- Associated Press - Wednesday, June 28, 2017

PORTLAND, Ore. (AP) - In a party-line vote this week, Democrats on the House Rules Committee approved a controversial bill that would expand the mission of one of Oregon’s most dysfunctional agencies - the Department of Energy - to include climate change policy.

The timing couldn’t be more awkward. Last week, a former agency manager pleaded guilty to accepting nearly $300,000 in kickbacks related to the sale of state energy tax credits. It’s the latest scandal in an agency racked by management and staff turnover, administrative failures, lawsuits over its funding streams and a near-constant drumbeat of problems in its incentive programs.

Problems got so bad that Senate President Peter Courtney and House Speaker Tina Kotek called for a “full and open overhaul” of the agency in late 2015, appointing a bipartisan interim committee to look at overhauling or even dissolving it.

After 10 meetings, however, that committee failed to provide any consensus recommendations for the legislature. Indeed, after more than 20 hours of testimony, members didn’t even manage a detailed debate over what they’d heard, and ended up arguing over the fine points of a report authored by the two democratic co-chairs.

In the end, one of the co-chairs, Rep. Paul Holvey, D-Eugene, introduced a bill this session that is nearly an exact replica of a concept floated to Gov. Kate Brown in fall 2015, before the interim panel was formed.

House Bill 2020 contemplates renaming it the Oregon Department of Energy and Climate and creating a governor-appointed board to oversee its activities. The agency would absorb the responsibilities of the Oregon Global Warming Commission and, in addition to its energy-related work, become the clearing house of state policies and programs related to climate change.

Angus Duncan, who chairs the Global Warming Commission, made essentially the same pitch to Brown in 2015. Since President Donald Trump announced his intention to pull the U.S. out of the Paris Agreement on global warming, Brown has joined other politicians in promising to accelerate state, local and regional efforts to combat global warming. The refashioned department would be the vehicle for that work.

Ruchi Sadhir, the governor’s energy policy advisor, submitted testimony to the Rules Committee supporting the bill. She called the agency “a critical component of our state efforts to curtail climate change,” adding that “collaborative work to rebuild confidence in the agency and its programs is a necessary step.”

Environmental groups have expressed enthusiastic support for the bill, insisting that the state needs to bring together and focus all its climate change work. Business and utility lobbyists testified against it, expressing no confidence in the agency and saying the climate change focus would replicate work taking place elsewhere.

Holvey, who co-chaired the interim committee, said Monday that members of the panel had “all agreed” that the state needed to maintain an energy department and establish an oversight board.

HB2020 would ensure proper oversight of the agency, he said, while consolidating climate change work that is currently siloed in various state agencies. He said the new department would gather and analyze data on climate change, and advise state leaders on how to deal with it.

“This endeavor is the right thing to do,” he said.

Rep. Jodi Hack, R-Salem, also served on the interim committee. She told the Rules Committee Monday that the legislation did not represent that committee’s work, and that she was highly skeptical of putting state climate change policy in the hands of an agency with a failed mission, failed funding streams, failed operations and an inability to administer the programs it has already.

“We’re talking about taking something we say is so important and putting it into an agency that has failed,” she said. “If it’s an agency that you want to hitch your wagon to and have it go out and do great things, you found the wrong one.”

Rep. Bill Kennemer, R-Oregon City, questioned the wisdom of having “significant expansion of an agency that has an ongoing criminal investigation?”

Holvey minimized those concerns, and even blamed them on lawmakers for not providing the agency with adequate resources to oversee its troubled tax credit and loan programs.

“Clearly the DOE has had some legacy problems,” Holvey said. “Maybe someone inside the agency was corrupt. Other agencies have had their problems. I don’t know how you protect yourself from illegal criminal activity by crooks. They exist everywhere. It’s a little unfair to look back two or three years and point to a failure… We have to look to the future and move forward.”

The Energy Department’s Director, Michael Kaplan, has been forthright with lawmakers about the agency’s cultural failures, its lack of technical and financial expertise, its lack of risk controls, and even it ability to collect and track accurate data on many of the tax credit programs it has been administering.

And the agency has been the subject of a blistering audit by a forensic audit firm hired by former Oregon Secretary of State Jeanne Atkins.

There was no estimate available Monday to the rules committee on the fiscal impact of expanding the agency and establishing the oversight board. House Republican Leader Mike McLane of Powell Butte said that was enough to make him an enthusiastic “no.”

The bill passed out of the committee on a 5-4 party line vote.

Last week, a former energy department manager, Joe Colello, pleaded guilty to accepting $291,017 in bribes to help expedite the sale of tax credits being brokered by a Seattle energy consultant, Martin Shain. Shain faces charges of racketeering, bribery, theft and tax evasion.

Separately, Shain has been indicted on forgery charges in connection with phony documents submitted to garner nearly $12 million in tax credits for a series of solar arrays at Oregon State University and the Oregon Institute of Technology.

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Information from: The Oregonian/OregonLive, https://www.oregonlive.com

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