Image courtesy of JEA.
Big - and controversial - changes may be coming to JEA, the publicly-owned utility providing power, water and sewer to the Jacksonville area. CEO Aaron Zahn has gotten unanimous approval from the board to explore privatizing the organization. Though it has been pushed behind the scenes by powerful interests including Mayor Lenny Curry, this prospect is massively unpopular with Jaxsons - in a June poll by the University of North Florida, 72% of the city opposed selling off any part of JEA. However, citing a May “status quo” report full of dire, if conjectural, future projections about the state of the utility, Zahn has moved forward with a plan to explore either privatizing the utility, or engaging in massive layoffs that would cost over 500 employees their jobs (apparently there’s no middle ground).
But while the JEA bigwigs are trying to sell an image of a utility on the verge of collapse under public ownership, their own website (not to mention Zahn’s recent hefty raise and benefits package) say otherwise. In a section called Benefits of Public Power (archived here in case the page manages to disappear into the memory hole), JEA itself lists out the various advantage community ownership provides to the city and its taxpayers. Many of these points are worth keeping in mind as the debate heats up over the privatization push.
- JEA rates are lower than competitors. Despite the conventional wisdom that a private utility would be more efficient and cheaper, JEA’s electric rates are 4.7 percept below the national average, and its water and sewer rates are lower than average in Florida.
- Utilities are regulated monopolies anyway. Everywhere in Florida and in most places across the country, utility companies are monopolies with specific service areas. The main reason for this is that power and water are essential services that must be available at all times to everyone in the region, not only those in the areas most profitable to corporations. Monopolization negates the main advantage of private ownership - competition to keep prices down and service up.
- Public utilities are better positioned to provide essential services like electricity and water. In JEA’s own words, “Municipal electric utilities—also referred to as public power entities—are well suited to deliver this essential service, because the only reason they exist is to provide the service to the communities that own them – not to make profits for shareholders.”
- Public entities are accountable to the citizens. Unlike private entities responsible only to shareholders, JEA is accountable to its ratepayers and elected officials. Taking JEA private means not only removing this accountability, but adding an incentive for the entity to seek profits at the expense of ratepayers.
- JEA provides infrastructure investments. As a public utility, JEA has invested in infrastructure for the sake of improving service and environmental sustainability, rather than to maximize profits. They give the example of the $2 billion investment to the city’s sewage and water systems they have made since taking over those responsibilities in 1997, which has given Jacksonville one of the best wastewater treatment plants in the country. It’s unthinkable that a private entity would engage in that level of investment when there’s no additional profit to be made from it.
Next page: More “benefits of public energy.”