Why St. Pete and Clearwater should think twice about municipal power

Florida’s west coast cities are facing a tempting proposition: take control of their electric grids from Duke Energy and create city-run power companies. 

Clearwater has already committed $500,000 to study the idea, while activists in St. Petersburg — led by the local Democratic Socialists of America — are pushing their City Council to follow suit. 

But beneath the promise of local control lies a financial minefield that could burden residents for decades. As the famous political observer H. L. Menken once said “for every complex problem there is an answer that is clear, simple, and wrong.”

The numbers alone should give pause. An Independent One analysis estimates Clearwater would need to pay more than $1.1 billion to seize Duke’s assets and establish a municipal utility.

St. Petersburg has twice Clearwater’s population and, presumably, a correspondingly larger price tag. And these aren’t one-time payments — cities would borrow from Wall Street banks, saddling every resident with thousands of dollars in debt. Doing some back-of-the-envelope math, that puts Clearwater on the hook for interest payments alone of more than $50 million a year.

It’s not just the cost that makes this a bad deal for St. Pete and Clearwater residents. As storms grow more frequent and severe, the importance and complexity of maintaining a resilient grid has never been greater. 

Last year Duke mobilized 27,000 workers to restore power to 2 million customers after Hurricanes Debby, Helene, and Milton. 

Duke’s grid investments completed before the storms saved more than 300 million minutes of outages. 

Investments to make our electric grid more resilient are expensive. Yet proponents want cities to take over this intricate operation just as the storms are getting more frequent and more intense.

The complexity of carving up the grid to create a government power company shouldn’t be overlooked. Take Clearwater for example. The city is served by ten substations, but only one sits on city land. Others lie in unincorporated areas or neighboring jurisdictions. Creating a separate municipal grid would require building new substations and potentially laying underwater cables—expensive projects taking years to complete. 

Meanwhile, experienced lineworkers with decades of knowledge might not transition to government employment, leaving cities scrambling to maintain critical infrastructure during emergencies.

History offers sobering lessons. Boulder, Colorado spent $29 million and a decade trying to municipalize before abandoning the effort, having fallen behind on climate goals while the private utility accelerated renewable energy adoption. Long Island’s government takeover brought 50% rate increases, $9 billion in debt, and catastrophic storm responses — 400,000 customers lost power for a week during the pandemic after Tropical Storm Isaias.

And the success rate, or rather lack thereof, speaks volumes. Of 64 municipalization attempts over 25 years, only seven succeeded. Two were later returned to private ownership. Of the remaining five, most served tiny populations — one had just 150 customers.

Proponents claim municipal ownership would lower costs and advance clean energy, but evidence suggests otherwise. 

Duke already pays Clearwater $28.2 million and St. Petersburg receives $52 million annually in franchise fees and municipal utility taxes — revenue that would vanish under city ownership. These funds currently support city services; without them, residents would face either service cuts or tax increases alongside their new utility debt.

Rather than gambling billions on unproven municipal takeovers, cities should leverage their negotiating power for better franchise agreements. They can demand things like stronger renewable energy commitments and community investment without assuming massive debt or operational risks.

Local control sounds appealing, but not when it means betting billions of taxpayer dollars on managing increasingly complex infrastructure during an era of escalating climate threats. 

St. Petersburg and Clearwater residents deserve better than a risky experiment that could leave them paying the price for decades.

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