JEA union leaders explain opposition to sale

This originally appeared in the Florida Times-Union

Question: Would a private utility better serve the city of Jacksonville and the JEA ratepayers of Northeast Florida better than JEA?

Answer: It is the official position of the JEA union leadership that a privatization of JEA would have severe, harmful and long-term detrimental economic impacts on all stakeholders.

Proposed reasons to privatize JEA

One-time cash windfall — amount and/or uses not guaranteed — laws may restrict uses and cause unintended consequences.

Exceptionally historically high evaluation purchase multiples for utility acquisitions — stock market and financial engineering are the drivers — high purchase multiples lead to long-term higher utility rates.

Flat industry electric revenues — industry-wide issue — JEA has adjusted well with fiscal discipline and accelerated debt reductions and has options for growth.

Technological advancements — primarily improvements in solar energy, batteries and production economies of scale are driving down costs. JEA stands to win big as electric cars become the norm.

Regulatory changes related to global warming Issue — highly political. The U.S. already cleans up industry pollution more than most countries.

Ideological — a private enterprise is more efficient — public power has proven high reliability, more community value and lower long-term rates than their private sector counterparts. See American Public Power Association studies.

Reasons to retain JEA

JEA provides cost-effective efficient operations with affordable and reliable services and holds high credit ratings with agencies.

JEA is citizen-owned, operated and controlled by local government.

JEA outsources, locally, hundreds of millions of dollars to local businesses.

JEA provides substantial tangible and intangible monetary contributions to the city and beyond.

JEA employees contribute considerable time and money to local charities and communities.

JEA provides significant economic benefits and jobs to the local community.

JEA controls substantial resources in a strategically situated utility matrix, including public lands.

JEA has demonstrated the ability to serve communities beyond its political jurisdiction.

JEA earns high customer service ratings: JD Power Award for customer satisfaction and quick responses during outages and storm restorations.

JEA is a partner in public power with substantial lobby leverage on regulatory matters.

JEA has demonstrated decisive responsiveness to strategic changes with resiliency and sustainability.

Executing a sale of JEA may cost hundreds of millions of dollars and is likely to create a host of unintended consequences preventing the ultimate execution.

If JEA is sold, net proceeds would most likely fall far below any current projections reducing the endeavor to a public debacle and distraction.

While we have attempted to counter much of the noise regarding the privatization of JEA, there is a very simple reason for not selling JEA that overcomes all the noise. Any company or entity willing to buy JEA, whether it is $1 billion or $20 billion, must have the resources to ensure the price it pays will definitely be paid back in full with interest.

This is not like selling your house for a premium and walking away with no further commitment to that house. The customers of JEA will still be on the hook for the premium paid in the initial purchase price, as well as the interest or earnings above and beyond that premium paid to the city. The premium payment will either come in increased rates down the road, or by higher property taxes, or fewer services offered by the city. There is one thing we can be sure of: all these costs will be paid in full by JEA customers one way or another!

Whereas all employees are encouraged to express their views on the privatization of JEA to their leadership (city, City Council and JEA), and whereas the reasons to keep JEA in the public domain far exceed any value that could be gained from privatization, and whereas this leadership believes privatization of JEA to be harmful to all stakeholders, our joint statement is that we hereby declare that a privatization of JEA is not in the best interest of the public, the city or JEA. Therefore, we jointly and respectfully call for an end to the initiative to privatize JEA and we call for our leaders to do the same by voicing their opposition to JEA privatization, publicly.

• American Federation of State, County & Municipal Employees, Kathleen Crowe, president.

• International Brotherhood of Electrical Workers 2358, Valerie Gutierrez, business manager.

• Jacksonville Supervisor Association, Rick Lehman, president.

• Laborers International Union of North America, Ronnie Burris, business agent.

• Professional Employees Association, Randy Hilton, president.