O’Leary Surprised but Not Unaware : Nominee: Friends say Clinton’s choice for energy secretary had not expected Cabinet post. The utility executive had worked on Ford and Carter staffs.

Hazel O’Leary’s friends say she was not hunting for a job in the new Clinton Administration.

Although three years in Minneapolis as an executive at Northern States Power Co. had not enamored her of Minnesota winters, she was fully immersed in her job. And she was promoted just last week, a sign that she must have been doing it well, they point out.

But on Monday, President-elect Bill Clinton declared her his choice for secretary of energy, presenting the 55-year-old with one of the more daunting assignments in his new Cabinet.

“Of all the people I considered for this position,” he told a press conference in Little Rock, Ark., “I thought she had the best mix of experience.”

O’Leary did not challenge Clinton’s effusive assessment, although she emerged the victor after a period of weeks in which it was widely expected that the job would go to retiring Democratic Sen. Timothy E. Wirth of Colorado.

“In many ways,” she said, “I feel I have been training for this job for about 20 years.”

The preparation she referred to began with a Gerald R. Ford Administration stint in the old Federal Energy Administration, a predecessor of the mammoth department she will now head. From there, she moved into the Jimmy Carter Administration and the new Energy Department, heading its Economic Regulatory Administration. After leaving that post, she and her new husband, John O’Leary, who was undersecretary in Carter’s Energy Department, opened a consulting business in Morristown, N.J., providing energy, economic and strategic planning services for their clients.

Since 1989, she has been with Northern States Power, acquiring a reputation for openness, negotiating skill and a progressive outlook as the company’s executive vice president for corporate affairs.

As the secretary-designate joins a new Administration pledged to foster energy conservation on an unprecedented scale, the brightest feather in her cap is perhaps a Northern States program that calls for the utility to generate 100 megawatts of electricity with windmills by the end of the decade. That would make Minnesota second only to California in use of wind energy.

O’Leary also can point to a $35-million program of loans, rebates and special rates to promote conservation.

And as the President-elect introduced her on Monday, she was congratulated for an initiative that will tie the compensation of Northern States executives to their performance on environmental issues.

But while energy producers welcomed the selection of a secretary with supply-side experience and Clinton partisans cheered the choice of a black woman, O’Leary will arrive in Washington with baggage that has raised eyebrows among environmentalists.

Although her role, if any, is unclear in the controversy, a Northern States subsidiary raised hackles in Florida by proposing to build a coal-fired power plant near the Everglades. (The initiative was headed off in part because of efforts by Florida environmental secretary Carol Browner, who has been named by Clinton to head the Environmental Protection Agency.)

Minnesota environmentalists also have found themselves occasionally at odds with O’Leary.

When Northern States proposed to burn oil containing small amounts of cancer-causing PCBs at one of its power plants, O’Leary succeeded in getting a state permit. But residents near the plant resisted until the state Legislature interceded and forbade the burning.

O’Leary also has been at odds with activists over the storage of spent fuel rods from one of Northern States’ Prairie Island nuclear generating stations.

With space running out in a storage pool, the utility proposed to store the highly radioactive material in metal casks at the reactor site, but environmentalists have gone to court to prevent it.

O’Leary vowed Monday that she will fight to reduce U.S. dependence on foreign oil. Calling the reliance “unconscionable,” the graduate of Fisk University and Rutgers Law School said that the situation has improved little since her service in the Energy Department.

But no less urgent than the imported oil burden is the new secretary’s challenge to clean up polluted nuclear weapon sites and resolve the maddening debate over the disposal of nuclear waste.

Nuclear weapons and the preliminary nuclear cleanup will consume nearly two-thirds of the department’s budget for 1993.

“That is potentially a black hole for public funds,” said William Nitze, president of the Alliance to Save Energy. “Some lines have to be drawn--leaving some contaminated sites with minimal or no remediation. This is a bullet that has not been bitten.”

On the nuclear issues belonging to the Energy Department, O’Leary’s background, observers said, is apparently skimpy. But there was in her demeanor in Little Rock nothing but confidence, which longtime associates say is a trademark. “I am ready to go to work,” she said.