Thrive
Is St. Pete next to explore a municipal electric utility?
Clearwater officials recently allocated $500,000 to weigh the pros and cons of replacing Duke Energy with a municipal utility. At least one St. Petersburg City Council member wants to follow their lead.
Clearwater’s 30-year contract with the investor-owned conglomerate ends in 2025. City leaders unanimously approved a nine-month study Aug. 2 to discern if potential benefits – rate reductions and a more responsive provider – outweigh the costs of implementing new electric infrastructure.
Approval from predominantly Republican Clearwater officials is reverberating in left-leaning St. Petersburg. Councilmember Richie Floyd, a municipal utility advocate, said the unanimous vote showed studying the electric grid’s future is “reasonable” rather than “radical.”
“It gets us in a good position for future negotiations,” Floyd told the Catalyst. “It’s not a partisan issue – it’s a good governance issue.”
Melissa Seixas, president of St. Petersburg-based Duke Florida, said the company’s equipment was not for sale. She pushed back against Clearwater’s hasty decision at the Aug. 2 meeting, stating that “nobody knows our system better than us … even the most brilliant of consultants.”
Multiple Clearwater officials noted that her comments influenced their votes. “If the opposing party really doesn’t want you to do something, that raises my eyebrows,” said Mayor Bruce Rector. “Here, Duke really does not want us to do this study.”
Seixas clarified her intent in a recent interview. While she does not oppose the study, Seixas believes that Duke, Clearwater and St. Petersburg officials should “work together by sitting down to understand what’s important to them, what their priorities are.”
“And to me, we haven’t had that opportunity with Clearwater,” Seixas added. “My recommendation was that the council consider tabling the motion for an opportunity to … allow kind of the normal process to work.”
Floyd wants to study creating a municipal utility before negotiating a contract extension, which ends in 2026. He said those results would provide leverage that benefits the city and its residents.
“We can say, ‘Look, give us better terms of an agreement, one that makes it more affordable and meets our renewable energy goals,” Floyd said. “I think that just provides for a broad range of outcomes.”
Floyd is not alone in his desire for a similar study in St. Petersburg. Councilmember Brandi Gabbard broached the idea in February.
St. Petersburg-based Duke Energy Florida’s local roots date back to 1899. File photo.
The discussion began when Allison Mihalic, the city’s former sustainability and resilience director, struggled to provide a committee with renewable energy data due to challenges receiving it from Duke. Gabbard called the city’s 30-year contract with the corporation sunsetting in 2026 a “rare opportunity.”
She noted that concerned residents “do not want us to just rubber-stamp a new agreement” with Duke and prefer to explore alternatives. “I’m not saying today that I’m in favor of that,” Gabbard said in February.
“What I’m saying is, I believe we need to have a conversation about it.”
Any change would end a relationship nearly as old as the city. Duke’s local roots trace back to the St. Petersburg Electric Light and Power Company, which began serving residents in 1899.
Seixas credited the lengthy contracts for the municipalities considering a switch. She believes “a lot of it has to do with just not understanding the nature of the franchise agreement.”
A self-funded company dedicated to compiling independent energy data found that the average St. Petersburg electric bill increased by 11.3% from 2023 to 2024. In addition, local electric rates are 18.3% higher than the state average.
Find Energy also reported that St. Petersburg’s national cost ranking dropped 2,331 spots since March 2023. The city now places 24,770th out of 31,812 cities.
Seixas said Duke has renewed all 41 of its expiring franchise agreements over the past five years. Most do not have infrastructure purchasing options.
Floyd and Seixas both referenced Winter Park. The city formed a municipal utility in 2005 after residents overwhelmingly approved a referendum in 2003.
Floyd noted Winter Park residents have saved over 20% on their electric bills since ditching Duke. Seixas said the city had a buy-out clause, “and that’s the key difference.”
She hopes the company’s extensive local history will encourage productive discussions. Seixas said Duke would assist any municipality’s storm recovery efforts, “but a large company with a lot of experience has a set of resources that is difficult to match.”
Floyd hopes he and his colleagues will have “an actual open discussion about doing the study” in a committee meeting next month. He said the overarching goal is ensuring “we can have an affordable, sustainable utility that’s not polluting the environment needlessly.”
“I’m willing to negotiate with Duke if we can lower the impact on residents,” Floyd added. “It’s all about making the city an easier place to live in the short term with costs, and in the long term by not burning fossil fuels as often anymore.”
Danny E White
August 22, 2024at4:32 pm
Seems the real issue here is the presence of corporate greed, pure and simple. Duke is an investor-owned behemoth. There is nothing fundamentally ‘wrong’ with curating a feasibility study to understand if the idea merits next steps or tossing into File 13. And then the outcry turns to how much the study costs!
Capt Bill Miller
August 19, 2024at4:26 pm
Catsimatidis, the family of developers of the large tall condo 400 Central, are pioneers in exploring using small nuke plants for city energy grids. These successful nuke units have been used for years on US Naval vessels and this might be the ticket for lower energy costs in Pinellas and St. Petersburg.
Many uninformed will deny the viability of nuke energy but France has succusfully used this resource for years.
marvistahotel
August 19, 2024at8:54 am
Government entities should focus on keeping their citizens safe from criminals and fraud, roads and bridges, and not much more. Citizens would be much better off with private schools, private healthcare, and private utilities. A municipal electric company adds more bureaucracy, waste, employee salaries, benefits, retirements, all for taxpayers to foot the bill.
Hugh Hazeltine
August 18, 2024at2:21 pm
There are 3 electric grids in the US. The eastern (includes Canada), western (includes Canada and Northern Mexico) and the Texas grid. The dividing line is at the Rocky Mountains. The Texas grid is vulnerable because they cannot tap the resources of the neighboring grids.
The Electric grid system is one of the least understood and under appreciated in modern life. In the end, the kilowatts are delivered to us at amazingly low cost.
Before anyone goes advocating a change in providers they should read “The Grid” by Gretchen Bakke PHD. One of the many things you can learn is that the cost of the infrastructure to deliver electricity far exceeds the fuel cost of generating it.
ElderFLnative
August 18, 2024at9:40 am
RIGHT ARM Rita,
That was the reply of many, as opposed to ”right on” back in the days when WE, in this case the very clearly ”working folx WE” were just hoping to have this necessary product, then and now a monopoly become just another utility based on cost of production rather than that cost plus SO many layers of profit…
I continue to hope that might become the normal for local and, in fact, global situations for this now necessary product.
SB
August 17, 2024at3:24 pm
The City of Gainesville already did this (I moved here from there 3 years ago . . . ). And it was disastrous. Worse. Politicians there use(d) it as a political slush fund. Here’s a list of all the bad news courtesy of AI:
Here’s a comprehensive list detailing the major problems associated with Gainesville Regional Utilities (GRU) and its decision to operate its own municipal electric authority:
1. Highest Electricity Rates in Florida: GRU consistently charges the highest electricity rates in the state, creating a significant financial strain on both residential and commercial customers. Google how bad the rates are folks!
2. Enormous Debt: The City’s decision to build and later buy out the Gainesville Renewable Energy Center (GREC) biomass plant led to the accumulation of massive debt, with costs nearing a billion dollars.
3. Mismanagement of the Biomass Plant: The GREC biomass plant, a politically motivated project aimed at making Gainesville a leader in green energy, faced severe operational issues and failed to provide the expected environmental or economic benefits.
4. Plant Closure: Despite the substantial investment, the biomass plant was eventually shut down because it was not economically viable, leaving the city with a costly, idle facility.
5. Exodus of Customers: High electricity rates and ongoing service issues have driven both businesses and residential customers to leave Gainesville, weakening the local economy and reducing the tax base.
6. Failed Economic Development: The high cost of electricity and GRU’s negative reputation have deterred new businesses from moving to Gainesville, stifling economic growth and development.
7. Political Interference and Mismanagement: GRU’s operations have been plagued by political interference, leading to poor decision-making, mismanagement, and inefficiencies that have exacerbated its financial difficulties.
8. Frequent Service Disruptions: Due to inadequate investment in infrastructure upgrades, GRU has struggled with frequent power outages and service disruptions, causing frustration among its customers.
9. Lack of Transparency: GRU has faced criticism for a lack of transparency, particularly regarding financial decisions and rate increases. Customers have expressed frustration over not being fully informed about why rates are so high and how funds are being utilized.
10. Legal and Regulatory Issues: GRU has been involved in multiple legal disputes and regulatory challenges, particularly related to the contracts and operations of the biomass plant, further draining the utility’s resources.
11. Environmental Concerns: The GREC biomass plant, initially promoted as a green energy initiative, did not deliver the promised environmental benefits and raised concerns about pollution.
12. Reputation Damage: The financial and operational failures associated with GRU have severely damaged the utility’s reputation, leading to widespread dissatisfaction and a lack of trust among the community.
13. Strain on Local Government: The financial burden placed on GRU has also strained the city’s budget and resources, negatively impacting other public services and initiatives.
This comprehensive list highlights the numerous and significant challenges that have arisen from Gainesville’s decision to manage its own municipal electric authority, serving as a warning to other cities considering similar paths, like St. Petersburg.
RITA SEWELL
August 17, 2024at3:17 pm
If St Petersburg or Pinellas County seeks to leverage this I would imagine setting community goals for solar through community cooperatives to provide affordable solar energy. It is a shame that all this massive new construction downtown was not mandated to have solar panels. Is the State of Florida government unwilling to see the benefits for its citizens? Coal and natural gas will continue to have a negative effect on rising CO2 levels. Perhaps Duke could provide panels to citizens and cut their dependence on fossil fuel. There are many ways to solve this.