Municipal Electric Utility Study
Project Overview and History
The city of Clearwater contracted with NewGen Strategies and Solutions, LLC (NewGen) to conduct a feasibility study of the establishment of a municipal electric utility to serve the citizens and businesses of the city. Duke Energy Florida currently provides electric services in Clearwater, Pinellas County, and a large portion of central and northern Florida.
Duke’s electric service to the city is granted through the terms and conditions within a Franchise Agreement with the city that was signed in 1995 with Florida Power Corporation and transferred to Duke in 2012 as a result of its merger with Progress Energy. This 30-year Franchise Agreement expires on Dec. 31, 2025, which offers the city an opportunity to evaluate different options for its electric service provider, including the creation of a potential Clearwater MEU.
The intent of this Feasibility Study was to develop an estimate of the Clearwater municipal electric utility’s projected average annual system retail rate compared to an estimate of Duke’s similar average system retail rate for the customers in the Clearwater area. The Clearwater municipal electric utility average system rate was developed as the total annual revenue requirement to provide service, which includes estimated operating costs, debt service payments associated with acquiring the physical assets of the Duke distribution system, and other costs.
This study does not envision, nor would it be required, that the Clearwater municipal electric utility own or operate any generation assets to serve its load. It is assumed and generally accepted that publicly owned utilities in Florida are entitled to purchase wholesale power and transmission service through processes regulated by the Federal Energy Regulatory Commission (FERC). The feasibility of establishing a Clearwater MEU must consider an estimate of a range of values for the acquisition of the Duke distribution assets plus other associated costs anticipated to be incurred in the process of such an acquisition. If the city determines that establishing a Clearwater MEU is feasible and chooses to move forward with this process, it must acquire Duke’s existing distribution-related assets. To accomplish this acquisition, the city would incur significant fees and costs.
The city does have the option to provide electric service directly to Clearwater residents and businesses, similar to the way that Clearwater operates its water, sewer and gas utilities. If Clearwater elects to municipalize, it will join 33 other municipally owned electric utilities in Florida. Examples of varying population sizes and topography include Bartow, Jacksonville, Key West, Lakeland, Leesburg, New Smyrna Beach, Ocala, Orlando, Tallahassee, Wauchula, and Winter Park. Alternatively, Clearwater can sign a franchise agreement with Duke Energy.
View the Duke Energy Franchise Agreement
About NewGen
NewGen brings decades of experience interacting with electric utilities, and the credibility of recent studies recommending municipalization (e.g. San Diego) and studies recommending against it (e.g. Chicago). The cost of the study equates to 4.8% of one year of franchise fees the city receives from its franchise agreement. The study costs will be paid through available special program funds. NewGen partnered with Barr Engineering Company and Duncan & Allen, LLP, collectively the NewGen Project Team, to develop the assumptions, analyses, and recommendations for this study. This report provides the results of the study conducted by the NewGen Project Team.
Next Steps
The study conducted by NewGen is a feasibility level estimate. It provides an approximation of cost to help the city evaluate whether we are “in the ballpark.” The next step is to evaluate the assets in detail. Like other property, this requires an appraisal. The city council has authorized a system appraisal, which is expected to be completed by the end of February 2026. The appraisal will either confirm, disconfirm, or modify the $572 million estimate. All information will be available to the public and reviewed at public meetings.
Watch the City Council Items
Feasibility Study with NewGen
NewGen Presentation and Council Discussion on Sept. 29, 2025
Appraisal Agreement Contract Amendment With NewGen on Oct. 15, 2025
FAQ and Resources