SUBJECT/RECOMMENDATION:
Title
Create the structure for possible bond issuance in the event the City purchases the local electric distribution assets and pass Ordinance 9887-26 on first reading.
Body
SUMMARY:
In December 1995, the City of Clearwater executed a 30-year electric franchise utility agreement with Florida Power. Through a series of corporate mergers and acquisitions, the agreement was assigned to Duke Energy in 2012. As the 30-year franchise agreement has now expired, the City is evaluating the best way to promote affordability, economic growth, and resilient infrastructure through undergrounding and other means. These goals align with the State’s energy policy, as codified in F.S. Section 377.601.
On September 29, 2025, the City Council received a presentation from NewGen Strategies & Solutions. NewGen was hired by the City Council to assess the financial and operational feasibility of the City distributing electricity directly to customers. Like most municipal utilities, the City would purchase power at wholesale. In that respect, a municipal electric utility would function similar to the City’s existing natural gas utility or its water & sewer utility.
On October 15, 2025, the City Council unanimously authorized an appraisal of the electric distribution system. The purpose of the appraisal is to reduce the cone of uncertainty, and identify a specific and reasonable purchase price in the event the City offers to purchase the distribution assets.
The next step is for Council to authorize bonds. An authorizing ordinance is a public process requiring two stand-alone votes, along with advertising. Importantly, the authorizing ordinance is only the first step in the process of considering bonds. The ordinance does not obligate the City to issue bonds, or to make a purchase offer. Rather, it provides a financial framework that enables the City to negotiate or extend a purchase offer in the event the City decides to do so.
APPROPRIATION CODE AND AMOUNT:
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