Energy Prices

Prospects for real household-electricity deregulation are fading in Maryland, and so are chances they can be revived. The one thing that would bring true deregulation - exposing families to new, volatile price swings and making them shop for kilowatts - is the one thing Maryland won't allow. Burned once by soaring rates and angry consumers, politicians are unlikely to place another finger over the flame. Look for Maryland to imitate Illinois and Virginia by re-regulating - renewing price controls on residential electricity and perhaps putting Baltimore Gas and Electric and other utilities back in the power-plant business.

Baltimore Gas and Electric customers will open their whopping light bills soon and ask: "How did this happen - a 70 percent increase in utility rates?" If they say it in the style of an ominous campaign commercial voiceover, it might take them back to a happier time, when candidate Martin O'Malley was promising in a TV ad to "stop the rate hikes." You can still see the ad on www.martinomalley.com, under the heading "Big Bills." "How did this happen - a 72 percent increase in utility rates?"

The "I" word -- inflation -- rejoined the American economic lexicon yesterday when a government report showed April prices for consumer products and services rose at their fastest rate in nine years, prompting stocks to plummet on fears the Federal Reserve might raise interest rates soon.The Dow Jones industrial average dropped nearly 194 points, closing at just above 10,913. The yield on the benchmark 30-year Treasury bond jumped to 5.92 percent -- the highest level since a year ago today.

WASHINGTON -- Prices paid to U.S. producers were unchanged in November for goods excluding food and energy, a sign that competition is keeping a lid on costs as the economy closes in on a record expansion, a government report showed yesterday."

WASHINGTON -- U.S. consumer prices held steady in March for the second time in three months and retail sales tailed off after surging in January and February -- signs that the economy is poised for more low inflation and steady growth."

WASHINGTON -- U.S. wholesale sales rose in February at the fastest rate in almost three years, suggesting growth may accelerate in the months ahead as companies place new orders to maintain inventories, government figures showed yesterday.February's 2.1 percent increase in wholesale sales, up from a rise of 0.8 percent a month earlier, was the largest since August 1994, the Commerce Department said.Inventories, meanwhile, held steady at a $260.1 billion annual rate during February after rising 0.8 percent in January.

WASHINGTON -- Inflation poked up its head in February as U.S. consumer prices rose more than expected and earnings of American workers increased at the highest rate on record, a government report yesterday showed.The February Consumer Price Index rose 0.3 percent as higher costs for fresh vegetables and natural gas contributed to the increase, according to Department of Labor figures. A month earlier, the CPI, the government's main inflation gauge, rose only 0.1 percent.Average weekly earnings rose 2.4 percent last month, after adjustment for inflation and seasonal variations, following a revised decline of 1.7 percent the month before, the Labor Department said.

WASHINGTON -- U.S. consumer prices rose a smaller-than-expected 0.2 percent in September, while manufacturing showed signs of slowing, further evidence inflation remains in check, government figures showed yesterday.The closely watched core rate of the consumer price index, which excludes food and energy costs, rose 0.2 percent in September. In August, the CPI rose 0.2 percent and core rate increased 0.1 percent, indicating the economy may finish the year with the lowest inflation rate in 11 years.

WASHINGTON -- Business at U.S. manufacturers improved in December as both orders and prices rose, a sign the economy may be gaining strength as the new year begins, a report showed yesterday.The National Association of Purchasing Management's index unexpectedly rose to 54.0 last month from 52.7 in November. It was the 11th consecutive month of growth and the highest reading since June. A reading of 50 or more means manufacturing is expanding, while one below 50 signals a slowdown."Things look very good," said T. Joe Crawford, a spokesman for Roanoke Electric Steel Corp.

WASHINGTON -- Prices paid to factories, farmers and other producers fell as expected in October for the third time in five months as lower energy costs offset a jump in new car prices.The producer price index declined 0.1 percent last month, while the core rate of the PPI, which excludes often-volatile food and energy costs, was unchanged."There's no meaningful inflation out there," said Robert Dederick, a consulting economist at Northern Trust Co. in Chicago. The Federal Reserve "has nipped in the bud what was a worsening of inflation earlier this year," he said.

It's going to cost substantially less to heat one's home this winter, so where are the huzzahs? Baltimore Gas & Electric announced Monday that natural gas prices are down 25 percent, and the average residential utility customer stands to save about $184 during the heating season. Declining natural gas prices are good for electric rates, too. The Energy Information Administration announced yesterday that all U.S. households will likely pay 8 percent less to heat their homes (although the savings for heating oil and electricity customers are projected to be less than the 12 percent to 14 percent savings expected for those who use propane or natural gas)

Matthew Simmons, Texas author and investment banker and the guy who bet oil will hit $200 a barrel next year, feels pretty good. Oil has doubled to $70 recently as the economy shows signs of life, and "prices do seem poised for the next leg up," he says on the phone. "By sometime a year or two from now, we'll look back and say, yeah, prices were really cheap." Perhaps the leading proponent of the idea that oil is running out, Simmons probably won't win his bet, made with New York Times columnist John Tierney.

Cheaper energy is the recession's solace. We all know about gasoline, which fell from $4 a gallon to less than $2 within a few weeks last year. Now prices for home energy are declining, too, giving Marylanders a chance to save hundreds of dollars on utility bills. Saturday's column covered electricity. Independent electricity suppliers are offering packages that are moderately less expensive than BGE's and Pepco's standard offerings. But natural gas prices have fallen, too, and the 1 million Maryland households that heat and cook with gas are also getting a break.

Sam and Heather Travaglini turn down the heat pump when they're away or asleep. They bought efficient fluorescent bulbs. They never put the thermostat higher than 70 degrees, even though the basement has trouble making it into the 60s. Heather "always has a blanket on," even when she's upstairs, her husband says. So what did they do to deserve a $265 Baltimore Gas and Electric bill this month? "It is the highest bill that I have received" since they bought their Columbia townhouse three years ago, says Sam Travaglini.

Add Maryland's energy future to Wall Street, the federal deficit, Washington politics, Detroit carmakers and everything else turned topsy-turvy by the financial crisis. Six months ago, we worried about even higher electricity prices and blackouts or brownouts as early as 2011. But the recession granted a reprieve. Not an especially welcome one, for sure. But the economic slowdown and crash in energy prices have delayed the future and offered policymakers time. The Public Service Commission just grabbed it. In a long-awaited report delivered Thursday, the agency focused on conservation as the main way to ensure that electricity resources meet electricity needs in the next few years.

We're all waiting for President-elect Barack Obama's economic stimulus plan. But it doesn't look like it'll be passed until after he takes office in late January. Then it'll take months to implement. Meanwhile, a massive can of economic Red Bull is already pouring down the country's throat, courtesy of President Hugo Chavez of Venezuela, King Abdullah of Saudi Arabia and other oil merchants. Commentators were frantic six months ago about the economic and personal damage of oil at $140 per barrel.

When prices fall for clothes, gasoline and other goods and services, it's good news for consumers who are facing increasing financial pressure in an ailing economy. Consumer prices fell by 1 percent last month compared with September, mostly because of plunging energy prices, according to federal data released yesterday. It was the largest single-month drop in the 61-year history of the consumer price index, highlighting the cost cuts that retailers and others are making in hopes of calming jittery shoppers.

David Martinez fought back when energy prices soared two years ago. He put extra insulation in his attic for $750. He installed an $1,800 "tankless" heater that warms water as you draw it. He put in a super-efficient furnace and air conditioner, insulated his basement and lined his attic with foil that repels summertime heat. In all, he spent about $15,000 cold- and heat-proofing the tidy, two-story house in Odenton he shares with wife Iris and daughter Isabella. His home energy use has fallen by about a third, and he has the Baltimore Gas & Electric bills to prove it. "I actually pay less for utilities now than I did before the BGE hike," which sent electricity prices up 70 percent in 2006, says Martinez, a Web developer.

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.

WASHINGTON - Soaring energy prices punished ordinary Americans in May, triggering the highest run-up in inflation in six months and exceeding the expectations of economic forecasters, the government reported yesterday. Consumer prices rose 0.6 percent, as measured by the Labor Department's Consumer-Price Index. Prices have risen by 4.2 percent, slightly above the 4.1 percent rise in prices for last year. Those annual numbers reflect the rise in all prices across the economy, and don't necessarily capture the pain that many Americans are feeling at the cash register.