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Monday PM February 9th, 2009

Review finds skyrocketing electric rates in deregulated Texas market…CERA begins annual Houston conference…Congresswoman Sheila Jackson Lee says Houston needs to stand up for economic stimulus money…

A report finds that since Texas deregulated its retail electric market, rates have skyrocketed higher than any other state with such open competition. The review was commissioned by the Cities Aggregation Power Project, which is a nonprofit coalition of Texas municipalities. The report found residential electricity rates rose 64 per cent between 1999 and 2007. But a trade group — the Texas Competitive Power Advocates — says rates have come down in recent months after spikes over the summer. Spokesman Ray Sullivan also says deregulation has sparked investments in cleaner energy and greater generation capacity. Sullivan says electric competition is working to make Texas the wind energy capital of America, unleash $16 billion in new investment and job creation, and keep downward pressure on rates.

One of the oil industry’s biggest challenges this year will be managing exploration and production amid the worst global recession in a generation. They’ll be trying not to scale back so much that it sets the stage for another round of painful price spikes. At the same time, industry leaders will certainly want a say as President Barack Obama shapes the nation’s energy policy and looks to reduce America’s dependence on fossil fuels. Some of the energy sector’s heaviest hitters meet in Houston this week at an annual conference organized by the consulting firm Cambridge Energy Research Associates. CERA is chaired by author and economic researcher Daniel Yergin. The list of scheduled speakers includes the top executives of European oil giants BP and Royal Dutch Shell and Saudi Oil Minister Ali al-Naimi. The five-day conference begins one week after many oil and gas companies reported their worst quarterly earnings in years. Crude oil’s 60 per cent price drop in the final three months of 2008 weighed on those earnings as oil continues to hover near five-year lows around $40 a barrel.

image of unemployment office

With more job losses expected this year in Houston, Congresswoman Sheila Jackson Lee toured the downtown unemployment benefits office on Jefferson, saying Houston is not immune to the economic crisis. The congresswoman says President Barack Obama has set up a board to help expedite economic stimulus funds to the most meritorious cases.

image of speaker, click here for audio“The reason why I’m meeting with educators and work force leaders and trainers (is) because I want to get them prepared — and state of Texas — to make the best case for why these dollars should come here and how they can be utilized. It’s going to be very important for the Work Source to be ready. They need to indicate, for example, that their phone lines are jammed and that they need more staffing to answer the unemployment requests. If that’s an issue, then they need to have that already prepared to say ‘we’re going to use some of those dollars for administrative costs’.”

image of Congresswoman Shelia Jackson Lee

Last week Congresswoman Jackson Lee met with local educators to discuss how the economic stimulus package could help their needs. Houston Independent School District Board Member Paula Harris will discuss the impact a federal stimulus package could have on the district in a town hall meeting tomorrow night at Lanier Middle School on Woodhead.

The 4,000 members of the Houston Professional Firefighters Association are looking over a tentative two-year labor agreement with the City of Houston. The agreement, reached last Friday after seven months of negotiations, provides a ten per cent pay increase over two years.

The Society of Petroleum Engineers says membership reached a record 88000 members worldwide at the end of 2008. Tat’s an 11 per cent increase over 2007. Membership has grown 46 per cent in the last five years. Some 23 per cent of the membership consists of members under age 35. SPE members include engineers, scientists, technicians, managers, operators, educators and others in the upstream oil and gas industry.

A spinoff of Halliburton is on the verge of pleading guilty to federal bribery charges. Court papers filed in Houston show Kellogg, Brown & Root is preparing to plead guilty to violating the foreign corrupt practices act for promising and paying tens of millions of dollars in bribes to officials in Nigeria in exchange for engineering and construction contracts between 1995 and 2004. The government filed a “criminal information” in federal court, a document which is often used as part of a plea deal. KBR, a major engineering and construction services company with operations around the world, was split off as a separate public company from Halliburton in 2007.

The Treasury Department says it’s making “minor tweaks” to its overhaul of the government’s $700 billion financial rescue, but it’s basically done. Treasury Secretary Timothy Geithner is expected to unveil the new program tomorrow. An administration official says it’s likely to use some of the money to back private sector purchases of bad assets that are keeping banks from resuming normal lending. The head of the National Economic Council said the administration has received a number of proposals on how the private sector could help. Lawrence Summers told Fox News Sunday that Geithner believes bringing private capital into the equation would be a better way to solve the banking crisis than relying solely on government resources. The revamped plan is expected to attach more conditions to any further capital injections for banks. The administration also has said it will devote up to $100 billion to addressing the rising number of mortgage foreclosures.

Newsstand sales of U.S. magazines continue to drop. An industry group says single-copy sales fell 11 per cent during the second half of 2008, compared with the same period a year earlier. Overall circulation including subscriptions remains largely flat, but because publishers make more from newsstand sales, their circulation revenue is dropping. The numbers are being released by the Audit Bureau of Circulations. They are based on 535 magazine titles that submitted circulation figures for both six-month periods. The group puts total circulation for those titles at about 345 million. More than 43 million comes from newsstand sales. Cosmopolitan remains the top-selling magazine at newsstands, with 1.8 million single-copy sales.

The airlines’ on-time performance declined dramatically in December compared to November. But the numbers were slightly better compared to December 2007. The airlines blame weather and aviation system issues for contributing to some delays. The Transportation Department also says the airlines had a significantly higher domestic flight cancellation rate and a higher mishandled baggage rate in the final month of 2008 compared to November. Even complaints about airline service were up in December compared to November. Still, the DOT said the airlines did a better job in all four categories in December compared to the same month in 2007.

The chairman and chief executive of Schlumberger received compensation of $13.7 million for 2008. That’s down 14 per cent for a year in which the Houston-based oilfield services provider’s profit surged–before falling along with crude prices. The total compensation figure for 62-year-old Andrew Gould was down from the $15.9 million he got in 2007. The biggest change was the difference in Gould’s performance-based bonus, which fell by $2.6 million last year. Details are in Schlumberger’s filing with the Securities and Exchange Commission. Like a lot of executives, the bulk of Gould’s package came in stock options and awards. The Associated Press calculations of total pay include an executive’s salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC.

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