JEA board picks Cavey to be interim CEO
Stowe steps down, will get $257K in compensation
Vickie Cavey speaks about her tenure at JEA after JEA CEO Jay Stowe announced that he was stepping down Monday afternoon. The board selected Cavey to be interim CEO.
The JEA board voted Monday to make former JEA administrator Vickie Cavey the utility’s interim CEO, replacing Jay Stowe as the top executive in a changeover that will pay him as much as $257,504 in separation compensation.
Cavey came out of retirement last month when the board hired her as its adviser and staff liaison to JEA administrators. The board still must put a contract in place for her as interim CEO, so it’s not clear how long she will fill that role or what her salary will be.
Stowe, hired as CEO in November 2020, and the board agreed to part ways after discussions about how the utility will move forward in the coming years, JEA Board Chairman Joe DiSalvo said.
“I want to clearly state this mutual decision had nothing to do with anything related to misconduct or any ethical transgressions,” DiSalvo said as he announced Stowe had verbally given his resignation notice.
He compared the change to New England Patriot’s owner Robert Kraft and Super Bowl-winning head coach Bill Belechick ending their relationship. He said Stowe had “done a great job” as CEO but the utility could be spending $9 billion in operations, maintenance and construction over the next decade and wants a “new direction.”
“We agreed to disagree on what the right approach for this is,” DiSalvo said after the board meeting. “Jay was confident in the way the capital process was going, and the board as a whole, we wanted to make sure we were very comfortable with it.”
He said Stowe and the board “just have different philosophies and we needed to go in a different way.”
JEA provides electricity to about 500,000 customers, water service to around 380,000 customers and sewer service to roughly 300,000 customers in most of Duval County and parts of St. Johns, Nassau and Clay counties.
Stowe became CEO after the board did a national search and selected him in November 2020, a year after the attempted sale of JEA imploded during Aaron Zahn’s tenure as the utility’s top executive. A federal jury convicted Zahn last month on charges of conspiracy and fraud for hatching an employee incentive plan that would have generated financial windfalls for JEA employees if the city had sold JEA.
Stowe given appreciation plaque
Stowe, who arrived in Jacksonville from Tennessee as a staunch proponent of public power, attended the first half of the meeting Monday when the board accepted his resignation. He gave a brief farewell speech after several union leaders thanked him for the work he did in being accessible and responsive to the 2,200 employees at JEA. They gave him an appreciation plaque.
“By far, the most important achievement in my time here was rebuilding the trust between the leadership and the workforce and the trust of JEA within the community,” Stowe said.
He said JEA was able to create a strategic direction “grounded in our core values of safety, respect and integrity — so many JEA employees were already living those values — and together we found a way to breathe them back into life in a place that had been hurt and broken for far too long.”
He said after talking individually with JEA board members and hearing their feedback, he saw the “time has come for a change at the helm.”
Stowe earned a $669,500 a year salary. Even though he stepped down as CEO, JEA will continue to pay him at the same salary rate through Aug. 15 while he is an executive consultant to JEA, according to terms of a separation agreement. His salary over 18 weeks equates to $231,750. He also will keep getting a $2,083 per month business allowance, though that allowance will be prorated for the month of August.
The separation agreement also gives an option to instead cut ties sooner than Aug. 15 if JEA makes a lump-sum payment of $257,504 to Stowe, which is equal to 20 weeks of pay.
Stowe has until May 6 to sign the agreement and it would become effective eight days after he signs it.
Stowe’s employment agreement with JEA says if the board terminates his employment without cause and gives him 30 days notice, he will get severance pay equal to 20 weeks of pay. His departure as CEO was a resignation rather than a termination, but the separation agreement would pay him the equivalent of 20 weeks of the salary he earned as CEO if he gets the lump-sum payment.
The upcoming decisions on what large-scale construction projects will get funded comes as JEA continues to absorb the cost of buying ultra-expensive electricity from the Plant Vogtle nuclear plant in Georgia. JEA must buy the electricity because of a contract the utility entered into back in 2008 under a different board and executive leadership. The Vogtle contract has forced base rate increases in JEA’s electric rates.
Board doesn’t want Vogtle repeat
JEA board member Bobby Stein has said current board members don’t want a repeat of what happened with Vogtle whose cost skyrocketed because of construction delays and cost overruns. JEA does not have an ownership stake in Vogtle but the contract binds it to purchase the costlier electricity from it.
“This is a complex business,” DiSalvo said when asked what the lesson of Plant Vogtle is for JEA. “Before we commit way ahead on these capital projects, we want to make sure we pump the brakes and make sure we’re going in the right direction.” Mayor Donna Deegan thanked Stowe for his work as CEO, saying he brought “steady leadership and strategic thinking when JEA needed it most.” She said she looks forward to working with Cavey “to continue that progress and JEA’s strong relationship with the city of Jacksonville.”
Former JEA board member Mike Hightower told the board during public comments that Cavey would be the perfect hire as interim CEO. He said she brings the same kind of institutional knowledge about JEA that former CEOs Walt Bussells, Jim Dickenson and Paul McElroy had when they became CEO.
“You have to understand it, learn it, you have to believe in it, and you have to live it every day,” Hightower said.
He noted that when the board brought McElroy back in 2020 as interim CEO after the attempted sale of the utility in 2019, his first hire was Cavey as his special assistant.
Cavey was not involved in negotiating the Plant Vogtle agreement, which happened when Dickenson was CEO and McElroy was the utility’s chief financial officer. JEA officials have said that at the time of that 2008 agreement, it appeared to be a good deal for the utility because the cost of nuclear-powered electricity was competitive with other fuels for generating electricity and nuclear energy does not have carbon emissions.
Cavey served as special assistant
Cavey joined JEA in 1984 as a mechanical engineer in the power engineering division. She worked as a manager and director for various parts of JEA from 1996 to 2016. She returned to JEA from May 2020 to January 2021 when she was a special assistant to McElroy and assisted Stowe during the first two months of his tenure after he started work as CEO in December 2020.
The board hired her as an adviser for $200 an hour for a period of up to six months and directed her to help select an outside consultant who will examine JEA’s operations and spending. The board also called on her to examine a staff reorganization Stowe did in February and do any fact-finding sought by the board.
JEA board member Kawanza Humphrey cast the lone vote against hiring Cavey as interim CEO. Humphrey said she did not have any objections to Cavey or her qualification, but since JEA lacks a formal succession plan for what happens when the CEO leaves, she is “more accustomed” to seeing the chief operation officer become interim CEO.
Chief Operating Officer Raynetta Curry Marshall has held the title since 2021. Her 35-year career in water resources and utility management includes working at JEA from 2011 to 2019 as an administrator in the utility’s water and sewer department.
Cavey said she will review JEA’s organization structure to make sure it is “administratively lean” while providing “the best service possible.” She said that review absolutely is not a prelude to another attempt to sell JEA and there are “zero plans” to go down that path.
“I’m very honored and humbled,” she told the board. “Thank you for your confidence in me and the staff here at JEA. I fully understand this governing board’s fiduciary concerns regarding (operations and maintenance) and capital spending.”
She said JEA “must be wise in increasing our (electric) generation capacity while being stewards of our environment. The board’s decision to hire an external firm to do a review of those was very wise.”
Goal of 35% clean energy by 2030
The board approved a long-range plan last year to get 35% of JEA’s electricity from clean energy such as nuclear power and solar farms by 2030. JEA has lagged other utilities for years in using solar power and other renewable energy sources.
The integrated resource plan also said JEA will retire unit 3 at the Northside Generating Station around 2029 because it is not an efficient unit. JEA is considering the construction of a new natural gas plant to come online around that same time it retires Unit 3.
Whether the JEA board sticks with that plan and schedule will be a central question when the board hires an outside consultant to work with Cavey.
DiSalvo said the outside consultant’s review would likely not be finished until at least the end of the year. Meanwhile, JEA employees said they are trying to understand the reason for the change in CEO.
“Just as we are getting over the potential sale of JEA, we find ourselves again in some uncertain times,” Valerie Gutierrez told the board. “The employees look to the JEA leadership and the board for guidance and stability, so let’s make sure that the transition is a smooth one.”