With St. Petersburg’s franchise agreement with Duke Energy set to expire this week and no negotiations underway, Downtown Partnership CEO Jason Mathis says the city is creating unnecessary uncertainty while it studies whether to municipalize its own electric utility, despite Clearwater’s own feasibility study and recent decision to extend a 30-year agreement with Duke.
Jason Mathis
“It seems like a mistake for the city to be standing on this precipice a week before the agreement ends and not have a path for negotiations,” Mathis told the Catalyst. “They have a path for a study, but not negotiations.”
A franchise agreement gives Duke the right to use city rights-of-way to operate its electric system while requiring the utility to pay the city a franchise fee. The current agreement expires at midnight Friday.
Duke has said it will continue providing reliable electric service regardless of the agreement’s status, but confirmed there are currently no negotiations with the city over a renewal.
Mathis said he does not expect residents or businesses to lose power if the agreement lapses. His concern is the erosion of investment that will occur when negotiations halt: “I don’t think they will be looking to make major investments in this community when the path is uncertain.”
Mathis continued: “I don’t know what incentive there will be for Duke if it’s unclear whether they have a home here in St. Pete.”
Duke Energy supports St. Petersburg through targeted community grants, including a $75,000 award to the University of South Florida St. Petersburg for STEM education programs. The company also provided a $50,000 emergency grant to help the university recover from a campus fire, alongside a past $1 million investment for a solar battery storage project.
In the meantime, the city is moving forward with a municipalization study that will examine whether St. Petersburg should acquire Duke’s local electric system and establish a municipally owned utility. City officials have said they did not want to negotiate a long-term franchise agreement before the study is complete.
However, Clearwater recently completed its own study to weigh municipalizing energy, but deemed it too risky, opting to renew its franchise agreement with Duke.
So why is St. Pete conducting another study rather than piggybacking Clearwater’s?
“Surely we have people smart enough from the city to extrapolate the Clearwater study and apply it to St. Pete and save $600,000 of taxpayer money. When asked whether municipalized electricity would deter businesses from moving to St. Pete, Mathis responded that he does not believe it will discourage, but that a prolonged legal battle over municipalization could become a concern.
Since Duke doesn’t intent to sell to the city outright, imminent domain is the only recourse for the city to acquire Duke’s infrastructure and turn it over to city control. “If the city does take over during a litigation period,” he said, “that would give businesses pause.”