Friday PM April 13th, 2007

Gasoline jumps more than a dime this past week...Litigators from Enron trial discuss their roles at American Bar Association conference...Texas House votes to cut electric rates 15 percent for some residential customers paying highest prices...

Texas retail gasoline prices continue to climb for a tenth straight week. The weekly AAA Texas Gas Price Survey finds pump prices for regular-grade gasoline in 11 Texas markets average $2.71 per gallon. That's 11 cents higher than last week. Houston's average is $2.72 a gallon, up 10.2 cents. Nationally, retail regular-grade prices are averaging $2.81 per gallon--up a dime from last week. Auto club spokeswoman Rose Rougeau says federal officials report weak gasoline inventories and strong demand continue to provide the updraft that's carrying prices higher. The survey shows the state's most expensive gas is in El Paso, where regular-grade is averaging $2.77 a gallon. That's up ten cents from last week. San Antonio and Corpus Christi both have the cheapest gas this week, with regular-grade averaging $2.62 per gallon. That's up 13 cents in Corpus Christi and 12 cents in San Antonio from last week.


The Federal Energy Regulatory Commission has ordered hearings on whether Enron attorneys and consultants acted improperly in a 2001 proceeding, according to BusinessWeek. A FERC administrative law judge accuses an economist and Enron attorneys of filing documents with FERC that had been altered to eliminate relevant information in a related proceeding five years ago.

The Enron trial was discussed by attorneys from both sides of the case at the American Bar Association's litigators' conference in San Antonio, according to the San Antonio Express-News. Former U.S. Justice Department litigator Kathryn Ruemmler told of weeding out jurors who expressed "anti-government bias" in the trial of Enron founder Ken Lay and former CEO Jeff Skilling. She is now a partner with Latham & Watkins in Washington, D.C. Skilling's attorney Daniel Petrocelli said not being able to depose government witnesses severely limited the defense. He suggested defendants be allowed to forgo the right to unanimous verdict in exchange for access to all witnesses. Bruce Collins, who represented Lay, said most potential witnesses refused to testify because of fear of being indicted. He said federal investigators had told the media before the trial that more than 100 people could have been indicted as co-conspirators.


The Labor Department has issued a report on inflation, painting a mixed picture. The March Producer Price Index is up one percent, a sharper-than-expected increase, reflecting the increased wholesale costs of food and energy. But the core rate, which excludes food and energy, is flat, which is better than forecast. The blend of those numbers suggests that inflation pressures are fairly contained, so far. The index intends to measure the costs of goods before they reach stores shelves. The Consumer Price Index is due to be released next week.


The government reports the U.S. trade deficit improved for a second straight month. Oil imports fell sharply and the politically sensitive deficit with China narrowed to its lowest point in nine months. The Commerce Department says the gap dropped seven-tenths of one percent to $58.4 billion in February. The improvement comes despite the fact that exports fell during the month. It reflects lower sales of manufactured goods including computer accessories, industrial machinery and civilian aircraft. Imports declined by an even larger amount, with the tab for foreign oil falling to the lowest level in 20 months. With oil prices rising, that improvement could be short-lived.


The Texas House voted to cut electric rates 15 percent for some residential customers paying the highest prices. The House also voted to give state regulators the power to reject future sales of some electric utilities. The regulatory provision would not affect the pending $32 billion sale of TXU. House members are still working on the bill including the rate cut. The fate of the bill is uncertain because House members must negotiate with the Senate, which passed a different version of the legislation. The rate-cut provision would apply to about two million Texans who are still paying the so-called price-to-beat. That's the basic rate charged by former monopolies such as TXU and Reliant Energy. Many customers have gotten lower rates by changing electric companies or signing up for long-term contracts with the former monopolies. They would not be helped by the vote.


Baker Hughes in Houston reports the number of rigs actively exploring for oil and natural gas in the U.S. jumped by 32 this week--to reach 1,758. One year ago the rig count stood at 1,610. Texas gained 21 rigs this week. Baker Hughes has tracked rig counts since 1944.


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