More Foresight Needed for Robust First Coast Development

By Jay Stowe
Former JEA Managing Director & CEO

Despite some recent easing, the unprecedented supply chain bottlenecks impacting U.S. residential and commercial construction, and JEA’s own ability to deliver utility services to such developments, aren’t going away any time soon. That doesn’t mean, though, that anyone should be hitting the pause button on economic expansion in Northeast Florida.

This is a story playing out all across the country, as demand for key water and energy service components, such as electric system distribution transformers, continues to outpace immediate supply options. These transformers are electrical devices embedded throughout the power grid that allow utilities to adjust voltage outputs to meet the needs of specific customers, and their availability has been a big part of some recent service delays.

While JEA has a sufficient stockpile of transformers to cover existing customer replacements and emergency situations, and deliveries and delivery schedules have been slowly improving, all of us in the utility industry have been compelled to adjust to longer lead times and delays as part of a “new normal” that could last well into 2024 and beyond.

As we continue our best efforts to expedite and advocate for national solutions to this national problem, we have been embracing new approaches, which will enable us to meet the growing demands of our development community, while also improving the effectiveness of our utility supply chains.

JEA is using this control-tower approach to help us evaluate our supply chain risks and determine the best ongoing course of action. Our efforts so far have reaped benefits by helping identify critical materials that have limited sourcing, including chemicals critical to water treatment, limestone and hydrogen used in fuel processing, transformers, poles, cable and meters.

We are increasing capability by using category managers to oversee all aspects of procurement for specific business units and creating multiyear buy plans to navigate business needs.

To ensure agility, JEA evaluates each contract/commodity to decide the best course of action (i.e., developing new suppliers, changing business requirements, changing contracting strategies). To further enhance our agility, we’re increasing our internal and contractor workforce capabilities by expanding our planning and project development team in FY24.

Finally, to increase forward-looking visibility, JEA measures key performance indicators, such as supplier engagement, spend trends, inventory on hand, number of requisitions and small-purchase cycle times.

At present, there is a range of lead times on the things we need, depending on the supplier. When we look at transformers, specifically during the last two years, lead times for domestic transformers have been increasing. We are now operating at about 80 weeks to 90 weeks ahead for the majority we have on order, where lead times historically had been eight weeks to 12 weeks. We have partnered with a few international suppliers with lead times that are about 20 weeks to 28 weeks, but they have fewer production slots to allocate and significantly higher costs. This has led us to proactively work more closely with our developer community and individual developers to think about their own timelines and utilize the diverse supply base to achieve the best outcome for JEA and the customers we serve.

JEA is now asking builders to complete or coordinate sequenced portions of their projects for JEA to energize, instead of expecting the entire project to be built at once. This “phasing” allows for a better allocation of available inventory and enables better coordination of closing dates for new homeowners.

We’ve also adjusted and streamlined plan reviews by moving to review electric needs during the water/wastewater plans submission—water plans are first in the queue—and accepting electric plans without recorded plats. This allows us to expedite the design process, while minimizing the need for plats provides additional cost savings to our developers.

Also, in the help-us-help-you category, we’re asking developers to share their initial visions—without designs—in order for JEA to better estimate future needs. This benefits all parties by producing better estimates for on-hand inventory needs and enabling JEA to buy larger quantities to expand on-hand inventory for subsequent development projects.

Consistent with our goal for enhanced developer engagement, we are finding opportunities to adapt and live up to our accountability as an economic driver and foundational resource for the region—important steps that we are now taking to improve lives and build community here in Jacksonville and Northeast Florida.

Published April 2023

Jay Stowe was JEA's managing director and CEO from November 2020 through April 2024.