As the dismal economy spawns desperate measures, some Americans are resorting to a hazardous practice: stealing electricity.
Many utilities say energy theft has risen sharply during the economic downturn. Culprits include residential customers whose power is turned off when they fall behind on their bills and small businesses struggling to keep their doors open.
They're using a wide array of tactics. Some run wires from utility lines directly into a circuit-breaker panel, bypassing the electric meter. Others attach cables on either side of a meter, swipe meters from vacant houses when theirs are removed or tamper with meters to lower their electric bills.
"We're finding more and more people are … stealing electricity because of the poor economy," says John Hammerberg, investigations supervisor for Tampa Electric in Florida.
American Electric Power has investigated 3,196 cases of theft in January and February, a 27% jump over the year-ago period, says AEP spokesman Pat Hemlepp. The company serves Rust Belt states hit hard by layoffs, such as Michigan, Indiana and Ohio.
In Philadelphia, of 14,000 customers whose service was turned off in early 2008, 30% were illegally using electricity late last year, utility PECO says.
Customers have stolen power for decades, costing utilities 1% to 3% of revenue — or about $6 billion industrywide — each year, according to Electric Light & Power magazine. Losses are borne by other customers. Many thieves operate home-based marijuana farms that use lots of lights.
But the problem is mushrooming. In Pennsylvania, utility PPL says thefts rose 16% last year, with fewer drug-related incidents and more tied to service terminations. Power shutoffs across the USA doubled last year to 4% of home accounts, says the National Energy Assistance Directors' Association.
Meanwhile, consulting firm Detectent has identified a double-digit rise in business thefts the past six months, many by energy-guzzling restaurants. In Detroit, Donald Brant, 48, was charged last fall with meter rigging. DTE Energy says he helped about 50 downtown businesses cut their gas and electric bills by more than $1 million — or 30% to 50% each — the past several years.
The practice is dangerous. Touching a power line can burn or even kill an untrained person. In Philadelphia this month, an illegal electricity hookup in a row house sparked a fire that killed a 30-year-old woman and her 8-year-old daughter.
Utilities often learn of thefts from meter readers, neighbors or abnormal use patterns. They expect to detect fraud earlier as they roll out smart meters that can remotely monitor electricity use.
http://www.usatoday.com/money/industries/energy/2009-03-16-electricity-thefts_N.htm
Housing starts surge; wholesale prices edge up March 17, 2009 - 11:47am
WASHINGTON (AP) - Housing construction posted a surprisingly large increase in February, bolstered by strength in all parts of the country except the West.
The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent in February compared with January, pushing total activity to a seasonally adjusted annual rate of 583,000 units.
Meanwhile, the Labor Department reported that wholesale prices edged up a slight 0.1 percent in February as a big drop in food costs offset a second monthly increase in energy prices.
After the news, Wall Street posted gains, with the Dow Jones industrial average gaining slightly and the Nasdaq composite index rising more than 1 percent. The better-than-expected reports on housing and inflation were offset by news of a dividend cut at Alcoa Inc. and layoffs at Nokia Corp.
While the surge in housing construction was far better than the continued decline economists had expected, the rebound is likely to be viewed as a temporary gain given all the problems the housing industry still faces.
Even with the big increase, construction activity remains 47.3 percent below where it was a year ago. The strength in February was led by a big increase in apartment construction, which can be highly volatile from month to month.
All areas of the country reported an increase in February, except the West, which has been hardest hit by the current housing slump.
The 0.1 percent increase in wholesale inflation was much lower than the 0.8 percent surge in January and smaller than the 0.4 percent increase economists had expected. Compared with a year ago, wholesale prices are actually down 1.3 percent.
Core inflation, which excludes energy and food, edged up 0.2 percent in February, only slightly higher than the 0.1 percent gain economists had expected. Core prices had risen 0.4 percent in January.
Only last summer, officials at the Federal Reserve had started to worry that a surge in energy costs could spread to other areas of the economy and boost inflation to unacceptable levels. But after the financial crisis struck in the fall, the Fed switched signals and is now aggressively fighting a deepening recession with no real threat of inflation.
On Wednesday, Fed officials are expected to signal that they will continue to keep a key interest rate at a record low near zero percent for as long as necessary and use other unorthodox means to jump-start the economy.
The Fed has the leeway to focus on the weak economy because inflation pressures are expected to remain law in the face of widespread layoffs that are depressing wage demands.
The 0.1 percent rise in wholesale inflation in February reflected a 1.3 percent increase in energy prices, which have been rising for two months after having retreated for five straight months.
Gasoline prices jumped 8.7 percent in February after a 15 percent surge in January.
Food costs fell for a third straight month, dropping 1.6 percent in February, the biggest one-month decline in three years. The costs of eggs, fruits, vegetables and dairy products were all down.
Outside of food and energy, prices for cigarettes rose 2.7 percent, the biggest increase in two years, while the price of light trucks rose 1.3 percent, a gain that is not expected to last given the weakness in auto sales.
Prices for computers dropped 4.5 percent, the biggest one-month fall since January 2005.
Inflation is not expected be a problem for some time to come given the prolonged recession, which is already the longest downturn in a quarter-century. Overall economic growth fell at an annual rate of 6.2 percent in the October-December quarter and many economists expect the drop in the gross domestic product for the current quarter will be a similarly steep decline. Many economists say the Fed will not even contemplate interest rate increases until the unemployment rate, which soared to a 25-year high of 8.1 percent in February, declines.
Companies are continuing to slash costs.
Alcoa became the latest Dow Jones industrial company to lower its dividend to conserve cash. The aluminum maker said after the market closed Monday that it was cutting its quarterly dividend 82 percent to 3 cents. It also said it plans to sell stock and debt to help reduce annual costs by more than $2.4 billion.
Nokia, the world's top mobile phone maker, said it will lay off 1,700 people worldwide to cut costs. Nokia fell 21 cents to $11.14. The mobile phone market has been suffering as consumers spend less during the recession.
http://wtop.com/?nid=111&sid=577993
Amid AIG Furor, Dodd Tries to Undo Bonus Protections He Put In
Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9517, 0.1716, 22%) bonus recipients so the government could recoup the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.
While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.
Also, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.
Dodd’s office did not immediately return a request for comment.
One of AIG Financial Products’ largest offices is based in Connecticut.
Dodd Amendment Rules
Crack down on bonuses, retention awards and incentive compensation: Bonuses can only be paid in the form of long-term restricted stock, equal to no greater than 1/3 of total annual compensation, and will vest only when taxpayer funds are repaid. There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.
For institutions that received assistance totaling less than $25 million, the bonus restriction applies to the highest compensated employee; $25 million to $250 million, applies to the top five employees; $250 million to $500 million, applies to the senior executive officers and the next top 10 employees; and more than $500 million applies to the senior executive officers and the next top 20 employees (or such higher number as the Secretary determines is in the public interest).
http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig---time/
ATF loses one
By: Joe Huffman Monday, March 16, 2009 6:42:47 PM (Pacific Standard Time, UTC-08:00) ( Freedom Gun Rights )
The ATF started really harassing the model rocketry folks a few years back. Today they got their wrists slapped:
District Court Judge Reggie B. Walton for the District of Columbia today issued an order finding in favor of the Tripoli Rocketry Association and National Association of Rocketry vs. The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The decision followed a status hearing this past Friday in Washington.
Walton’s order granted a summary judgment motion in favor of the plaintiffs TRA and NAR, denied the summary judgment motion of BATFE, and vacated the classification of Ammonium Perchlorate Composite Propellant (APCP) as an explosive.
...
The parties came before the Court on March 13, 2009, for a hearing on the parties’ cross-motions for summary judgment. Upon consideration of the parties’ written submissions, the administrative record presented to the Court, the applicable legal authority, the oral arguments presented by the parties, and for the reasons expressed by the Court at the hearing on the motion, the Court finds that the agency’s decision does not satisfy the standard for evaluating agency rulemaking because it was arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law. 5 U.S.C. § 706(2)(A). Specifically, the defendant did not adequately explain why it came to the decision it did in light of contrary evidence in the administrative record submitted by the plaintiffs, which tended to show that APCP can burn at a rate lower than that which the defendant designated as the threshold, and “which, if true, . . . would require a change in [the] proposed rule.’” La. Fed. Land Bank Ass’n, FLCA v. Farm Credit Admin., 336 F.3d 1075, 1080 (D.C. Cir. 2003); see D&F Afonso Realty Trust v. Garvey, 216 F.3d 1191, 1195 (D.C. Cir. 2000) (quoting Public Citizen, Inc. v. F.A.A., 988 F.2d 186, 197 (D.C. Cir. 1993) (”‘[t]he requirement that agency action not be arbitrary or capricious includes a requirement that the agency adequately explain its result . . . .’”). Here, the agency’s shortcoming was its failure to articulate any rationale for finding that the relevant and significant evidence in the record that conflicted with its position was unpersuasive, which it seemingly out-of-hand dismissed merely because it was contrary to the agency’s ultimate conclusion.
I hope this is but one of many more to come in regards to both firearms and explosives. It's long past time they were told in no uncertain terms they must obey the law.
http://blog.joehuffman.org/2009/03/17/ATFLosesOne.aspx
Blackwater back in U.S. employ
Days after the Baghdad government decided it no longer wanted the company then known as Blackwater in Iraq, the State Department signed a $22.2 million deal in February to keep the embattled contractor working there through most of the summer, contract records show.
The decision keeps Blackwater - since renamed Xe - in Iraq months longer than anyone has suggested publicly, while raising questions about why the U.S. would pay a contractor for work in Iraq if it may not be able to operate there legally.
The State Department has been under pressure from Blackwater critics, including several in Congress, not to renew the company's contracts in Iraq. Much of the concern stems from a 2007 incident that left 14 Iraqi civilians dead and six former Blackwater guards facing manslaughter charges. One of the guards pleaded guilty, but the company was accused of no wrongdoing in the incident.
In late January, the Iraqi government said it would not renew Blackwater's operating license and that the company would have to leave as soon as a joint Iraqi-U.S. committee completes its work on guidelines for the operation of private security companies. State Department officials said they would honor the decision.
On Feb. 2, a department spokesman was asked whether officials planned to renew one of Blackwater's contracts past May. The spokesman, Robert Wood, said the department had told Blackwater "we did not plan to renew the company's existing task force orders for protective security details in Iraq."
But records available through a federal procurement database show that on that same day, the State Department approved a $22.2 million contract modification for Blackwater "security personnel" in Iraq, with a job completion date of Sept. 3, 2009. "Why would you continue to use Blackwater when the Iraqi government has banned the highly controversial company and there are other choices?" asked Melanie Sloan, executive director of the nonpartisan Citizens for Responsibility and Ethics in Washington.
State Department spokesman Noel Clay said the contract modification involves aviation services. "The place of performance is Iraq, but it is totally different than the Baghdad one that expires in May," he said.
Ms. Sloan called the State Department's explanation of the Feb. 2 deal a "parsing of words" and said "they should just be straight with us."
Xe spokeswoman Anne Tyrell declined to comment on the status of the company's work in Iraq or the Feb. 2 contract modification. She said the company was aware that the State Department had indicated that it did not plan to renew its contracts in Iraq but that Xe officials had not received specific information about leaving the country.
"We're following their direction," she said.
The Iraqi Embassy in Washington had no comment on the Blackwater contract when contacted on Monday.
The State Department has given clear indications for months that the Iraqi government might not be renewing Blackwater's operating license.
Harold W. Geisel, the State Department's inspector general, told the congressionally mandated Commission on Wartime Contracting at a Feb. 2 hearing that officials were awaiting the outcome of an FBI report into the 2007 shooting incident before deciding whether to keep Blackwater in Iraq.
"The issue is not only one of, well, what we would like to do, but it also is to some extent what the department can do," Mr. Geisel said of decisions about the future of Blackwater's role in Iraq, according to a transcript of the hearing.
"Blackwater had certain assets that the department determined the other contractors did not have," he said, citing the company's 24 aircraft as an example.
Nonetheless, Mr. Geisel said his office did "advise the department that they better start planning for when the Iraqis say this is it with Blackwater. And without getting into diplomatic negotiations, I believe the department is planning for this eventuality, which is clearly not too far off."
Scott Amey, general counsel for the Project on Government Oversight, a nonprofit group that investigates federal contracting, said the State Department's decision to continue paying Blackwater for security in Iraq raises broader questions about federal procurement practices.
"This case highlights the fact that the U.S. government over-relies on contractors and that it isn't in a position to hold them accountable," he said. "Continuing to do new business with questionable actors flies in the face of spreading trust, peace and democracy around the world."
The contractor, based in North Carolina, recently underwent a big shake-up. The company changed its name to Xe, pronounced "zee," last month. Also, a subsidiary, Blackwater Lodge and Training Center, which secured the State Department's $22.2 million contract modification, was renamed.
Blackwater founder Erik Prince and company President Gary Jackson have resigned.
Mr. Prince has donated nearly a quarter-million dollars over the years to political causes. More than half of the donations went to the National Republican Congressional Committee and the Republican National Committee, according to a 2007 Democrat-led House committee report, citing data from the nonpartisan Center for Responsive Politics.
Blackwater also had spent hundreds of thousands of dollars lobbying Congress, according to Senate records. It contributed between $10,001 and $25,000 to former President Bill Clinton's charitable foundation. Mr. Clinton released the donor information last year to avoid conflict-of-interest questions about his fundraising activities and the duties of his wife, Hillary Rodham Clinton, as President Obama's secretary of state.
Despite any political good will that the company might have generated from its lobbying and political activities, it was unable to dodge fallout from the Sept. 16, 2007, shooting incident in Baghdad, in which prosecutors said six former guards went on an unprovoked rampage, shooting innocent Iraqi civilians.
Five of the former guards have pleaded not guilty to manslaughter charges, while a sixth pleaded guilty to voluntary manslaughter and attempted manslaughter. Attorneys for the former guards say they fired in self-defense.
http://www.washingtontimes.com/news/2009/mar/17/new-deal-for-blackwater-bucks-decision-by-iraq/
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