Clearwater\u2019s study.<\/a> It\u2019s not the right time for us right now, and those numbers show how serious and big this conversation is. I understand those getting priced out of communities due to utility rates, but we have so many other systems that need attention and relief, like stormwater and sewage. This just isn\u2019t the right time.\u201d<\/p>\nMathis said the city could address some of the affordability concerns that helped drive interest in municipalization without purchasing Duke\u2019s system. \u201cIf the push for municipalization was for affordability,\u201d Mathis said. \u201cThe city could get rid of the franchise fee and the utility tax. That would address affordability immediately.\u201d<\/p>\n
Before the franchise expired, Duke collected a 6% franchise fee from customers and remitted about $23 million annually to St. Petersburg in exchange for its use of public rights-of-way. Mathis previously told the Catalyst that allowing the agreement to expire without a new deal created uncertainty for businesses and questioned the city\u2019s decision to spend up to $590,000 on its own municipalization study.<\/p>\n
That study is being conducted by NewGen Strategies and Solutions, the same firm that previously studied municipalization for Clearwater. The St. Petersburg analysis is intended to determine the financial and operational feasibility of the city acquiring Duke\u2019s infrastructure and operating its own electric utility.<\/p>\n
Mathis said St. Petersburg\u2019s system presents another complication, because Duke infrastructure within the city is interconnected with surrounding communities.<\/p>\n
\u201cDetaching St. Pete from Gulfport and all the beach communities would be more complicated than the feasibility study in Clearwater,\u201d Mathis said. \u201cClearwater spent a lot of time and money investigating this idea, then abandoned it when they realized how expensive it would be.\u201d<\/p>\n
Concentric\u2019s estimate identifies that separation as one of the largest potential expenses. The firm says portions of Duke\u2019s system would have to be reconstructed to maintain service to customers in St. Pete Beach, Treasure Island, Gulfport, Tierra Verde and surrounding areas of Pinellas County.<\/p>\n
\u201cWe need to negotiate the best deal, the best terms with Duke \u2014 that\u2019s the city\u2019s job,\u201d Mathis declared.<\/p>\n
Steinocher also questioned whether the city\u2019s independent study will reach substantially different conclusions from Duke\u2019s analysis: \u201cMy belief is that the numbers will be similar to Duke\u2019s study. Some of this is real figures that can\u2019t be fudged. It\u2019s a math problem not up for interpretation. It\u2019s an intriguing effort but not worth its weight in gold.\u201d<\/p>\n
Ana Gibbs, director of communications and public affairs for Duke Energy Florida, released a prepared statement, writing \u201cThis study makes clear a government takeover of St. Petersburg\u2019s electric service is unaffordable and irresponsible. Our residents deserve a clear understanding of the costs, risks, and long-term implications of this unprecedented proposal.\u201d<\/p>\n
Gibbs said Duke believes that \u201ca government takeover could cost as much as $4 billion, and our customers would ultimately be asked to shoulder the burden through higher taxes and increased fees or worse, a reduction in public services,\u201d Gibbs said. \u201cDuke Energy Florida and its predecessors have delivered cost-effective, reliable, electric service for decades and we are committed to continue providing the same level of service as the city learns more about the risks of this proposal.\u201d<\/p>\n
Concentric estimates St. Petersburg would need between $185 million and $330 million to establish an independent utility. That includes staffing, vehicles, control facilities, billing and outage-management systems, cybersecurity and other operational infrastructure. Transaction costs and initial financial reserves could add another $144 million to $240 million.<\/p>\n
The report also identifies potential costs that are not included in its $2.75 billion to $4.1 billion estimate. Concentric says St. Petersburg could face $300 million to $550 million in stranded generation and power-supply costs, depending on how the city obtains electricity after separating from Duke.<\/p>\n
Concentric also did not quantify the potential cost of replicating portions of Duke\u2019s automated grid technology that could be affected by separating the systems. The firm cautions that a more detailed feasibility study could identify additional costs.<\/p>\n
That being said, the city\u2019s NewGen study may provide an independent estimate of whether municipalization is financially viable and give city officials a basis to compare its assumptions with Duke\u2019s \u2013 or at the very least, provide new knowledge for better negotiating power.<\/p>\n","protected":false},"excerpt":{"rendered":"A Duke Energy-commissioned analysis estimates St. Petersburg could spend between $2.75 billion and $4.1 billion to create a…\n","protected":false},"author":2,"featured_media":387486,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[202,204,203,199,201,200],"class_list":["post-387485","post","type-post","status-publish","format-standard","has-post-thumbnail","category-st-petersburg","tag-st-pete","tag-st-pete-headlines","tag-st-pete-news","tag-st-petersburg","tag-st-petersburg-headlines","tag-st-petersburg-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/posts\/387485","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/comments?post=387485"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/posts\/387485\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/media\/387486"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/media?parent=387485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/categories?post=387485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/tags?post=387485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}