Poll

Should Jacksonville sell (privatize) JEA?

Yes
4 (10.3%)
No
35 (89.7%)

Total Members Voted: 39

Voting closed: February 27, 2018, 12:55:01 PM

Author Topic: Should Jacksonville sell (privatize) JEA?  (Read 17258 times)

camarocane

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #45 on: February 15, 2018, 10:57:25 AM »
The report states that JEA is valued between 7.5 and 11 billion, and that after debt is paid the COJ may take home between 3 and 6 billion.
A few problems call out at last nights meeting I felt were red flags were as follows:
-Report was not a valuation, but an evaluation. As an evaluation, it did not consider assets, only considered what a mid-sized utility company would currently fetch on the market. Consultant was not certified to make any valuation of the company.
-Report mentioned a 1.2 billion dollar deficit JEA owed on a nuclear plan, however that was not included in the final debt.
-Report did not mention the cost of upgrading septic (a promise that was made from JEA at consolidation) ~$2billion.
-Report closed the annual payment gap to the COJ by suggesting a 6% franchise fee instead of a 3% as currently paid. Did not mention that this may be transferred (as it is currently) to the ratepayers as a line item on the bill.

My takeaway is that the Council wants to know why the question to sale was asked, who asked the question, and why do we need the money. 


MEGATRON

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #46 on: February 15, 2018, 12:29:04 PM »
The report states that JEA is valued between 7.5 and 11 billion, and that after debt is paid the COJ may take home between 3 and 6 billion.
A few problems call out at last nights meeting I felt were red flags were as follows:
-Report was not a valuation, but an evaluation. As an evaluation, it did not consider assets, only considered what a mid-sized utility company would currently fetch on the market. Consultant was not certified to make any valuation of the company.
-Report mentioned a 1.2 billion dollar deficit JEA owed on a nuclear plan, however that was not included in the final debt.
-Report did not mention the cost of upgrading septic (a promise that was made from JEA at consolidation) ~$2billion.
-Report closed the annual payment gap to the COJ by suggesting a 6% franchise fee instead of a 3% as currently paid. Did not mention that this may be transferred (as it is currently) to the ratepayers as a line item on the bill.

My takeaway is that the Council wants to know why the question to sale was asked, who asked the question, and why do we need the money.
What?  Why do we need the money? 
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camarocane

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #47 on: February 15, 2018, 12:56:07 PM »
The report states that JEA is valued between 7.5 and 11 billion, and that after debt is paid the COJ may take home between 3 and 6 billion.
A few problems call out at last nights meeting I felt were red flags were as follows:
-Report was not a valuation, but an evaluation. As an evaluation, it did not consider assets, only considered what a mid-sized utility company would currently fetch on the market. Consultant was not certified to make any valuation of the company.
-Report mentioned a 1.2 billion dollar deficit JEA owed on a nuclear plan, however that was not included in the final debt.
-Report did not mention the cost of upgrading septic (a promise that was made from JEA at consolidation) ~$2billion.
-Report closed the annual payment gap to the COJ by suggesting a 6% franchise fee instead of a 3% as currently paid. Did not mention that this may be transferred (as it is currently) to the ratepayers as a line item on the bill.

My takeaway is that the Council wants to know why the question to sale was asked, who asked the question, and why do we need the money.
What?  Why do we need the money?
If you are asking me personally, I couldnt tell you. Obviously more money = more stuff. Conversely, more money = more problems. Regardless, the point being, there should be some type of discussion with an end goal rather than arbitrarily adding money to the city coffers. Does selling JEA lead to Jacksonville's version of "Ice Town"? Or is there some other end?

BridgeTroll

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #48 on: February 15, 2018, 01:02:56 PM »
I suspect it is our pension deficit of $3 billion+...

Quote
Jacksonville still faces $2.86 billion of unfunded liability for benefits earned by current employees and retirees over the coming decades. The sales tax is aimed at helping the city get out from under the weight of that debt, which has driven annual city pension costs from $78 million in 2008 to $290 million this year.

http://www.jacksonville.com/news/metro/2017-04-21/city-council-says-yes-curry-s-pension-reform-package
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vicupstate

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #49 on: February 16, 2018, 09:42:45 AM »

As one of the largest power providers in South Carolina, Santee Cooper directly serves more than 165,000 residential and commercial customers in Berkeley, Georgetown, and Horry counties. With a diverse fuel and energy supply of coal, nuclear, oil, gas, hydro and some renewable energy, Santee Cooper supplies power to the cities of Bamberg and Georgetown, 30 large industrial customers, and Charleston Air Force Base. Santee Cooper generates the power distributed by some of South Carolina's electric cooperatives.

https://www.postandcourier.com/politics/two-utilities-offering-about-billion-each-to-buy-santee-cooper/article_9ec72476-12a3-11e8-bd05-2fe1638c6bc9.html

Two utilities, Florida's NextEra Energy and Greenville's Pacolet Milliken, are willing to offer roughly $10 billion each to buy state-run Santee Cooper's electric business, a source with knowledge of the negotiations told The Post and Courier Thursday.

A third utility that the source declined to identify made an offer to manage Santee Cooper and work toward buying the Moncks Corner-based power provider.

The offers cover Santee Cooper's electric generation, transmission and distribution businesses that serve nearly two million South Carolina customers, mostly through power sales to 20 electric cooperatives around South Carolina.

Any sale approved by the General Assembly would eliminate Santee Cooper's $8 billion in debt or risk a veto from Gov. Henry McMaster. McMaster started looking for buyers for Santee Cooper soon after the utility and South Carolina Electric & Gas pulled the plug on a decade-long nuclear construction project in Fairfield County. Half of Santee Cooper's debt comes from the abandoned $9 billion reactors at the V.C. Summer Nuclear Station.

Talk about selling Santee Cooper has heated up since SCE&G's parent company, SCANA Corp., received a $14.6 billion buyout offer from Virginia's Dominion Energy in January.

NextEra, itching to move into South Carolina, has been seen as a favorite to buy Santee Cooper. Leaders from the Florida company have kept in constant contact with McMaster and Statehouse leaders and hired eight lobbyists, including a pair of former top lawmakers.


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ronchamblin

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #50 on: February 17, 2018, 09:54:07 AM »
Over recent years there seems to be a cyclical return of the idea of privatizing JEA.  I am ignorant as to the benefit of doing so, or the benefit of the status quo.  The complexity of the JEA system might leave most of us ignorant on this question. 

Two issues seem to be important.  One is to ponder the best scenario for operating the system to optimum performance; that is, in the best efficiency.  The other issue is which route would provide the best scenario for the JEA worker, and for the citizens who, I presume, currently own, by some distance, the JEA; that is, which route would provide the best service, at the best cost to the consumer citizen.

I suspect that the JEA system can achieve and maintain optimum performance whether operating under a private concern, or whether remaining as is. Given the qualities within most engineers, management, and workers, I suspect the motivation to operate with the greatest efficiency exists in either scenario.  Therefore, one might wonder about the greatest variable to which we might offer attention when pondering the question of privatization.

Of course, the greatest variable is that of profit; that is, the distance between actual operating costs, and the rates set upon the citizens using the electricity.  Currently, I suspect there is reasonable sensitivity to ensuring that the citizen of delivered electricity via a fair rate, and that the worker is not forced to near slave like conditions, as with the current Amazon work camps.

If nobody actually knows for sure whether the privatized scenario will provide a better overall scenario for the citizen, everyone should know that privatization will provide an open door for an escalation of rates far above what is necessary for operation.  Privatization will allow the quest for high profits will take hold, to gain momentum, becoming another mechanism for financially exploiting the average citizen so that more of the already wealthy can become more wealthy.  Our nation has seen this obscene scenario take place in many sectors.  It is one cause of the continuing drift to further inequality.

I suspect that there have been lobbyists, or persons similar, who, over recent years have applied pressure for privatization of JEA.  Why?  Because JEA provides another vehicle for big profits for a few who, by their control and their insensitivity to the plight of the average citizen, will not shy in maximizing the quest for more riches.

Mayor Curry is of course aligned with the Republicans who, by most of the news, the history, and perhaps the propaganda, seem to be less concerned about the average citizen, the poor, and the struggling, and more concerned about profits for their political compatriots, their campaign contributors, and simply those already enjoying a good level of wealth.

There is nothing wrong with entertaining the idea of privatization of JEA, as it is a question that must be addressed simply because it is an option.  The question is whether Mayor Curry, the city council, and others of influence, will allow the quest for great profits for a few, to override the wellbeing of the average citizen, the poor, the struggling worker … those who are already disadvantage by a system structured by a dynamic set with many mechanisms to perpetually shift wealth to those already set in obscene comforts.

Privatization would be relinquishing control of JEA to a group of individuals that could possibly … and with good probability … financially rape the average citizen already struggling in a system set for exploitation of the average worker. 

Privatization is good in some respects, as it applies pressure to greater efficiency.  But, given the example of a privatized Amazon scenario, wherein most work under near slave like conditions, for poor wages and heavy stress, the prospects for worker conditions at a privatized JEA is not good.  The “squeeze” effect in a privatized entity, with high motivation to gain high profits for a few wealthy shareholders and owners, and high motivation to cut costs via low wages and slave like worker conditions, can be devastating to the average worker, and to the consumer. The slightly greater efficiency, if there would in fact be any, under a privatized JEA, would encourage worse working conditions for the employees … more stress, and perhaps less pay, given the quest for maximized profits for the few who gain at the top. 



Adam White

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #51 on: February 17, 2018, 02:00:58 PM »
Over recent years there seems to be a cyclical return of the idea of privatizing JEA.  I am ignorant as to the benefit of doing so, or the benefit of the status quo.  The complexity of the JEA system might leave most of us ignorant on this question. 

Two issues seem to be important.  One is to ponder the best scenario for operating the system to optimum performance; that is, in the best efficiency.  The other issue is which route would provide the best scenario for the JEA worker, and for the citizens who, I presume, currently own, by some distance, the JEA; that is, which route would provide the best service, at the best cost to the consumer citizen.

I suspect that the JEA system can achieve and maintain optimum performance whether operating under a private concern, or whether remaining as is. Given the qualities within most engineers, management, and workers, I suspect the motivation to operate with the greatest efficiency exists in either scenario.  Therefore, one might wonder about the greatest variable to which we might offer attention when pondering the question of privatization.

Of course, the greatest variable is that of profit; that is, the distance between actual operating costs, and the rates set upon the citizens using the electricity.  Currently, I suspect there is reasonable sensitivity to ensuring that the citizen of delivered electricity via a fair rate, and that the worker is not forced to near slave like conditions, as with the current Amazon work camps.

If nobody actually knows for sure whether the privatized scenario will provide a better overall scenario for the citizen, everyone should know that privatization will provide an open door for an escalation of rates far above what is necessary for operation.  Privatization will allow the quest for high profits will take hold, to gain momentum, becoming another mechanism for financially exploiting the average citizen so that more of the already wealthy can become more wealthy.  Our nation has seen this obscene scenario take place in many sectors.  It is one cause of the continuing drift to further inequality.

I suspect that there have been lobbyists, or persons similar, who, over recent years have applied pressure for privatization of JEA.  Why?  Because JEA provides another vehicle for big profits for a few who, by their control and their insensitivity to the plight of the average citizen, will not shy in maximizing the quest for more riches.

Mayor Curry is of course aligned with the Republicans who, by most of the news, the history, and perhaps the propaganda, seem to be less concerned about the average citizen, the poor, and the struggling, and more concerned about profits for their political compatriots, their campaign contributors, and simply those already enjoying a good level of wealth.

There is nothing wrong with entertaining the idea of privatization of JEA, as it is a question that must be addressed simply because it is an option.  The question is whether Mayor Curry, the city council, and others of influence, will allow the quest for great profits for a few, to override the wellbeing of the average citizen, the poor, the struggling worker … those who are already disadvantage by a system structured by a dynamic set with many mechanisms to perpetually shift wealth to those already set in obscene comforts.

Privatization would be relinquishing control of JEA to a group of individuals that could possibly … and with good probability … financially rape the average citizen already struggling in a system set for exploitation of the average worker. 

Privatization is good in some respects, as it applies pressure to greater efficiency.  But, given the example of a privatized Amazon scenario, wherein most work under near slave like conditions, for poor wages and heavy stress, the prospects for worker conditions at a privatized JEA is not good.  The “squeeze” effect in a privatized entity, with high motivation to gain high profits for a few wealthy shareholders and owners, and high motivation to cut costs via low wages and slave like worker conditions, can be devastating to the average worker, and to the consumer. The slightly greater efficiency, if there would in fact be any, under a privatized JEA, would encourage worse working conditions for the employees … more stress, and perhaps less pay, given the quest for maximized profits for the few who gain at the top.

Privatization almost never works. You get short term gain, but long term loss. We need to move away from the flawed notion that everything should turn a profit.
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thelakelander

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #52 on: February 17, 2018, 05:58:20 PM »
If JEA were sold, what would the one time influx of cash be spent on? I assume there must be a reason or critical need to consider cashing out now?
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JaxAvondale

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #53 on: February 18, 2018, 01:23:41 AM »
If JEA were sold, what would the one time influx of cash be spent on? I assume there must be a reason or critical need to consider cashing out now?

This is my question as well. If you tell me that selling JEA is going lead to better infrastructure and quicker development downtown then I’m more apt to listen.

BridgeTroll

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #54 on: February 18, 2018, 07:11:03 AM »
If the proceeds paid off our huge pension debt and the tax monies currently devoted to servicing that debt were available for use in the yearly budgets this would solve a large long-term problem.  I  am not endorsing the idea but would like to know if it was feasible...
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Re: Should Jacksonville sell (privatize) JEA?
« Reply #55 on: February 18, 2018, 09:20:15 AM »
If JEA were sold, what would the one time influx of cash be spent on? I assume there must be a reason or critical need to consider cashing out now?

If there is any urgent need, why hasn't the mayor revealed what it is?   Is it because he wants to maintain the illusion that he doesn't have an opinion on privatization or is it because he wants to use it for things many wouldn't consider urgent?     As excited as I am about the District and Shipyards projects,  I'd be unhappy to see proceeds used to remove Hart Bridge ramps or city-funded infrastructure for the District.   

Tacachale

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #56 on: February 18, 2018, 11:30:37 AM »
Some updates. The mayor is saying he's not for or against selling JEA but just wanted to explore the option.

Quote
Curry undecided on putting JEA up for sale
By David Bauerlein
Posted Feb 16, 2018 at 7:47 PM Updated Feb 16, 2018 at 11:30 PM

Mayor Lenny Curry said Friday he will be meeting with City Council members about whether the city should seek offers from private companies for JEA and what kind of up-front conditions the city should have for such a sale

As City Council debates whether it will give JEA the green light to put the city-owned utility up for sale, Mayor Lenny Curry said Friday he has not decided whether he would support the city taking that step, which he said would require ensuring terms and conditions are crafted up front to protect the interests of taxpayers and utility employees.

Curry said he is going through the report that Public Financial Management, a consultant hired by JEA, presented Wednesday to City Council about the many aspects that would come into play if the nation’s eighth-largest municipal utility were put on the market.

“I’m going to spend some time going through the report, digesting it, asking questions, collaborating with members of my team, collaborating with members of City Council and meeting with them to get their ideas,” Curry said. “But as I’ve said many times and I’ll say again — I’m not for or against privatization.”

At the City Council meeting, JEA board Chairman Alan Howard said that based on the high prices that utilities are attracting nationally, the city has a “once in a generation” opportunity for a sale that “could be transformative” for Jacksonville.

Curry said it’s too early to say whether a sale could have that kind of impact because “there’s a whole lot of questions that would have to be answered.”


http://www.jacksonville.com/news/20180216/curry-undecided-on-putting-jea-up-for-sale

Others are skeptical.

Quote

News analysis: JEA debate cracks Mayor Curry’s armor

By Christopher Hong

By Nate Monroe
Posted Feb 16, 2018 at 5:09 PM Updated Feb 16, 2018 at 11:25 PM

Mayor Lenny Curry has had remarkable success muscling through major legislative wins in his first term, but the potential sale of JEA has proven to be divisive and calls into question whether he can keep his winning streak going.

The honeymoon might be over for Mayor Lenny Curry.

The first-term Republican has had remarkable success muscling major legislative wins through a City Council that more often than not was willing to give his administration the benefit of the doubt. Whether that kind of winning streak will continue is an open question after a public meeting Wednesday ostensibly over the future of Jacksonville’s publicly-owned electric and water utility turned into what one veteran member called a “debacle.”

In its wake, Council President Anna Brosche and Curry are in open war, and it’s clear there is no consensus on the 19-member council over how or whether to proceed with a sale of JEA to a private buyer — a move that would amount to one of the largest changes to Jacksonville government in a half century.

Curry and his supporters place the blame on Brosche and City Councilman Garrett Dennis, both of whom have become public antagonists of the administration.

“It’s gotten personal with a couple of people who want to discredit him,” said Councilman Bill Gulliford, a Curry ally.

For their part, Brosche, Dennis and other Curry critics say they are responding in kind to a mayor who doesn’t respect them, and that Curry’s sometimes confrontational leadership style has worn thin — a point even some Curry supporters acknowledge.

“Obviously based on some of the things that happened over the last week people are for a variety of reasons rejecting that type of approach,” said Michael Binder, a University of North Florida political science professor who also runs the school’s polling operation. “You can push for a while. Eventually people might pull back from that.”

...

The mayor has said he is still studying the issue and taking in a report delivered this past week that estimates the value JEA might have to a private buyer, and that he wants to work collaboratively with the council. Yet he has also struggled to shed suspicion aired by his adversaries in the community and on the City Council that he has been working behind the scenes to ram through a sale of JEA — accusations he has repeatedly and forcefully denied.

...


http://www.jacksonville.com/news/20180216/news-analysis-jea-debate-cracks-mayor-currys-armor

It'll be interesting to see where this goes now. It doesn't seem like there's much public will to sell JEA like there was to do something about pension reform, for instance. I expect we'll either see this die, or the Mayor's going to have to seriously change tactics and work with Council.
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sanmarcomatt

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #57 on: February 18, 2018, 03:45:31 PM »
If the proceeds paid off our huge pension debt and the tax monies currently devoted to servicing that debt were available for use in the yearly budgets this would solve a large long-term problem. 

Wait, you mean increasing the tax payer cost of the existing pension plan combined with dramatically increasing the tax payer cost of future employees didn't fix the pension?!?

camarocane

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #58 on: February 18, 2018, 06:14:58 PM »
If the proceeds paid off our huge pension debt and the tax monies currently devoted to servicing that debt were available for use in the yearly budgets this would solve a large long-term problem. 

Wait, you mean increasing the tax payer cost of the existing pension plan combined with dramatically increasing the tax payer cost of future employees didn't fix the pension?!?

BridgeTroll

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Re: Should Jacksonville sell (privatize) JEA?
« Reply #59 on: February 19, 2018, 06:04:35 AM »
If the proceeds paid off our huge pension debt and the tax monies currently devoted to servicing that debt were available for use in the yearly budgets this would solve a large long-term problem. 

Wait, you mean increasing the tax payer cost of the existing pension plan combined with dramatically increasing the tax payer cost of future employees didn't fix the pension?!?
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