In this paper, we develop and analyze a novel clustering protocol, Decentralized Energy Efficient cluster Propagation (DEEP), that attempts to manage the communication of data while minimizing energy consumption across the sensor networks. We also develop an Inter-Cluster Routing protocol (ICR) that is compatible with the proposed clustering technique. DEEP takes advantage of the multi-rate capabilities of 802.11a, b, g technologies by elevating the data rate to higher levels for shorter transmission ranges. This approach reduces the energy consumption by lowering the transmission time. Protocol DEEP starts with an initial cluster head and gradually forms clusters throughout the network by controlling the geographical dimensions of clusters and distribution of cluster heads in order to conserve energy and prolong network lifetime. Furthermore, due to the balanced load, protocol overhead caused by unnecessary frequent re-clustering is eradicated. Our simulation results demonstrate that DEEP distributes energy consumption approximately 8 times better than an existing clustering scheme, LEACH. In addition, DEEP substantially reduces total data communication and route setup energy consumption in the network compared to LEACH.