Council representatives plug their opinions on JEA purchase idea

BoyerLove

Should the city consider selling JEA to the highest bidder? That’s the suggestion of District 6 City Councilman Matt Schellenberg, who instigated a resolution last month to study the idea further.
Neighborhood representatives District 5 City Councilwoman Lori Boyer and District 14 City Councilman Jim Love are mum on their stance. Since they will be voting on the resolution during a November meeting, neither representative took a firm position on the issue but indicated they were exploring the issue.
Boyer said last month she was learning more about the idea but said “it’s no comment on selling JEA.”
JEA, a not-for-profit entity, funnels more than $100 million to the city annually. It is the seventh largest community-owned electric and water utility in the country and provides service to more than 750,000 users.
Love said thinking out of the box is a good exercise. But the bottom line is that the city needs to look at the numbers and see what makes the most financial sense.
“The numbers will speak for themselves – it doesn’t hurt to look at it,” Love said. “This has been done before and it’s a pretty easy thing to calculate.”
In a letter to Schellenberg dated Oct. 10, City Council Auditor Kirk Sherman estimated the value of JEA to the city to be “a range between $2 billion and $2.5 billion.” He described a list of assumptions in the letter.
“We estimate that the range in value of JEA could be $1 billion at a minimum and as high as $1.2 billion to an investor-owned utility or utilities assuming that a willing and able buyer exists,” he said in the letter.
In a release celebrating Public Power Week last month, JEA officials lauded the perks of a public power utility. JEA CEO Paul McElroy pointed to one of JEA’s major strong suits as a public power company – its borrowing capital is less than a for-profit power company. He said JEA bonds are tax-exempt, which means customers pay less in the long run for improvements to power plants or water and sewer pipelines.
“We take great pride in the fact that a significant portion of the dollars we collect from our customers remains in our community,” McElroy said. “This year we will reinvest over $500 million of our customers money to support ongoing utility operations and make the capital investments necessary to keep the community’s utility systems strong and reliable. This activity supports the local economy and leads to thousands of local jobs.”
Additionally, JEA expects to contribute $106.7 million to the City’s general operating fund in 2013, a figure described as a “record.”

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