NRG Energy has agreed to acquire Austin-based Green Mountain Energy for $350 million in cash. NRG, based in Princeton, New Jersey, says it was attracted to Green Mountain's portfolio of renewable energy. Green Mountain Energy has residential and commercial customers primarily in Texas and the New York metro region. NRG Energy's retail business, Reliant Energy, serves nearly 1.6 million residential, business, commercial and industrial customers in Texas. NRG said it will run Green Mountain as a standalone company and said it is expected to contribute annual pretax earnings of $70 million. NRG says the deal is subject to approval by government regulators. The agreement should close in November.
The Texas Public Utility Commission will allow electric providers to prevent customers from switching when their bills are due and they refuse to set up payment plans. Commissioners approved the so-called switch-hold rule. Customers who are behind on their payments cannot just switch to another provider and leave the old debt behind. The Dallas Morning News reports that utilities must provide electricity to low-income customers during very hot or cold weather and to people who rely on electronic medical devices to survive. Companies must also offer deferred payment plans in some circumstances. In return, the companies asked for the ability to place a switch-hold on customers who do not pay. Commissioner Donna Nelson says people “who are trying to do the right thing aren't harmed or penalized.”
Federal prosecutors have asked that charges against a third defendant in a long-running and problematic Enron-related case marred by overturned convictions and flawed legal theory be dropped. This week's motion to a federal judge in Houston requesting that the three most serious charges against James A. Brown be dismissed comes just days before the former Merrill Lynch executive's retrial on these counts was to begin. U.S. District Judge Ewing Werlein, Jr., had not issued a ruling on the motion, which had been filed a day earlier. But Brown's attorney, who was pleased by the prosecutors' decision, expected the judge to grant the request. A Justice Department spokeswoman declined to comment on the decision to drop the charges against Brown.
The number of newly laid-off workers seeking unemployment benefits dropped slightly last week to its lowest level in two months, a sign that employers are cutting fewer jobs. The Labor Department says new claims for jobless benefits fell by 3,000 to a seasonally adjusted 450,000, the third decline in four weeks. Many economists had expected an increase. Claims have fallen by 11 percent in the past month, after jumping to 504,000 in the week ending August 14th. That indicates layoffs are easing, even as the pace of economic growth has slowed since earlier this year. The four-week average of new claims, which reduces volatility, dropped sharply to 464,750, down 13,500 from the previous week.
The number of people living in poverty has climbed to 14.3 percent of Americans, with the ranks of working-age poor reaching the highest level since at least 1965. The Census Bureau says that about 43.6 million people, or one in seven, were in poverty last year. That's up from 39.8 million, or 13.2 percent, in 2008. The number of people lacking health insurance rose from 46.3 million to 50.7 million, due mostly to the loss of employer-provided health insurance during the recession. Congress passed a health overhaul earlier this year to extend coverage to more people. The statistics cover President Barack Obama's first year in office, when unemployment climbed to ten percent in the months after the financial meltdown. The median--or midpoint--household income was $49,777.
An Obama administration report finds minimal impact from the deepwater drilling moratorium in the Gulf of Mexico and says the stoppage has not markedly increased unemployment in the region. The report says the moratorium imposed after the BP oil spill might temporarily cost 8,000 to 12,000 jobs on oil rigs and elsewhere. But thanks in part to hiring for cleanup crews, there was no net job loss in the region. The scenario is far rosier than described in some previous reports, including an Interior Department estimate of 23,000 jobs lost. The new report says other surveys measured worst-case scenarios that never came to pass.
Louisiana's two U.S. Senators aren't buying an Obama administration report that says the deep-water drilling moratorium in the Gulf of Mexico hasn't increased unemployment in the region. Democrat Mary Landrieu says the “heavy hand of the federal government” was placing thousands of jobs in the Gulf at risk. Republican David Vitter says the upbeat analysis is at odds with reality in the Gulf. Vitter told a Commerce Department official that he speaks with people every day and he says, “it sure as heck is not what they are telling me.” Vitter says he was astonished that the administration didn't do an economic analysis before imposing the moratorium. Undersecretary Rebecca Blank told the Senate Small Business Committee that the well-being of the environment and protecting the safety of the drilling industry were the biggest concerns.
The companies being sued in the largest offshore oil spill in history are accusing the government of mishandling a key piece of evidence. In a new federal court document, the company that owned the drilling rig, Transocean, says federal investigators aren't adequately preserving evidence from the rig's failed blowout preventer, a key safety device. It's now sitting at a NASA facility in New Orleans. How exactly it will be studied is the subject of a court hearing in federal court in New Orleans. Earlier court records obtained by the Associated Press show that the companies are upset about the government's plans. They complained unsuccessfully to a judge about the government shipping the device to a NASA facility that they said is not equipped to house or test it.
Texas has asked a federal court to block new Environmental Protection Agency greenhouse gas rules, arguing they threaten jobs and are based on questionable science. The motions are based on a lawsuit the state filed in February challenging the EPA's finding that greenhouse gases are dangerous to people. Texas wants the court to block rules that would impose new emission limits on cars and possibly factories and refineries. The court challenges are all part of a bitter battle between Texas and the EPA. Recently, the EPA has disapproved chunks of the Texas industrial permitting program, a move that left some of the nation's largest refineries in operating limbo. Governor Rick Perry has accused the federal agency of meddling in state affairs.
Fannie Mae's latest survey suggests Americans have become more cautious about home buying, though most believe the market has bottomed out. The Fannie Mae national housing survey shows 47 percent of Americans believe home prices will remain steady while 31 percent believe a slight rebound is coming in the next year. Seventy percent of Americans think it is a good time to buy a house, compared with 64 percent in a similar survey conducted in January 2010. But 33 percent of those polled say they would be more likely to rent their next home if they were to move. That's up from 30 percent in January. A large majority of Americans, 67 percent, still say housing is a safe investment. And more than 70 percent of those polled believe it will be harder for the next generation to buy a home, up three points from the beginning of the year.
Rates on 30-year mortgages climbed for the second straight week, but remain near the lowest level in decades. Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans this week was 4.37 percent. That's up from 4.35 percent a week earlier and 4.32 percent the previous week, which was the lowest level on records dating back to 1971. The average rate on 15-year fixed loans dropped to 3.82 percent. That was the lowest on records dating back to 1991 and was down from 3.83 percent last week. Rates have been at or near the lowest level in decades since spring as investors sought the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yield.
New foreclosure data shows lenders took back more homes in August than in any month since the start of the mortgage crisis three years ago. Foreclosure listing service RealtyTrac says 95,364 homes were repossessed by lenders last month. That's an increase of 25 percent from the same month last year and up three percent from July's tally. The previous high was in May. Meanwhile, the number of properties entering the foreclosure process slowed for the seventh month in a row. That's because lenders are letting borrowers who have missed payments stay in their homes longer so they can delay adding to their backlog of bad loans. In all, one in 381 homes received a foreclosure-related warning in August.
Wholesale prices rose last month for the second straight month as the cost of energy climbed enough to offset an unexpected drop in food prices. The Labor Department says the producer price index rose 0.4 percent in August after increasing 0.2 percent in July. The index measures price changes on products before they reach the consumer, excluding volatile food and energy costs--so-called “core” producer price--rose 0.1 percent for the 10th straight increase. Core prices have risen 1.3 percent in the past year. Energy costs increased by the most since January. Most other price swings were small, suggesting that the economy remains too weak for suppliers to raise the prices they charge to retailers.
Americans' stronger appetites for imported goods, especially cars and computers, lifted the broadest measure of the U.S. trade deficit in the second quarter to its highest point since late 2008. The Commerce Department says the current account trade deficit grew to $123.3 billion in the April-to-June period, a 12.9 percent increase from the first quarter. It marked the fourth quarter in a row that the deficit had increased. That could be viewed as a healing sign for the economy as Americans slowly regain their appetite to spend. Exports did rise in the quarter, but imports rose faster. The current account is the broadest measure of trade because it tracks the flow of goods and services as well as investments between the United States and other countries.
President Barack Obama says this year's 18 percent rise in exports over last year underscores the importance of selling goods and services abroad to create jobs and strengthen the American economy. Obama says the more that countries export, the more they produce and the more jobs they create. He says those jobs often pay wages 15 percent higher than average. Obama has called for the U.S. to double its exports in the next five years. A government report says the U.S. can meet that goal by making small businesses aware of export opportunities, increasing trade missions abroad and promoting U.S. exports in emerging markets like Colombia and Turkey. In 2008, exports accounted for close to seven percent of the country's total employment.
Congress is pressuring the Obama administration to take a tougher stand with China over trade practices that they say have cost Americans millions of jobs. Both Democrats and Republicans on the Senate Banking Committee are telling Treasury Secretary Timothy Geithner that China is manipulating its currency. They say that and other practices have led to a huge trade gap between the two countries and job losses in the United States. Geithner says the administration is ready to work with Congress on an effective strategy. He said China needs to move faster to reform its currency system and remove other barriers that are blocking sales of U.S. products in China.
Fedex indicates that the global economic recovery remains uneven. It said strength in international shipments is driving profits, even as it announced plans to cut 1,700 jobs in an attempt to fix its money-losing U.S. trucking business. The world's second-largest package delivery company also raised its financial outlook after its first-quarter net income doubled. But the projections for the second quarter and full year fell shy of Wall Street expectations, and the stock dropped. Fedex will combine its Fedex Freight and Fedex National less-than-truckload operations on January 30th and closing 100, or 20 percent, of its service centers. The 1,700 job cuts represent about five percent of the freight division's employees. Overall, Fedex has about 280,000 employees.
The Senate has passed a bill to create a $30 billion government fund to help open lending for credit-starved small businesses, cut their taxes and boost federal loan programs for them. The 61-38 tally rewards President Barack Obama and his Democratic allies of Capitol Hill with a long-sought victory and sets the stage for a final vote in the House, which is likely to approve it for Obama's signature. The new fund would help community banks increase lending to small businesses hurt by the recession and the 2008 Wall Street crisis. The bill would also provide about $12 billion in tax breaks over a decade to both large and small businesses and also boost the Small Business Administration's lending programs.
A watchdog panel says the government's failure to level with the public about its bailout programs will make it harder to deal with future financial crises. Public confidence suffered after the Treasury Department claimed that bailout money would only go to healthy banks, according to a report from the Congressional Oversight Panel. Unless the government can show a recession-weary public that the program worked, Congress will not approve another such measure when faced with financial threats, the report says. Treasury spokesman Mark Paustenbach says the government can respond to future panics using tools it gained under sweeping financial overhaul signed into law this summer.
The head of the Securities and Exchange Commission says an exemption for the agency from public disclosure requirements is needed because financial firms won't provide some information to the SEC if they anticipate it will be released. Some lawmakers say they want to close a loophole in the financial overhaul law that allows the SEC to withhold from public view records related to its monitoring of firms such as hedge funds and investment advisers. But Schapiro says in her testimony that the exception to Freedom of Information Act requirements “is central to our ability to develop a robust examination program that better protects investors.”
A new poll shows that nearly 45 percent of the country opposes tax increases for the richest Americans. It's seen as an indication that Congressional Democrats are taking some risk by backing President Barack Obama's plan to boost levies on the wealthy. The poll shows 54 percent favor the tax hike on the richest Americans. The Associated Press-GFK poll has some encouraging signs for Republicans less than 50 days from elections that the GOP hopes will hand it control of Congress. Huge majorities of Americans call the economy sickly and say Congress is doing its job badly. By a 46 percent to 41 percent margin, people want Republicans steering the economy. That's the first time in the AP-GFK poll that the GOP has had the edge on that concern of voters. And those likeliest to vote tilt toward the Republicans, 53 percent to 43 percent. But the poll also indicates that the public is far from infatuated with the Republicans and, in fact, is wary of both parties.
General Motors' new CEO says it's likely to take a couple of years for U.S. taxpayers to get their bailout money back. Daniel Akerson, who took over as CEO on September 1st, told reporters in Detroit that GM has a goal of repaying all the money, but it won't come in the company's first sale of stock to the public. The initial public offering is expected to take place in mid-November. Akerson says he can't answer further questions about the IPO. The U.S. government loaned GM $50 billion to keep it in business last year. The company later repaid $6.7 billion and the government currently owns a 61 percent stake.
A private lab reports finding toxic chemicals in the drinking water of a Pennsylvania community already dealing with methane contamination from natural gas drilling. Daniel Farnham tells the Times-Tribune of Scranton that his tests found ethylene glycol, propylene glycol and toluene in the well water of “almost everybody” living on Carter Road in Dimock Township, Susquehanna County. The chemicals are among dozens used to hydraulically fracture, or frack, shale deposits to release natural gas. The wells are in the heart of the gas-rich Marcellus shale. Dimock residents sued Houston-based Cabot Oil & Gas last year, alleging the drilling company polluted their wells with methane gas and other contaminants. On Tuesday, 13 families in Lenox Township, Susquehanna County, sued another Houston driller, Southwestern Energy, claiming their wells were also contaminated with fracking fluids. In the Dimock case, Cabot says the chemicals existed in some wells before drilling began. In Lenox, Southwestern denied any problems with its well.