(a) There is hereby created and established the Alabama Department of Energy. For the purposes of this chapter, the term "department" or "ADE" means the "Alabama Department of Energy."

(b) The programs and activities of the department shall be administered by a director with the assistance of such other officers, agents and employees as are necessary to carry out the functions of the agency. The director shall propose priorities and funding required to ensure that the programs and activities as provided in this chapter are effectively and efficiently carried out and that the intent of the Legislature is fully implemented. The director shall organize and employ the staff of the department.

(c) The director of the department shall be appointed by, and serve at the pleasure of the Governor. The pay of the director shall be set by the Governor without regard to any other limitation set by law. Division chiefs shall be appointed by, and serve at the pleasure of, the director. The director shall be exempt from the provisions of Article 1 of Chapter 26 of Title 36, and the division chiefs shall serve as unclassified personnel under the provisions of Article 1 of Chapter 26 of Title 36. All except the director shall be members of the Alabama State Employees Retirement System. The director may, however, at his option, become a member of such system. All other employees of the department except as provided in this subsection shall be classified personnel and shall be members of the state Merit System.