3 suitors suing JEA to keep bid details secret

FP&L parent among companies trying to block JEA from releasing ‘confidential’ information

Three suitors suing JEA to keep bid details secret
Three suitors suing JEA to keep bid details secret

JACKSONVILLE, Fla.Three companies that expressed interest in buying JEA are suing the city-owned utility to block the release of certain details from their bids, saying that information is considered proprietary.

On Wednesday, Florida Power & Light parent NextEra Energy, Duke Energy and American Water Works filed a lawsuit in Duval County to keep bid details, such as what they would have paid for JEA and what the utility would have netted from a sale, out of the public eye.

“This information constitutes proprietary confidential business information and trade secrets, which, if disclosed, would inflict substantial competitive injury upon Plaintiffs and cause them irreparable harm,” the companies argue, according to a copy of their complaint obtained by News4Jax.

Further, the privately held utility companies contend that the formulas involved in calculating their bid amounts are considered trade secrets, so the release of their complete bids could allow third parties to reverse engineer their calculations and expose confidential information.

The suit stems from an Invitation to Negotiate (ITN) JEA issued in August, which opened the door to bids from outside companies interested in buying or operating all or part of the city-owned utility. Of the 16 initial responses received by JEA, nine were selected in October for additional talks.

DOCUMENT | Read a copy of the lawsuit

Unlike the initial responses, the companies say, the revised responses were “far more substantive and complex” and contained details that the suitors viewed as confidential – specifically the initial gross proceeds and initial net proceeds – because their release could influence future negotiations.

“Each Plaintiff derives independent economic value from the fact that its respective Calculation Process is not generally known to and is not readily ascertainable by proper means by others who would likely obtain economic value from its disclosure and/or use,” the complaint states.

Nothing ultimately came from the negotiations as JEA’s board of directors formally voted to cancel the ITN process on Christmas Eve in response to public backlash over the direction of the utility.

At the heart of the issue now is whether the details cited by NextEra and its cohorts would be exempt from Florida’s public records laws. In court filings, the companies cited a series of state laws designed to safeguard sensitive information and trade secrets from public disclosure.

But not everyone is convinced of that parts of the bid should be treated as confidential.

Carla Miller, the city’s ethics director who was present for negotiations that took place behind closed doors, has called on JEA to release the bids because she considers them public records. She had plans to release her notes from those talks Thursday but was told to hold off because of the lawsuit.

“I find it surprising they don’t want to release the basic information,” Miller told News4Jax on Friday.

The lawsuit comes at the same time the utility is trying to clear the air over the state of its finances. Throughout the ITN process, then-CEO Aaron Zahn painted JEA’s financial future as bleak. Others have since challenged that outlook, pointing to a recent quarterly report that they say shows positive signs.

JEA has pushed back on that, saying the utility was forced to draw money from a stabilization fund to shore up its revenues. City Councilman Matt Carlucci, a critic of the ITN process, doesn’t agree.

“That was last year,” Carlucci told News4Jax. “This year they are making so much more money, they won’t have to dig into the right stabilization fund to stabilize rates.”

Of course, the entire privatization process is under the microscope now more than ever before. Besides parting ways with several members of its senior leadership team, including Zahn, and its board, JEA now finds itself under investigation by the City Council, and possibly federal investigators, too.

Mayor Lenny Curry, who appoints the board of directors, has identified seven executives he views as qualified replacements for the outgoing board members. Those appointments remain subject to the approval of City Council, which is expected to discuss them on Tuesday.

About the Author: