April 2, 2018
The Jessie Ball duPont Fund has commissioned the University of Florida Public Utility Research Center to conduct an independent analysis of the potential sale of the Jacksonville Electric Authority, the municipally-owned utility that provides electric, water and sewer services to Greater Jacksonville.
“This six-month study is intended to help inform the discretion of City Council, the administration and the public to ensure the Jacksonville community makes the best possible decision,” said Sherry Magill, president of the Fund.
Since November 2017, Jacksonville leaders have been embroiled in debate over the future of JEA after its outgoing chairman suggested that the City look into selling the utility.
JEA serves more than 450,000 electric, 340,000 water and 264,000 sewer customers, and employs about 2,000 workers. Established in 1968, it is an independent agency of the City of Jacksonville. It has high ratings for customer service and its average monthly bills, as a percentage of ratepayers’ household income, are below the national average.
This is not the first time the City has considered selling the JEA but previous studies concluded the City and ratepayers would be better served by keeping JEA municipally owned. However, rapid changes in the utility industry suggest the need for a new evaluation.
In February, JEA released a report by Public Financial Management, which has served as JEA’s financial advisor since 2002, stating that the City might net between $2.9 billion and $6.4 billion through a timely sale.
Shortly after, the City Council Auditor’s Office issued a report estimating the net gain would be smaller — $1.7 billion to $5.2 billion – and raising a number of risks that would be associated with the City losing control of the utility.
A City Council committee has been established to evaluate the merits of selling the utility and both sale and no-sale proponents have lit up social media.
In this over-heated environment, the Jessie Ball duPont Fund offered to underwrite the cost of an independent analysis of the question.
“Helping citizens grapple with difficult issues is an important role for private, independent foundations, which, by definition, serve a broad public purpose and operate free of political influence,” Magill said.
The Public Utility Research Center, located in the Warrington College of Business at the University of Florida, is an internationally recognized academic center that works to enhance understanding of issues confronting public utilities and regulatory agencies.
The Jessie Ball duPont Fund was established by Mrs. duPont upon her death in 1970. It has invested $84 million grant dollars in Jacksonville-based organizations and commissioned numerous studies to benefit the community on topics ranging from the neighborhood revitalization and juvenile justice to Medicaid reform, affordable housing, historic building reuse and housing markets.
A copy of UF’s proposal outlining the scope of their research is attached.