The Jacksonville, Fla., municipal utility's board of directors unanimously decided May 15 to put on hold any activities tied to possibly privatizing the entity, which could be valued upwards of $11 billion.
By doing so, members of the JEA board indefinitely took the city-owned utility off the market, a move that culminates an acrimonious public debate between JEA leadership, Jacksonville's mayor and lawmakers, and local business and labor interests.
"I believe that to the extent there's any speculation ... let's go ahead and put our stake in the ground," JEA Board Chairman Alan Howard said at the utility's board meeting. "We're going to be about our business."
A departing JEA board member in November 2017 first suggested that the utility go private, triggering a flurry of activity in the ensuing months. The board hired a consultant to appraise JEA's market value. The Jacksonville City Council, JEA's local regulator, set up a special committee and solicited Wall Street investment banks to handle a potential transaction. Local business leaders lobbied for a deal.
But the mayoral administration expressed strong opposition to a privatization, as did JEA employees and concerned citizens. Members of the mayor's staff refused to cooperate with the council's requests for help, and the extent to which workers would be retained and how ratepayer bills would be impacted was unclear.
Drama peaked when the council in late March attempted to subpoena then-CEO Paul McElroy to testify under oath. While he ultimate appeared before the body on his own, McElroy resigned unexpectedly just two weeks later — setting off a leadership scramble that saw new board member Aaron Zahn vacate his post to privately campaign for the interim CEO position, which he eventually secured.
Before the May 15 meeting, the board had met only twice to discuss a possible privatization, leaving much of the time since November 2017 to be dominated by what members lamented as a lost opportunity to shape public debate. "We have no control over those who run out in front of us, especially those who are playing politics," board member Frederick Newbill said of local lawmakers.
With the privatization debate set aside, the JEA board now is focused on resetting the discourse and hiring a permanent CEO. Zahn told members that he will formulate a shareholder framework over the next several months that JEA should use as a "measuring stick" to evaluate any future opportunities for the utility. That is expected eventually to lead to an updating of JEA's strategic plan — which could include going private, but not until the process to do so is more thought out.
"This board needs to be deliberate, and we need to take our time," Howard said. "There's no more important decision that we will make perhaps in our tenure as members of this board than the engagement of the next CEO. And it will be a thorough and transparent process."