76ºF

FP&L parent would have paid $11 billion for JEA

Councilman Diamond calls plan that could’ve netted execs hundreds of millions ’criminal’

JACKSONVILLE, Fla. – The parent of Florida Power & Light would have paid more than $11 billion for JEA had the city-owned utility’s leadership gone through with a scuttled effort to put the utility up for sale.

That sum could have meant nearly $1 billion in bonuses for JEA executives and management through a controversial bonus scheme, known as a performance unit plan (PUP), that would have mimicked a stock purchase plan.

The bid amount, which NextEra Energy argued should remain under wraps for competitive reasons, was released Wednesday once a judge ruled it was public information. It would have netted the city nearly $6.5 billion in proceeds.

DOCUMENT: View a PDF copy of the judge’s order | Preliminary proposal from NextEra Engery

“As our bid clearly demonstrates, we believe Jacksonville has a bright future and we value highly our long-standing relationship with JEA,” NextEra spokeswoman Debbie Larsson said in an email Thursday.

The sales process, known as an Invitation to Negotiate (ITN), has been under scrutiny for months. Even though JEA’s board of directors canceled it in response to public outcry in December, the fallout from it has been wide ranging.

Among other things, it led to the removal of then-CEO Aaron Zahn along with the departures of several C-level executives and a shakeup of JEA’s board, which had signed off on the plan to test the waters of privatization as well as the PUP plan.

Now, both the city and federal government are looking into those abandoned plans. While the Council hopes to wrap up its investigation at the end of September, there’s no word on the status of the federal probe.

City Councilman Rory Diamond, a former federal prosecutor who’s a member of a special City Council committee looking into the abandoned sale process, said the $11 billion price tag could result in criminal charges for some of those involved in negotiations.

“What we found out is how much money the senior executives were going to get if JEA had been sold,” Diamond told News4Jax in an interview Thursday. “And it’s almost $1 billion and that’s just disgusting.”

Now that NextEra’s bid is public, Diamond said, the City Council is getting a better picture of why former management and executives might not have been forthcoming to the JEA board about the proposed sale and who stood to benefit the most from it.

“The bonuses executives were going to get were based on false information provided to the board,” Diamond said. “I don’t think the JEA board knew at the time what they were voting on. They thought it was a $4.3 million [PUP] plan, not hundreds and hundreds of millions of dollars plan.”

“And that’s criminal, in my opinion,” he added.

In May, NextEra released a list of consultants and lobbyists in response to a city subpoena. The list included Mousa Consulting Group, a firm run by Mayor Lenny Curry’s former chief administrator Sam Mousa, and Bold City Strategic Partners, a firm led by Curry’s one-time political consultant Tim Baker.

The mayor’s office had no comment in response to questions from News4Jax about the NextEra bid. The current management for JEA said any comment at this point would be speculation.

Zahn, the former CEO, meanwhile, had this to say:

“I wish the Board, City Council and voters had a chance to review the facts on all five options being developed by JEA and its consultants. Council and public would have been able to have an informed policy debate and make good decisions about the future of JEA. Instead, the City Council, Civic Council and Unions hijacked the conversation for their own personal benefit. The disparaging and defamatory political rhetoric towards me by JEA, OGC, JEA’s counsel and City Council is transparent scapegoating to everyone. The PUP would never have paid a dollar to a single employee, including executives, and the public documents prove this to be true.”


About the Author: