Are some public power and water utilities starved for cash or challenged by the depth of resources needed for the future?
The question is a natural as the list of companies is revealed to possibly purchase JEA, the Jacksonville, Florida, government-owned water and power utility.
The CEO of JEA set the stage well: “In today’s dynamic energy and water environments, simply keeping up with everyone else is no longer enough. Creating and sustaining value depends on setting yourself apart in non-traditional ways and continually looking ahead to understand what drives superior financial performance, while exceeding the service, reliability and affordability demands of customers.” (Source – JEA)
Sale of a public power organization is a sensitive topic, especially in Florida with the JEA possibility, and in South Carolina with the Santee Cooper sale possibility. Appreciating the past is certainly understandable. The past does not keep lights on in the future, however.
Realism is why the CEO statement from JEA stands out. “As a government-owned utility in Florida, JEA has a substantial number of constraints imposed upon it through the government organization, the Florida Constitution, different state statutes, and the city charter, which is ultimately the organizational document that dictates those things JEA can and cannot do.” (Source)
Jacksonville Mayor Lenny Curry, “… has said that selling the city-owned utility JEA would allow the city to pay off $2.2 billion in debt, freeing up $232 million in annual debt service payments,” (Source)
Underline the debt issue. Check this: “There is also concern that some debt may not be financing productive investment.” That’s the PBS News Hour reporting. The question: Is a company servicing high debt using that debt constructively – for the future? Or, is it paying off unproductive investments?
Utilities are changing. Industry transitions include:
- Scale: Having financial resources and flexibility. (Debt can stymie flexibility.)
- Technology: Implementing high-tech advancements.
- Talent: Broad yet deep skills to match technical sophistication.
- Preparedness: From weather to human activities, hurricanes to cyber invasions. Threats are big.
Why? Just to compete. To serve the public. “One commonality among utilities across the country is that they can see the status quo won’t work forever,” (Source)
Perhaps the visceral fear of this change is its meaning to a city or neighborhood. Even so, certain aspects of the business must be constant or get better. Customer service. Local attention. That is a business basic. Providing customers with the products and services they want in the future means being in the right field of play with the right resources.