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Callahan discusses new role heading electric co-ops group

In a surprise move last month, Mississippi Public Service Commissioner Mike Callahan abruptly resigned from his six-year elected post to take over as CEO of the Electric Power Associations of Mississippi, a trade organization representing 26 member-owned rural EPAs.

The 37-year-old former assistant district attorney from Hattiesburg described the new position as “the best job in the state.”

The Mississippi Business Journal caught up with Callahan, a University of Southern Mississippi alum and graduate of the Mississippi College School of Law who switched from the Democratic to the Republican Party last year, to ask him about his change of roles.

Mississippi Business Journal: What attracted you to this position and how did it happen so quickly?

Mike Callahan: I have always thought that it was the best job in the state. I met Hobson (Waits, Callahan’s predecessor) in 1998, while I was district director for the southern district of the Public Service Commission (PSC). We sat down and had lunch before the annual convention golf tournament on the Gulf Coast, and he explained to me what he did and how the organization was structured. When he was finished, I thought to myself, “Wow, what a great job. I would like to do that someday.”

With regard to the timing, I met with the search committee on Thursday, November 17, and was informed of the board’s decision around noon on Friday. There were two concerns. First, my continuing on as commissioner might cause some conflicts and open up both myself and possibly the organization to future criticism. Second was that it would become public before it was officially announced.

While I would have certainly liked time to conclude certain matters at the PSC, I agree with the board that sooner was better. Also, it would have been awkward to have been announced as the new CEO, but at the same time still have been commissioner.

MBJ: What assets or strengths do you bring to the organization?

MC: Education, knowledge of the electric industry, state and national contacts both industry-related and political and a youthful and energetic enthusiasm and passion.

MBJ: How does your background as commissioner equip you to lead this organization?

MC: To some extent it does, and to another degree it doesn’t. I am fluent in electric policy and have industry and political contacts across the country. That certainly will be a plus in this job. However, as commissioner, I never had to deal with printing a newspaper (Today in Mississippi), running a bank (EPA Credit Union) or running an insurance company (Health and Workers Compensation Insurance).

MBJ: What do you see as major organizational goals for the EPA of Mississippi over the next couple of years, and do you see new opportunities for the organization in the near future?

MC: At this point, I am just trying to familiarize myself with the organization and personnel. The board emphasized that they were generally pleased with the association and were not looking for someone to come and totally revamp. So, my plan is to do an analysis on the association, which will include individual interviews with the personnel, meetings with the 26 board members and making some visits to other statewide organizations. Once that is completed, I will put together a strategic plan and present it to the board. I expect this process to take between six and nine months. Again, everyone seems pleased with the overall operations, so I am under no time constraints and the prudent action would be to proceed slowly.

MBJ: What is your deregulation position as head of the EPAs?

MC: When I ran for public service commissioner in 1999, one of my campaign goals was to stop electric deregulation in Mississippi, and I did that within the first six months in office. That is still my position today. Of the 14 states that deregulated, none of them can be called a success and most deregulation models were complete failures. Mississippi was very fortunate not to go down the path of deregulation.

MBJ: Your position on regional transmission organizations (RTOs)?

MC: The concept of an RTO is a noble endeavor: to create a regional grid that would allow numerous buyers to have access to many suppliers on the wholesale market. But like most things, the devil is in the details, and in the case of RTOs, it has been with the staggering cost of implementation. Organizational and operational costs have devoured what slight benefits might have accrued and left many states, especially the ones in MISO (MidWest Independent System Operator), wondering how to get out. FERC is planning on hosting either some technical conferences or hearings to look at RTO costs and to try to devise some methodology to hold them in check.

At this point, there are more economical and practical ways of dealing with transmission issues, without jumping into an RTO.

MBJ: Your opinion on the cooperative model versus investor-owned utilities?

MC: I have always admired the cooperative model. Co-ops aren’t worried about returns on equity or growing earnings. Their job is to provide reliable and affordable power to their member/owners in ways that are environmentally responsible. The EPAs in Mississippi are well-run organizations that are vital parts of the communities they serve. Co-op monies stay here in Mississippi for the benefit of the community. Co-op workers are not just employees, but family members. Our Katrina Relief Fund has driven that point home. So far, a little over $1.8 million has been donated from cooperative members from around the country. That money has been used to aid the employees whose homes sustained damage from the storm.

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.


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