Often maligned JEA has suitors – 16 of them.
That many companies made bids to buy all or part of the local utility company.
The next question will be: how many are serious and how many are simply bargain hunters.
Some think the company could be worth about $7 billion. Local politicians are licking their lips over getting that much money in their hands.
Among other things, they envision paying off the city’s unfunded pension liability. There are already plans to do that with a new tax that kicks in in 2030. Would the new tax be ditched, or would they proceed with it anyway?
There are two clear advantages to city ownership of the utility. Local control and cheap debt financing.
Otherwise, there is no magic. Millions of Florida residents buy electricity and water from private companies. They don’t seem to be impoverished as a result.
The city would lose a stream of income called “contribution in lieu of taxes.”
That is an amount JEA collects from its customers in rates and gives to the city, which uses the money rather than property taxes mostly paid by the same people.
A private company running the business would pay property taxes and franchise fees but they would not produce as much as the JEA’s current contribution.
All this is why the City Council wants to set up a committee to probe into the issue. It must approve any sale, and so must the voters.
As expected, the giant Florida utility company Florida Power & Light was one interested party, through its owner NextEra Energy. Likewise, TECO’s owner also is interested, along with Duke Energy and other heavy hitters in the industry.
One puzzling aspect is why they would be interested when the JEA is in court trying to wiggle out of a contract it has to purchase power from a not-yet-built plant in Georgia. That could be a fiasco costing billions of dollars.
There are some who believe the ultimate outcome will be hiring a company to run JEA while the city retains ownership. That could be the best of both worlds.
There is a lot of debate and discussion ahead.