St. Petersburg and Clearwater are considering doing something very few Florida cities have done recently: unplug from the electric company.
If either city decides to disconnect from Duke Energy, here's a little advice from someone who knows something about it.
“I would tell them to expect a big fight,” said Randy Knight, the city manager of Winter Park, just outside of Orlando.
In 2005, the city's voters approved a divorce from Progress Energy, which later merged with Duke Energy.
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“From a public relations standpoint, they will be going around the community telling everybody they don't know what they're doing,” he said. “They've never run an electric utility.”
"The joke in Winter Park at the time was we would have five guys in a pickup truck trying to restore power," Knight said. "That's what they were telling people, and so they will attempt to get elections overturned to where more favorable people will be in office that would support a new franchise. So that's what I would expect."
Knight added his city was given an estimated price tag of $106 million from Progress Energy. After prolonged battles in court, it ended up costing about $43 million, including the powerlines and poles. Most of the money paid for the utility’s lost business and investment. Winter Park paid another $30 million in legal fees.
Switch has a positive effect
But voters approved a referendum by 69% and the city's utility bills are now 28% lower than Dukes'. The city has used the profits it makes to bury 81% of its power lines, meaning fewer outages during major storms.
“I will tell you that when the last hurricanes came through last year, all the utilities around us had outages for a few days,” Knight said. “We had everybody back up the same day the storm left the city.”
Knight said there's even an industry manual out — a kind of a how-to book that companies can use to fight municipalities looking to get off the utility grid. The 70-page manual from the Edison Electric Institute includes ways to prevent takeovers at the legislative level and at the ballot box.
“They fought us every step of the way,” Knight said. “We were, of course, the first one in Florida to do this. And so they first filed a lawsuit challenging whether we really had the right to purchase.”
Winter Park bought the electric distribution system in the city limits from Duke and buys power on the open market through long-term contracts. Knight said they buy the bulk of the power through the Florida Municipal Power Association, but had to buy energy through Duke after they bought the system.
"We enter into seven- to 10-year contracts to buy power," he said, "And then it comes across the transmission lines, in our case, owned by Duke Energy, because they're all around us."
The Orlando-based Association describes itself as a wholesale power agency owned by municipal electric utilities in Florida. It serves the 33 municipal electric utilities located across the state.
In September, Clearwater's City Council voted unanimously to study creating its own municipal electric utility to replace Duke.
During that meeting, residents were in favor of the change. Shane Marr said the Charlotte, North Carolina-based utility charges higher rates to pay its investors.
“Duke has fleeced the Clearwater community for many decades,” he told council members. “People across the community have struggled to pay the bonuses of shareholders who have no regard for their well-being.”
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Councilman Ryan Cotton noted that Winter Park is on track to bury all their power lines underground by 2030.
"If we look at Winter Park, your city's going to be able to reinvest into itself," he said at the September meeting. "So not only are you going to be getting upfront savings that still continue through the 30-year (contract) generationally, but you will also get the reinvestment of undergrounding service lines just like Winter Park is doing."
An independent study commissioned by NewGen Strategies and Solutions predicts that electric bills would become up to 18% lower than Duke Energy's rates.
City council members agreed to go forward with a more detailed feasibility study. The city's 30-year agreement with Duke ends in December.
Duke states its case
Duke spokeswoman Ana Gibbs says they're the most reliable source of electricity for the region — especially right after hurricanes.
“During Milton, Helene, and Debbie, Duke Energy was able to bring in 27,000 resources from across the country. That means crews came in from Colorado, California, and even Canada, and we were able to restore more than 2 million customer outages,” Gibbs said.
"In addition to that, our advanced self-healing technology was able to reroute power and avoid more than 325 million minutes of outages. And what that means was the lights were able to stay on during those 325 million minutes, when customers needed the lights on the most. The investments we've made to upgrade the grid was able to avoid outage minutes during those storms, and that's really important to our customers."
Duke added that it’ll fight moves by the city to disconnect. It's study showed a transition could cost Clearwater up to $1 billion.
The city plans to get its own estimate after the new study is complete.
Research shows Duke Energy has the highest average residential rates in the state, followed by Tampa Electric. Winter Park had one of the cheapest rates.
It's been done before
Many Florida cities have run their own electric services for decades, including Jacksonville, Orlando, Gainesville, Kissimmee, and Alachua.
In Polk County, Lakeland Electric has operated as a public power utility since 1904. Bartow has had its own electric utility since the early 1900s.
St. Petersburg is also considering creating its own utility. Its 30-year contract with Duke ends in August.
Council member Corey Givens Jr. said during a meeting that he knows the city could end up in litigation for years. But he said he has personally felt the pinch of high prices.
“$450 was my bill yesterday, the highest bill that I have ever received. And I was disgusted because I felt what my constituents are feeling,” he said. “They want help now.”
But Mayor Ken Welch has already discussed a new decade-long agreement with the company.
There have also been arguments to stay with established utilities. In 2018, Vero Beach voters agreed to sell their century-old, debt-laden municipal utility to Florida Power and Light.
The selling point — their utility bills would go down. And... they did.
