OPINION

Selling JEA: Good review needed

Jake Godbold

There is absolutely no doubt if Mayor Lenny Curry can fast-track the sale of JEA and use much of the money to fund Peter Rummell’s healthy town development at the JEA property on the Southbank, Shad Khan’s development at Metropolitan Park and the Shipyards, expand the sports and entertainment complex and speed up Downtown development, the results could have a major impact on Jacksonville.

Having money for the early retirement of the pension fund debt also can be good.

And if those things happen before Curry leaves office, probably five years from now, it will make a great political story in a campaign for Florida governor.

But at what long term cost to taxpayers?

One thing is for sure. This is a massive issue that demands careful and intensive study that must involve the public. The childish political rift going on between Curry and City Council President Anna Lopez Brosche, if not stopped now, will leave us all doubting they are up to the task of deciding what is in the best interest for the future of Jacksonville.

We deserve better.

The fact that the JEA is one of only 31 publicly owned utilities in Florida is not a bad thing. It provides a guaranteed and reliable annual contribution to the city that has funded essentials like law enforcement, fire and rescue services and the construction of needed infrastructure.

There are good reasons JEA has always been called “the goose that lays the golden egg.”

Those who want to sell argue that once sold the JEA’s property will go on the tax rolls and continue to provide income annually to the city. That’s true, but it won’t be as much as the city now receives, opening a shortfall that will have to be filled.

As the Times-Union asked in an editorial, what if a private utility decides to move power plants to another county? Those property taxes will disappear. It’s also likely that if sold and kept in Jacksonville, one casualty will be many JEA employees.

In addition, currently the majority of JEA vendors are local. Under private utility ownership that, too, will change to national and international vendors, which will be another big hit on the local economy.

Over the years the utility has maintained one of the lowest rate structures in the country — excluding times when the nation has faced a full-scale energy crisis outside control of the JEA. It has maintained fair rates and provided reasonably efficient service.

When it became obvious we could no longer afford to depend on the use of imported oil, the JEA converted to coal with construction of two coal-fired plants that at the time was the largest bonded municipal project in U.S. history. And now JEA is converting to a more reliable, available and cost-efficient natural gas and other alternative sources of energy.

During former Mayor John Delaney's administration, the JEA worked with the city to take over operation of the city’s water and sewer utilities. And it has been a great success. What will happen to water and sewer operations if the JEA is sold?

There are numerous other examples of the history of the positive JEA’s performance for Jacksonville and the utility’s ratepayers.

But there is one more important thing. A city-owned JEA ensures local control. People making the decisions and doing the work, whether board members, executives or employees, are our neighbors. On top of that, the Jacksonville City Council provides oversight. These people are accessible and available to ratepayers.

If we sell JEA, that will no longer be the case. Instead JEA will be owned by private investors and regulated by the Florida Public Service Commission (PSC), which has established a long record of being utility friendly if not downright in the pockets of privately owned companies like Florida Power & Light.

In the 1970s, JEA was on the path to partnering with Westinghouse-Tenneco to build floating nuclear power plants to provide our electricity. The cost was projected at $1 billion with the promise of 10,000 jobs. This was backed by then-Mayor Hans Tanzler along with the Chamber of Commerce.

Thank God we had local control of the authority and 13 members of the City Council believed City General Counsel Harry Shorstein when he said the project was disastrous and needed to be stopped. As a member of that City Council, we stopped it. Later, floating nuclear power plants were proved to be bogus.

I contend if the JEA had been under the regulation of the utility friendly PSC, the floating nuclear power plants would have gone forward and the city would have gone bankrupt.

Again, in 1978, after JEA had negotiated a $60 million contract with Ebasco Services to design the two coal-fired plants, the City Council said, “Whoa.” I was City Council president and we hired an outside expert and held hearings. The outcome: We were able to cut $20 million off that $60 million cost, something that would never have happened if the PSC regulated JEA

There have been several examinations of selling the utility.

When I was mayor in 1983, there was a group urging us to sell the JEA. We took our time. I appointed a high-level committee to study the issue. We turned over every rock and spent six months examining the issue. JEA is owned by the taxpayers so our deliberations were very transparent, including public hearings. Afterward, I made a decision not to sell and it was over.

Then in 2007 and again in 2012, there were studies on whether to sell the utility. On both occasions after deep reviews by the City Council auditor, the decision was made again to keep the utility public.

Let me give you one final example of how selling the utility can run the train off the tracks for ratepayers. Florida Power & Light promised it would construct two nuclear power plants at its Turkey Point facility to open in 2008 and 2009. It didn’t happen and in 2016 FP&L said it would be another four years at least before construction. Now, FP&L is saying perhaps in 2030 these $20 billion-plus projects will come on line.

The kicker: FP&L expected its ratepayers to pay for the unbuilt plants in advance of them going on line. That meant customers paying each month for power they did not use and probably never would. The FP&L request was based on a “nuclear cost recovery“ law that FP&L pushed through the Florida Legislature in 2006. FP&L had already billed ratepayers $282 million for planning and licensing costs of the proposed nuclear plants. This was one time when ratepayers and the media put so much heat on the FPSC and legislators that the FPSC had to say no. However, the PSC did let FP&L keep millions of dollars already collected.

There is no reason selling the JEA should not be examined once again. But it is absolutely imperative that any study be deliberate, dispassionate and thorough, not rushed or hurried simply because the mayor and some his wealthy backers want it done that way. The tracks don’t need to be greased so the only people driving the train are the mayor and his powerful friends.

The utility is owned by its Jacksonville ratepayers. And they must have a seat at the table — and a voice in the decision making.

Jake M. Godbold is a former mayor of Jacksonville.