City Council voted unanimously Tuesday to extend for four years the agreement the city has with the JEA for an annual contribution to the city general fund.
The contribution “in lieu of property taxes” currently makes up about 10 percent of the revenue to the city’s general fund.
Thus, for taxpayer/ratepayers, it comes out of one pocket instead of the other. You are paying the JEA what you would be paying to the city in property taxes if you live in Jacksonville, as the vast majority of JEA customers do.
For many years there was an annual debate in the council over how much they would take from the JEA. It usually revolved around speculating how much a private utility would pay in taxes and fees.
Former executive director Royce Lyles saw the futility in this and suggested they just set an automatic rate based on a percentage of gross revenue. It has worked well and provided the city with a steady stream of funds.
However, the JEA’s future is not as predictable as it has been in the past.
People are using less electricity with energy saving devices in the home.
Also, the Plant Vogtle mess looms. Because of a 10-year-old agreement to buy power generated by a nuclear plant in Georgia, the JEA may be on the hook for more than $1 billion if the plant is not built. It is in court trying to wiggle out of the deal, but the case is weak.
JEA is paying down its debt by $1 billion to free up its cash flow, giving it more flexibility for a more uncertain future.
Meanwhile, discussion about selling the city-owned utility to a private company has been muted. It was a hot topic last year but the new JEA director, Aaron Zahn, told the Jacksonville Daily Record it was a discussion that should not have been held.