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Jax Daily Record Tuesday, Oct. 27, 202005:39 PM EST

JEA board interviews CEO finalists

Three utility executives answer questions about renewable energy, leadership, company culture and financial strategy.
by: Mike Mendenhall Staff Writer

The JEA board of directors heard from three finalists Oct. 27 in its search for the city-owed utility’s next CEO.

In a 4½-hour meeting at the Jacksonville Main Library, the board interviewed: 

• John L. Hairston: Bonneville Power Administration COO in Portland, Oregon.

• Morgan K. O’Brien: Former President and CEO of Peoples Gas in Pittsburgh.

• Jay C. Stowe: CEO and founder of Stowe Utility Group LLC in Chattanooga, Tennessee. He is the former senior vice president of resources and operations support for the Tennessee Valley Authority.

The board gave each candidate 75 minutes to answer 11 questions. 

They ranged from the candidate’s views on renewable energy integration in JEA’s portfolio to their experiences dealing with rating agencies, government entities and to rate competition with investor-owned utilities like Duke Energy and Florida Power & Light Co.

“I think any one of the three would be an excellent CEO,” board Chair John Baker said in an interview after the meeting. 

“It will be a hard decision. They’re all very different people,” Baker said. 

 The board chair added the decision will come down to “what the majority of the board feels is the right temperament and mindset to run JEA,” he said.

JEA seeks a permanent replacement for interim CEO Paul McElroy, who returned May 8 on a six-month contract at the board’s request after former Managing Director and CEO Aaron Zahn was fired by the former board.

John L. Hairston is COO of the Bonneville Power Administration in Portland, Oregon.

John L. Hairston

Several board members noted Hairston’s longevity with Bonneville Power, spending his 30-year professional career with the nonprofit federal power marketing administration, beginning as an economist in 1990. 

Bonneville supplies 85% of the high-voltage electricity to municipal customers in the Northwestern U.S., specializing in hydroelectric power. 

Hairston also helped manage the organization’s internal oversight and compliance programs. He told the board that he sees JEA’s goal to reduce carbon emissions and add more solar, nuclear and purchase power agreements to its portfolio is a goal he can help achieve.

“I think that’s the right path to be on because if you look at the science and you look at all the things happening around climate change if we’re able to move in that direction, zero carbon is the way to go,” Hairston said. “But there are costs to that.”

He said JEA would need a reliable power source like natural gas or power purchases until battery storage technology reaches utility-grade capacity.

Hairston said he would explore flexibility in JEA’s contract with the Municipal Electric Authority of Georgia for the nuclear Plant Vogtle to use it as a “variable resource” to fill in gaps from renewable energy.

Morgan K. O’Brien, former President and CEO of Peoples Gas in Pittsburgh.

Morgan K. O’Brien

All board members liked O’Brien’s nearly 18 years of experience as a utility chief executive officer.

O’Brien touted his work at Peoples Gas coordinating a microgrid system at the Pittsburgh International Airport that uses a combination of solar and natural gas to generate electricity on-site.

O’Brien said the system created a revenue stream for Peoples to sell natural gas to the airport year-round instead of only the peak winter months. 

Board member and UF Health Jacksonville CEO Leon Haley noted O’Brien’s efforts helping workforce diversity at Peoples. 

O’Brien told the board the natural gas company brought a call center back in-house, creating 300 jobs with 100 reserved for minority workers.

He said the program improved worker retention and offered advancement opportunities for minority employees, which improved the diversity of People’s Gas management.

“We didn’t solve the diversity issue in Pittsburgh, but we showed others how we can be a leader in that issue by taking action and doing something,” O’Brien said. “My employees felt and we talk about how we’re helping the city become more diverse.” 

Jay C. Stowe is the CEO and founder of Stowe Utility Group LLC in Chattanooga, Tennessee.

Jay C. Stowe

All three candidates either directly mentioned or alluded to JEA’s management struggles since 2018. 

JEA is under a federal grand jury investigation looking into the attempted sale of the utility last year.

Stowe said he would continue communication, team building and one-on-one meetings with employees and managers to rebuild JEA’s internal culture.

“There is no way that the events of the last two years have been shaken off and everything is fine all the way through the organization,” Stowe said. “There’s got to be continued .... consternation and trust issues that we’ve got to get through and then begin building a team to support that.”

When he was CEO of Huntsville Utilities in Huntsville, Alabama, in 2013, Stowe had a series of phone conversations about strategies to increase the utility’s J.D. Power customer service ranking with then-JEA CEO McElroy.

Stowe told the board he has experience presenting and communicating with New York-based bond rating agencies like Moody’s Investors Service that determine a utility’s ability to issue debt capital. 

“It’s not wit and charm that gets you ratings, it’s good numbers that you’ve produced and a plan.” Stowe said. “You all have done that here. You’ve had an increase in ratings for water and wastewater that was driven because decisions that you’ve made to stabilize problems you’ve had over the last few years.”

Next steps

Board members have 48 hours to return scoring sheets ranking the candidates to JEA Chief Legal Counsel Jody Brooks. 

Baker requested executive search firm Mycoff Fry Partners LLC and interim Chief Human Resources Office Angie Hiers provide contact information for each candidate’s references before the scoring sheets are due.

As the meeting ended, the board voted 7-0 on a motion from board member Marty Lanahan that allows Brooks and Baker to negotiate a contract and compensation with the top candidate with assistance from Mycoff Fry Partners.

The vote allows the search firm to enter into negotiations with the second-ranked and third-ranked candidates should JEA negotiators be unable to reach a deal with the top selection.

Gerri Boyce McKenzie, special assistant to interim CEO Paul McElroy, said Oct. 20 the board’s goal is to select and announce a hire Nov. 2.

McElroy’s six-month contract ends Nov. 8. It includes a provision to allow him to remain on a part-time basis at 50 hours every two weeks if the board deems it necessary.

McElroy said in an interview after the Oct. 27 meeting that he and the board have not determined if he’ll stay past his contracted end date, but his goal is a smooth transition. 

“One of my objectives coming back was to facilitate this six-month period until we get a new CEO, and key now is facilitating a very smooth transition. So, we’ll define what that looks like,” he said. “Ensuring a smooth transition is what I’m committed to.” 

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