A closer look at the companies, funds that wanted to buy JEA
The JEA board ended the bidding process during an emergency meeting Dec. 24
JACKSONVILLE, Fla. – Before the JEA Board of Directors voted unanimously Tuesday to end the process of selling JEA, nine suitors were still in the running to acquire the city-owned utility.
Little was known about the companies selected to enter the negotiation phase of the controversial ITN (or Invitation to Negotiate) process, but that changed Friday evening when JEA launched the redesigned Whatsnextjax.com, a website billed as a way to "provide as much information regarding the Strategic Alternatives ITN process to the public as quickly as possible.”
“While I firmly believe the ITN process began for the right reasons — to figure out how we can best serve our community long into the future — the way the process was conducted has resulted in a loss of trust by the stakeholders we serve,” Interim Managing Director and CEO Melissa Dykes wrote in a statement on the website. “It is my goal to rebuild that trust. We will do so by operating in a deliberately transparent way, being more forthcoming with information, and clearly explaining the reasons for the decisions we’ve made.”
The move comes after JEA was heavily criticized for lack of transparency during the now-dead ITN process, which was cloaked in secrecy by a so-called “cone of silence” at the advice of attorneys.
The website, described as “a repository of documents that will continue to be populated over the coming days and weeks,” shows all 16 responded to invitations to negotiate for all or part of JEA.
Those 16 respondents were narrowed down to nine:
JEA Public Power Partners, IFM Investors PTY LTD, NextEra Energy Inc., MIRA Inc., E & W Development Corporation, American Public Infrastructure, American Water Works Company, Inc., Duke Energy and Emera, Inc.
Breaking down the bidders
- In their proposals to JEA, American Public Infrastructure wrote they planned to transition ownership to a new model, owned by U.S. public pension funds and state sovereign wealth funds - they say that sticks to JEA’s element of “public stewardship of public assets for public benefit". The company said their offer would lead to a higher upfront payment to the city, compared to other privatization structures, as well as lower rates for consumers. They also planned to maintain JEA as an independent electric/water utility, headquartered in Jacksonville.
- Duke Energy said it was Interested in the acquisition of substantially all of JEA’s assets and talked about its successful history of merging utility companies, resulting in $30 billion in transactions over the last decade. Duke Energy planned to make JEA a subsidiary.
- Emera Incorporated is a publicly-traded energy company based in Halifax, Nova Scotia, Canada that serves almost 400,000 gas customers across the state and 764,000 electric customers in the Tampa Bay area. The company planned to provide the City of Jacksonville and the Duval County Public School system with 100% renewable electricity by the year 2030. The company said it would provide greater than $3 billion of value and planned to provide more than $400 million of value distribution to customers ($350+ paid to each JEA account; $1,400+ for customers with electric, water, sewer and irrigation accounts).
- The JEA Public Power Partners proposal involves JEA and the city entering into a 30-year agreement with JEA Public Power Partners who would implement a tax-exempt debt financing structure by issuing bonds to meet JEA and the City’s needs. The City would retain ownership of assets and employees would remain city employees. The deal would give $3.25 billion upfront to the City, and provide $3.52 billion in debt relief as well as three years of base rate stability.
- IFM Investors PTY LTD, which is owned by 27 not-for-profit pension funds from around the world, planned to purchase JEA assets. IFM would be responsible for ongoing operation and management of JEA.
- Macquarie Infrastructure and Real Assets Inc. (MIRA Inc.) has about $129 billion in assets under management and owns utilities in the U.S. and around the world. The company was seeking 100% ownership interest in JEA as a combined electric/water/wastewater business. JEA would continue to be an independent utility based in and managed in Jacksonville. Executives would be local.
- E&W Development Corporation is a subsidiary of Exelon, a holding company based in Chicago that is connected to electric & gas utilities. Planned to acquire JEA for cash and convert it to a traditional investor-owned utility. JEA would have operated as a separate utility in the Exelon family, with senior management located in Jacksonville. The summary said their existing utilities outside of Florida would give JEA priority access to mobile response crews in the event of a hurricane.
- The proposals from NextEra Energy, the parent company of Florida Power & Light, and American Water Works Company, Inc., aren’t yet available because the release of their information still awaits legal authorization. A JEA spokesperson said the two companies filed “timely objections” to the release of documents provided to the city.
Also on the table, JEA was exploring going public with an initial public offering (IPO) or reorganizing as a utility cooperative, similar to the model used by Clay County’s utility provider, Clay Electric Cooperative, Inc.
To view all seven of the available proposals in their entirety, visit Whatsnextjax.com.
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