Home / Business and Economy / Clearwater Reverses Course on Duke Energy Split
Clearwater Reverses Course on Duke Energy Split
17 Jul
Summary
- Clearwater council approved a 30-year contract with Duke Energy.
- Duke Energy committed $600,000 for infrastructure resilience.
- A prior study estimated significant savings from a municipal utility.
Clearwater's City Council has taken a turnabout by granting initial approval to a new 30-year electricity service agreement with Duke Energy. This decision follows a two-year period where the city actively investigated the possibility of establishing its own municipal utility.
The council's unanimous vote on the contract, which still requires a second approval, was influenced by concerns over a forthcoming property tax referendum. Council member Mike Mannino emphasized the need for the wisest, not necessarily the boldest, decision.
Duke Energy made several financial commitments in a memorandum of agreement. These include a $600,000 donation for city infrastructure resilience, long-term funding for beautification projects, and $100,000 for the North Greenwood Community Redevelopment Agency through a planned shipping container mall.
Additionally, Duke Energy is set to pay $30,000 annually for naming rights to Coachman Park and will contribute to a downtown retail development strategy. This agreement represents a dramatic shift from the city's prior stance of criticizing Duke and preparing to leave its services.
A feasibility study commissioned by Clearwater had indicated that a municipal utility could save residents millions, with average annual savings projected to grow significantly over 25 years. Mayor Bruce Rector had previously felt compelled to explore leaving Duke due to rising resident electric bills, exacerbated by hurricane fees, heat, and rate hikes.
However, Duke Energy countered these efforts by warning of over $1 billion in costs for Clearwater to split and indicating its equipment was not for sale. Council member David Allbritton raised concerns about assuming such a large obligation, especially with the potential $20 million annual revenue reduction from the property tax referendum, noting Duke's $2 million contribution to sweeten the current deal.
The city of St. Petersburg is also evaluating the possibility of forming its own utility, having recently approved a study for such an endeavor.
