Plans to sell the Jacksonville city-owned power and water utility, Jacksonville Electric Authority (JEA), have become a political and legal quagmire. The sale is unlikely to occur, after the JEA board on Christmas Eve cancelled the sale.
Florida Times-Union reporter Nate Monroe, who has covered the controversial sale from the start, wrote that the board on Dec. 24 unanimously voted “to stop its efforts to sell the city-owned utility in response to growing calls from city officials to end a process that has been rife with controversy and has cost ratepayers $10 million.”
Voters must approve the sale of the city-owned water, electric, and sewer agency. The plan to sell the system has encountered major public opposition, which has also been reflected in the city council’s reactions to the sale.
On Jan. 13, the Times-Union reported that local law enforcement in December initiated an investigation into the troubled, convoluted sale. The newspaper said that the local officials had decided to ask “federal officials” to take over an investigation, without specifying what federal agency. The Department of Justice and the FBI refused to comment. The newspaper said the development “significantly escalates a broadening public scandal in Jacksonville city government.”
A Jan. 17 Nate Monroe story reported that JEA had hired an outside law firm to look into the backgrounds and “political interests” of members of the Jacksonville City Council, which has been challenging the sale. According to an invoice, the law firm billed JEA $1,105 for work to “determine the best approach for handing Council interests and specifically the (invitation to negotiate). That was the city utility’s invitation for potential buyers to discuss and make offers.
JEA’s path toward privatization came as a result of a potentially ruinous 20-year contract to take power from the Southern Company’s vastly over-budget and behind-schedule Vogtle nuclear power plant additions, two 1,000-MW units to join two existing nuclear reactors at the Georgia Power site. JEA in September 2018 sued in federal court to void the power purchase agreement, but failed.
Last July, after much internal discussion, leaked extensively, the municipal utility formally sought discussions with potential buyers of the multi-billion-dollar operation. According to the utility’s 2018 annual report, operating income for the year totaled $1.4 billion.
Monroe’s reporting, on Jan. 15, revealed that the utility “considered asking voters to approve a sale of the city-owned utility as early as August 2020, “a more precise date than utility executives had disclosed with investors, ratings agencies and the public, and one that wuld have likely ensured the fate of the city’s largest public agency would be decided in a low-turnout election.”
Monroe, who has done exceptional work on the story, commented, “Although JEA doesn’t possess the authority to put questions on the ballot – the City Council must do that – the timeline suggests (former JEA CEO Aaron) Zahn and his team were considering a lightning fast timeline on what would have been the largest change to Jacksonville’s government in a half century.”
— Kennedy Maize