SUBJECT/RECOMMENDATION:
Title
Approve a 30-year Franchise Agreement with Duke Energy Florida, LLC, for the purpose of providing electric and power services in the City of Clearwater, authorize the appropriate officials to execute same, and pass Ordinance 9929-26 on first reading.
Body
SUMMARY:
Every ratepayer in Florida receives electricity from one of three distributors: either the electric utility is municipally owned, or it is an investor-owned utility (IOU), or it is a non-profit electric cooperative. The Public Service Commission (PSC) grants each utility, regardless of ownership, a monopoly to serve as the sole distributor of electricity within a given service area. Water utilities and natural gas utilities operate in a similar way.
To enable private IOU’s to access, and often excavate, the public right-of-way, IOU’s typically enter into franchise agreements with local governments. These agreements can be customized in several ways, including provisions relating to franchise fees and tree trimming.
In December 1995, the City granted a 30-year electric franchise to the Florida Power Corporation. Florida Power was a Florida company. However, the franchise agreement allowed Florida Power to freely assign and transfer their rights to different entities. In the years that followed, Florida Power was acquired by Duke Energy, a publicly traded North Carolina company. Duke Energy has provided local electric service since 2012.
As the 30-year franchise agreement reached its conclusion, the City evaluated the financial and operational feasibility of the City distributing electricity directly to customers, similar to the way that Clearwater operates its water and sewer utility and the Clearwater Gas Company (CGS).
In 2024, the City hired NewGen to prepare a feasibility study to advise the City as to the infrastructure needed and probable cost for the municipalization of electric utilities. In September 2025, NewGen presented an electric feasibility presentation to City Council. Based on that presentation, City Council voted to move forward with an appraisal. In June 2026, the City received the appraisal from NewGen.
Since the expiration of the franchise agreement in December 2025, the City and Duke have been operating on a month-to-month basis under the provisions of that franchise agreement. During this time, City staff and Duke have engaged in negotiations for a new franchise agreement.
Under the proposed franchise agreement, Duke will continue to construct, operate, and maintain its electric utility facilities to the City and its residents. The new franchise agreement will be for a 30 year period. The City will continue to receive a 6% franchise fee.
In addition to the new franchise agreement, the City and Duke will enter into a memorandum of agreement. The duration of the memorandum will coincide with the term of the franchise agreement, and provides as follows:
• Create a Vision Community Action Plan, performed by Vision First Advisors (or another mutually agreed third party) at Duke Energy's sole expense to best achieve its strategic goals. Provide ongoing Economic Development support in furtherance of the recommendations developed in the Action Plan in amounts of $20,000.00 annually for the first five years of the Memorandum.
• Create a Downtown Retail Development Strategy, performed by Retail Strategies (or another mutually agreed third party). Provide funding of the Development Strategy through five installments of $30,000.00, followed by a site readiness review based on the strategy, with all work coordinated to support the City's strategic goals.
• Assist with the City's increased infrastructure resiliency goals to further support economic growth and development of annual donations of $100,000.00 for six consecutive years.
• Site-readiness evaluations of city-designated downtown areas and the Hercules Industrial Park, on schedules jointly determined by the Parties.
• Providing five annual payments of $20,000.00 in economic development funding for the North Greenwood Community Redevelopment Agency through Grove @ 1105.
• Complete construction of a looped electrical feed for the City Police Headquarters at 645 Pierce Street.
• Donate $10,000.00 annually for the first twenty 20 years of this Memorandum for the City's beautification efforts.
• Duke and the City will draft and execute a 20-year Naming-Rights Sponsorship Agreement (NRSA) for Coachman Park improvements, to include shade producing structures, with Duke contributing $30,000.00 annually throughout the NRSA term.
• Provide annual updates identifying third-party users attached to Duke poles throughout the City, with coordination assistance as needed.
• Provide annual GIS updates of Duke's distribution network.
• Allow the City continued use of property adjacent to the Clearwater Beach Restoration Center, adjacent to the Countryside Recreation Complex and Library at 2191 Soule Road at no cost. Allow parking access within Duke's right-of-way at the Carpenter Complex and BayCare Ballpark.
• Leverage Duke-maintained attic stock of electrical equipment for City Manager-designated critical, time-sensitive projects.
• Duke quality assurance process to include ADA accessibility of power pole installation to comply with ADA requirements.
• Vegetation Management Plan.
• Appear annually at a regularly scheduled council meeting to provide information on resiliency plans within the city.
If Council passes this Ordinance on first reading, the memorandum would be approved by Council together with the second reading of this Ordinance tentatively scheduled for August 6, 2026.