Unless stopped by either the Assembly or the Senate, a plan to consolidate all the state energy agencies except the California Public Utilities Commission under a new department could be implemented as early as September. The governor proposed a new Department of Energy that would consolidate the California Energy Commission, the Electricity Oversight Board, the Department of Water Resources? energy functions, and services that were supposed to be provided by the now-defunct California Power Authority. The plan would include a cabinet-level secretary of energy, who would chair the new organization. ?By establishing a Department of Energy, a clear energy policy direction for California will be developed and implemented, bureaucratic fragmentation and duplication will be reduced and public access and transparence will be improved,? said Governor Arnold Schwarzenegger in a letter to the Little Hoover Commission May 12. Former deputy energy secretary and now CEC chair Joe Desmond did not return requests for comment. The Schwarzenegger administration has made noises about a reorganization ever since taking office. However, a similar plan by Democrat Joe Canciamilla (D-Martinez), AB 1190, never made it out of committee because of concerns that it was premature (<i>Circuit</i>, April 8, 2005). Legislation proposing energy agency consolidation has cropped up on a regular basis in the last several years. The governor?s plan was submitted to the Little Hoover Commission May 12. That commission has a month to vet its usefulness. Then it goes to the Legislature. Both houses have two more months to disapprove the agency consolidation. If neither house blocks it, the plan becomes law. Early bets are that the Legislature will neither block it nor sit idle. ?Both houses are going to give it a real close look,? said Randy Chinn, Senate Energy, Utilities and Communications Committee chief consultant. ?I don?t think anybody?s going to stand up and say we don?t need a more efficient system,? added Kurt Schuparra, Canciamilla?s energy adviser. ?But odds are one house or the other will raise a significant stink.? He noted that there are some technical conflict-of-interest issues, such as having some functions assist unregulated power suppliers while others in the department may be pursuing market-manipulation claims. The new department would control transmission and natural gas pipeline siting instead of the CPUC. It would also subsume the current CEC siting authority for generation, appliance and building efficiency, and the EOB. Although the reorganization is intended to eliminate overlapping functions, it will also have its own market-monitoring office, in addition to those of the California Independent System Operator and the Federal Energy Regulatory Commission. Its commission would include the state energy secretary, four members appointed by the governor, and two nonvoting members?the president of the CPUC and the chair of CAISO. There would be five divisions within the new organization?permitting, siting, and standards; program management; energy analysis; research and development; and market monitoring and oversight. Environment California gave the move a cautious thumbs-up. ?The extent to which Governor Schwarzenegger uses this new office to work with the Legislature to pass forward-thinking state laws while fighting backward federal energy policies and preemption over local authority will be a critical measure,? stated Bernadette Del Chiaro, Environment California clean-energy advocate.