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For the first time in 30 years, the city of St. Petersburg is crafting new agreements with Duke Energy. A draft memorandum of understanding outlines a broad strategy for collaboration, while a franchise ordinance includes a buyout provision.
Obtained by Power Broker Magazine through a records request, the separate documents establish a detailed framework for how the utility will operate within municipal boundaries over the next decade. St. Petersburg’s contract with Duke expires in August, and the two entities “desire to memorialize their shared vision, guiding principles, values, and goals,” according to the memorandum of understanding (MOU).
Mayor Ken Welch’s administration covered community alignment, affordability, resilience, sustainability, and guiding principles in the unsigned MOU, which officials and Duke will annually review. City council members, who narrowly approved a $590,000 municipal utility feasibility study earlier this month, must still sign off on the 10-year franchise agreement ordinance.
“(The) City and Duke Energy will work to support and achieve a shared vision in areas of mutual alignment,” states the MOU. “Data-driven solutions will combine to continue the shared vision of continuous improvement toward renewable energy goals and an affordable, efficient, and resilient city.”
The eight-page MOU notes that St. Petersburg and Duke have “developed a strong tradition of working together” over the decades. However, perhaps the most notable provision in the 12-page ordinance is the city's right of purchase.
Officials can request a valuation and condition assessment of Duke’s electric system after nine years. They would analyze the information to validate cost estimates and then have the right to purchase utility assets within the city.
Company leadership has repeatedly said its property is not for sale. The buyout clause would eliminate the potential for protracted legal battle over eminent domain.
Duke must supply all records related to its franchise fee calculations, which are subject to city audits. The energy conglomerate collects that money from customers and transfers it to the city.
“We do not profit from these fees in any way,” states Duke’s website. Ana Gibbs, director of corporate communications, noted that the city also sets the 10% municipal utility tax - the maximum allowed under state law.
St. Petersburg annually collects approximately $23.5 million in franchise fees and $29 million in utility taxes. The city can reduce either rate at any time, Gibbs said.
Welch broached that topic at a recent mayoral forum. He noted that electric bills include franchise fees and municipal utility taxes, “and there is room in there for us to lower either one of those.”
However, Gibbs said residents currently pay a 6% franchise fee, which would remain unchanged under the new contract. The draft ordinance does not mention the municipal utility tax.
The proposed agreements follow a successful grassroots “Dump Duke” campaign, which advocates for a municipal utility. Councilmember Brandi Gabbard, a mayoral challenger who has pushed to explore electricity options for years, has proudly received the organization’s endorsement.
“Duke Energy has not agreed to the terms outlined in the city’s draft MOU,” Gibbs said in a statement to Power Broker Magazine.
“Duke Energy continues to believe that renewing the (current) franchise agreement is the best path forward for our customers and the St. Petersburg community,” she continued. “While the city’s decision to conduct a feasibility study pauses negotiations and creates uncertainty around how Duke Energy and the city will engage moving forward, it does not affect our responsibility and commitment to continue providing safe, reliable electric service to our customers.”
Community alignment
To strengthen the city’s relationship with Duke, the MOU outlines several community benefits. The two entities agree that public outreach should inform energy policy, support investments that create jobs, boost the economy, uplift local values, and embrace accountability through communication and transparency.
The city and Duke will hold annual meetings with “external stakeholders to discuss the progress of the collaboration, provide timely updates to upcoming actions that impact the broader community, and seek input and feedback as necessary,” states the MOU.
Duke must continue financially supporting programs that provide payment and energy conservation assistance. If signed, the MOU obligates the utility to keep its Florida headquarters in St. Petersburg.
The company would also have five years to break ground on a Clean Energy Demonstration project in St. Petersburg, “or provide $50 million to the city to be used to assist low-income households with utility payments.” Duke would commit $5 million for aesthetic improvements at the 40th Street and 71st Street North substations or pay the same amount for customer assistance.
St. Petersburg would also receive the Bayboro Harbor Plant property and convert it into parkland if the historic facility is decommissioned. “In addition, (the) City and Duke Energy will share accomplishments, philanthropy, and other community-minded activities,” states the MOU.
Resiliency
The document states that “collaboration has continued to expand, notably related to energy efficiency and renewable energy,” and billing analysis and tracking efforts. Duke plans to cut carbon emissions in half by 2030 and achieve a net-zero rate by 2050.
Prioritizing the integration of distributed energy resources, including microgrids, battery storage, and advanced smart grid technology, is a core resiliency strategy outlined in the agreement. The goal is to create more adaptable infrastructure that withstands environmental challenges while ensuring consistent service for residents.
“(The) city and Duke Energy are creating a holistic, collaborative, and mutually beneficial relationship that supports each of their goals for a clean energy future,” states the MOU.
Data transparency
“The success of this relationship will depend, in part, on the cooperative sharing of information and data in a timely manner,” states the MOU. That has been an issue since Gabbard first broached the idea of a municipal utility in February 2024.
Duke must annually provide city or corridor-wide electric consumption data to help inform planning, resilience assessments, and grant applications. Officials will also receive anonymous usage information on various customer classifications, including zip codes and income levels.
St. Petersburg will also receive data on local revenue generated, emissions, battery and distributed storage systems, clean energy projects, service outages, grid investments, self-healing technology that serves critical facilities, and vegetation management.
“Within 30 days after the execution of this Memorandum, (the) City and Duke Energy will meet to plan and advance projects covered under this collaboration,” states the MOU. (The) City and Duke Energy will move projects forward in a reasonable manner.”
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