St. Petersburg Mayor Ken Welch’s administration will move forward with creating a request for proposals (RFP) on a feasibility study evaluating a potential municipal electric utility, after the City Council approved a resolution calling on him to do so.
But Welch is also suggesting a short-term solution with Duke Energy, which currently provides electric service for the city under a 30-year memorandum of understanding (MOU) that expires next year.
“It is vital that we approach the question of a municipal electric utility with a clear-eyed and realistic analysis of both the costs and the potential benefits,” Welch wrote in a memo to the City Council Friday.
The memo outlined the administration’s plans to “begin the process of developing a feasibility study RFP informed by” a “high-level analysis and community feedback. The administration also plans to “clarify the perceived cost/benefits and goals of creating a municipal electric utility” that looks at rates, local control, clean and renewable energy and more.
But Welch said the city must also be mindful of protecting “the stability and continuity of service” for residents. Creating a municipal utility, Welch argued, would take years.
To ensure a shorter-term solution, Welch suggests establishing a 10-year agreement with Duke that would provide a window to complete studies and — if determined to be in the best interest of the city, its residents and stakeholders — “ensure reliable service and build the substantial capital plan required for municipal electric utility acquisition and operation.”
Welch wrote that his administration has already been in communication with Duke Energy about such a plan.
He also said a short-term agreement would allow the city to update its MOU with Duke “to advance our community’s clean energy and electric service priorities.” He said information gleaned from a feasibility study could also be used to inform that updated MOU, along with “broad community feedback.”
“This approach gives us the opportunity needed to conduct a thorough, transparent analysis with thoughtful and strategic planning over the next decade,” Welch wrote. “It also ensures that during this time our residents can rely on stable and dependable services as we shape the long-term future of energy in St. Petersburg.”
The memo comes after the St. Pete City Council on Thursday approved a resolution calling for the feasibility study. There had been some debate about whether to move forward or wait instead for results of a similar feasibility study underway in Clearwater.
The city of Clearwater’s contract with Duke ends this year, prompting its City Council last year to order its own feasibility study. Duke Energy, in May, offered its own study, warning Clearwater and its residents that acquiring its infrastructure would cost between $1.13 billion and $1.52 billion. It also made clear its property was not for sale.
St. Pete’s legal team told Council members that since Duke would not be a willing seller, the city would have to pursue eminent domain, which would likely set up a protracted legal battle.
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