University of Florida study finds JEA worth $7.5 billion

Study does not weigh in on whether utility should be sold or kept public

By Jim Piggott - Reporter, Jennifer Ready - Reporter

JACKSONVILLE, Fla. - A new study provides another look at the value of Jacksonville's biggest asset, JEA.

The study from the University of Florida shows the city-owned utility is worth $7.5 billion.

For six months, the Public Utility Research Center at UF’s Warrington College of Business studied JEA. Its 100-page report does not make any recommendations or suggestions on whether the city should sell the utility or keep the utility public.

The study found that JEA is valued at $7.5 billion, with the electric utility worth $4.5 billion and the water utility worth $3 billion.

    

In a recent JEA meeting, however, the utility's new CEO Aaron Zahn said the water side would soon outpace electric and be of more value, which is something that the report also suggests could occur.

The report also shows that JEA's water and sewer business compares favorably to other water utilities elsewhere in the United States, and that JEA's business has consistently high credit ratings from multiple agencies.

If JEA is sold, the report says, the city would no longer receive a huge contribution from the utility, but it would receive property taxes. 

According to the report, JEA’s electric business performs well in comparison to other electric utilities in Florida. The report says JEA ranks high as a benefit to customers because there are so many of them and they're spread out over a larger area -- controlling outages can be challenging, but performance is still better than average utilities. 

JEA currently gets federal help in the event of a major storm. If it's sold, that may not happen.

Additionally, the report delves into the fact that JEA investment into the nuclear power plant in Georgia called Vogtle would have a huge impact on any potential sale.

The report ends by bringing up the thought of just how would JEA and the city would spend the money from a sale.

DOCUMENTS: Report overview | Executive summary | Full report

Zahn declined to talk with News4Jax on Wednesday about the report, but did issue a statement saying the board is already following many of the suggestions listed in the report

In its statement, JEA said there is no talk of a sale, and contributions from JEA to the city will continue to at least 2023.

But City Councilman Matt Schellenberg, who is reviewing the report, said it still does not answer the questions of what someone would be willing to pay for JEA. He believes the public needs to know that.

"I also believe that citizens believe this process has not been transparent," Schellenberg said. "I think any administration this one or in the future, if they want to sell, they have to have a clear message on why it’s beneficial."

The authors of the report suggest the study contains information that the city and JEA can use to help make those decisions. 

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