With his family in tow, Energy Secretary Federico Pena announcedlast week he plans to leave the Department of Energy (DOE) forpersonal and family reasons effective June 30th, the news of whichelicited ho-hum reactions from the natural gas industry and spurredspeculation that Deputy Energy Secretary Elizabeth Moler willsucceed him.

While gas trade groups officially applauded Pena’s efforts atthe department, unofficially they sang a different tune in the wakeof the surprise announcement. “What has he done? Who cares?” saidone gas insider of Pena’s imminent departure. “The DOE was supposedto come out with electricity legislation” during his one-and-a-halfyear tenure. Instead, “they’ve been completely stonewalled by theEPA. They came out with principles [rather than legislation]. Theyhaven’t advanced the debate on restructuring one iota.”

Apart from electricity reform, Pena’s leaving shouldn’t be asource of great concern for natural gas since most of the keyissues that the industry’s focusing on are at the Federal EnergyRegulatory Commission rather than at DOE, said John Sharp, directorof federal affairs for the Natural Gas Supply Association (NGSA).”Certainly everyone’s interested in their [DOE’s] electricityprinciples, but I think FERC is the place to be for gas.”

The timing of Pena’s departure – in the middle of electricityrestructuring – was criticized on Capitol Hill. “I’m verydisappointed by Secretary Pena’s resignation,” said Sen. FrankMurkowski (R-AK), chairman of the Senate Energy and NaturalResources Committee. He noted Pena’s premature departure “may makeit difficult, especially for electric rate deregulation, to proceedthis year” in Congress. But Pena disagreed. Rather than slowing theprocess down, he sees the news of his early departure “reallyenergizing” the focus on a number of issues, including reform ofthe electric industry. Pena said he hopes to “bring closure” to asmany issues as possible by the time he leaves the department. Heconceded this was an ambitious undertaking, but he doesn’t thinkit’s impossible.

Gas insiders believe the best thing the Clinton administrationcould do for DOE and the fate of electricity restructuring would beto tap Moler as Pena’s successor. “To the extent that she isselected, I think she would be a fantastic secretary. Her depth ofenergy knowledge and issues is very good. She would be more thancapable of being the steward of that agency,” Sharp remarked. Infact, energy sources initially had expected President Clinton topick Moler to head up DOE during his second term, but he stunnedeveryone when, bowing to pressure from the Hispanic community, heselected Pena – someone who had no experience in energy – inDecember 1996. Moler, former FERC chair, accepted the job ofdeputy energy secretary four months later, but it reportedly wasconditioned on assurances from the White House that she wouldsucceed Pena when he stepped down in mid-term.

“I think Betsy’s in a very good position given the fact thatshe’s over there [at DOE]; she’s running the show,” Sharp noted. Hedoubts the Clinton administration will pick a lightweight for thejob this time around because whoever’s chosen will have to see sometough issues, such as electricity restructuring and nuclear waste,down to the wire. Pena, who apprised Moler of his decision to leaveprior to announcing it publicly last Monday, said he’s “veryconfident” that her name will be “right up there” on a short listof possible successors.

There have been some reports that Moler has been disgruntledwith DOE’s lack of success on the restructuring front, and has beenshopping outside the agency – at various Washington D.C. law firms- for another job. “They’re doing a lot more interesting work interms of electric restructuring than she is at DOE,” an energysource said. But “I guess if she were offered this position [EnergySecretary] she would stay. It’s quite a resume builder.”

Susan Parker

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