Tuesday November 1st, 2005
by: Ed Mayberry, November 1, 2005 12:11:00 am
Texas officials today released to regional councils of government the site screening criteria for an ambitious, billion-dollar federal energy generation project. The U.S. Department of Energy's FutureGen project would create a 275-megawatt plant to produce electricity and hydrogen from coal with almost no pollution. Today, the FutureGen Texas advisory board sent out screening maps to the state's 24 regional councils of government, each of which can submit a candidate site. The maps developed by the state Bureau of Economic Geology will help local officials determine how their areas stack up against the geologies and oil and coal reserves of others. The DOE is expected to formally solicit site proposals from states early next year, and the advisory board will be responsible for advancing one proposal for Texas.
Government regulators have removed a major barrier to the SBC takeover of AT&T and the Verizon Communications purchase of MCI. The 4-to-0 votes by the Federal Communications Commission approving the deals did come with some strings attached. The FCC is requiring San Antonio-based SBC and Verizon to freeze the wholesale prices they charge competitors to lease high-capacity business lines. It's also requiring the two companies to guarantee that they'll sell their internet access as a stand-alone service so customers aren't forced to buy local phone service as well. The approvals came after a weekend of negotiations. Several state regulatory agencies still must sign off on the deals. SBC's acquisition of AT&T is valued at $16 billion. The Verizon-MCI deal is said to be worth about $8.5 billion.
The former head of the natural gas trading desk at El Paso Corporation has been indicted in connection with alleged manipulation of natural gas prices. Charges against Jim Brooks have been added to existing charges against former El Paso trader James Pat Phillips, indicted last November on two counts of false reporting, one count of conspiracy and one count of wire fraud. Federal prosecutors in Houston have been looking into whether companies manipulated natural gas prices by submitting false data to publishers of indexes widely used to set gas prices at pipeline hubs. The government says that could move the price and cause companies and consumers to overpay for natural gas.
A federal judge in San Francisco today indefinitely delayed jury selection in the criminal trial of Reliant Resources and four employees. They're accused of driving up electricity prices during California's 2000-2001 energy crisis. The company and the employees have pleaded not guilty. The trial, which had been scheduled to begin tomorrow, was postponed to give the government time to appeal a key evidentiary ruling defining "market manipulation.'' Houston-based Reliant Resources is a subsidiary Reliant Energy Services. The defendants are accused of purposefully withholding power from the market, purchasing electricity instead of producing it and then selling power at artificially high prices. Reliant is charged with conspiracy, wire fraud and commodities manipulation and could face millions in fines if convicted.
A court hearing continued in Houston as the owner of a home-health care company is accused of providing fake flu shots. An attorney for Iyad Abu El Hawa says the charges are false and fabricated. The FBI says El Hawa is the owner of Comfort & Caring Home Health Care. He was arrested last week and charged with Medicare fraud. El Hawa is accused of organizing flu-shot sessions at Houston-area companies and nursing homes and providing syringes filled with phony vaccine. The hearing was cut short yesterday when the man's attorneys told a magistrate that they needed more time to respond to some of the allegations. Also, Attorney General Greg Abbott yesterday sued El Hawa and two of his associates--accusing them of violating the Texas Deceptive Trade Practices Act. Abbott also had El Hawa's assets frozen.
The multi billion-dollar class-action lawsuit against San Diego-based Sempra Energy continues. An executive who organized a meeting that plaintiffs say led to California's power crisis in 2000 and 2001 has been testifying. Vladimir Lorenz was then an executive with Southern California Gas Company and initiated the 1996 meeting at the Embassy Suites Hotel near Sky Harbor Airport in Phoenix. The lawsuit charges that the gathering laid the groundwork for a scheme to limit gas supplies in California. It says executives from Sempra-owned Socal Gas and San Diego Gas and Electric Company conspired with Houston-based El Paso Corporation, which has already settled. Sempra says the meeting with El Paso was simply Socal's effort to save money by ridding itself of unused pipeline capacity leased from El Paso.
Hurricane Rita is likely to result in $4.7 billion in residential and commercial property loss claims for the insurance industry. That's according to a preliminary survey released today. The hurricane struck the Texas-Louisiana border area in late September. ISO's Property Claim Services Unit said that damage was reported in seven states. The highest losses totaled $2.4 billion in Louisiana. Texas was second with $2.2 billion, with Beaumont, Orange and Port Arthur "suffering extensive wind damage.'' Last month, ISO's preliminary survey of Hurricane Katrina-related claims from late August indicated at least $34.4 billion dollars in personal and commercial property loss.
They fled their hurricane-ravaged hometowns and have been trying to rebuild their lives, many in the Texas cities where they landed. But time--and aid--are running out for many evacuees. The Texas Apartment Association says thousands of evacuees could face evictions in November. The group estimated that about 15,000 people statewide may again lose their homes because federal aid has run out or has not arrived. For example, Jacqueline Ortega received two months' free rent in North Dallas. But she has not received federal assistance to cover the rent on the apartment she shares with her three-year-old son. FEMA spokeswoman Nicol Andrews says FEMA has no reports of applicants facing eviction. She says there is no evidence to suggest the prediction of mass evictions is in any way a reality.
The Motiva Port Arthur Refinery has completed its start up. Shell says most processing units at the facility are at or near normal rates. The refinery has a capacity of 275,000 barrels of crude throughput per day.
Pilots at American Airlines this week consider helping the company out a second time. American employees agreed in 2003 to provide $1.8 billion in annual job, wage and benefit cuts to save the company from filing for bankruptcy, including $660 million in cuts from pilots. The pilot union board meets in Fort Worth this week to discuss the matter.
Continental Airlines has become the first carrier to inaugurate scheduled non-stop service between the United States and India, launching daily flights between its New York hub at Newark Liberty International Airport and Delhi's Indira Gandi International Airport. The flight will cut travel time between New York and Delhi by over two and a half hours compared to current connecting service on other carriers between the two cities.
For the eighth year in a row, Continental outranked all of its U.S. competition in International Business Class service, according to results of a survey of Conde Nast Traveler readers published in the magazine's October 2005 edition.
The nation's manufacturing activity continued to surge last month, but at a slightly slower pace. The Institute for Supply Management says its index stood at 59.1--down three-tenths of one percent from September's level. It is stronger than expected. Any number above 50 indicates growth. A major concern of purchasing managers continues to be rising prices, including energy costs. ISM survey chair Norbert Ore says the performance overall was "strong,'' supported by "continuing growth in new orders and production.''
Advanced Aromatics is expanding its Baytown plant's production capacity by 25 percent, according to the Houston Business Journal. This is the first expansion of the naphthalene unit since 1996. The number of naphthalene producers in North America has dropped from five to three in the past nine years.
Utility holding company Entergy Corporation today reports a 24 percent rise in third-quarter earnings. That comes despite extensive hurricane damages that pushed one of the New Orleans-based company's units into bankruptcy. Entergy, whose service area includes parts of Arkansas, Louisiana, Mississippi and Texas, also said it could not affirm 2005 earnings guidance due to the uncertainties brought on by the third quarter's storms. After preferred dividends, net income rose to $350 million from $282.2 last year's third quarter results included special items that reduced earnings by 17 cents per share. The company says revenue grew six percent, as warmer-than-usual weather spurred greater electricity usage in the residential, commercial and government sectors. The company also announced a plan to secure $2.5 billion to $3 billion in financing through a combination of debt and equity. The company said it needs the money while it recovers its hurricane-related costs from insurance, the government and by raising rates. Entergy's New Orleans unit filed for bankruptcy on September 23rd.
Tenet Healthcare today posted a sharply wider loss for the third quarter because of legal and tax-related charges and costs from facilities damaged by Hurricane Katrina. The Dallas-based hospital operator reports a third-quarter loss of $408 million. It says the loss from continuing operations was $385 million. Results for the latest quarter include charges totaling $308 million, with Katrina-related expenses accounting for almost half. Even without those items, Tenet's adjusted loss exceeded the loss of five cents per share expected by analysts polled by Thomson Financial. Net operating revenue fell two percent to $2.39 billion.
Dell trimmed sales and income targets for the current quarter, citing sluggish growth in its U.S. and UK business and a $300 million expense to fix a glitch. The leading U.S. PC maker expects to post a profit of 25 cents per share for the third quarter, including charges of $450 million or 14 cents per share related to restructuring and a defective product. Dell shares have been sliding for several months as the company has struggled with weak prices for computers. Company executives have acknowledged being too aggressive in cutting prices. Most of the charge, $300 million, will be to repair the main circuit boards in its Optiplex business desktop PC's. A spokesman says some have failed because of a bad capacitor, preventing the machine from powering up. Dell isn't recalling the machines but will replace the circuit board on those that fail.
Kemah-based American International Industries has purchased a ten-acre manufacturing facility site on Rankin Road. The company plans to lease the property to Hammonds Technical Services. The land includes train rails and additional acreage for future expansion of Hammonds.
Forty-two Houston-area companies landed on the inaugural Aggie 100 list of the fastest-growing Aggie-owned or Aggie-led businesses, created by Texas A&M's Mays Business School's Center for New Ventures and Entrepreneurship. Houston-based D2C Solutions placed at the number three spot.
Amegy Bank is a national and regional winner of the Greenwich Associates 2005 Excellence in Business Banking Award. The award is based on results of an annual Greenwich survey of decision makers at more than 22,000 businesses with annual sales of $1 million to $10 million in 66 markets. Banks are recognized at the national level for excellent overall satisfaction, excellence for business bankers, branch service, call center service, online services and cash management quality. Banks receive awards at the regional level for excellent overall satisfaction and cash management.