Following Clearwater’s lead, St. Petersburg recently issued a request for proposals for a feasibility study on creating a municipal electric utility to replace Duke Energy. In a February 2026 report entitled “Clearwater’s Plan To Establish Its Own Municipal Electric Utility Puts Taxpayers At Risk” Florida TaxWatch did a “deep dive” into the feasibility study prepared by Clearwater’s consultant. Florida TaxWatch cautioned Clearwater not to proceed with the planned acquisition of Duke’s electric distribution assets and the establishment of a municipal electric utility.
Before going forward with what Florida TaxWatch considers to be a huge financial risk for something that may or may not produce cost savings, residents of St. Petersburg should consider the following.
First, to municipalize its electric utility, the city must acquire Duke Energy’s electric distribution assets that serve city residents and businesses. Duke has made it clear that it has no interest in selling its assets, leaving the city with only the lengthy, contentious and expensive process of eminent domain. The acquisition of assets is not something that happens overnight. If the city pursues eminent domain, the acquisition process could take a decade or more. It is also important to note that, under Florida law, the city will be required to pay Duke’s legal expenses.
Second, a consultant’s finding that the municipalization of an electric utility is “feasible” should not be a green light to move forward. Feasibility studies performed on behalf of municipalities frequently underestimate the cost of completing municipalization efforts. This is especially true in municipalizations like the Clearwater municipal electric utility, that do not have the cooperation of the existing utility service provider.
Third, the assumptions underlying the Clearwater feasibility study provide little confidence that the projected cost savings will materialize. The feasibility study acknowledges that “there can be no guarantee that the Clearwater MEU will achieve cost savings compared to continued service from Duke…,” and that “…actual results may, and likely will, vary from those contained in this report and developed for this Study.”
Research shows that, since 2000, only a handful of the more than 75 attempts to municipalize a community’s electric service have been successfully completed, and those utilities that were municipalized seldom delivered on their promises. Ratepayers rarely saw lower prices; customer service failed to appreciably improve; no more clean/renewable energy was produced; and taxpayers were left to foot a sizeable bill for the purchase of the assets.
There are some things the private sector does better than the public sector, and in most cases, the provision of electric power service is one of those things. Privately (investor) owned utilities like Duke Energy have the advantages of economies of scale. Economies of scale permit larger utility companies to generate and distribute electric service at a lower average cost per customer by spreading their fixed and overhead costs over a larger customer base. Larger utility companies also have an easier time raising cash to pay for replacement facilities and recover from major weather events.
St. Petersburg has approximately six months before the existing franchise agreement with Duke Energy expires. It seems unlikely that the outcome of a municipal electric utility feasibility study for St. Petersburg would differ significantly from that of the study for Clearwater.
Florida TaxWatch thinks St. Petersburg officials could save its taxpayers a considerable amount of money, now and in the future, by withdrawing the request for proposals and joining with Clearwater to negotiate new franchise agreements with Duke Energy, agreements that represent a “win-win” for both cities, Duke Energy and most importantly, the taxpayers.
The taxpayers deserve nothing less.
Jeff Kottkamp, Esq., serves as the president and CEO of Florida TaxWatch, an independent, nonpartisan, nonprofit research institute and government watchdog for more than 45 years. He is the former lieutenant governor of Florida.