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No Rate Increase From TVA
Despite what it called "a challenging year," the Tennessee Valley Authority board of directors on Thursday passed a budget for fiscal year 2013 that includes no increase in wholesale electric rates.
“This demonstrates TVA’s commitment to delivering reliable, low-cost and cleaner energy to consumers and businesses in the Valley,” said TVA President and CEO Tom Kilgore. “Supplying reliable, competitively priced electricity is the single most important thing TVA can do for the economic health of the region.
“The budget recommendation approved by the board contains no rate increase for FY2013 and lays the foundation for a consistent rate strategy in the years ahead,” he added.
Kilgore also announced his pending retirement at Thursday's meeting.
Kilgore noted that even as TVA works to improve its power rates, it also must invest in the power system to address necessary maintenance and operational needs, including environmental projects. The approved 2013 budget, which is based on projected revenues of $11.2 billion, includes $2.7 billion for capital investments, in addition to $9.5 billion for operating expenses.
In a news release Kilgore said long term, having a balanced portfolio of several generating sources – instead of relying heavily on any one source – will help TVA lower power costs and ensure reliability. TVA also plans to avoid spikes in power prices in the future by considering smaller rate increases more frequently.
“This rate strategy would serve our customers and TVA better by making our rates less volatile and easier to predict,” he said. If TVA had used that approach in past years, TVA rates would be no higher than they are now but TVA would have better cash flow for maintaining and upgrading the power system.
In other actions, the board:
Approved the issuance of up to $5 billion in long-term bonds, if needed, during FY 2013.
Approved an update to the unique transmission service arrangement TVA has with Memphis, Light, Gas and Water to support changing utility and business obligations for high voltage transmission.
Heard an update on TVA’s environmental policy that noted progress in air quality, climate change mitigation, water resources, waste management and natural resource management.
Selected Ernst and Young as TVA’s independent external financial auditor for FY 2013.
More Business News
Last Update on July 30, 2014 07:27 GMT
TOKYO (AP) -- Asian stocks rose Wednesday ahead of U.S. economic data and as cheery earnings from major Japanese companies such as Honda Motor Co. countered a lower close on Wall Street.
Tokyo's Nikkei 225 recouped losses at the open to rise 0.3 percent to 15,662.84 in morning trading. The Hang Seng in Hong Kong, South Korea's Kospi and Sydney's S&P/ASX all gained ground.
Honda shares added 3 percent after a strong quarterly earnings report Tuesday, released after Tokyo stock trading closed, which prompted the Japanese automaker to raise its full year projections. The cheap yen is working as a plus for export manufacturers such as Honda, which are expanding sales in China and other emerging markets.
THE DAY AHEAD
WASHINGTON (AP) -- The Commerce Department later this morning will release the gross domestic product for the second quarter -- a report being closely watched in many quarters.
The economy shrank at a steep annual rate of 2.9 percent in the January-March quarter. Analysts said the harsh winter had contributed to the biggest contraction since the depths of the recession five years ago.
The policymakers of the Federal Reserve conclude a two-day meeting, and the central bank is not expected to announce any dramatic moves.
Among the quarterly earnings reports due today, Wellpoint Inc. and Goodyear Tire & Rubber will release results before the market opens and Whole Foods Markets Inc. reports its quarterly financial report after the market closes.
WASHINGTON (AP) -- Most analysts don't expect the Federal Reserve to make any major pronouncements or headlines when it ends a two-day meeting in Washington Wednesday.
Fed Chair Janet Yellen gave few hints about changes in the benchmark short-term interest rate or the Fed's enormous investment holdings when she testified to Congress this month. There will be a brief policy statement, but Yellen won't hold a news conference.
The Fed is expected to make a sixth $10 billion cut in its monthly bond purchases, which have been aimed at keeping long-term rates low.
Most analysts believe maintaining the status quo is likely because the economy needs less help now. Hiring is solid and manufacturing is strengthening. Consumers are voicing renewed confidence.
But because workers' pay remains flat and there is international uncertainty in Ukraine and the Mideast, there are potential threats. That likely means the Fed will leave its key short-term rate at a record low near zero "for a considerable time" after it ends its bond purchases.
WASHINGTON (AP) -- Analysts are upbeat about what the government is expected to announce Wednesday.
The Commerce Department will provide its first estimate of how much the gross domestic product -- the economy's total output of goods and services -- grew in the April-June quarter.
According to a survey of economists by the data firm FactSet, the economy expanded at an annual rate of 2.9 percent. That would be a warming trend compared to the January-March period when unusually severe weather was blamed for 2.9 percent contraction, the biggest since the depths of the recession five years ago.
Some forecasters are encouraged about the remainder of the year and predict a period of acceleration. They cite hiring gains, surging consumer confidence, a cutback in business stockpiling and a rebound in business capital spending on new equipment.
NEW YORK (AP) -- Stronger-than-expected financial results pushed Twitter's stock sharply higher on Tuesday after the short messaging service said its revenue more than doubled in the second quarter.
The San Francisco-based company's stock jumped 29.6 percent to $50.01 in extended trading after the results came out.
Twitter posted a net loss of $144.6 million, or 24 cents per share, in the April-June period. That compares with a loss of $42.2 million, or 32 cents per share, a year earlier when Twitter was still a private company.
Adjusted earnings were 2 cents per share in the latest quarter, beating analysts' expectations of a loss of 1 cent, according to FactSet.
Revenue was $312.2 million, up from $139.3 million.
NEW YORK (AP) -- Argentina's finance secretary and economy minister met with a court-appointed mediator as the South American nation worked into the night to prevent its second default in 13 years.
Minister Axel Kicillof arrived Tuesday evening at the Manhattan offices of a mediator appointed to try to strike a deal by midnight Wednesday.
U.S. District Judge Thomas P. Griesa last week ordered around-the-clock negotiations to avoid a default, but no face-to-face talks between negotiators for Argentina and bondholders had occurred by the time Argentina officials arrived Tuesday morning.
Argentina has blamed the judge for the crisis, saying his orders are forcing it into insolvency.
CRASH TESTS-SMALL CARS
DETROIT (AP) -- The four-door Mini Cooper Countryman was the only one of 12 cars to earn a top rating of "good" in new frontal crash tests.
The Nissan Leaf, Nissan Juke, Fiat 500L and Mazda5 wagon fared the worst in tests performed by the Insurance Institute for Highway Safety.
The frontal test, introduced in 2012, replicates what happens when 25 percent of a car's front end strikes a rigid object at 40 miles per hour.
The Chevrolet Volt, Ford C-Max, Mitsubishi Lancer, Scion FR-S and Subaru BRZ all got the second-highest rating of "acceptable." The Hyundai Veloster and Scion xB got "moderate" ratings.
The Volt was the only car in the group to earn the institute's "Top Safety Pick Plus" rating, because it has an optional front crash-prevention system
THOUSAND OAKS, Calif. (AP) -- Biologic drugmaker Amgen plans to lay off 12 percent to 15 percent of its worldwide workforce and close sites in Colorado and Washington state to fund investments, particularly launching new drugs.
The layoffs will happen this year and next, eliminating 2,400 to 2,900 jobs, mostly in the U.S. The announcement came even as the company reported second-quarter results that trounced Wall Street expectations.
Amgen said it will streamline the company, reduce management layers and reduce its real estate footprint by 23 percent.
The company based in Thousand Oaks, California anticipates charges of $775 million to $950 million, mostly in 2014 and 2015. It expects modest 2015 savings, but expense reductions in 2016 of about $700 million, versus 2013 spending. Most savings will be reinvested, including expanding operations in the biotech hubs of Cambridge, Massachusetts, and South San Francisco, California. The company manufactures Prolia for osteoporosis and anemia treatment Aranesp.
SIOUX FALLS, S.D. (AP) -- Three reporters for a food safety publication have been subpoenaed in the $1.2 billion defamation lawsuit against ABC related to the network's coverage of a meat product derided as "pink slime."
Court records show that the writers for the online Food Safety News have been asked to supply all communication they had with ABC in 2012.
Attorney Bruce Johnson said Tuesday the subpoenas were "overreaching" and that the publication would fight the requests.
Beef Products Inc. sued ABC in 2012 alleging that its reports led to plant closures and layoffs because it misled consumers into believing the product was unsafe. The industry describes the meat product as "lean, finely textured beef."
Attorneys for ABC and BPI have proposed a trial date in February 2017.
NEW YORK (AP) -- McDonald's is coming under intensifying pressure for labor practices at its U.S. restaurants.
The National Labor Relations Board said Tuesday that the world's biggest hamburger chain could be named as a joint employer in several complaints regarding worker rights at franchise-owned restaurants. The decision is pivotal because it could expose McDonald's Corp. to liability for management practices in those locations.
It also comes as protests for higher pay have captured national attention, with labor groups calling for pay of $15 an hour and the right to unionize. Organizers had been pushing to get McDonald's named as a joint employer at franchised restaurants, a move intended to give them a centralized and powerful target.
In the U.S., the vast majority of McDonald's more than 14,000 restaurants are owned and operated by franchisees. The same is true for many other fast-food chains, including Burger King and Yum Brands, which owns Taco Bell, KFC and Pizza hut. As such, the companies have sought to distance themselves from the pay protests by saying they don't determine wages.
DETROIT (AP) -- A trial to determine if Detroit gets out of bankruptcy has been delayed by a week to Aug. 21.
Judge Steven Rhodes filed a new schedule Tuesday. Some creditors wanted a longer postponement, but he settled on seven days. Rhodes found "extraordinary cause" for "limited adjournments."
It's the second delay in the historic case. The trial was first scheduled for July, a year after Detroit filed for protection under Chapter 9.
Detroit's plan to erase or greatly reduce $18 billion in debt has been approved by many creditors, including thousands of retirees. But nothing will happen unless the judge finds that the overall strategy is fair and feasible.
The greatest resistance is coming from bond insurers who stand to lose millions. The trial likely will last weeks.
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