The Legislative Analyst?s Office disagrees with the governor?s proposal to consolidate the state?s energy agencies, concluding in a preliminary evaluation that the estimated savings that would accrue from reorganizing the entire state bureaucracy are overblown by as much as $15 billion. Another potential glitch in the reorganization plan is a report that Chevron, which hopes to build liquefied gas terminals in Southern California and Mexico, had a major role in the development of the California Performance Review (CPR). In an Initial Assessment of the California Performance Review, released last week, the legislative analyst labeled Governor Arnold Schwarzenegger?s plan to squeeze the energy agencies into one large department ?premature.? ?While there is merit to consolidating some energy-related permitting, we think that any restructuring of permitting functions should follow the structure of the energy market (for example, the extent to which the market is deregulated),? it states. The state?s energy market structure, currently in flux, is expected to determine the roles of California?s energy agencies. The legislative analyst supports the CPR?s recommendation to unify and coordinate state policy on energy efficiency. The administration released its reorganization proposal August 3 (<i>Circuit<\/i>, August 6, 2004). Among other things, it proposed moving the California Energy Commission to a new energy agency under the executive branch. It also recommended eliminating the California Power Authority and the Electricity Oversight Board. Back in February, the legislative analyst warned against wholesale elimination of the Power Authority and recommended that the Legislature retain some of its functions, including the agency?s bonding authority and demand-response program (<i>Circuit<\/i>, February 20, 2004). The state analyst noted that the rationales for some of the CPR proposals are ?not clear? and ?often lack sufficient detail? to determine whether a proposed consolidation would improve state government. Furthermore, the reports noted that agency conglomeration risks making departments so large that ?they become unmanageable.? Also on the CPR front, a report by the Associated Press released late September 2 said that ?state records and interviews with the [CPR] participants show Chevron enjoyed immense success in influencing the report through its array of lobbyists, attorneys and trade organizations.? Public hearings to gather input on the report began last month. The next sessions are scheduled to take place in Los Angeles on September 9 and Long Beach on September 10. The governor will review with his cabinet the report?s recommendations on September 11-12.