St. Petersburg City Council member Richie Floyd and representatives of the grassroots Dump Duke campaign came together Wednesday evening to discuss the future of energy in St. Petersburg.
Floyd and Dump Duke organizer and planning engineer Jason Scott spoke about the city’s 30-year franchise agreement with Duke Energy, which will expire in August. The town hall was also an opportunity to discuss the City Council’s June 4 vote on funding a municipal electric utility feasibility study.
According to a City document, $590,000 will be allocated if the study is approved.
Before outlining the potential benefits of a public power operation, Scott and Floyd talked about the various costs on Duke Energy bills. These include fees for storm recovery and an asset-securitization charge. As a result, customers are paying to help cover costs after Duke Energy closed a nuclear plant in Crystal River.
Earlier this month, the Florida Public Service Commission authorized a $90.5 million refund because Duke Energy over-collected funds for storm restoration efforts.
According to the Florida Municipal Electric Association, Duke Energy has one of highest rates in the state.
Scott and Floyd explained that even if customers decrease their electrical use, their bills will continue to increase with a corporate energy provider. This is due to storm-related costs, fuel increases and grid upgrades that customers help pay for.
Duke Energy Florida’s approved return on equity range is 9.3% to 11.3%, with a midpoint of 10.3%, under a 2024 settlement approved by the Florida Public Service Commission. ROE is a measure of profitability.
Floyd argued that a municipal utility could provide more flexibility and have a local economic impact. Community members and elected officials could work together on major energy decisions such as placing power lines underground. This could reduce outages during storms.
“That’s a big difference with public power. We get a say in how things are run,” he said. “The revenue stays in our community. Duke Energy is not a local company. They’re from North Carolina. They make a lot of profits and they take those profits and give them to shareholders and it doesn’t necessarily help us out.”
Floyd added that the City is concurrently exploring a feasibility study and negotiating a potential new long-term agreement with Duke Energy.
“We have no other option,” he said. “If we were to sign up with Duke Energy again, it would be a minimum of 10 years. Possibly 20 to 30 depending on how the contract is structured. So, this is our one opportunity within a generation to see if something different is possible for us.”
Floyd added that the City does not have to make a quick decision. The St. Petersburg government could continue working with Duke Energy after the expiration date without signing a new franchise agreement. It’s important, he said, to “do our due diligence.”
If the study is approved next week, NewGen Strategies and Solutions LLC will oversee the effort. The company previously worked on a feasibility study for the City of Clearwater.
He explained that the initiative could provide “real data” including how much it would cost to build a municipal utility and whether the City should purchase transmission equipment.
“That’s optional for us,” Scott added. “We don’t need to buy any generation or transmission assets. But, there could be some benefits to it as well. As in, less transmission costs. If we were to just be distribution here in the City of St. Pete, we would have to still pay Duke Energy or another utility for transmission costs.”
The study could also help the City negotiate with Duke Energy, Floyd argued. It could provide some “leverage.”
Switching to public power will not be easy, he emphasized. It would require “work” and “commitment.” The study is estimated to take eight to nine months to complete. If a municipal utility is determined the best path forward, the process would be a multi-year effort.
“I don’t see any reason why we shouldn’t invest in determining if it’s feasible for us,” Floyd said. “I think, using conservative language, it’s fiscally irresponsible for us not to at least explore this.”
