Jacksonville's public utility JEA and the fight to privatize it
During his farewell address as he left the board of Jacksonville’s municipal utility in 2017, businessman Tom Petway suggested it might be time to consider selling JEA, Florida’s largest municipal utility. Petway noted that most Floridians were served by the private marketplace and told the board he thought JEA was worth as much as it would ever command from a buyer — the utility, he said, was “at, or very near, peak performance.”
The board took Petway’s advice and commissioned a valuation assessment of JEA. That step, and others that followed, teed up a two-year civic battle that is now in a ceasefire but may not have settled JEA’s future.
JEA got its start in 1895, when the city’s electric division began generating electricity from a single wood-burning plant on Main Street. Today, the utility operates five power plants in Jacksonville — and is actively growing its solar footprint — as it provides electric, water and sewer services to hundreds of thousands of households in and around Duval County. It gets high marks in customer satisfaction and has one of the strongest credit ratings among city-owned utilities.
JEA also generates a steady stream of revenue for Jacksonville, pumping $116 million into city coffers in 2018 and $138.2 million in 2019.
JEA: The Fight Over Privatization
BACKING A SALE
- Mayor Lenny Curry
- Alan Howard, former JEA board chairman, former CEO Aaron Zahn and six former board members: Chair April Green, Fred Newbill, Camille Lee-Johnson, Dane Grey, Henry Brown and Kelly Flanagan. (The entire board resigned.)
- The suitors: NextEra Energy, the parent company of Florida Power & Light; Emera; American Public Infrastructure; American Water Works; Duke Energy; JEA Public Power Partners; IFM Investors PTY; MIRA; E&W Development
THE SALES PITCH
- A sale would erase both JEA’s and the city of Jacksonville’s debt
- Philosophical opposition to government ownership
- Long term, conservation moves by consumers are reducing demand for electricity
- Governmental restraints and regulations will limit JEA’s ability to get into new lines of business
- Consumers face big rate increases, and JEA will have to cut or eliminate the dividend it pays the city
- Utilities are commanding big premiums in the market; JEA is at peak value
- Former Mayor Jake Godbold and many members of the Jacksonville City Council
- The citizens of Jacksonville, who polls show oppose privatizing JEA
- Business leaders like CSX CEO Michael Ward, Jacksonville Jaguars owner Shad Khan, construction company executive Preston Haskell and the Jacksonville Civic Council, a group of about 80 local CEOs