There’s a simple reason why St. Petersburg should not waste more than half a million dollars to study the feasibility of the city taking over electric service from Duke Energy Florida.
The answer is already clear: It is not financially feasible, it won’t lower electric rates for decades if ever and it won’t provide better service.
Clearwater paid for a feasibility study to determine whether it should pursue taking over electric service from Duke Energy and recently decided against it.
In the past 25 years, 64 local governments have explored taking over electric service. Only five succeeded, including two in Alaska with fewer than 75 customers each. In Boulder, Colorado, the city gave up trying to create its own electric utility in 2020 after spending a decade and about $30 million in taxpayer money.
In St. Petersburg, supporters of the effort to replace Duke Energy with a municipal utility often cite Winter Park as a success story. I know something about that. From 2017 to 2024, I served as director of Winter Park’s electric utility. Winter Park’s success won’t translate to St. Petersburg.
First, St. Petersburg would be the largest city ever in Florida to take over electric service from a private utility company. It has about 62 square miles of land, about 265,000 residents and about 160,000 Duke Energy customers. Winter Park has about 9 square miles of land, about 30,000 residents and about 16,000 electric customers.
The startup costs also aren’t remotely comparable. Winter Park paid about $43 million to Duke’s predecessor, Florida Progress Energy, to buy its poles, power lines and other assets before it took over electric service in 2005. St. Petersburg would have to spend up to $4 billion to take over electric service from Duke Energy, according to a Duke Energy consultant. Who would pay that enormous cost? City residents.
There’s also no comparison in the scale of the Winter Park electric utility and the one St. Petersburg would have to create. Winter Park has six linemen on staff, and contractors are called in if multiple outages occur. St. Petersburg would have to hire a staff many times larger.
It’s true that Winter Park’s electric rates are lower than Duke Energy’s rates in St. Petersburg. Winter Park does not generate its own electricity, and nearly a decade ago, I negotiated a favorable deal with the Florida Municipal Power Agency to buy power when cost and demand for power were much lower. That deal expires soon, and Winter Park should anticipate higher rates. St. Petersburg also would find electricity expensive to buy, and for regulatory and financial reasons, it can’t shop around like you can for a car.
With Duke Energy, St. Petersburg has benefits Winter Park electric utility customers don’t. Duke’s automated system finds outages, determines what went wrong, shows how many lost power and where, and estimates the length of the outage for customers. Winter Park’s system only recognizes when each individual electric meter stops working; there’s no map of outages or estimated repair times.
It doesn’t take a feasibility study to see that it is unaffordable and unworkable for St. Petersburg to create its own electric utility.