JEA board votes to investigate privatization
Utility's board considering options to deal with falling revenues
JACKSONVILLE, Fla. – After the board of directors of the JEA discussed options to deal with falling revenues due to lower electric consumption, it voted unanimously Tuesday morning to investigate privatizing the city-owned utility.
The board found other options presented to stay profitable, including significant rate hikes and laying off more than 500 employees, unacceptable, but backed a resolution to explore privatization. It said all options, from finding a new buyer to selling individual assets to bringing in outside management, would be considered.
"There was never a vote by the board today to sell JEA," board member Alan Howard said. "It is really just to explore options. What are the options available to make JEA successful in the future?"
This option approved does not specifically call for the utility to be sold. When the subject of selling the JEA came up 18 months ago, the controversy spilled over into the City Council and prompted a referendum on last year's ballot in which voters overwhelming supported ballot approval before selling more than 10% of the utillity.
The board on Tuesday approved "Scenario 3 - The non-traditional utility response." After discussion, a resolution passed calling for CEO Aaron Zahn to "take any and all action" to solicit an entity to manage the utility that could meet several criteria, including:
- Guaranteeing the city of Jacksonville at least $3 billion in value
- Giving each customer a rebate of about $350
- Guaranteeing three years of base rate stability
- Provide funding to make the city and Duval County Public Schools use 100% renewable energy by 2030
- Committing to providing 40 million gallons daily of alternative water capacity by 2035
- Retaining all full-time employees and offering current employee compensation and benefits for three years
- Protecting employee pensions
- Committing to its new headquarters building, to keep employees downtown
JEA board members said this option will allow the utility to grow instead of reacting to falling revenues with a massive rate hike and layoffs. Under this proposal, changes will be made and the City Council will get involved.
Councilman Danny Becton is the liaison between the city and the JEA.
"Privatization is way at the bottom of the list and there is a lot of paths to go down before that discussion becomes anything," Becton said. "We've got to figure out how to take JEA forward and grow with us."
Mayor Lenny Curry is traveling Tuesday, but sent this statement about the board's action:
Since taking office in 2015, I have challenged board appointees to focus attention on how independent agencies can best serve our city and strategically prepare for generations to come. This includes the board at JEA and the senior leadership they empower.
For more than a year at JEA they have undertaken a comprehensive strategic assessment. I welcome their wisdom and expertise, and that includes their assessment that there are significant challenges to moving forward with the status quo. Moving forward I hope they continue to apply this wisdom and expertise as they explore alternatives to these challenges.
Whatever path JEA board and senior leaders undertake, I will reiterate what I’ve said since 2018; any decisions I make related to JEA are guided by three core principles:
- The strength and success of JEA for decades is directly linked to the hard work of JEA’s employees. Any policy regarding the utility’s future MUST keep promises made to these employees. A path leading to hundreds of job cuts or failure to meet retirement needs of career employees is not acceptable.
- In our community, JEA customers have had access to a stable supply of electricity and clean water at reasonable, market-based rates. Any policy regarding the utility’s future MUST continue that access. Our local economy must not face diminished service or massive rate increases.
- As a publicly-owned asset, the value of JEA is built on the investment of taxpayers. Any policy regarding the utility’s future MUST respect that investment. Jacksonville taxpayers are co-owners of the utility and MUST have a voice in the future of their investment.
A Laborers' International Union of North America Local 630 representative, who represents many JEA employees, was glad the board looked at options other than layoffs, but that he still has concerns.
"Privatization is always a concern," Ronnie Burris said. "Any way you look at it, we don’t know what’s going to happen."
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