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JEA Board Talks Role In Privatization, New Revenue Streams

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A special committee of JEA’s board that’s exploring privatization met for the first time Tuesday.

Though no vote was taken, board members seem to agree they need more information about their power and responsibility in the decision.

Chairman Alan Howard asked the board’s lawyer to figure that out.

“Understanding that city council under the charter is required to approve any disposition of 10 percent or more of JEA’s assets, educate the board as to our role and responsibility if that decision were to be made to move forward,” he said.

The committee got a short history lesson on the utility’s modern role in Jacksonville and explored both the good — the utilitycould be worth as much as $6.4 billion — and the bad — water and electricity use hasslowed in the past decade, creating the need for new revenue streams.

One way to increase revenues was voted on by the full executive board earlier in the day. The board will ask the city council for permission to expand its network of so-called “dark fiber,” which is fiber optic cable the utility can lease to third-parties.

JEA already leases portions of its telecom network, but it needs the green-light from city leaders to offer more to private users.

Chief Information Officer Paul Cosgrave said he’s spoken with several interested customers.

“From a financial projection we believe we can easily grow this business by at least 50 percent over the next few years with a very small growth and associated operating and maintenance cost,” he said.

Cosgrave said dark fiber contracts with city entities and telecom companies net the utility an almost $2-million-dollar annual profit.

JEA has 550 miles of unused dark fiber; some of it has yet to be installed underground.

As city council grapples with the controversial prospect of whether selling JEA would be financially good and beneficial for customers and employees, the utility board’s newest member,

Aaron Zahn, said with uncertainty regarding future revenue streams, the sale conversation is premature.

“It seems to me as a collective public, we jumped right to the conversation of sell versus don’t sell. I think we should stop that conversation,” he said. “In fact, I would submit that this board of directors … it’s our fiduciary responsibility to take a more pragmatic and deliberate course and fulfill our fiduciary responsibilities by doing the following: We should design a process that allows for us to produce a strategic plan for 2028.”

Board Chair Alan Howard agrees with Zahn. He suggested a new special committee could be created to draft a report laying out JEA’s future, without addressing whether it should stay publicly owned.

Aspecial city council committee investigating the sale will meet for the third time Thursday, while an outside group —the Jacksonville Civic Council — gets started on its own evaluation.

Ryan Benk can be reached at rbenk@wjct.org, 904-358-6319 or on Twitter at @RyanMichaelBenk.

Ryan Benk is a former WJCT News reporter who joined the station in 2015 after working as a news researcher and reporter for NPR affiliate WFSU in Tallahassee.