JEA CEO, Jacksonville City Council discuss Plant Vogtle obligation

The Jacksonville City Council special committee on the potential sale of JEA continued its regular Thursday deliberations.

The major highlight of the meeting: One of the potential sticking points to a JEA sale: a 20-year commitment to Plant Vogtle, a nuclear plant under construction in Georgia, with exposure leading to a ratings downgrade for JEA late last year.

Plant Vogtle seemed like a good idea in 2008, but the industry changed since, per JEA CEO Paul McElroy.

Falling natural gas prices, stagnated interest in nuclear plants (just four nationally), and a near 30-percent cut in demand happened between the time the deal was agreed to a decade ago and now.

“The world has changed,” McElroy said, noting that wind and solar are cheaper than ever, and that there are no carbon penalties domestically (even as JEA produces 40 percent less CO2 than it did in 2008).

As a result, McElroy said, purchasing power from the project right now would be above market. And he couldn’t offer a guess on the break-even point on the project, saying “we’re not looking to make any margin on this contract.”

Even after 20 years, the duration of the project, McElroy would not commit to it making a profit.

Despite this cut in CO2, McElroy said there was still “risk” involved, as “the rest of the country has moved to CO2 reduction … and so too has the rest of the globe.”

JEA’s investment in solar will help mitigate those issues, the CEO said.

McElroy noted that energy efficiency and conservation have lowered the growth rate of JEA and other utilities, including shifts to a service economy from more of a manufacturing base.

Total projected borrowings on this project, per a 2017 disclosure from JEA distributed at the meeting, could exceed $2.58 billion.

Despite JEA saying additional units on the project should be canceled rather than completed, JEA “continues to plan as if the project will be completed” as scheduled.

When the plant is fully online, it could bring 13 percent of JEA’s necessary power, McElroy said.

In some happier news, reports Southern Nuclear, the reactor vessel for unit 4 has been constructed, which is a “milestone for 2018.”

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Misunderstanding resolved: Chairman John Crescimbeni said that the mayor’s office would work with the committee after all on figuring out questions related to JEA valuation. Previously, it was thought by the Lenny Curry administration that the committee did not want the mayor’s office involved, with CFO Mike Weinstein saying “they’re on their own” in an email to subordinates in response to a request for help.

Whether that is a reversal of position by City Council or a genuine misunderstanding is a matter of interpretation.

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Dueling bills: As promised, a bill expressing council opposition to a sale of JEA was filed by Councilman Jim Love.

It will be introduced at Tuesday’s meeting, along with a bill from Matt Schellenberg “encouraging the Mayor and JEA to proceed with review of a potential sale of JEA.”

Both will be on the regular six-week cycle.