The city of Clearwater has completed another big step in deciding whether to separate from Duke Energy by finishing an appraisal of all Duke property the city would need to acquire.
The estimated value of Duke’s Clearwater assets is about $265 million, according to the city’s consultant, NewGen Strategies & Solutions.
Officials are aiming to discuss the findings in July. The city is mulling its options as its longtime legal agreement with Duke comes up for renewal and residents have felt the pain of spiking power bills. A previous report commissioned by the city found that if Clearwater left Duke and formed a city-run utility, residents could save millions.
St. Petersburg officials also voted earlier this month to fund a NewGen report analyzing whether it could leave Duke.
The new appraisal number is roughly half the lowest estimate for Duke’s assets in a report commissioned by the company. That analysis, completed by a different consulting company that’s often hired by utilities fighting municipal grid campaigns, found that Duke’s assets would be worth anywhere from $477 million to $695 million.
Those blockbuster numbers contributed to a whopping total cost estimate of more than $1 billion, which was printed on door-hangers and other campaign materials distributed by pro-Duke canvassers. Duke has distanced itself from that campaign but has repeatedly declined to answer questions about whether it’s funding the effort.
When asked about the disparity between the appraisals, Duke Energy spokesperson Ana Gibbs only said that the company believes that renewing the agreement with Clearwater would benefit customers.
“We remain committed to providing safe, reliable power and look forward to working with the city of Clearwater to renew our franchise agreement,” Gibbs wrote in a statement.
As part of conducting this latest appraisal for the city, NewGen consultants visited several substations in Clearwater in November along with engineers. They observed the equipment from the public property outside because the visits were “not facilitated by Duke,” the report reads. They also drove around the city to look at distribution equipment.
Engineers also analyzed maps and proprietary information provided by Duke, though the utility did not give any information on its real estate rights, according to the consultants. This hamstrung the appraisers’ ability to arrive at an exact figure in some parts of the report.
Consultants also analyzed sales of utility equipment in other parts of the country and crunched numbers related to the depreciation of the system, the income it produces and more.
Clearwater Mayor Bruce Rector said he wasn’t surprised — nor was it unusual in these situations — that Duke’s appraisal was much higher than NewGen’s, which he said “came out more favorable than what was expected.”
Regardless, he said he remains interested in seeing if the city could provide lower electricity rates.
“It’s certainly interesting to see what their thoughts are,” Rector said of the appraisal. “I haven’t made up my mind yet.”
If Clearwater were to acquire the property from Duke, it wouldn’t be in a voluntary transaction.
The company has said its equipment is not for sale. That means the city would likely have to seize it through eminent domain in court.
Still, this appraisal could be key to that process. In eminent domain proceedings, a jury could decide how much money is owed to the original owner of the property.
NewGen calculated this appraisal based on definitions of property value set by Florida’s eminent domain law.
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