Wholesale power prices in Northeast Ohio will go up - Cleveland Plain Dealer Wholesale power prices in Northeast Ohio will go up - Cleveland Plain Dealer
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Wednesday, May 23, 2012

Wholesale power prices in Northeast Ohio will go up - Cleveland Plain Dealer

Wholesale power prices in Northeast Ohio will go up - Cleveland Plain Dealer

CLEVELAND, Ohio -- The cost of electricity is going up -- along with FirstEnergy Corp.'s profits.

How much rates will rise, no one knows. But the increase is coming because the company announced it would close four power plants just months before a complex multistate auction that sets part of customer rates three years before the power is actually sold.

That portion, typically 10 percent of the price of electricity, is for reserve capacity -- power that is not committed and can be ramped up when needed.

PJM Interconnection, the company that manages the high-voltage grid system in Ohio, 13 other states and the District of Columbia, conducted the Internet-based auction in the last 10 days. The bidders -- primarily power plant owners -- vied for the price each would be paid for holding back power to use during peak demand. To prevent brownouts and blackouts, PJM maintains up to 20 percent reserves.

Industrial customers that agree to shut down during times of peak demand, freeing power for others, also compete in the auction.

PJM released its analysis late Friday after business hours and talked about it on Monday.

The company said the cost of reserve capacity in FirstEnergy's territory will be more than 21/2 times higher than most other places.

No one disputes that customers in northern Ohio will feel the effect of the auction. How much rates will increase for consumers is the question that experts can't answer yet because the prices set in the auction don't kick in until June 1, 2015. They will stay in place for one year.

Forecasting the final customer rate is premature, said Andrew Ott, PJM senior vice president for markets.

Ott said the cost of the power itself has been declining because utilities are switching from coal-burning plants to natural gas. He said the decline could well continue and offset the extra charges for reserve capacity. The auction results follow PJM's announcement that FirstEnergy will spend about $1 billion in the next several years to upgrade its transmission lines - including building an all new high-voltage line - so that power can get to Greater Cleveland from other states.

Customers will have to pay for most of that, as well.

FirstEnergy's transmission system around Cleveland has been congested for years, and its limitations first emerged dramatically during the major blackout of 2003.

Not even the Public Utilities Commission of Ohio can avert the increase, but it intends to try to limit the effect to parts of FirstEnergy's service area where the congestion is the worst. That would mean that Greater Cleveland would still have to pay it.

PUCO Chairman Todd Snitchler said FirstEnergy's announcement just 90 days before the auction that it would close four of its northern Ohio power plants is at the root of the problem.

"FirstEnergy did not provide the market any time to respond. We want PJM to extend that requirement notice to three years," he said.

Analysts are pretty sure FirstEnergy will make more money.

At least one Wall Street analyst on Monday estimated FirstEnergy would pull in an extra $550 million between June 1, 2015, and May 31 2016, because of the auction.

That's extra money that all power users in northern Ohio will have to pay, whether they are FirstEnergy customers, live in FirstEnergy territory and buy from a competitor, or are municipal power customers such as those in Cleveland.

"In light of the auction results, we are raising our 12- to 18-month target price for FirstEnergy to $50 per share," Hugh Wynne, a senior analyst with Bernstein Research of New York City, wrote in an analysis to investors. (FirstEnergy's stock actually lost 11 cents Monday on the New York Stock Exchange, closing at $47.69)

It's money that FirstEnergy would not have made had it not decided that it would close the four power plants rather than upgrade them to meet new federal emission standards for mercury and other toxic metals. Other utilities announced the closings of old plants months earlier.

After PJM objected, FirstEnergy said it would place four 208-megawatt combustion turbines at its Eastlake plant, where it will close the coal-fired boilers by 2015. But the turbines are now scrapped.

The company said the turbines did not "clear" the auction price, meaning that FirstEnergy's asking price was even higher than the record capacity prices the auction set.

The company has no plans to buy the turbines at this point, spokesman Todd Schneider said.

This auction was FirstEnergy's first capacity auction in PJM. The Akron-based company moved from control of another grid manager - the Midwest Independent System Operator - last year.



She's still got it! Sharon Stone goes hell for leather on shopping trip - Daily Mail

By Mike Larkin

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It seems time has yet to catch up on Basic Instinct star Sharon Stone.

For the 54-year-old looked as good as ever when she stepped out in a pair of leather trousers in Los Angeles today.

And she looked like a real cool cat after twinning her cream trousers with a black top.

Cream of the crop: Sharon Stone looked great in leather trousers in Los Angeles today

Cream of the crop: Sharon Stone looked great in leather trousers in Los Angeles today

Sharon had a busy day, indulge in a spot of shopping before heading for a well-deserved lunch.

She was no doubt relieved to relax, after recently revealing she faced death threats when she began her charity work.

The actress claimed that people accused her of seeking publicity when she began raising money and volunteering.

She told Life and Style: 'When I started doing charity work, people thought I was only doing it for press. They called me the new Zsa Zsa Gabor.

'The adversity was awful. My life was threatened - someone wanted to kill me.

It's behind you: Sharon's friend helpfully pointed out what she was looking for

It's behind you: Sharon's friend helpfully pointed out what she was looking for

Shapely: Sharon still looks fantastic from every angle despite entering middle age

Pleased with her choices: The Sliver favourite was happy with her purchases

Pleased with her choices: The Sliver favourite was happy with her purchases

'It was serious. I know what it's like to be bullied, but charity work is meaningful to me, so I didn't give up.'

The Sliver star described the incidents as a 'hard time' in her life, adding: 'I had to be careful. People wanted to hurt me.'

But she thinks it was all worth it when she sees the money raised being 'put to good use,' adding her public profile is a 'gift' to create good.

Given her love of charity work, no one can deny she deserved to indulge herself with a spot of shopping.

And she seemed to do the same at lunch, as she was spotted tucking in to a particularly tasty-looking dish.

Yum: Sharon could not get enough of her scrumptious lunch

Yum: Sharon could not get enough of her scrumptious lunch


Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

Why shouldn't she look good? She's hardly "over the hill"!

She is such a beautiful woman, very elegant. I think she is still just as sexy as in Sliver 1993 movie, one of my fave movies with her!

She's just 54, why won't she look good?

I've met the woman. Trust me: she has incredible bone structure. She's also fiercely intelligent. And she looks after herself. That combination makes for lasting beauty. - Beth, Vancouver, Canada, 22/5/2012 14:22 What a positive lovely post in a sea of unsupportive women as usual Beth. You didn't say if she was a nice person to you or not but the fact that you have said it how it is made me smile. Not many women are blessed with good genes/bone structure but she works hard to look that good. Not sure if she has botox or not but I wish I looked that good now.

What happened to this woman's kids??? Didn't she and her newspaper editor ex husband adopt two little boys once upon a time back in the 90"s?

Those leather trousers do nothing for her backside. But she's still pretty fine!

She always looks amazing. She just has a great sex appeal and I would love to see more movies with her

She tested herself once as an actress and that was in Casino. She was superb. Since then she's just cruised and she is 20 years passed her best.

She looks great. The person that designed those pants needs to take a Pockets 101 course.

Sharin' a stone or two between them and I would have to agree with you..>She looks like she is morphing into Hillary Clinton- colin, huddersfield, 22/5/2012 21:24

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.



As U.S. Retailers Retreat, a Japanese Chain Sees an Opening - New York Times

Now, that pain is being seen as an opportunity — for some foreign retailers.

Uniqlo, the Japanese basics brand, is starting aggressive growth plans at shopping malls that are expected to include 20 to 30 new stores a year over the next eight years.

In its first move, Uniqlo, which has three stores in New York City and one opening this fall in downtown San Francisco, has signed a lease at the Garden State Plaza mall in Paramus, N.J. The store will be in a space previously occupied by an Old Navy store.

Other international retailers, from the low end, like Massimo Dutti and Topshop, to the high end, like the PPR brands Yves Saint Laurent, Bottega Veneta and Balenciaga, are also adding new stores in the United States.

Over all, the retail real estate market is starting to recover from the recession. Rents rose in the first quarter and retail vacancies declined for the first time since 2005 as some companies opened new stores and expanded existing ones, according to the research firm Reis.

“This is a country of shopaholics,” said Faith Hope Consolo, chairman of the retail group at Douglas Elliman, who is handling inquiries from retailers in Australia, New Zealand and Canada about opening in this country.

Overseas companies are looking to the American market because of relatively easy access to credit, fewer regulations than some other countries, cheaper rents because of the recession and the promise of getting Wall Street’s attention, she said. And many shoppers here like the panache of clothing from abroad.

“It’s a fickle market here — the consumer always wants something new,” Ms. Consolo said.

Uniqlo is drawing particular attention because it has succeeded in selling basic and affordable clothing, a category that American companies like Gap and Old Navy once dominated. But it failed in a previous effort to expand into American shopping malls. In 2006, it closed stores in three malls in New Jersey it had opened in 2005.

This time, company officials said, they have learned from their mistakes — most notably, a recognition that the Uniqlo (pronounced YOU-nee-klo) brand needed a bigger introduction in the United States. Last time, the retailer leased standard-size mall locations — about 7,000 square feet each — that did not distinguish the brand from competitors. The new Garden State Plaza space, by contrast, is 43,000 square feet, and it has external exposure, meaning Uniqlo’s signs can be seen from a nearby highway and the mall’s parking lot.

“Our brand is still not a household name, so we need a bigger box than some of our competitors,” said Shin Odake, the chief executive of Uniqlo’s United States division.

Well saturated in Japan, Uniqlo is now posting most of its growth overseas. Fast Retailing, the Uniqlo parent company based in Tokyo, said sales in Uniqlo’s international division grew 68 percent to 84.8 billion yen ($1.07 billion) in the first half of its fiscal year, from September to February. Profits increased 45 percent to 11.4 billion yen for non-Japan stores in that period.

Uniqlo posted a loss at its United States stores for that period, but analysts say the region is crucial for the company’s growth.

“They need to have a competitive positioning in the world’s largest market,” said Masafumi Shoda, an analyst at Nomura Securities, in an e-mail.

Unlike other low-priced international brands, like Zara, H&M and Mango, which rush fashionable items into stores weeks after trends are seen on runways, Uniqlo’s clothes are simple. There is “a strong emphasis on fabrication,” said Faye Landes, a retail analyst with Consumer Edge Research.

Uniqlo is best known for its solid and striped basics like T-shirts, shorts and cashmere sweaters, available in a wide spectrum of colors. Uniqlo emphasizes high-tech fabric, for example, in a moisture-wicking T-shirt it sells in summer. And prices are low — T-shirts start at $9.90, and cashmere sweaters at $79.90.

Yasunobu Kyogoku, chief operating officer for Uniqlo’s United States division, said the company was able to get prices that low because it did not change its merchandise plans based on the latest fashion fad. Instead, it books factory capacity in advance, and produces garments at a steady pace year-round, rather than rushing to produce trendy items from specialty factories.

“Typically in retail there’s a seasonality to the products you sell and therefore a seasonality to factories — when they’re running at full capacity and when they’re not,” Mr. Kyogoku said. “To be able to balance out, over 365 days a year, full capacity, you’re able to create more efficiencies.”

After retreating from its last foray into American malls, Uniqlo took a different approach, opening a store in New York’s high-traffic SoHo district in 2006 and adding two more stores in New York last year, on 34th Street and on Fifth Avenue. The stores, filled with spinning mannequins and steel and white décor, serve in part as an advertisement for Uniqlo.

And the company almost quadrupled its spending on advertising in the United States in 2011 versus 2010, to $8.3 million, according to Kantar Media, with ads pushing its prices. With the promotions started, Uniqlo executives said it was time to re-enter malls.

“If you have just another store in a shopping mall, there’s no reason for a customer to buy at your store because we are selling clothes, and it is not so much different from the clothes that other people are selling,” Mr. Odake said. “So unless the customer knows about your brand or what the company stands for, there is no reason for the customer to shop at your store.”

To hit the company’s stated target of $10 billion in sales in the United States by 2020, “we need to go where the customer is, and in the United States, malls are the premier location where Americans shop,” Mr. Kyogoku said. The Uniqlo executives declined to discuss specifics about the expansion plans, beyond saying they also included stores in other big American cities. The company is also working on an e-commerce site in the United States, the executives said.

“Even though I think it may be too early to go to mall locations,” Mr. Shoda, the retail analyst, said, the company “needs actual trials in there.”


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