Outgoing Transportation Secretary Federico Pena came out of the blue to become President Clinton's choice to replace Hazel O'Leary as Energy secretary.

Pena's selection caught Hanford observers by surprise.

"You're kidding. That's totally different from all the speculation," said John Wagoner, the Department of Energy's Hanford manager when he heard about the selection at 10 p.m. Thursday.

"I'm amazed. I don't know his background on any energy subject," said Sam Volpentest, executive vice president of the Tri-City Industrial Development Council.

A senior White House official said the job was offered by Clinton and accepted by Pena after a late-night meeting.

Clinton is scheduled to announce Pena's selection - along with his other choices to fill his final Cabinet and domestic policy posts - this morning.

Pena's surprise selection came after Clinton tentatively settled on Elizabeth Moler, a Federal Energy Regulatory Commission member, to replace O'Leary.

However, after reviewing the list of tentative picks, concerns arose in the White House about whether Hispanics were under-represented. Clinton and his inner circle of aides went back to work late Thursday and came out of a meeting with Pena's name.

The senior official said Clinton decided at the last minute to go with Pena, a Hispanic, because he is a strong manager and already has experience running an agency.

Pena said after the election that he did not want to serve a second term at Transportation. It was widely assumed he was leaving the administration.

Wagoner, Volpentest and others were expecting Moler to be picked.

"Wow, all that speculation for naught," said Gerald Pollet, director of Heart of America Northwest.

"Everyone was talking about Moler as probably the shoo-in," said Jim Watts of the Oil, Chemical and Atomic Workers union.

And now, everyone will begin trying to figure out who Pena is and what will he likely do.

"I didn't even research him because I didn't think he had a chance," Watts said.

"I haven't a clue on what he will be like," said Merilyn Reeves, chairwoman of the Hanford Advisory Board. "We will certainly look forward to working with him."

Before Pena became Transportation secretary, he was Denver's mayor. Wagoner noted DOE's Rocky Flats site is next to Denver.

"He's from a state where DOE has a major cleanup site. ... I assume he has a significant degree of sensitivity to the issues we deal with," Wagoner said.

Pollet said Pena "has experience running a large department. He does not come from the closed and secretive culture of DOE or (the Department of Defense). I think this is automatically a plus."

Reeves voiced concerns about Assistant Energy Secretary Thomas Grumbly's fate under a Pena administration. She noted Grumbly has been an active and highly respected player in Hanford's cleanup.

"It would be nice to have some continuity," she said.