firm NewGen Strategies and Solutions found that replacing Duke with a municipal utility would save residents millions on their electric bills.

While concerns and questions remain, officials found the study’s results compelling enough to take the next step in an extensive process. Rector noted Duke has the highest rates in Florida, and according to NewGen, municipal customers would immediately save $17.70 on their monthly bills.

“With the feasibility report coming back the way it did, I think we have a duty to continue on and look at it further,” Rector said. “So, I’m going to support doing the appraisal as well.”

The city paid NewGen $500,000 to outline the benefits and risks of establishing a municipal electric utility in August 2024. St. Petersburg’s council voted to conduct a similar study a year later, despite multiple members and Mayor Ken Welch eagerly awaiting the results of Clearwater’s report.

Duke’s 30-year contract with Clearwater terminates Dec. 31, and St Petersburg will follow in August 2026. While Welch has already discussed a new decade-long agreement with the conglomerate, attorneys from both cities expect an operational status quo if officials fail to negotiate extensions by those respective dates.

“I know that St. Pete is looking at how we’re going to do it, because I think they’re next,” Clearwater Councilmember David Albritton said Monday.

NewGen’s “all-in” preliminary valuation for taking over Clearwater’s electric grid is $572 million. Duke unexpectedly released an analysis in May that pegged the number at over $1 billion.

Melissa Seixas, president of St. Petersburg-based Duke Florida, highlighted “significant issues” with NewGen’s study in a letter sent to Clearwater officials and the media Monday. She noted that the report was not definitive and could not guarantee any cost savings.

“Duke Energy’s property is not for sale,” Seixas wrote. “Any acquisition would have to utilize the long process of eminent domain. NewGen states directly that they are assuming an ‘overnight’ conversion to a city-owned utility.”

Scott Burnham, a partner with NewGen and the study’s project manager, said a municipal utility could promote affordability and local economic development. The city could also offer discounted rates for seniors and low-income households with savings provided by tax-free bonds.

A comparison between Duke Energy’s current rates and those of the City of Clearwater could offer through a municipal utility. Image: Screengrab.

Burnham added that the “feasibility-level estimate” has limitations and assumptions. “Certainly, the cost for the assets would vary, depending on negotiations and litigation,” he said.

Clearwater, under NewGen’s proposal, would not acquire any electric transmission or generation infrastructure. He said the city could pay Duke and other state organizations for those services and purchase distribution assets, including three substations.

Burnham said the electric utility would operate similarly to CGS Energy, Clearwater’s city-owned natural gas company, which does not own wells. “It buys natural gas as a wholesale commodity.”

Dozens of public speakers spoke in favor of a municipal utility Monday night. Several Duke employees emphasized their expertise in complex jobs and community relationships.

Councilmember Ryan Cotton expressed gratitude for their service. He also noted those contributions are “not going to go away,” and Clearwater would acquire a well-established system operated by a third party “until we’re able to hire good, knowledgeable experts.”

“For a very long time, our electric service has been guided from boardrooms far away from here,” Cotton added. “We now have the ability to take control of our own future by forming a municipal utility.”

NewGen expects residents to save 10% on their monthly electric bills immediately, and 18% after five years. “That’s hundreds of millions of dollars kept right here at home,” Cotton said.

The city’s storm response capability was a frequent concern. Cotton said Clearwater could prioritize undergrounding lines.

Albritton said he “didn’t see one Duke Energy truck out there fixing lines” following Hurricanes Helene and Milton. “They were all out-of-state people who came in.”

Burnham said the city could utilize the state’s mutual aid program during emergencies. “There’s not a cost to that … We made the assumption that they would be available to you.”

Rector expressed appreciation for Duke’s local efforts during an unprecedented hurricane season, despite the ongoing study. While he credited area employees and leadership, Rector noted that the company’s CEO earned over $20 million in 2024.

“We’re trying to do the best we can to work for the citizens,” Rectors said. He and his colleagues agreed that beginning the appraisal process, which would provide more financial certainty, was prudent.

“If we decide to move forward, it will be a fight,” Albritton said. “I just hope it will be a successful one, and we can lower some rates, hopefully.”