- 2014 - February - 19th -
Melissa Dykes

JEA report shows different picture than pitch Mayor Alvin Brown made to pension board

By David Chapman, Staff Writer

If the JEA was to pitch in an additional $40 million each year to help solve the city’s pension problems, it might need better financial reports than it received Tuesday.

Mayor Alvin Brown wants the utility to contribute more to help pay down the city’s $1.7 billion in unfunded liability. He suggests a JEA pension switch combined with natural growth and savings would allow that to happen.

But, to just have flat revenue on the electric side of the business, the utility would need 2.5 percent growth for the year — about 10,000 new electric meters from a combination of new businesses and residential.

The last time that happened was 2007.

Even after a cold January when sales were up, the utility’s electric side is down about 1 percent. As JEA Chief Financial Officer Melissa Dykes told the board Tuesday, the utility should be “hoping for a hot summer.”

“These are scary numbers to me,” she said.

Board Chair Mike Hightower said he was “stunned” and called the numbers needed to maintain flat revenue “one of the most powerful statements in a long time.”

Energy users are conserving more, leading to fewer megawatt hours per year. It’s a figure projected to decline again, Dykes said.

Hours earlier, Brown gave a pension task force a different projection.

Brown said that despite the utility saying its revenue would be flat, growth would be above projections. He cited a U.S. Department of Energy report that shows electricity consumption will grow about 1 percent a year, equaling about $18 million a year for JEA.

That would supplement the bigger savings he says JEA could receive if they were to enroll their employees in a pension plan separate from the city. Total savings: $503 million over 35 years, he told the pension group.

Another opportunity, he said, is JEA’s natural gas costs, which are below the budget’s utility. Last year, it produced a $35 million fuel surplus because of lower prices. The year before it was $37 million.

Dykes said Tuesday that the projections show it at around a $26 million surplus. But, she asked the board to wait another month or two on the issue because natural gas prices were “higher than expected” now.

Additionally, the fuel surplus serves as a rebate to customers.

Dykes’ report wasn’t a response to Brown’s proposal. It served as the monthly financial update.

Instead, the JEA board received Brown’s plan Monday and will now go through its own review process as it would with any other entity seeking assistance. Hightower passed Brown’s ideas to JEA’s senior staff members, who will analyze them before a March 10 meeting of the board’s finance and audit committee.

Over the coming months, that board will work with JEA senior leadership before making a recommendation to the full board. From there, the seven-member board will decide on Brown’s plans fate.

Hightower said Tuesday the entire process will be “thoughtful and objective” and that should a positive vote come back on any additional contribution, a series of public hearings would be scheduled to allow the public to weigh in.

Brown created a task force to make recommendations for pension reform, which has the JEA idea still on the table as its work comes to an end. The group is scheduled to meet at 1 p.m. today, a day after Brown’s pitch to the funding subgroup.



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