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Jax Daily Record Tuesday, Aug. 11, 202001:40 PM EST

Court rules NextEra’s bid for JEA is public record

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FPL's parent company wanted to keep secret how much it would have paid for the city-owned utility.
by: Mike Mendenhall Associate Editor

Florida 4th Judicial Circuit Judge Virginia Norton issued a ruling Aug. 10 that NextEra Energy Inc.’s proposed purchase price for JEA is public record and should be released, according to attorneys for the city.

City General Counsel Jason Gabriel told a City Council committee investigating the publicly owned utility’s 2019 attempt to privatize that Norton denied NextEra’s request for temporary and permanent injunctions to prevent the disclosure of the gross and net amounts the city would have received in the private energy company’s bid to purchase JEA. 

NextEra, the parent of Florida Power & Light Co., is one of 16 private utility companies that bid on JEA’s invitation to negotiate last year — a process ended by JEA’s board of directors Dec. 24 after public and Council scrutiny.

NextEra was joined by two other JEA bidders, Duke Energy Corp. and American Water Works Company Inc., and filed a civil suit for the injunction Feb. 19 to keep bid amounts and other information out of the public record, claiming trade secrets.

Council member Rory Diamond sits on the four-member JEA investigatory committee. He said Aug. 10 that the amount NextEra and other companies bid is important for transparency and because it would show the amount of money JEA’s former senior leadership team, including fired former CEO Aaron Zahn, would have earned in a failed Long-Term Performance Unit Plan.

According to a memo issued Nov. 18 by the Council Auditor’s Office, the bonus-style incentive program could cost JEA up to $636.6 million if the utility was sold to a private company.

“It’s the missing variable. It’s the X in your algebra class for the PUP equation. So, once you know how much you can sell JEA for and what the offer was, you plug that into the performance unit plan equation and you find out home much these executives were thinking they were going to make,” Diamond said. 

“And my hunch is it’s in the hundreds, and hundreds, and hundreds of millions of dollars into their pocket, and there was nothing we could do about it had we sold JEA,” he said.

A report released in February 2018 by the outside firm Public Financial Management Inc. said that JEA’s gross sales price would be $7.5 billion to $11 billion, depending on how the market values the utility. The report estimated the city would net $2.9 billion to $6.4 billion. 

Despite the order, NextEra’s official bid was not released Aug. 10 by city attorneys. Gabriel said Aug. 10 a second order issued by Norton gives NextEra 15 days to extract and redact information from transcripts and exhibits from the final hearing, held July 22-23.

Gabriel and Council’s outside attorney Steve Busey of firm Smith Hulsey & Busey LLC said they do have the figure and will release the number in the near future. 

“We want to digest the order itself. It certainly bodes and orders in favor of disclosure as a public record, but we want to honor the other order that was issued on giving the opportunity for NextEra to redact, and I want to check with the litigators to make sure — I don’t know what appellate review or anything they might want to pursue,” Gabriel said

“I just want to honor and respect the situation we’re in at the moment,” he said.

Busey told the committee that he thinks Norton’s ruling will set a precedent for other claims of trade secrets in the government and public invitation to negotiate process. 

“This is a significant removal of an impediment to the completion of this report,” Busey said. “It is just an example of the people participating in the ITN and the ITN process who have asserted trade secrets (and) wrongly tried to muzzle JEA and muzzle the information coming out of this investigation.”

Federal probe and Melissa Dykes

Busey said Aug. 10 that the COVID-19 pandemic has kept the U.S. Department of Justice and the U.S. District Court Middle District of Florida from convening a grand jury to hear testimony from witnesses in the federal probe into JEA. 

A federal grand jury subpoena filed April 21 ordered JEA to provide documents, communications and records from top utility and City Hall officials related to the failed push to privatize the city-owned utility and the hiring of Zahn.

Busey said federal officials said the grand jury may not convene until late 2020 or early 2021, pushing back any possible indictments or results. 

He said the delay also will prohibit Council investigators from interviewing Dykes, but that she would eventually testify before the grand jury or in any subsequent criminal proceedings.

“Her evidence will come out,” Busey said.

The former JEA executive rescinded an early offer to provide sworn testimony in a May 20 letter through her attorney, Hank Coxe of Bedell, Dittmar, Devault, Pillans & Coxe, that her public testimony would compromise the federal investigation. 

Busey said Aug. 10 Dykes was one of two witnesses justice department and FBI officials asked Council lawyers not to interview for public depositions and Busey’s team deferred to the federal investigators.

Busey’s team still plans to interview five additional key witnesses in the sale in the coming month — Tim Baker, Jacksonville Mayor Lenny Curry’s former political consultant; former city Chief Administrative Officer Sam Mousa; The Dalton Agency PR and Social Media President Michael Munz; former JEA board member and attorney Alan Howard; and Foley & Lardner LLP partner Kevin Hyde.

All five agreed to testify after the committee voted 4-0 on Aug. 4 to seek subpoenas for their depositions.

A final report on findings by Busey and the Office of General Counsel will be issued by late October without any unexpected new pieces of evidence or lines of investigation, according to Busey.

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