Energy Costs

Spending is slowing - but so is inflation, offering the Federal Reserve more room to stimulate the economy by lowering interest rates next month, if it wants. Retail sales softened in October, rising 0.2 percent after a 0.7 percent gain in the previous month, the Commerce Department said yesterday. The report underscored analysts' expectations that consumers will be more reluctant to spend freely over the holiday season. It was the smallest sales gain since a 0.1 percent rise in August.

The U.S. economy might be rocking and rolling, but inflation remains remarkably well behaved.That was the main message from a fresh batch of government data on consumer prices, industrial activity and home building released yesterday. The new evidence further soothed investors who have been worrying that the Federal Reserve might raise short-term interest rates more than a quarter-point next week to slow the economy. Bond and stock prices rallied.The Consumer Price Index -- a broad measure of inflation that reflects the prices of imports and services as well as those of domestically produced goods -- rose just three-tenths of a percent last month after registering no increase at all in May and June, in line with forecasts.

Maryland manufacturers yesterday said the global climate treaty negotiated in Kyoto, Japan, would raise energy costs, threaten thousands of state jobs and shrink tax revenue by millions of dollars."

WASHINGTON -- U.S. consumer prices rose in June at the slowest pace in seven months as energy prices posted the largest monthly decline in five years, the Labor Department said yesterday.The smaller-than-expected 0.1 percent increase in the consumer price index, down from a 0.3 percent increase in May, suggests that Federal Reserve policy-makers, who left interest rates unchanged at a policy meeting two weeks ago, might do the same when they next meet Aug. 20, some observers said."We have an economy that's well-balanced and performing at a very satisfactory pace," said Lynn Reaser, chief economist at Barnett Banks in Jacksonville, Fla.In most cases, the Fed prefers to move on bad inflation news rather than good economic reports.

The people who clean and care for Harford County schools aren't endorsing a proposal by a private contractor to save the school system as much as $1.8 million in energy costs but say they are open to Johnson Controls Inc.'s suggestions.The board has heard from two private companies -- the other is ServiceMaster Service Management Co. -- in an effort to find ways to run its facilities and construction departments more efficiently.Johnson Controls' proposals include: more efficient lighting, replacing boilers with less expensive natural-gas boilers, combining laundry facilities and installing controls that cut energy use during off hours.

Everybody likes the idea of saving energy costs, but even the most dedicated penny-pinchers may find their eyes glazing over when the talk turns to R values, degree-days and British thermal units.But suppose there were a simple device that you could put in your home that would monitor your heating and cooling, adjust it to fit the way you live, save energy -- and even, in some cases, save you big bucks. Suppose it was also inexpensive, easy to install, and once it's set up, utterly forgettable.

Big Blue is about to go green. IBM Personal Computer Co. is preparing to introduce a compact computer that addresses key issues of environmental interest -- energy conservation and electromagnetic radiation.The typical desktop computer uses 250 to 300 watts of power. But IBM's offering belongs to a new generation of computers, popularly called "green PCs," that will cut energy usage to less than 60 watts.Many of these new computers, as well as printers and monitors, are expected to be introduced next month as part of the Environmental Protection Agency's Energy Star program for encouraging conservation in the PC industry.

Do you remember the energy crisis? The energy industry certainly does. Consumers changed overnight from energy wastrels to energy misers, and 20 years later the building industry and the people who make heating and cooling equipment are still coming up with ways to cut energy costs.Over the years it's become clear the two best solutions are interlocking: houses have to be made more energy-tight, so heated or cooled air doesn't escape; and once that's done, heating and cooling equipment should be made smaller, to meet reduced energy demands.

The nation's cost of living edged up 0.2 percent in June, bolstering the view of some economists that inflation appears to be under control as the recession winds down.Figures released today by the Labor Department showed that for the first half of 1991, consumer prices increased at an annual rate of 2.7 percent, well below the 6.1 percent advance for all of 1990, the worst in eight years.Declining energy costs offset a sharp rise in fruit and vegetable prices in June. The seasonally adjusted gain in the Labor Department's Consumer Price Index followed a 0.3 percent increase in May and an 0.2 percent rise in April.

When Captain Kirk orders Scotty to take the Enterprise to Warp 9, the cost of the ship's antimatter fuel is never mentioned.Why?Because the cost of even a simple starship maneuver is beyond comprehension -- but well worth consideration.Assume that the starship Enterprise is as massive as two large supertankers -- i.e., a million tons. The fuel cost to get a million-ton ship to a speed of 1 percent of the speed of light works out to $592 trillion. (The starship's engines are assumed to be 20 percent efficient -- i.e., 20 percent of the energy of the fuel gets converted to kinetic energy of the reaction mass.

Power prices add to economic woes Economist Lester B. Lave is quoted in "Customers howl as utility bills skyrocket" (Feb. 24) lamenting that utility prices have become a political situation: "When the price of lettuce goes up, we don't demand an investigation," he says. This must be one of the most absurd things I have ever heard. How can one compare a few cents' increase in the price of lettuce to a rise of a few hundred dollars in energy costs? Baltimore Gas and Electric's excuses for rising prices are just as absurd.

McCormick & Co. plans to announce today that it will begin using solar energy at its distribution center and spice mill in Hunt Valley by early next year. The spice maker signed an agreement to have Constellation Energy build a one-megawatt solar power system at the two facilities, located at its headquarters campus. McCormick will purchase electricity generated by the system from Constellation. The two companies did not disclose financial details. The solar energy project will be McCormick's largest effort at its U.S. facilities to use alternative sources of energy, said Alan Wilson, McCormick president and chief executive officer.

Steven B. Larsen turned out to be a double-edged political sword. He was precisely what Gov. Martin O'Malley needed at the Public Service Commission: smart, experienced, tough and unlikely to get cozy with the businesses he was regulating. He was in the job, politically speaking, to knock down energy costs borne by Maryland consumers. In his campaign, Mr. O'Malley had seemed to promise such a reduction. If anyone could make the power guys back down, it was Steve Larsen. On the other hand, if he couldn't do it, maybe it couldn't be done.

Spending is slowing - but so is inflation, offering the Federal Reserve more room to stimulate the economy by lowering interest rates next month, if it wants. Retail sales softened in October, rising 0.2 percent after a 0.7 percent gain in the previous month, the Commerce Department said yesterday. The report underscored analysts' expectations that consumers will be more reluctant to spend freely over the holiday season. It was the smallest sales gain since a 0.1 percent rise in August.

The end of denial always requires a jarring encounter with reality. Mine came at the Giant, where a $4 gallon of milk made clear - in a way that somehow $3 gas hadn't - that forces pushing up consumer prices are aligned as they haven't been since the 1980s. A worldwide boom has driven up the costs of basics such as energy, food and metals as well as shipping capacity and smart workers. The computer-productivity and global-outsourcing trends that enabled a decade of low inflation seem to be running out of steam.

FedEx Corp. Shares declined $3.06, or 2.9 percent, to $104.45. The world's largest air-cargo carrier yesterday cut its 2008 earnings forecast as much as 4.3 percent, citing "financial market volatility" and energy costs.

The first week in July marked the beginning of the peak season for electricity consumption. The mix of 90-degree weather and power-hungry air conditioners is the major culprit, but chances are your residential appliances, computers, hot water heaters and various other electrical devices aren't exactly taking the dog days of summer off either. Now is an ideal moment for consumers to take responsibility for their energy costs - the stakes have gotten too high to think otherwise. That begins with conservation.

The Baltimore County government expects to announce in coming weeks the sale of 18 acres in Essex to a developer who would build housing for senior citizens and low-income families, a government spokesman said yesterday. The county has been trying to sell the land for nearly two years as part of the planned redevelopment of Kingsley Park, a formerly crime-ridden apartment complex at Old Eastern Avenue and Back River Neck Road. Donald I. Mohler, a spokesman for County Executive James T. Smith Jr., said officials are close to a deal with a well-known developer, whom he did not identify, and hope to announce an agreement in the next four to eight weeks.

Baltimore has signed a $14 million contract with a Milwaukee-based company to generate electricity from the methane produced by the city's Back River sewage treatment plant - a project officials say they expect to save the city $1.4 million a year in energy costs while also improving air quality. The contract with Johnson Controls Inc., to be announced today, calls for construction of a "cogeneration" facility at the city-owned plant near Essex, which treats the sewage of 1.3 million city and Baltimore County residents.

Give yourselves a pat on the back, America. In light of soaring energy costs, Americans have given generously this cold season by contributing $34.7 million more than usual to help low-income customers pay their heating bills, says the Washington-based National Community Action Foundation. Normally, about $100 million is raised each year. The good news comes just as the Department of Energy released predictions that, despite mild weather and lower-than-expected prices, residential heating bills still will be 24 percent higher this season than a year ago. So congratulations, rate-payers, stockholders and utility industry foundations, for recognizing that the less fortunate needed more help this season.