Florida TaxWatch Warns Clearwater Municipal Electric Utility Plan Puts Taxpayers at Risk

TaxWatch recommends Clearwater pursue renegotiated franchise agreement with Duke Energy instead.

Published on Feb. 10, 2026

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Florida TaxWatch has released a report opposing Clearwater's proposed plan to establish its own municipal electric utility, warning that it would put taxpayers at substantial financial and legal risk with limited upside. The report found that the city's feasibility study underestimated the costs, and that acquiring Duke Energy's assets would likely require prolonged litigation over eminent domain issues. TaxWatch is instead recommending Clearwater pursue a renegotiated franchise agreement with Duke Energy.

Why it matters

The decision on whether Clearwater should establish a municipal electric utility has major financial implications for taxpayers. Florida TaxWatch's analysis raises concerns that the city's own feasibility study may have underestimated the costs and risks involved, potentially exposing residents to higher bills and taxes if the plan moves forward.

The details

Florida TaxWatch's report found that Clearwater's proposed municipal electric utility 'presents substantial financial and legal risks with limited upside for taxpayers.' The group's analysis concluded that acquiring Duke Energy's assets would 'almost certainly require prolonged litigation' over eminent domain, which could dramatically increase costs and delay implementation. TaxWatch also said the city's feasibility study conducted by NewGen Strategies underestimated acquisition, severance, startup and financial costs, and that a municipal utility would lack the scale and experience of a large investor-owned utility like Duke.

  • Clearwater's franchise contract with Duke Energy ended on December 31, 2025.
  • In September 2025, the Clearwater City Council voted to move forward with next steps in establishing a municipal electric utility.
  • The NewGen report estimates that eliminating Duke and establishing a Clearwater Municipal Electric Utility would save ratepayers approximately 7% each year for the first five years, with savings increasing to 18% over the subsequent 25 years.

The players

Florida TaxWatch

A nonpartisan, nonprofit public policy research institute and government watchdog organization that analyzes state and local government spending, taxes, and economic issues.

Clearwater City Council

The governing body of the city of Clearwater, Florida, which voted in September 2025 to move forward with next steps in establishing a municipal electric utility.

Duke Energy

An investor-owned electric power holding company that provides electricity to customers in Florida, including the city of Clearwater.

NewGen Strategies

A consulting firm that conducted a feasibility study on behalf of the city of Clearwater regarding the establishment of a municipal electric utility.

Sen. Nick DiCeglie

A Florida state senator who requested the independent research project by Florida TaxWatch on Clearwater's municipal electric utility proposal.

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What they’re saying

“Florida TaxWatch considers the City of Clearwater's efforts to take over electric utility service from a private company to be a huge financial risk for something that is projected to generate single-digit savings, at best, for the first few years of operation.”

— Jeff Kottkamp, President and CEO, Florida TaxWatch (floridapolitics.com)

“No matter how much the City thinks this effort will cost, or how long this process will take, it is going to cost more and take longer to do.”

— Jeff Kottkamp, President and CEO, Florida TaxWatch (floridapolitics.com)

“Moreover, there are some things the private sector does better than the public sector, and the provision of electric power service is one such example.”

— Jeff Kottkamp, President and CEO, Florida TaxWatch (floridapolitics.com)

What’s next

The Clearwater City Council will decide whether to move forward with establishing a municipal electric utility or pursue a renegotiated franchise agreement with Duke Energy.

The takeaway

Florida TaxWatch's analysis raises serious concerns about the financial risks and potential costs to Clearwater taxpayers if the city moves forward with establishing its own municipal electric utility. The group's recommendation to instead negotiate a new franchise agreement with the private utility provider, Duke Energy, highlights the need for Clearwater officials to carefully weigh the tradeoffs and potential downsides before making a decision that could have long-term implications for residents.