The city of Clearwater, Florida is considering getting rid of Duke Energy and replacing it with its own city-run utility, following complaints from residents stemming from high bills, vegetation management on private property, and rights of ways for power line maintenance, the Tampa Bay Times reported.
On Monday, the Clearwater City Council held a work session and discussed hiring a consultant to look into the process of dropping Duke and creating a municipal electric utility, the Times reported. On Thursday, the Council will vote on whether it will spend $504,000 to hire a consultant to conduct a study that could take nine months. The city’s 30-year agreement with Duke Energy expires in December, 2024.
The last time a Florida city successfully broke ties with an investor-owned electric utility was in 2005, the Times reported, when a voter referendum in Winter Park removed Progress Energy Florida. Now, almost two decades later, Winter Park’s electric bills are 27.8% lower than Duke Energy’s customers, City Manager Randy Knight said, according to the Times. Last year, Winter Park’s electric utility made a $9 million profit, the Times reported, which the utility directly invests back into its system without worrying about shareholders.
The Winter Park referendum victory did not come easily, however. The Times reported that a group backed by Florida Power spent more than $500,000 trying to squash the referendum, which originally came about due to concerns about reliability.
City Attorney David Margolis said Clearwater would likely see a similar effort from Duke Energy, who in a statement to the Times highlighted its “army of resources” to restore power after extreme weather events, and questioned whether the city could legally remove Duke from its territory.
Clearwater is not alone in its hard feelings toward Duke. Earlier this year, members of the St. Petersburg City Council discussed breaking away from the utility. St. Petersburg has not decided to spend money on a study evaluating the move, the Times reported, but its agreement with Duke expires in 2026.
Earlier this year, Duke requested permission to raise base rates by about $820 million over the next three years, the Times reported. In July, after discussion with consumer advocates, the utility agreed to decrease this request by more than half, but the request has not yet been approved.
Cities across the U.S. are wrangling with how to achieve ambitious climate goals. Many, however, depend on the decarbonization plans set forth by their states and private utilities, which may not be aligned. Geography also plays a role: cities in regions underpinned by fossil fuels may also lack access to electricity markets with abundant clean power.
Louisville, Kentucky is considering its own approach: a “partial” municipal utility serving government-owned-and-operated buildings and some public loads. Under the idea, Louisville would build and own distribution infrastructure alongside LG&E’s, without connecting to the utility’s grid. They would also build new transmission infrastructure to link to the MISO bulk power system to gain access to clean energy resources participating in that market.
Siemens determined Louisville’s partial municipalization would cost around $340 million. Amortization would come out to around $30 million annually for 30 years, bringing the total cost to around $900 million.
While the price tag likely places municipalization out of reach for Louisville, Sumedha Rao, the executive director of the city mayor’s sustainability office, said the exploration has contributed to more productive conversations with LG&E. Previously, the city’s load was too small or too big to qualify for the utility’s clean energy tariffs, but Rao said LG&E appears to be exploring additional options.
Louisville began noodling municipalization several years ago. The city set a community-wide net-zero target of 2040, but the investor-owned utility supplying its electricity, LG&E, relies heavily on coal (84%) and natural gas (15%). Renewable energy resources account for only 1% of the utility’s generation mix.
The city began working with the National Renewable Energy Laboratory in 2021 to assess a spectrum of options from heavy reliance on LG&E to full municipalization. Some cities, like San Diego, have explored public takeovers of existing private utility infrastructure. Maine voters considered a buy-out of the state’s two investor-owned utilities but ultimately rejected the proposal.
