Duke hits back at Clearwater takeover study

Duke Energy is pushing back on Clearwater’s new feasibility study that says residents could save money by forming a city-run electric utility. In a letter filed ahead of Monday night’s council meeting, Duke Florida state president Melissa Seixas said NewGen’s findings rest on uncertain costs and outdated rate data, and warned the transition could take years and erase any projected savings.

The council commissioned NewGen Strategies & Solutions in 2024 to explore leaving Duke when the city’s 30-year franchise expires in December 2025. NewGen’s report, previewed last week, said a municipal electric utility could trim average bills roughly 7% in the first five years and closer to 18% over a longer horizon. The council discussed the study at its Sept. 29 meeting at Clearwater City Hall.

Seixas’ letter argues the study’s headline number – a $572 million “all-in” cost to acquire and stand up the system – is based on an AACE Class 5 estimate that can be off by minus 50% to plus 100%. In plain terms, she wrote, the city’s price tag could range from $386 million to $943 million, and NewGen’s authors themselves state “there can be no guarantee that Clearwater will achieve cost savings.” A bar chart on page 2 of Duke’s filing visualizes that range, with reserves and start-up costs layered onto an estimated asset value.

The letter also hits timing. NewGen modeled what Seixas calls an “overnight” conversion using today’s dollars even though any municipalization would likely require a lengthy eminent domain process. Delays could lift interest, legal and acquisition costs. The filing notes additional uncertainties that Clearwater doesn’t control – wholesale power prices, transmission costs, fuel, litigation outcomes and annexations needed to reach an assumed 20,000 additional customers. If annexations fall short, projected savings shrink.

Duke further says NewGen used obsolete Duke rate data to claim a typical 1,000 kWh residential customer would save $17.70 a month in 2026. Using Duke’s 2026 rates already on file with the Florida Public Service Commission, the company argues, “speculated Clearwater MEU customer savings are essentially eliminated.” The letter adds that NewGen’s forecast shows Duke rates rising faster than a Cleawater utility’s even though Clearwater would purchase power and transmission from Duke – an assumption Duke calls illogical.

Duke is not neutral in the fight. In May, a consultant engaged by the utility shared a separate, preliminary valuation suggesting costs could top $1 billion once condemnation proceedings, forgone city revenues and other municipalization expenses are added. That analysis, by Concentric Energy Advisors, cautioned that a full process would require additional studies and could increase the final figure.

After Monday’s presentation, the council voted to further examine the municipal utility path, even as Duke questioned NewGen’s assumptions. Clearwater is not alone. St. Petersburg officials have publicly watched the outcome as they consider their own options with Duke.

Seixas closes with an offramp. She points to items NewGen raised that could be addressed in a renegotiated franchise: undergrounding targeted feeders, vegetation management, reliability metrics and customer affordability programs. Duke says it is already undergrounding portions of Myrtle Avenue between Court and Cleveland Street and seven other areas in the city, and it’s open to a shorter, 10-year renewal term.

.