The JEA board of directors took a step at its meeting July 28 toward settling invoices related to the proposed sale of the public utility that was terminated in December.
According to a memo presented to the board by interim Managing Director and CEO Paul McElroy, JEA received invoices totaling more than $13 million for services rendered related to the invitation to negotiate that led to 16 companies expressing interest in purchasing JEA.
Services comprise legal and consulting fees, engineering, banking, data management, public affairs and human resources.
To date, $3.2 million has been paid. The board unanimously recommended paying an additional $1.5 million of the invoices.
The board also recommended retaining outside counsel to review the remaining balance of about $8.75 million.
The invoices that will be further reviewed include about $5.85 million from the Pillsbury Winthrop Shaw Pittman, Foley & Lardner, Holland & Knight and Milam Howard law firms and $2.9 million from the McKinsey & Co. management consulting firm.
Also reviewed will be charges by firms retained by the law firms and McKinsey, said Steve Tuten, JEA director of audit services.
When the public portion of the board meeting adjourned at 11 a.m., the board and attorneys from the city Office of General Counsel and Stephen Busey, private counsel retained by JEA, went into a “shade meeting” not open to the public because of attorney-client privilege.
The discussion was about JEA’s agreement to purchase electric power from Plant Vogtle, a nuclear power plant under construction about 20 miles south of Augusta, Georgia.
JEA signed a 20-year power purchase agreement with Municipal Electric Authority of Georgia in 2008 to use nuclear energy after the estimated $20 billion power plant expansion is complete, anticipated in 2021 or 2022.
JEA has been trying to get out of the agreement, which requires the utility to buy energy and to pay each year for some of the debt for the ongoing construction cost. JEA lost a lawsuit to cancel the deal in June.
According to the 12-year-old agreement with the Municipal Electric Authority of Georgia, those payments could be as much as $123 million per year.
A $41 million payment is expected to be due before the two reactors come online by the end of 2022.
After the shade meeting, the board reconvened with public access and unanimously approved providing staff guidance to pursue and approve mutually beneficial business solutions, including a settlement with MEAG.
Assistant General Counsel Jody Brooks, the city’s assigned counsel to JEA, said the board discussed a proposed settlement, but did not offer details.
“We’re not going to talk about the specifics of the settlement,” Brooks said.
McElroy said JEA will conduct the negotiations in a “cooperative spirit.”
“We will thoroughly engage to explore mutually beneficial ways to reduce costs,” he said.