Mayor says $1.2 billion liablity is “a problem that has to be fixed."
The week after a consultant said JEA was worth $2.9 billion to $6.4 billion if sold, Mayor Lenny Curry said one concern sticks out in the 28-page evaluation.
“There’s an investment that they (JEA) made on that report that has a $1.2 billion liability,” said Curry, referring to the public utility’s commitment to buy electricity from Plant Vogtle, a nuclear power plant under construction 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 – energy that won’t be available until at least 2021.
“That’s a problem that has to be fixed,” Curry said.
The agreement requires JEA not only to buy energy, but also annually pay for some of the debt from the ongoing construction.
Those payments eventually will be as high as $123 million per year, according to the agreement.
The utility already is expecting a $41 million payment due before the two reactors come online over the next three years.
During the JEA board of directors meeting Tuesday, JEA Chief Financial Officer Melissa Dykes said the utility put $40 million into a rate stabilization fund ahead of the payment.
“That will take us most of the way through the time period before COD, (commercial operation date), for Plant Vogtle,” she said.
Dykes said the plant anticipates opening its third reactor by 2021 and its fourth reactor by 2022.
“What does this $1.2 billion mean for ratepayers, for taxpayers and for the employees of JEA?” Curry asked Wednesday. “Those questions need to be examined and answered now.”
The $1.2 billion estimate by consultant Public Financial Management Inc. released Feb. 14 is less than the $1.77 billion estimated by financial services agency Standard & Poor’s in December.
Standard & Poor’s, along with other credit ratings agencies Moody’s and Fitch, noted the obligation is a substantial challenge for the utility in their December evaluations.
The agreement with Plant Vogtle does not include an estimated $3.9 billion in other debt JEA would need to pay off before a potential sale.
JEA’s board of directors said Tuesday it would schedule a workshop to answer some of those policy questions, conversations Curry said he would stay informed on as needed.
Curry said he had a brief conversation with the City Council’s liaison to JEA, Matt Schellenberg, after the meeting. Schellenberg suggested the board take its own look at privatization outside of what council is doing.
“I think he’s going to be engaged,” Curry said. “To the extent to where we’re invited into anything, we’ll be part of the process.”
Curry said he welcomed the five-member committee established Tuesday by council President Anna Brosche to study a potential sale and “examine this in a transparent way.”
Some members on the committee, primarily Garrett Dennis and Danny Becton, have been vocal opponents of privatization.
Curry said he didn’t have time to “get caught up in the rhetoric” and that he was committed to working with council.
Rummell states gun control stance
One of Curry’s largest political financial donors, Peter Rummell, told The New York Times in a report published Saturday he’ll join another Republican donor, Al Hoffman Jr., in withholding financial backing to candidates who don’t support a ban on assault weapons.
Hoffman’s announcement followed the Feb. 14 shooting at a Parkland high school that left 17 students and faculty members dead. The suspect, 19-year-old Nikolas Cruz, used an AR-15 semiautomatic rifle during the attack.
“It has to start somewhere,” Rummell told the Times about gun control.
While Hoffman said he would issue an ultimatum to the politicians he supports, Rummell provided his position in a statement Sunday night, saying he was not sure if “starting with just an ‘ultimatum’ is the right first step.”
“We need a plan, a strategy and tactics,” Rummell said.
“Now is the time for us to have a debate that is honest, thoughtful and complete, taking into account all the important issues about how we live practically under the 2nd Amendment, which I fully support,” his statement reads in part.
Curry declined Wednesday to say if he would support a ban on assault-style guns, saying that “the regulation of firearms is done at the state and federal level.”
Regarding Rummell, Curry said he and his supporters “don’t have 100 percent alignment and agreement on issues” and that both sides expect and understand that.
“I’m the mayor of Jacksonville, (elected) by my supporters to be an independent thinker and to work for the betterment of the city as a whole,” he said.
“That’s my focus,” Curry said.