After more than two years of looking at dropping Duke Energy in favor of running its own electric utility, Clearwater has agreed to a new, 30-year contract with the power company.
In a unanimous vote Thursday, the City Council formally approved the contract, which it first voted on last month. The council also approved a memorandum of agreement that outlines roughly $2 million in financial commitments to the city from Duke.
“This is what we felt like was the best solution for our citizens,” Mayor Bruce Rector said. “Citizens of Clearwater and our taxpayers who would be funding the bill to make the transition happen.”
The City Council has said the upcoming property tax referendum makes dropping Duke too risky, even though a study that Clearwater commissioned in 2024 found residents could save millions of dollars on their electric bills throughout the next 25 years with a city-run utility.
Clearwater could lose more than $28 million dollars in annual property tax revenue if voters approve the referendum to raise an exemption on primary residences in November, according to a report from the state Revenue Estimating Conference, a nonpartisan panel of economists.
The city would have to acquire Duke’s electric equipment in court, which the utility warned would be “lengthy, expensive and very complicated.”
Those factors, in addition to Duke’s financial contributions, made staying with the company the better option, council members said.
Duke has agreed to pay a total of $600,000 to help the city in storm-proofing efforts, fund “beautification efforts” for two decades and help create a downtown retail development strategy.
Clearwater will receive a total of $100,000 throughout five years for a shipping container mall in the North Greenwood neighborhood, and Duke will work with the city to purchase Coachman Park’s naming rights. Duke would have to pay $30,000 annually and add more shade to the park as a part of that agreement.
In recent years, residents have been angry at the utility for cutting down dozens of trees, which the company said was necessary maintenance to limit power outages, and some have struggled to keep up with the rising cost of monthly bills. But for some residents who spoke during public comment Thursday evening, the $2 million wasn’t enough.
“I feel like you all are more certain of keeping an energy company monopoly in Clearwater than investing in the community,” Clearwater resident Jeff Month said.
Clearwater’s previous 30-year agreement with Duke expired in December, which gave the city a rare opportunity to explore its options with — or without — one of the country’s largest power companies.
From the beginning the utility has pushed back.
Residents have received robocalls saying dropping Duke would cause higher taxes. And canvassers early this year knocked on doors in Clearwater and St. Petersburg, where officials also are considering dropping Duke. They warned that the city could incur billions of dollars in debt and residents would face higher property taxes.
Although Duke declined to answer specific questions about whether it had helped fund the canvassing effort, Rector and a St. Petersburg City Council member said they suspected the utility was behind it.
“We appreciate the City’s collaborative approach in working with our team to reach a meaningful agreement that benefits customers, supports the City’s priorities, and lays the groundwork for an even stronger relationship with Duke Energy,” Duke Energy Florida President Melissa Seixas said in a statement.
Times staff reporter Emily L. Mahoney contributed to this report.
