Falling natural gas prices pull down electricity costs
Falling natural gas prices helped drive down New England’s electricity prices by nearly a quarter last year, according to a report released Wednesday by the region’s power grid operator.
The 2012 Annual Markets Report by the ISO New England said natural gas-fired power plants generated just over half of the electricity produced in the region last year, a more than three-fold increase in the percentage of power they generated compared with 2000.
So a nearly 20 percent decline in the average price of natural gas in 2012 helped pull down wholesale electricity prices 23 percent, in what the ISO said was the acceleration of a recent trend.
“There is a clear linkage between the cost of fuel and the price of electricity,” said David LaPlante, the ISO’s vice president of market monitoring.
The report noted that the flip side of lower prices — increased demand for natural gas for heat, as well as power — continued to strain regional pipeline capacity.
Producer price index drops steeply in April from March
Sharp drops in fuel and food costs reduced a measure of U.S. wholesale prices in April by the most in three years. Outside those volatile categories, inflation stayed tame.
The producer price index, which measures price changes before they reach the consumer, fell a seasonally adjusted 0.7 percent in April from March, the Labor Department said Wednesday. It was the second straight monthly decline and the steepest since February 2010.
Lower inflation means the Federal Reserve has more leeway to continue its aggressive policies to boost economic growth.
U.S. factory output sees third decline in 4 months
U.S. manufacturers cut back on production in April, as auto companies cranked out fewer cars, factories made fewer consumer goods and most other industries reduced output. The weakness suggests economic growth may be slowing.
The Federal Reserve said Wednesday that factory output dropped 0.4 percent in April, the third decline in four months.
Production of autos and auto parts fell 1.3 percent in April. The drop is likely temporary because automakers are reporting stronger sales.
Home builder confidence rebounds as sales improve
Confidence among U.S. home builders rebounded this month, reflecting improved sales trends during the spring home-selling season and the strongest outlook for sales over the next six months in more than six years.
The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday rose to 44 in May from 41 in April. The increase for May was the first month-to-month gain since December.
Measures of interest by prospective buyers and current sales conditions also improved from April’s reading.
Southwest to delay orders for 30 new Boeing 737 jets
Southwest Airlines is delaying delivery of new planes and filling the gap with used planes to reduce spending over the next five years.
It’s also raising its dividend and could soon buy back more of its own shares.
Southwest said Wednesday that it will delay 30 firm orders for Boeing 737 jets, which CEO Gary Kelly said would cut capital spending through 2018 by more than $500 million. The airline is also giving up or delaying options for additional planes.
Meanwhile Southwest will buy 10 used 737s from Canada’s WestJet over the next two years. They average about 11 or 12 years old and should bide Southwest over until Boeing begins producing a new, more fuel-efficient 737 model called the Max late in this decade, Southwest officials said.
— From news service reports