Eleven billion dollars. That’s how much money the latest political infighting has cost the residents of Jacksonville, Florida. A great city with a lot going for it, Jacksonville over the last decade has gotten bogged down far too often in partisan political fights. These fights have cost the city opportunities, time and money, but possibly none have cost the city as much as the most recent fights over the potential sale of the Jacksonville Energy Authority (JEA).
The city’s attempt to sell JEA has been a hot topic, and the utility’s controversies have sadly overshadowed their real issues — like aging water, sewer and electrical infrastructure in need of repair, or the mounting financial obligation owed for a bad deal made over the Georgia nuclear generation facility known as Plant Vogtle. Unfortunately, political infighting and bad management, and we’re talking about really bad management, has resulted in the city squandering their opportunity to sell JEA, and it appears to have cost Jacksonville big – eleven billion dollars big.
Sixteen companies took part in the city’s “Invitation to Negotiate” process to buy JEA, including Duke Energy, Amera, and NextEra. Yesterday the city made public the amount of what should have been the winning bid of $11.05 billion. That was the offer for JEA’s electric, water, and sewer systems by NextEra Energy, the parent company of Florida Power & Light. While other companies also submitted sizable bids, NextEra’s bid of more than $11 billion was the highest.
Had JEA accepted the offer and sold to NextEra it would have netted the city more than $6 billion in pure profit after JEA debts were paid, which could have been used to pay off city debt and fund infrastructure projects, all without raising taxes. The sale could have been game changing for the city, even before COVID-19 hit and the economy came to a screeching halt, which will now likely cause serious funding holes at all levels of Jacksonville city government well into the future.
Unfortunately, the city’s ability to sell JEA got mired down in controversial and highly questionable attempts by then-JEA executives to create programs that would pay out untold millions of dollars for themselves in bonuses and incentives if the utility was sold. So now, instead of being able to clear nearly $5 billion in debt while keeping another $6 billion in cash reserves, Jacksonville residents now have the pleasure of watching their tax dollars go to waste helping to pay for the continually delayed and way over budget Vogtle nuclear plant. All the while as they try to figure out how to pay for desperately needed investments in water, sewer and electric projects.
Unfortunately for Jacksonville, local political infighting combined with actions by a few bad actors ended the process before city residents had a chance to even see the bid offers for JEA or hear about the benefits that could have been seen by the entire community, much less vote on them as local law requires.
The only thing they may get to vote on is the upcoming rate increase to pay for the Vogtle boondoggle. Except…Jacksonville residents don’t actually get a voice in that decision either. They’ll just get the bill, and they can rest assured that it’s going up.