Monday PM August 10th, 2009
by: Ed Mayberry, August 10, 2009 9:08:55 pm
The U.S. price of gasoline jumped nearly 16 cents a gallon during the past two weeks to $2.64, according to the national Lundberg survey. Analyst Trilby Lundberg says it appears the rate of increase is slowing. The latest average price of regular gasoline is $1.20 below the price at the same time last year. The average price for a gallon of mid-grade was $2.77. Premium was at $2.88. Charleston, South Carolina, had the lowest price, $2.38 for a gallon for regular. Honolulu was the highest at $3.07.
Southwest Airlines says it's bidding $170 million to buy Frontier Airlines out of bankruptcy protection. The bid sets up an auction for Frontier. Regional airline operator Republic Airways Holdings has also bid for Frontier. Southwest says it will discuss its cash offer with interested parties. It says an auction is expected to begin on Thursday. The auction was originally slated for Tuesday. A bankruptcy judge had already approved the sale of Frontier Airlines Holdings to Republic for $108.8 million. But the process left the door open for other bidders. On July 30th, Southwest put in a nonbinding bid of $113.6 million. Denver-based Frontier has been operating under Chapter 11 protection since April 2008.
A CenterPoint Energy transformer substation caught on fire and caused a temporary thick, black cloud of smoke to hang over Houston skies over the weekend. The fire happened Sunday shortly before noon. CenterPoint officials said they had to de-energize and shut down the transformer so firefighters could put foam on the hot spots. Almost 2,400 customers lost power which has been restored. A substation, which is unmanned, is like a breaker box in a backyard. It steps down electricity being transported from power plants by high-voltage transmission lines to distribution customers. No injuries were reported.
Houston-based Dynegy will sell eight existing plants and one project to ex-development partner L.S. Power Associates. Dynegy announced the deal for about $1 billion in cash and $500 million in stock as the company attempts to bolster its finances and cut near-term debt. Dynegy's second-quarter loss widened by 27 per cent as it wrote down the value of some of the plants it will sell. The Texas-based company also cited falling energy prices. Dynegy plans to slash expenses by $400 million to $450 million over the next four years. Losses for the quarter ended June 30 totaled $345 million, compared with $272 million, in the year ago quarter. Revenue rose 53 percent to $493 million. Under the deal with L.S. Power, Dynegy will sell about a quarter of its generating capacity.
Horizon Wind Energy has suspended development of the Simpson Ridge wind farm in Carbon County because of Wyoming's position on protecting key sage grouse habitat. Project manager Nate Sandvig said that Houston-based Horizon is not scrapping the project, but is placing it on hold indefinitely. He says Horizon made the decision last week as it neared time to submit a permit application to the state's industrial siting council. The council has permitting authority over industrial projects with construction costs of $173 million or more. Wyoming has taken a hard-line stance against wind development in areas identified as core grouse habitat. The state is trying to stave off federal protections for the bird.
Houston-based BMC Software is acquiring MQSoftware, according to the Houston Business Journal. The Minneapolis-based firm was founded in the mid-1990s as an IBM software solution, with offices also in London, Berlin and Paris. MQSoftware will be a part of BMC's mainframe service management business unit.
Walmart has opened a Sam's Club spinoff in Houston called Mas Club, offering bulk-style sizes of familiar foods from Latin America. The new Latino-themed warehouse store on the North Freeway offers fresh produce, meats and seafood, as well as Hispanic foods and international brands of beverages, spices and candies and a tortilla bakery. The $30 annual fee allows customers to get a Mexican take on warehouse-style food shopping. The concept faces competition from Fiesta Mart and other grocery chains.
A recent lawsuit filed to get food stamps to more Texans during the recession comes as additional workers are hired to process applications. The class-action lawsuit seeks to force Texas to comply with federal regulations requiring that most eligible applicants be certified within 30 days. Texas legal services attorney Bruce Bower told the Houston Chronicle that the food stamp benefit is 100 per cent federally funded. Texas must provide half of the administration cost. The legislature authorized the Texas Health and Human Services Commission to hire about 650 more workers, starting September 1st. Spokeswoman Stephanie Goodman says the agency "has an obligation to do better for Texas." She says workers is a long-term solution because of the length of time it takes to train them.
A high-profile cast of politicians and alternative energy leaders is meeting in Las Vegas to talk about prospects for the fledgling industry. Quick hopes for employment in alternative energy went bust quickly over the past year as credit markets seized up, major projects were canceled and workers in solar and wind industries were laid off. But unions, major manufacturers and researchers joined politicians and others to plan for what comes next. Organizers say they plan to define an agenda that pushes clean energy and creates jobs.
The Obama administration says green energy could sprout into a new "industrial revolution" ripe with jobs. Labor Secretary Hilda Solis says she expects hiring in the alternative energy industry to pick up over the next year, but she says it'll be a while longer before it's a large part of the job market. Solis says she expects new government initiatives to help kick-start hiring in the industry. She says clean energy will offer better prospects for minorities and new training for workers with traditional vocational skills. Heavy-hitters are putting their weight behind the cause. At the Second National Clean Energy Summit in Las Vegas, former President Bill Clinton, Al Gore, Energy Secretary Steven Chu and U.S. Senate Majority Leader Harry Reid plan to speak.
Texas has taken in more than $6.5 billion of the $787 billion stimulus package so far, according to the Houston Business Journal. That works out to $269.30 per person. Texas 48th on a per-capita basis in the rankings, according to the nonprofit organization ProPublica. Alaska has brought in $1.024.28 per person. Sparsely-populated areas have received more per person than larger metro areas. Harris County received about $143 per person. The federal government has allocated more than $121 billion of the $787 billion stimulus bill to date, or about $216 per person.
The chief of the insurance industry's top lobbying group is telling the Associated Press that the battle over reshaping the nation's health care system will be decided during this month's Congressional recess. The president of America's Health Insurance Plans, Karen Ignagni, tells AP reporters and editors that if what she calls the "vilification" of her industry by the White House and top Congressional Democrats continues, August will be a lost chance to persuade voters that the health overhaul is needed. She says the industry thinks "health care reform is going to be won or lost in August." Insurers say they favor bipartisan changes in the health system, but strongly oppose Democratic proposals for optional, government-run health coverage.
Auction players are furious about all the money they have tied up in energy leases on public lands that they can't get their hands on. The Associated Press has found that the federal government is holding nearly $100 million in payments for leases it hasn't issued for oil or gas drilling across the Rocky Mountains. The leases have been held in limbo for as long as seven years because of environmental protests and lawsuits. The backlog grew exponentially under President George W. Bush's administration, which pushed for more domestic drilling. Brian Wixom, managing partner of Salt Lake City-based International Petroleum, says he wants his leases or his money--hundreds of thousands of dollars--back. Government records show 46 of the firm's leases have been held under administrative review since 2005.
AT&T has reached a tentative deal on a new three-year contract for 23,000 employees in California and Nevada. The agreement was announced today by the Dallas-based telecommunications company. The previous contract with the Communications Workers of America expired four months ago, along with other four contracts together covering nearly 80,500 workers in AT&T's wireline operations. Another contract covering 23,000 workers in the former BellSouth area in the southeast expired Saturday. Negotiations are under way. The contract covering California and Nevada is the second to be reached in this round of negotiations. In mid-July, 18,500 employees in the Midwest reached a tentative agreement, which was ratified by its members on Friday. AT&T has been seeking to have workers shoulder more health care costs.
A new study shows female managers are more than three times as likely than their male counterparts to underrate their bosses' opinions of their job performance. Scott Taylor, an assistant professor at the University of New Mexico's Anderson School of Management, says women are significantly poorer at predicting others' ratings of them compared to men. Taylor is set to present his findings Tuesday at the annual meeting of the Academy of Management. Taylor says the women studied rated themselves highly, so they didn't lack confidence. He says 251 male and female managers from across the country participated in the study. Taylor says the findings could indicate why women don't rise to head companies or why there is a pay disparity between men and women.
Offshore spending is expected to grow strongly, according to energy analysts Douglas Westwood, despite the global recession. Spending may grow from $957 billion to $1.356 trillion over the period to 2013.
U.S. Justice Department officials say U.S. refineries are buying stolen oil siphoned from Mexican government pipelines and smuggled across the border--in some cases by drug cartels. U.S. and Mexican law enforcement officials are working together to track the stolen oil, which is hauled by tanker and barge into the United States. The U.S. government plans to hand over $2.4 million to Mexico on Tuesday following a joint investigation. Mexican authorities in April seized $46 million from the Zetas, a group of hit men tied to the Gulf cartel, that they say came from selling stolen oil.
Investors will be looking for more insight into the economy when the Federal Reserve's interest rate committee concludes a two-day meeting on Wednesday. It is unclear when policymakers will decide the economy is strong enough to handle rate hikes aimed at keeping inflation in check.
Other economic guidance this week may come from a variety of government reports. Tomorrow brings a Labor Department report on productivity for the second quarter and the Commerce Department report on wholesale trade inventories for June. On Wednesday, the Commerce Department releases numbers on international trade for June, and the Treasury Department releases the federal budget for July. The Labor Department releases weekly jobless claims on Thursday and the Commerce Department releases retail sales for July and business inventories for June. Also, Freddie Mac, the mortgage company, will release weekly mortgage rates. The week concludes with Friday's Labor Department report on the consumer price index for July and a report from the Federal Reserve on industrial production for July.