Is the JEA preparing to hold a “going out of business” sale?
It almost sounds like it from the dire alarms the utility is putting out.
Rates could be going through the roof and the huge pile of cash it hands over to the city each year might shrivel up and disappear.
It could all be a ploy to soften up voters for a proposal to sell the city-owned utility, conspiracy theorists might say.
That often-voiced idea came up again about a year ago and raised such a ruckus it was dropped quickly.
It really doesn’t make sense, however, to propose a sale at the same time you are telling any potential buyers that it isn’t a very good investment. There is discussion of shedding its less-profitable ventures but, again, who will buy?
One reason JEA officials see declining revenues ahead is that is they have been promoting energy conservation. If their customers conserve, it means they are saving money and JEA is collecting less money.
The less it collects, the less it can give the city. At some point, it also has to raise rates to cover expenses, which don’t necessarily decline when customers conserve.
But I suspect the real crux of the problem is the very unwise decision JEA made more than 10 years ago to go nuclear by buying a piece of the action from a Georgia utility venture that now seems to have very few prospects of success.
City lawyers are in court now trying to wiggle out of the fix but it doesn’t really look like they will be successful.
JEA customers could be on the hook for $2 billion if the venture fails. It is far behind schedule and over budget.
Hindsight is 20-20 and all that but, really, given the problems with getting a nuclear plant into operation that have been demonstrated over the past few decades, did anyone really have their thinking cap on? Was there due diligence?
Before consolidation, the electric utility was a cash cow milked by local politicians who controlled it directly. After it became an independent authority with a board of businessmen it steadily improved, despite being caught in the 1973 oil crisis when it was 100 percent dependent on oil and locked into long-term contracts. In recent years it had the lowest rates in Florida.
The irony is that people who are saving money now by conserving energy are likely to be the same people paying higher rates and higher property taxes in the not-too-distant future.
Some days, you just can’t win.