trending Market Intelligence /marketintelligence/en/news-insights/trending/yq87qyuyhztu1kfvhlcx-q2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Jacksonville, Fla., utility could have permanent CEO by 2019

Blog

Essential Energy Insights - February 2021

Blog

Message in a (Word)Cloud

Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Jacksonville, Fla., utility could have permanent CEO by 2019

The Jacksonville, Fla., municipal utility aims to install a permanent CEO by the beginning of 2019, with that leader likely to revisit privatization discussions that bitterly divided the city for half a year.

At a July 30 meeting of JEA's board, Vice Chairman Husein Cumber said the goal is to have a permanent CEO start work by Jan. 1, 2019. JEA has been searching for a CEO since former CEO Paul McElroy resigned unexpectedly in April, following attempts by the Jacksonville City Council to subpoena him to testify about questions related to a possible privatization of the utility.

Members of the council would have to approve JEA being acquired by an investor-owned utility or being managed in a public-private partnership. JEA, which could be valued at upwards of $11 billion, was the subject of heated debate between JEA leadership, Jacksonville's mayor and lawmakers, and local business and labor interests. The utility's board in May unanimously decided to put on hold any activities tied to a strategic transaction.

Cumber said JEA's search firm, Heidrick & Struggles, is prepared to publicly post the permanent CEO job description, which will be available for the next 45 days. The firm will then work to develop a list of qualified candidates, with whom JEA's search committee will meet in October. The committee would then produce a slate of finalists later in October.

In early November, Cumber continued, the rest of the board will have the opportunity to meet the finalists, with public interviews scheduled to take place during the board's Nov. 27 meeting. A vote could be called that same day to name the permanent CEO, or a decision could be postponed to a special session in December.

A candidate already in the mix is Aaron Zahn, JEA's interim managing director and CEO. He served on the utility's board for two months before stepping down to campaign for, and secure, the temporary leadership role. Zahn relinquished his position as the head of Pascal Partners, a Jacksonville-based firm funding and developing distributed infrastructure, to run JEA.

Zahn has expressed interest in the permanent CEO position, while his internal competitor for the job, President and COO Melissa Dykes, has said she would need to discuss the matter with her family. The board in April unanimously chose Zahn over Dykes as interim CEO.

'Very productive' rating agency meetings

JEA is also addressing other issues that will inform whether its permanent CEO decides to restart privatization talks. The Jacksonville public was mostly opposed to a transaction, with dozens of citizens speaking out at meetings of the JEA board and city council.

That sentiment was reinforced in the findings of a survey conducted by J.D. Power, which were relayed at the July 30 meeting by JEA Vice President and Chief Customer Officer Kerri Stewart. Customer satisfaction scores have not regained their past upward trajectory, she said, with the recent decline due in part to citizens seeing JEA as dishonest and opaque during the privatization discussion.

A critical issue for customers was whether JEA could exit an agreement to purchase power from the Vogtle nuclear plant, the expansion of which is years behind schedule and billions of dollars over budget. Moody's in November 2017 downgraded its outlook of JEA to "negative" for its exposure to the Georgia project, and JEA has said it is exploring options to withdraw from the contract while still honoring its terms.

Interim CFO Ryan Wannemacher said JEA management recently met with the three rating agencies, having what he characterized as "very productive" conversations regarding Zahn's new strategic framework for the utility. "I think it was very well-received," Wannemacher added.

The framework, a second draft of which was reviewed at the July 30 meeting, is intended to align the interests of all JEA stakeholders and "drive value," in Zahn's words, through specific measurements of profitability, customer satisfaction, community impact and financial contributions to Jacksonville's municipal coffers. The board will vote on the final framework at its next meeting Aug. 21.