Governor appoints insider Michael Kaplan to lead Oregon Department of Energy

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The Oregon state Capitol in March.

(Yuxing Zheng/The Oregonian)

Gov. John Kitzhaber has elevated Michael Kaplan from interim to permanent director at the Oregon Department of Energy.

The recruitment to run the oft-troubled agency attracted dozens of applicants. But Kitzhaber offered the job to Kaplan, an insider who has served the governor in several roles but has limited background in the energy field.

Michael Kaplan, director at ODOE

Kaplan, 36, said his focus would be rebuilding internal and external confidence in an agency that has been buffeted by controversy for years, making sure its disparate units were functioning cohesively, and "building a culture of accountability."

Kaplan joined the department in 2013 as deputy to its new director, Lisa Schwartz, an energy policy expert with limited experience managing a large state agency. Schwartz was abruptly pushed out of the position last May, becoming the fourth director to depart the agency in five years.

Indeed, the position has become something of a hot seat in state government. The department has been the focus of legislative scrutiny for years, from its loose administration of the costly Business Energy Tax Credit to risky loans and resulting losses in its Small Energy Loan Program. It also faced a mutiny among utilities in 2012. They filed a lawsuit alleging that the discretionary fees the agency charges energy companies were unconstitutional. The real complaint was that the agency was using the assessment as a virtual ATM to backstop its budget while coordinating its regulatory activities with environmental advocates against those same companies.

The department has also been a crossroads of controversy surrounding Oregon's first lady, from charges that former director Mark Long steered a contract to Cylvia Hayes' company to more recent revelations that Kitzhaber's staff intervened to forestall the department's foreclosure on a non performing loan to one of Hayes' clients.

The Department of Energy has downsized considerably since the sunset of the business energy tax credit program and exhaustion of one-time federal  payments under the recovery act that bolstered its finances. But Kaplan said he was taking a sharper pencil to the budget and eliminating six more positions, which will save $600,000 annually.

That may be an important step, as the Legislature put the agency on a shorter leash in 2013 by requiring it to convene regular workgroups with stakeholders to review its budget -- a compromise that ended the lawsuit over the energy supplier assessment.

Kitzhaber said in a news release Wednesday that Kaplan had brought stability and leadership to the agency, along with rigorous fiscal oversight.

"His broad management expertise and his experience working with the Legislature will be invaluable as this agency focuses on some of the most pressing issues facing Oregon," the statement said.

Kaplan said that he had no designs on the director's job after Schwartz's departure and was simply setting the table for someone to take over, but took the governor up on the offer when it came.

"They allowed me to consider it, and I decided to do it," he said.

He said the agency had plenty of in-house expertise from a policy standpoint, and that his focus had been on bolstering administration.

"I think this agency has a lot of potential. It's been through the wringer," he said. "Rebuilding the confidence of this agency is really important to me."

Kaplan's annual salary will be $141,432.

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