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New CEO Al Simpson Knows Arkansas Valley Co-op From the Ground Up

5 min read

As the new CEO of Arkansas Valley Electric Cooperative Corp., Al Simpson has no trouble imagining himself in his employees’ shoes. For seven years as a journeyman lineman, he wore those work boots.

Simpson, 43, inherited leadership of the utility in January from Bill Peters. In doing so, he took charge of the 71st-largest private company in the state, and one that he knows from the ground up — or the pole down.

“I took a path of more resistance,” he said, describing dropping out of college, marrying and returning home to Ozark (Franklin County) for an entry-level job at the electric co-op. Starting as a right-of-way crewman, he was soon on the rise, literally, working on lines high above the roadways.

“I worked out of a bucket, on hot lines. When you can say you’ve done what your workers do, you get a somewhat higher level of respect. That’s helped, too, as far as people embracing me as their leader.”

Simpson became a foreman, then a supervisor, and in 2014 was promoted to Van Buren District manager, where he was in charge of opening the cooperative’s new Crawford County facility.

“It’s not entirely uncommon in my experience,” Simpson said of his trajectory. “Most electric utility CEOs have worked their way up through the ranks to some degree. It’s important in a complex industry to have an understanding of all aspects of the business and its processes.”

Simpson said he recommends a college education, but has no regrets. “I went to Arkansas Tech and transferred to UCA,” he said. “I never finished my degree, but you know, I wouldn’t change things at all. My experience really helped me understand everything about Arkansas Valley Electric.”

And now, from his office at the company headquarters on West Commercial Street in Ozark, Simpson doesn’t deny the appeal of his hometown-boy-makes-good narrative. “Well, I was raised right here in Ozark,” he said.

“I like the new job; it’s challenging, of course, but the transition has been pretty smooth,” he said, noting that the utility is on good footing.

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Arkansas Valley serves some 57,000 members, or electricity consumers. According to its 2015 annual report to the Arkansas Public Service Commission, the utility had total operating revenue of $113 million versus operating expenses of just under $101 million. Its power production expenses were about $67 million, distribution expenses were $15.6 million, and administrative and general expenses just $5.6 million.

The Goal: Serving Members

“Cooperatives are organized to serve members,” Simpson said. “That makes us different from the investor-owned utilities, which have to try to make a profit. Our goal is a high satisfaction level from members, and that contributes to our being more efficient. Being efficient and financially stable is our goal.”

Arkansas Valley operates in 10 counties in western Arkansas and three counties in eastern Oklahoma, with offices in Waldron, Van Buren and Pocola, Oklahoma, along with the main office in Ozark. “Our rates are in line with what it costs us to do business, and they’re right in the middle of the pack in comparison with other utilities in Arkansas,” Simpson said. “Of course we return our capital to our members, and we have to keep up with the latest technology, but profit isn’t the mission.”

Arkansas’ electric cooperatives were organized during the Great Depression as a way to bring power to an agricultural state. Arkansas Valley itself was born in 1937, midwifed by farmers and business owners from Crawford, Logan and Johnson counties who saw rural electrification as a key to the region’s economic growth. The cooperative’s first power line, 57 miles long, was energized in December 1938 and delivered power to just 114 electric meters. The utility now has 141 employees, more than 8,200 miles of distribution lines and 33 electrical substations.

Simpson credited a “good and experienced” staff for aiding his transition to CEO, and said he was able to “shadow” Peters for two months, which helped him understand the day-to-day routine.

But doing the same job doesn’t mean Simpson gets the same pay as Peters, who retired at Arkansas Valley after 30 years. The 2015 PSC report listed Peters’ annual salary at $305,000. “Maybe at some point mine will be comparable,” Simpson said, avoiding specifics. “But not yet, not right now.”

Peters expressed pleasure when Simpson was named as his successor. “I couldn’t be happier about the board’s decision,” Peters said. “AVECC’s members should feel confident knowing that the co-op is being left in qualified, capable hands upon my retirement. Al is poised to do great things.”

Simpson said that even before he was tapped as Peters’ successor, the two communicated frequently and had a good relationship.

He said many of the lessons included efficiency and economy. “We’re always seeking new ways to provide affordable and reliable energy; that’s our primary goal,” he said. “While keeping one foot grounded is what’s made us successful, we’ve got to embrace whatever new processes allow us to provide affordability.”

Turning Toward Sun

Solar power is one technology the utility is embracing for the first time. Simpson said Arkansas Valley is planning a 500 kilowatt-capacity array in Van Buren. “We’re just at the beginning stage, and we haven’t broken ground yet, but we’re looking forward to providing that for our members,” he said, noting that it was a move toward sustainable energy. While he didn’t provide a cost estimate, he said that tax credits had made the project “pretty affordable.”

Arkansas Valley is partnering with Today’s Power Inc. — a subsidiary of Arkansas Electric Cooperatives Corp., another of the state’s largest private companies — to build the array next to the cooperative’s Van Buren facility.

Groundbreaking is set for June 6, and construction is expected to be completed by the fourth quarter, according to utility spokesman Greg Davis. He said the solar power system will help reduce the cooperative’s peak demand costs and stabilize capacity in high-use periods while keeping rates low.

Simpson said the utility also emphasizes electricity conservation, something the cooperatives have long been known for.

“We constantly reach out to members to make sure they understand the importance of conserving energy as we step into the future,” he said. “Demand is going to grow as we move forward, so we’ve got to be diligent in conveying that conservation is one key to keeping rates affordable.”

Arkansas Valley delivered more than 1.2 billion kilowatt-hours of electricity to residential, commercial and industrial members in 2015. It purchases its power wholesale from Arkansas Electric Cooperatives Corp., which provides energy to all of the state’s 17 electric distribution cooperatives. The record for peak demand on the Arkansas Valley system, 360 megawatts, was set during a heat wave in June 2013.

“We don’t have any capacity problems now,” Simpson said, “but we’re always looking to stay on the front end of that.”

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