Energy Prices

Sharply higher energy prices are expected to seriously squeeze family budgets in coming months, particularly seniors living on fixed incomes.

Baltimore Gas and Electric Co. said Thursday that energy prices will rise $6 a month for the typical residential electricity customer who doesn't use an outside power supplier, the first jump in energy prices in four years. That rise in costs, running from June through next May, comes on top of a distribution-rate increase approved in February. The state calculated that distribution rise at $3.33 a month for the average residential electricity customer, though BGE said typical customers - halfway between the biggest and smallest power-users - would pay $2.66 a month extra.

Federal Reserve Chairman Alan Greenspan told members of the Senate banking committee yesterday that "inflation is not likely to be a serious concern" but that policy-makers are watching the effect of rising energy prices on the world and U.S. economies closely. Bond prices rose after Greenspan's remarks about inflation, continuing a rally that had begun earlier in the day after the release of May consumer price data that were not as bad as many had feared before the report's release. Greenspan spoke at a hearing on his confirmation for a fifth term as chairman of the Federal Reserve Board.

Gov.Martin O'Malleyis getting backing from the Midwest in his push to put giant wind turbines off Maryland's coast.  Former Iowa Gov. Chet Culver, a fellow Democrat, showed up in Annapolis Tuesday to testify in support of O'Malley's bill to provide incentives for building offshore wind projects.  With turbines towering over cornfields across Iowa, the state is the nation's second leading producer of wind energy, and Culver said the industry has...

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."

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.

If Aris Marantan does his job well, not a single person who works in the Chesapeake Building at the University of Maryland, College Park will notice. That's because the lights come on with the flip of a switch, the computers boot up at the push of a button and the printers hum without a hitch - all humdrum events. What's unusual is that almost 30 percent of the electricity is generated in a box the size of a large industrial freezer outside the building's back door. Some electricity consumers can live with a momentary blackout or sputtering lights, but many commercial and industrial companies cannot.

Prices paid by consumers in May rose at their fastest rate in more than three years, the Labor Department reported yesterday. The news was greeted positively by stock and bond traders, who had been worried before the report that the news might be worse than it was. The rise in the broad Consumer Price Index was 0.6 percent, a bit higher than the consensus Wall Street forecast of 0.5 percent. The increase followed a rise of 0.2 percent in April. The index was pushed higher by rising energy and dairy prices, which posted their largest monthly gain since 1946.

Speaking Thursday, the Federal Reserve chairman explained why the Fed would keep a close watch to keep the economy on a path of moderate growth. "A significant increase in energy prices can simultaneously slow economic growth while raising inflation." Ben Bernanke

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."

The Sun may have cut back its foreign bureaus, but your editorial writers ( "End subsidies for corn-based ethanol," March 14) must still be aware of the turmoil in North Africa and the Middle East which has been sending oil prices soaring over $103 a barrel, pushing gasoline prices to $4 or even $5 in some states and pointing up the need for the only clean-burning, domestically produced alternative to imported oil: ethanol. If the U.S. provides a $4 billion subsidy for blending ethanol into gasoline, as your editorial contends, it's still a better buy than importing 65 percent of our oil, mostly from unfriendly or unstable countries, and subsidizing big oil by $130 billion over the past 32 years, not counting the tens of billions more that our military spends to protect petroleum shipments from the Middle East.

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.

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.

An electricity cooperative organized by the Carroll County Chamber of Commerce has accumulated about $3.5 million in buying power in an effort to solicit the best price possible when energy prices are deregulated in a few months. The chamber has acquired 82 members for its electricity purchasing group, double the number of participants expected, said chamber President Bonnie J. Grady. Eight energy suppliers have expressed interest in submitting bids during a daylong process in May, when cooperative members will choose a supplier or decide to find other utility providers, Grady said.

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.