Clearwater city leaders are weighing whether to move forward with a plan to replace Duke Energy with a city-owned electric utility, but new estimates show the transition could carry a significant price tag.
According to the City of Clearwater’s municipal electric utility study, the estimated cost to acquire Duke Energy’s local distribution infrastructure is approximately $572 million. The estimate was prepared by the consulting firm NewGen Strategies and Solutions as part of the city’s ongoing evaluation of whether to provide electric service directly to residents and businesses.
City officials commissioned the study as Clearwater explores alternatives to its long-standing franchise agreement with Duke Energy. Under the proposal, Clearwater would operate a distribution-only utility, purchasing power from existing suppliers rather than generating electricity itself.
The feasibility study found that a municipal electric utility could potentially provide lower electric rates than Duke Energy. NewGen projected average customer savings of about 7% during the first five years and approximately 18% over the following decades.
However, Duke Energy disputes the city’s cost projections. A separate analysis commissioned by the utility estimated that acquiring and separating Duke’s infrastructure could cost more than $1 billion, citing the value of assets, system separation expenses, startup costs, and other financial obligations.
The city has already authorized a detailed appraisal of Duke Energy’s assets within Clearwater. Officials say the appraisal will help determine whether the $572 million estimate accurately reflects the value of the infrastructure and provide a clearer picture of the costs involved.
Any effort to establish a municipal electric utility would likely require years of planning, negotiations, regulatory approvals, and potential legal challenges. Duke Energy has stated publicly that its system is not for sale, raising the possibility that Clearwater could face a lengthy acquisition process if it decides to move forward.
City leaders have not made a final decision on whether to pursue a municipal utility. The appraisal and additional analysis are expected to play a key role in determining the next steps.
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