From 1972 to 1977, Hodel was at the
Bonneville Power Administration as deputy administrator from 1969 to 1972 and administration from 1972 to 1977. After leaving it, he said that the Pacific Northwest would eventually need all the power that would be produced by the nuclear power plants proposed by the
Washington Public Power Supply System. Hodel served as
United States Secretary of Energy from 1982 to 1985 and
Secretary of the Interior from 1985 to 1989 under
President Ronald Reagan. He had been Undersecretary of the Interior under
James Watt from February 1981 to November 1982. Critics disrupted his efforts to impose a new management policy on a large amount of
federal land and blocked his efforts to create vast new
wilderness areas. In spite of the criticisms, the
Reagan administration added over two million acres (8,000 km²) to the national wilderness system. The Hodel policy was continued under
Manuel Lujan Jr. in the
George H. W. Bush administration. It was rescinded in 1997 by Secretary
Bruce Babbitt. In an article, Hodel wrote, "Throughout President Reagan's eight years, his secretaries of the Interior pursued these objectives within the framework of his and their conviction that America could have both an improving environment and an adequate energy supply. We did not and do not have to choose between them, as some have contended." While secretary, Hodel proposed to undertake a study on the removal of the
O'Shaughnessy Dam in
Yosemite National Park, and the restoration of
Hetch Hetchy Valley, a smaller but inundated version of
Yosemite Valley.
Dianne Feinstein, former
mayor of
San Francisco, which owns the dam, opposed the study and had it quashed. In March 1984, the
Navajo Nation requested that Secretary of the Interior William Clark make a reasonable adjustment of the coal lease royalty rate paid by Peabody Coal, now
Peabody Energy. In July 1985, the newly appointed Hodel secretly met
ex parte with Peabody's representative, "a former aide and friend of Secretary Hodel". After briefly reviewing the proposals' merits, Hodel approved lease amendments with royalty rates well below the rate that had previously been determined appropriate by the agencies responsible for monitoring the federal government's relations with Native Americans. In 2007, the US Court of Appeals for the Federal Circuit determined that those actions breached the government's duty of trust to the Nation and established a "cognizable money-mandating claim" against the government under the Indian Tucker Act. ==Post-government career==