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JEA halts effort to sell utility


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JEA halts effort to sell utility

The board of directors of Jacksonville, Fla., utility JEA on Dec. 24 abandoned efforts to sell the municipal electric and water utility, a day after Jacksonville Mayor Lenny Curry called for an emergency meeting.

The public's view of the sale effort had been "eroded due to missteps over the last few months," Curry said Dec. 23, the Florida Times-Union reported. The moves came a week after the JEA board placed Managing Director and CEO Aaron Zahn on leave. The Jacksonville City Council had questioned whether an employee incentive plan was set up to give certain employees a cash windfall if JEA were sold. Zahn, a private investor who joined the JEA board in early 2018, was later named the utility's CEO after the previous CEO resigned.

JEA in July restarted an effort to consider privatizing its operations or selling itself to another company after its management said the company was facing a multibillion-dollar cash gap if it maintained a "business as usual" approach. It had considered privatization in late 2017, but Curry objected, prompting the JEA board to halt efforts in spring 2018.

According to the Dec. 23 Florida Times-Union report, Curry was not opposed to the JEA board considering privatization. But members of the city council, which oversees the utility, began questioning the process. Earlier in December, the council asked the utility board to present it with several options, making it clear that the council would make a final decision.

In October, the JEA board disclosed a list of nine bidding parties it was considering. Three were investor-owned utilities with electric utility operations in Florida: Duke Energy Corp., Emera Inc. and NextEra Energy Inc. Emera was involved in a second bid with a private investor and a water utility operator. American Water Works Co. Inc. was interested in JEA's water and sewer operations. Several investment firms were being considered as well.

JEA served 466,000 electric customers, 348,000 water customers and 271,000 wastewater customers in fiscal year 2018. It owns more than 3,100 MW of generating capacity, mostly natural gas, according to S&P Global Market Intelligence data. JEA has been trying to get out of a power purchase agreement for a portion of the output of the new reactors at the Alvin W. Vogtle Nuclear Plant, which are under construction though years behind schedule and billions of dollars over initial budget projections.