A.G. Gancarski
On Tuesday, the Jacksonville City Council approved a bill that would change conditions under which part of the local utility could be sold.
All committees voted the bill up without a no vote, pushing the bill onto the consent agenda.
Charter previously required City Council approval of any transfer of more than 10 percent of JEA assets. This bill would require a referendum approving such, as the straw ballot mandated.
The bill (Ordinance 2018-142) follows a companion bill from earlier this year that authorized a successful straw ballot on the November ballot showing that people want a say in a potential sale.
The legislation to put the matter on the ballot came after some of the best-connected lobbyists in the area started working this spring for companies that may want to buy JEA.
Florida Power and Light engaged Paul Harden, best known locally as the representative for the Jacksonville Jaguars and team owner Shad Khan‘s interests.
Emera, a Nova Scotia-based utility company that acquired TECO and otherwise has assets ranging from New Mexico to the Caribbean, retained Marty Fiorentino and The Fiorentino Group.
While it is by no means certain that FPL or Emera have any interest in JEA assets, both companies were involved in acquisitions of municipal utilities.
FPL acquired the Vero Beach utility recently. The $185 million price tag allowed the city to exit utility agreements, secured the city a new power substation, and led to $36 million in city coffers.
Emera’s TECO acquisition was described as “a perfect fit for Emera’s strategy.” The $6.5 billion deal was lauded as facilitating Emera’s diversification of assets and being “significantly accretive” to shareholder earnings.
A JEA commissioned valuation report of the utility urged exploration of a sale, given a combination of flat electrical revenues and a trend of industry consolidation.
Proceeds, the report said, could be between $2.9 billion and $6.4 billion after the retirement of debt. Values range from $7.5 billion up to $11 billion, based on cash flow, price/earnings ratios, and other metrics, per the JEA-commissioned report.
The Jacksonville City Council Auditor subsequently issued his own report.
The 2018 Council Auditor report was more conservative in estimates than the one JEA commissioned.
It contended “the net proceeds to the City from selling JEA could range from a low of $1,702,795,000 to a high of $5,202,795,000.”
Speculation has swirled that even though the issue has been tabled in recent months, privatization could return with a new intensity after city elections in spring 2019.
One comment
Frankie M.
November 19, 2018 at 10:23 pm
Tony Khan told Gus that Gabbert’s pass completion percentage went way up when he had all day to throw the ball. (Along with every other qb in the league.) This is the equivalent of Ralph from the Simpsons saying that his cat’s breath smells like cat food. Tony is in charge of analytics for the Jags. Zhan is in charge of the JEA. Neither one has a clue what they’re doing. One gained his position thru nepotism. The other through backroom dealing & political cronyism. Semantics really.
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