Commissioned UF Report Finds JEA Worth Up To $7.5 Billion

Dec 4, 2018

A new report from University of Florida researchers shows that Jacksonville’s electric and water utility is worth between $6.3 billion to $7.5 billion, though it stops short of saying whether selling the agency to a private operator is a good idea.

The top line numbers — the researchers at UF’s Public Utilities Research Center cautioned — are more like a property appraisal: They don’t necessarily reflect what a buyer might offer for JEA, and they don’t price in a number of potentially complicating factors, like the agency’s involvement in an increasingly expensive nuclear power project.

Our Florida Times-Union news partner reports the Jessie Ball duPont Fund paid for the study, which was commissioned during a poisonous debate earlier this year within City Hall over whether city leaders should consider selling the agency to a private company. That debate ultimately petered out after Mayor Lenny Curry issued a statement in April saying he would not put forward any plan to sell JEA to the City Council. And in the time since, the council approved a change to the city’s charter that would make a sale harder — voters must now sign off on any attempt to do so.

Still, the issue continues to irk some JEA employees and critics of Curry, who believe he could revisit the issue if he’s re-elected next year.

The UF report avoids making any judgments on the wisdom of selling JEA.

“A couple of utility geeks from Gainesville and Tallahassee shouldn’t be telling you what to do with your utility,” said Ted Kury, the UF director of energy studies and one of the researchers who prepared the report.

Still, the report provides insight into some of the obstacles a potential sale might entail. Namely, it would be a complex transaction given JEA’s size and the number of contracts and obligations it holds with other companies and agencies.

“Even once a willing buyer has been identified, it can take years to execute a sale,” the report says.

It points to the case Vero Beach, where Florida Power & Light signed a letter of intent to purchase the city’s utility in 2011. The sale is still not final — an indication that selling JEA, the nation’s eighth-largest municipal utility, wouldn’t happen overnight.

The report also notes that JEA’s status provides it with advantages that a private operator wouldn’t have, like the opportunity to get FEMA reimbursement for hurricane damage to its infrastructure.

Although Kury, the UF researcher, repeatedly emphasized the report does not speak to the prospects of a sale, it nonetheless appears to be a bit more bearish on the overall value of JEA than a past study conducted by a private firm, Public Financial Management. That study found that JEA could be sold for a gross price of $7.5-$11 billion, with the city netting far less than that since JEA’s debts and other obligations would have to be subtracted out before City Hall would get any money.

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