Mayor Ken Welch could have declined the city council’s formal request to study the feasibility of terminating St. Petersburg’s longstanding relationship with Duke Energy and replacing the conglomerate with a municipal utility.
Welch acquiesced in a memo sent to council members Friday, a day following their 5-3 vote. However, he also pitched a 10-year extension with St. Petersburg-based Duke Florida.
The city’s current 30-year contract with Duke ends in August 2026, and Welch has already discussed a new decade-long agreement with the company. He said that would provide a “reasonable window – sufficient to ensure reliable service and build the substantial capital required for municipal electric utility acquisition and operation, but not prolonged as to limit our future options.”
“This approach gives us the opportunity needed to conduct a thorough, transparent analysis with thoughtful and strategic planning over the next decade,” Welch wrote. “It also ensures that during this time our residents can rely on stable and dependable services as we shape the long-term future of energy in St. Petersburg.”
Thursday’s vote marked the first time the entire council has publicly offered its thoughts on a subject broached multiple times by the Health, Energy, Resilience and Sustainability Committee. Councilmembers Gina Driscoll, Lisset Hanewicz and Mike Harting voted against the proposal.
The passed resolution requires Welch, who once worked as an accountant for Florida Power Corp., which later became Duke Florida, to seek bids from consultancy firms to conduct the feasibility study. Councilmember Richie Floyd called it an initial step before a “big decision coming up next summer.”
“I don’t want us to get lost in the weeds of what is and isn’t possible,” Floyd said. “Because we’ll find out what is and isn’t possible if we were to go through with this.”
Residents expressed concern with soaring electric bills, service reliability and Duke prioritizing shareholders over customers with no other options. The company reported a net income of $971 million in the second quarter, beating analysts’ estimates. New York City-based Brookfield Asset Management recently announced its $6 billion cash offer for a 19.7% stake in the utility.
The City of Clearwater allocated $500,000 to weigh the pros and cons of establishing a municipal utility in August 2024. Councilmember Gina Driscoll is among the city officials who would prefer to see those results “before we start expending time and funds on a study of our own.”
Welch, to some extent, agreed with that sentiment. He called it vital to “approach the question of a municipal electric utility with a clear-eyed and realistic analysis of both the costs and potential benefits.”
“To that end, while we await the results of Clearwater’s feasibility study, which should be instructive, we will also initiate a St. Petersburg-specific process to clarify the perceived costs, benefits and goals … at a macro level,” Welch wrote. That will encompass rates, local control, clean energy projects and other aspects.
He said that “high-level analysis and community feedback” would inform the city’s request for proposals process. Welch also noted that officials must ensure service continuity for residents.
“Even if the decision were ultimately made to move forward with creating a municipal utility, that process would take years,” he added. “For this reason, it is prudent to pursue a shorter-term franchise agreement with Duke Energy.”
Assistant City Attorney Jenaine Williams said Thursday that Duke will “not be a willing seller.” The city and company must determine the value of local electric infrastructure, and officials must then prove a “municipal purpose for seizing those assets through eminent domain” in court.
Consultancy proposals will determine the feasibility study’s cost. Councilmember Brandi Gabbard reiterated that “this is a step-by-step process,” and “we’re running out of time.”
“I see no danger in us moving forward past today,” Gabbard said. “I see a lot of danger in not moving forward past today, because then we’re going to move into a negotiation without all of the information and without doing all of our due diligence.”
Councilmember Deborah Figgs-Sanders similarly said she would not support another 30-year contract with Duke. However, she would also like additional information that is specific to St. Petersburg.
“This is about education – this is not about an end-game of dumping Duke,” Figgs-Sanders continued. “We’re not Clearwater. This is the City of St. Petersburg.”
Welch subsequently wrote that franchise negotiations would offer the city an opportunity to update its memorandum of understanding (MOU) with Duke. He said that would help “advance our community’s clean energy and electric service priorities” through the 10-year extension.
Council Chair Copley Gerdes said he would approve the resolution, but is a “far way away from a ‘yes’ vote when these proposals come back.” He was joined by Gabbard, Floyd, Figgs-Sanders and Councilmember Corey Givens Jr., who expressed similar reservations.
