City officials across the country are seeking to exercise their municipalities’ state-granted condemnation powers, including, in some cases, eminent domain, to pursue a process known as “municipalization” to take over their local investor-owned electric utility’s assets and deploy them as a public utility.  This affront to property rights threatens to saddle taxpayers in dozens of communities with considerable public debt.

On August 1, 2024, the Clearwater, Florida City Council voted to spend up to $504,000 to commission a nine-month feasibility study, set to conclude in May 2025, on seizing Duke Energy’s local assets to run its own municipal-owned electric utility when the current contract with Duke Energy expires in December 2025.  At a public meeting, Duke Energy Florida President Melissa Seixas told the council that “the City of Clearwater's current agreement does not have a purchase option and Duke Energy’s system is not for sale, not here, not anywhere within the state of Florida. … We will not be negotiating a purchase price if the city is actually interested in municipalization and taking over the system.  You will have to go through a process of condemnation, which is lengthy, expensive and very complicated.”  

In Michigan, the Ann Arbor City Council commissioned a feasibility study in September 2022 to evaluate the costs and benefits of a proposal to municipalize the assets of DTE Energy within its jurisdiction.  However, on January 6, 2025, the council voted to indefinitely pause the study until the initial estimated cost of between $300 million and $1 billion could be reduced before placing the proposal on the ballot in the fall of 2026.  The council anticipates having to face legal battles from DTE Energy, along with a $1.7 million estimated cost to complete the study on top of the $458,797 the city has already paid for the initial cost estimates.

In New York, State Senator Michelle Hinchey (D) reintroduced a bill, S. 2026, on January 15, 2025, which had failed in the 2023-24 session, to create a Hudson Valley Power Authority inspired by the Tennessee Valley Authority (TVA).  The TVA has struggled with its finances for decades, which was one of several reasons that President Trump’s fiscal year (FY) 2019 Major Savings and Reforms report proposed that the federal government should divest from its stake in TVA to save $4.9 billion over five years.  CAGW made the same proposal in its 2024 Prime Cuts, which estimated that divesting the government from TVA would save taxpayers $5.03 billion over 5 years.  New York’s S. 2026 would allow the new authority to seize the assets of Central Hudson Gas & Electric Group, a company whose more than 1,000 employees in the region serve approximately 315,000 electric customers, and may also put at risk the assets of four other investor-owned utilities in New York’s Hudson Valley region.  The bill has passed out of the legislature and is on its way to Governor Kathy Hochul’s (D) desk.

In 2023, voters in Maine defeated by a 70-30 percent vote a proposal to give the state government the power to seize the state’s two largest private energy providers and sell their assets to a new government-run energy monopoly.  Voters in El Paso, Texas defeated a similar measure by a vote of 82 percent to 18 percent.  State lawmakers considering whether to grant authority to municipal utilities to take over private energy providers should reject such proposals.  If they decide to permit them, they should apply guardrails to protect their constituents’ interests and let voters decide whether to allow such takeovers.