December 4, 2018
The Public Utility Research Center (PURC) at the University of Florida’s Warrington College of Business today presented its independent analysis of the potential sale of the Jacksonville Electric Authority, a municipally-owned public utility that provides electric, water and wastewater treatment services to Greater Jacksonville. According to the assessment, the utility’s current value is $7.5 billion, which is not inconsistent with earlier valuations promulgated by JEA.
Commissioned by the Jessie Ball duPont Fund in early 2018, the PURC value assessment provides Jacksonville’s elected officials, policymakers, and stakeholders unbiased and academic-quality data to help inform future decisions about the utility. The PURC study is in response to heated political discussions during the past year among city and community leaders on JEA’s potential privatization.
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Outlined in the assessment is the process of valuing the JEA, viewing the financial commitments and net book value of its physical assets, and the ability of those assets to provide services to customers, which determines value for its owner.
The report addresses considerations when evaluating a possible sale of the JEA, including history, effects on the city’s welfare, possible advantages and disadvantages of being a municipal utility, regulatory treatment of investor‐owned utilities vs. municipal utilities, and factors, such as timing, that could significantly impact the potential seller and buyer.
The six-month study at PURC was led by a team of four utility regulatory experts with extensive experience in academic research, the economics and governance of municipal utilities, and the regulation of private utilities. PURC is an internationally recognized academic center that works to enhance understanding of issues confronting public utilities and regulatory agencies.