St. Petersburg’s debate over whether to break away from Duke Energy now has a more immediate complication: The city’s 30-year franchise agreement has expired, and Duke is questioning the legal footing for more than $24 million in revenue expected next year.
The agreement formally expired July 31, but electric service will continue uninterrupted while St. Petersburg and Duke negotiate a new contract.
Now, Duke is calling the city back to the negotiating table. In a letter sent to Mayor Ken Welch, Duke Energy Florida Associate General Counsel Matthew Bernier urged St. Petersburg to begin negotiations on a new franchise agreement “as soon as practicable.”
In an effort to address rising electrical costs, St. Petersburg is currently spending as much as $590,000 to study whether the city could buy Duke’s local electric distribution system and establish a public municipal utility. However, Bernier said no talks are currently scheduled and that the lapse has left basic parts of the city’s agreements with Duke unsettled.
Duke said the expired agreement does more than formalize who provides the city’s power. It governs Duke’s use of public rights-of-way, establishes liability protections, and authorizes the utility to collect and send franchise fees to City Hall.
Duke is now questioning whether it can continue collecting the fee from customers without an active franchise agreement.
Under the former agreement, Duke paid St. Petersburg a monthly franchise fee equal to 6% of its base revenues from customers within the city. Welch’s proposed Fiscal Year 2027 budget counts on $24.2 million from those franchise fees, according to Duke’s letter. Duke asked the city to formally identify the legal authority it believes permits the payments to continue.
The Friday letter comes a day after Duke resolved a similar politically charged contract negotiation in Clearwater, resulting in a renewed 30-year deal after the company agreed to some concessions.
The Clearwater City Council voted unanimously Thursday to approve a new 30-year franchise agreement with Duke, ending its own examination of a city-run electric utility. Clearwater preserved the same 6% franchise fee while securing at least $1.75 million in community, resiliency and economic-development commitments from Duke.
Those commitments include $600,000 over six years for infrastructure resilience projects and plans to negotiate a 20-year naming-rights sponsorship valued at another $600,000 for improvements at Coachman Park. Duke also agreed to support downtown retail development, beautification, broader economic-development efforts and projects in the North Greenwood Community Redevelopment Area.
Duke’s letter indicates similar options could be in play in St. Petersburg.
Bernier argued that renewing the franchise agreement would restore certainty over fees, liability and use of city property while still allowing both sides to discuss shared priorities.
While Duke pressed for an agreement with the city, the company cautioned that a push for a public utility could require years of regulatory review, valuations and litigation.