The Portland Press Herald / Maine Sunday Telegram » Business Mon, 25 Jul 2016 16:07:55 +0000 en-US hourly 1 New Hampshire to evaluate scenic impacts of Northern Pass power line proposal Mon, 25 Jul 2016 14:23:04 +0000 CONCORD, N.H. – An assistant attorney general representing the public will conduct five workshops from Concord to Colebrook in the coming weeks on the impact the Northern Pass energy project could have on places of scenic beauty or that have cultural or historic significance.

The first of the workshops will be held at 6 p.m. Tuesday at the Ashland Elementary School auditorium.

Senior Assistant Attorney General Peter Roth says the workshops will open with presentations by experts hired by the state to provide evidence of the potential impact of the 192-mile transmission line.

Community members will then break into smaller groups and identify places and resources within 10 miles of the proposed transmission line that are important to them and their communities.

Roth said the structured workshops are designed to have people work together rather than give testimony or make comments in a more formal setting.

The state’s Site Evaluation Committee must consider that input in weighing whether to approve the project. Regulators in May pushed back their deadline for making that decision from December 2016 to Sept. 30, 2017, citing public interest. The project’s developer – Hartford, Connecticut-based Eversource – called that decision “disappointing.”

Eversource wants to run the transmission line from Pittsburg to Deerfield, carrying 1,090 megawatts of Canadian hydropower to the New England power grid. Backers say it will create jobs and lower costs in a region that pays the nation’s highest average cost for electricity. Opponents have argued it will hurt property values, tourism and the environment.

Other workshops are scheduled on Thursday at The Heights Community Center in Concord; Monday, Aug. 1, at the Littleton Opera House in Littleton; Tuesday, Aug. 2, in the Colebrook Elementary School cafeteria; and Wednesday, Aug. 3, in the Lancaster Auditorium. All workshops begin at 6 p.m.

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Verizon buys Yahoo for $4.83 billion Mon, 25 Jul 2016 11:54:20 +0000 SAN FRANCISCO – Verizon is buying Yahoo for $4.83 billion, marking the end of an era for a company that once defined the internet.

The sale announced Monday marks the second time in two years that Verizon has snapped up the remains of a fallen internet star as it broadens its digital reach. The nation’s largest wireless carrier paid $4.4 billion for AOL last year.

Verizon won the Yahoo bidding after a five-month auction.

Yahoo Inc. is parting with its email service and websites devoted to news, finance and sports in addition to its advertising tools under pressure from shareholders fed up with a steep downturn in the company’s revenue during the past eight years.

The deal is expected to close in 2017’s first quarter.

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South Portland moves ahead with solar proposal on former landfill Mon, 25 Jul 2016 08:00:00 +0000 SOUTH PORTLAND — City officials are moving forward with a cost-saving plan to build a solar power array on the former municipal landfill off Highland Avenue.

ReVision Energy of Portland has sweetened the terms of its proposal to build the solar facility, reducing the price that the city would pay for electricity generated by the array from 12 cents to 10 cents per kilowatt-hour under a power purchase agreement.

ReVision revised its offer after legislation to reform Maine’s solar regulations failed last spring, causing several communities to pull back from solar proposals without the means to make them financially viable.

“I think ReVision was really willing to work with us,” said Julie Rosenbach, the city’s sustainability coordinator. “The project economics look very good. We would save more in energy costs than we would pay to finance the project.”

Rosenbach and other city administrators are expected to pitch ReVision’s latest proposal at a City Council workshop on Aug. 22. A formal vote will follow at a regular council meeting.

“The new terms that ReVision has offered make it an acceptable proposal to bring to the council,” said City Planning Director Tex Haeuser, a longtime advocate for building a solar farm on the 34-acre landfill.

Rosenbach teamed up with Portland officials to negotiate separate agreements with matching terms for ReVision to build a solar array atop each city’s capped solid waste landfill.

The Portland City Council’s Energy and Sustainability Committee voted 3-0 Wednesday to recommend the revised proposal for a solar farm on that city’s the 44-acre landfill off Ocean Avenue. The full council will take it up next.

“By doing it jointly, we’d actually be saving some funds, so I’m optimistic,” said South Portland Mayor Tom Blake.

Under the proposal, ReVision would build a 660-kilowatt array on each city’s landfill. Each array would serve a maximum 10 municipal meters – the largest possible under Maine law.

ReVision can afford to build the arrays in part because, as a for-profit company, it would receive federal solar investment tax credits, which provide a tax reduction equal to 30 percent of a project’s costs. The cities aren’t eligible for a tax credit because they are nonprofit entities.

Each city would make an initial investment of about $25,000 per year for six years. The initial $150,000 investment is expected to be paid back within 10 years through energy savings.

“That’s based on conservative estimates, so people can say that’s not far-fetched,” said Assistant City Manager Josh Reny.

Each facility would generate about 1.2 million kilowatt-hours of electricity annually. That’s nearly 12 percent of the 10.1 million kilowatt-hours used annually by South Portland’s municipal and school facilities, Rosenbach said. And it’s about 3.5 percent of the 35.6 million kilowatt-hours used by Portland’s municipal and school facilities – enough to power Portland City Hall and Merrill Auditorium for a year.

The facilities are expected to be in cash-positive positions by the seventh year of the agreement, when each city would anticipate buying its array for $1.6 million, financed through a 20-year bond at 3 percent interest.

South Portland officials hope to cut the cost of financing the buyout, Rosenbach said, possibly by setting up a solar fund, where the city would set aside money for several years in advance, with an eye toward reducing or eliminating borrowing altogether.


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A new device is helping Maine fishermen avoid protected cod Mon, 25 Jul 2016 08:00:00 +0000 GEORGETOWN — Like many Maine fishermen, Bryan Kelley faces a dilemma as he looks to diversify beyond the lobster that account for the bulk of his catch.

To target pollock, which are relatively common in the Gulf of Maine, he has to fish in the same areas frequented by cod, a type of groundfish protected through strict federal catch limits.

“We literally have to stay away from the codfish,” Kelley said while standing on his 40-foot boat moored in the Five Islands harbor of Georgetown. “I could fill this with codfish if I wanted to, but that wouldn’t help anybody in this sector and that is not why we are out here.”

To help him catch the groundfish he wants and avoid the species he doesn’t, Kelley has begun experimenting with a contraption akin to a conventional fishing reel on steroids and with an electronic brain. The “automatic jigging machines” loaned to Kelley and a handful of other fishermen by The Nature Conservancy allow them to more accurately target the water column where pollock hang out and stay off the bottom where cod lurk. The machines’ simple hooks and lures also ostensibly reduce inadvertent “by-catch” of cod while avoiding other downsides of trawlnets and gill nets more commonly used by fishermen.

GEORGETOWN, ME - JULY 13: An automatic rigger system on Bryan Kelley's boat. The Nature Conservancy has equipped a handful of fisherman's boats with the system that is designed to help fishermen catch groundfish, namely pollock, while avoiding the far more scarce cod.  (Photo by Brianna Soukup/Staff Photographer)

An automatic jigger system on Bryan Kelley’s boat (Brianna Soukup/Staff Photographer)

“That’s part of the draw of it: It’s the quickest and easiest I have ever rigged anything up in my life,” Kelley said.

Geoff Smith, marine program director at the Maine chapter of the The Nature Conservancy, said preliminary reviews of the machines have been largely positive.

“This project is really about helping fishermen target those healthy stocks (of fish) while avoiding the codfish to allow them to rebuild,” said Smith, whose organization owns several groundfish permits in the Gulf of Maine. “We really feel that these jigging machines, if fished properly, can be selective and have minimal impact on the seafloor. … And if they work for fishermen, we think they could be a real game-changer.”


The jigging machine project is an example of the types of collaboration among fishermen and organizations that might have been unheard of decades ago. Working with the Maine Coast Fishermen’s Association, the project aims to re-engage small-boat fishermen in an industry that was once the backbone of New England’s coastal economy, but now numbers just a few dozen boats in Maine.

“With these jigging machines, we have seen a lot more interest from lobstermen in getting involved in groundfishing than we have had in a long time,” said Ben Martens, executive director of the fishermen’s association, a nonprofit founded by Port Clyde-based fishermen a decade ago.

Automatic jigging machines have been used elsewhere – most notably in Iceland and the Pacific Northwest – but are fairly uncommon in the Gulf of Maine, where trawls or gill nets were typically used to catch groundfish.

The machines, which are about the size of a small outrigger engine, attach to the side of the boat and feature a spool of heavy fishing line outfitted with six to 10 hooks. The machine drops the weighted line to the seafloor and then raises the hooks back up to the level specified by the fisherman. The “jigging” part of the names comes from the machine moving the hooks up and down in the water column to draw the attention of the fish.

Finally, sensors detect when a certain amount of tension or weight is on the hooks, triggering the machine to automatically retrieve the line. Fishermen then hand-remove the fish from the line.

Kelley said that during a recent trip, his crew hauled in roughly 2,300 pounds of pollock in a four-hour period. He uses simple, hard plastic lures, eliminating bait costs and allowing him to potentially bring on another deckhand. And with fresh pollock fetching anywhere from $2 to $3.50 a pound – compared to the 80 cents a pound Kelley said he used to receive for groundfish – the Georgetown lobsterman is already planning to purchase his jigging machines from The Nature Conservancy and invest in a few more.

“It gives us another season. There’s no downtime,” said Kelley, who, like many Maine lobstermen, has fished for everything – scallops, shrimp and other species – when the lobster are out-of-season or the fishing isn’t good.

In 1989, Maine fishermen landed more than 12 million pounds of cod alone, only to see the fishery peak and then collapse several years later. This year’s cod quota – or “annual catch limit” – for the entire Gulf of Maine is just over 600,000 pounds.

Groundfish accounted for just 2 percent of total poundage – and just 1 percent of the total value – of seafood landed by Maine fishermen in 2015, according to the Maine Department of Marine Resources. Lobster, by comparison, accounted for 44 percent of the total poundage and 81 percent of the monetary value of seafood landed in the state last year.


The National Oceanic and Atmospheric Administration has designated Gulf of Maine cod as “overfished” and well below the “target biomass level” needed to rebuild the stocks. Pollock, by comparison, are not considered overfished in the gulf in 2016 and have a federal quota of more than 30 million pounds. But after years of ever-tightening quotas, the number of Maine fishermen holding groundfishing permits has dwindled from hundreds of vessels in the 1990s to just 39 that landed any groundfish last year.

The Nature Conservancy and the Maine Coast Fishermen’s Association are among several nonprofit organizations that have purchased groundfishing permits from willing sellers in Maine and other New England states in recent years as part of the groups’ focus on sustainable fishing. The organizations then typically lease the quotas, or “catch shares,” associated with those permits to fishermen at favorable rates or contracts with the fishermen to conduct research on gear configurations or practices meant to make a fishery more sustainable.

Smith said The Nature Conservancy purchased about 20 of the automated or electronic jigging machines and has installed several on boats in Maine. Participating fishermen are allocated some of the organization’s quotas for pollock as well as for cod to cover any by-catch. The conservancy will sell the machines to fishermen at a discounted rate, if they elect to continue using the technology.


Automated or electronic jigging machines are billed by manufacturers and supporters as being more sustainable because they can be used to more accurately target the desired species. And because fish are quickly retrieved after the line hits a weight limit, any fish that are undersized or of the wrong species can often be released alive or at least in better shape than those caught in a gill net or trawl. Additionally, Smith said the jigging machines do not damage the ocean bottom.

Kelley said the fish he’s been hauling up have been very “clean” – fishermen-speak for “not banged up” – which often can help them command a higher price in a marketplace already seeing growing demand for fresh, locally caught fish.

Others see a specialized market for hook-caught pollock.

“We are starting to have conversations with people in Portland and Boston and New York to see if there is a market for that product,” said Martens, of the fishermen’s association.

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German cargo ship christened in Portland Mon, 25 Jul 2016 00:36:19 +0000 A German-based company that for years has quietly transported clay slurry to Maine for use in the paper mill industry put the spotlight Sunday on one of its newest cargo vessels, providing the public a rare look into the global maritime industry that makes Portland Harbor one of the state’s busiest ports.

The company, MST Mineralien Schiffahrt, based in Schnaittenbach, Germany, held an unusual naming ceremony late Sunday afternoon at Portland’s Ocean Gateway Terminal for the MV Marguerita. The ship is named after a New York City woman, Marguerita DeLuca, whose husband, Matthew, a shipping broker, has known MST’s founder for 45 years.

Clay slurry has been shipped by MST to the ports of Searsport and Portland for about 20 years, officials familiar with the company said. Clay slurry from Brazil supplied by Imerys, a company based in Savannah, Georgia, is used for specialized paper coatings in Maine’s paper mills. The slurry solution provides a glossy, smooth surface to the paper product.

Aside from the people who work in the port of Portland, cargo ships the size of the MV Marguerita – which is 185 meters long, or about the size of two football fields – largely go unnoticed. And if they are noticed, not too many people can guess what the ships are carrying.

“People notice all the cruise ships and tankers, but this cargo ship represents the other side of Portland Harbor. They slip in under the cover of darkness, before they ship out again,” said Capt. Shawn Moody, agency operations manager with Chase, Leavitt & Co. of Portland.

Moody’s firm acts as MST’s local shipping representative, making sure that ship arrivals and deliveries are coordinated with port authorities and local vendors.

The MV Marguerita was built in China and set sail on its maiden voyage in February. The ship made its first visit to Portland on March 9 and returns every 25 days, offloading its cargo at the Sprague Terminal in South Portland.

Moody said the fact that MST chose Portland as the place to christen its new ship is an honor.

“The owners could have done this in China, but instead they chose Portland. It’s something Portland should be proud of,” Moody said.

Markus Hiltl, MST’s chartering manager, introduced the ship’s captain, Paul Lukac, and his crew to a crowd of about 50 people who attended the ceremony at the Ocean Gateway Terminal. Hiltl said that on the guest list were people from all over the world, including China, Canada, Italy, the United Kingdom, Germany and the Netherlands.

Hiltl said the MV Marguerita, in addition to Brazil, has sailed to Vancouver, British Columbia.It also was designed to navigate through the Great Lakes Waterway, a system of channels and canals. It is manned by a crew of 21 sailors.

Matthias M. Ruttmann succeeded his father, Jürgen W. Ruttmann, in 2009 as MST’s owner. Matthias spoke at the ceremony.

Ruttmann said his father, who could not attend the ceremony, believes that naming a ship, an old seafaring tradition, is still important.

“Why should we christen a piece of steel?” Ruttmann asked. He said naming a ship is important to the crew, which can face all sorts of dangers on the open sea.

“In a situation of stress and danger, the crew will be happy to think of someone who will hold their hands, mentally of course,” Ruttmann said.

Marguerita DeLuca wished the crew calm seas and safe passage before cutting the rope that held a bottle of champagne suspended in midair. After cutting the rope, the bottle smashed against the hull. Ship tours and a private reception followed the christening ceremony.


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Got a part-time food business? You can rent this commercial kitchen by the hour Mon, 25 Jul 2016 00:27:32 +0000 WHITEFIELD — When Stephen and Milva Smith purchased the Country Farm Restaurant building on Mills Road in 2008, they converted part of the building into apartment units and a commercial space available to lease, but they had no idea what to do with the restaurant’s kitchen.

“It was trashed and it was unused,” Milva Smith said.

The couple left the space untouched and unoccupied for quite some time before slowly converting it into a commercial kitchen and business incubator called Food Forge that can be rented by anyone who has a need for a large-scale food operation without the financial or regulatory hassles that come from building one themselves.

“We did some research and looked around, and we saw an interesting space in Washington, D.C., which, on a really large scale, is what we envision for our space,” she said.

The Smiths, who live down the street from the property, said there are regulatory and financial burdens that come with trying to open something like this. Not everyone wants to spend or can afford $200,000 to build one of these kitchens, especially if they just have an idea for a product they’d like to explore.

“I’ve gotten a call recently from a baker who bakes out of her home kitchen, but she wants to be able to approach places like Whole Foods and local markets, but she needs something on a larger scale than what she has at home,” Milva Smith said. “Those are the kinds of people calling us.”

Milva Smith feeds a llama called Dolly as Stephen Smith watches at Food Forge.

Milva Smith feeds a llama called Dolly as Stephen Smith watches at Food Forge.

Her husband said the Whitefield area is the center for a back-to-the-earth, organic movement, and the couple felt there was a need for kitchen space so people could not only harvest food from those local farms, but also have a place to process it locally. They have a commercial food processor license from the state, which allows many foods to be prepared in the kitchen and re-sold.

Stephen Smith, who by day is a trial lawyer for Lipman & Katz in Augusta, credits the Sheepscot General country store down the street from Food Forge for reinvigorating the farming community in the area.

“They opened a new chapter in Whitefield, and we hope that something like this can keep it going,” he said.

Because the couple, who have four children ranging from 3 to 14, already owned the building, there isn’t a lot of pressure to immediately fill the space and make money. Most of the equipment came with the purchase of the restaurant back in 2008, so the Smiths haven’t put too much new money into the venture.

Food has always been a big part of Milva’s life, and growing up in an Italian family, it became a passion. Her parents came to the U.S. from Italy in the 1960s, and her father, Donato Ferrante, was an original co-owner of an Amato’s Italian sandwich shop in Portland, where she spent much of her childhood.

She and her husband owned Giacomo’s Italian Groceria in Bangor, but it was difficult to run the business with a growing family, so they now lease it.

Stephen Smith knew how important food was to his wife from the beginning.

“When I first went to her mother’s house, there was a very beautiful meal on the table, and it was so delicious that I had thirds,” he said. “Then I learned that there were four more courses coming. It’s her vernacular, and I’ve really come to appreciate it.”

The couple hopes the family’s love and passion for food translates into a successful venture that offers not only commercial cooking space, but cooking classes and space for events and other projects.

The building, which also includes two apartments and a hair salon, sits on the front of several acres of farm property the Smiths own.

The kitchen is fully equipped with everything a baker or chef would need, including a commercial-grade stove and hood, multiple sinks, a convection oven, meat slicer, stainless steel work tables and granite presentation tables among many other pieces of equipment. During the tour, the Smiths showed off the kitchen equipment, much of which was covered up by the client currently using the facility, and explained where they hope to see the venture go in the future.

“I want to get to the point where we have a lot of different people making a lot of different products,” Milva Smith said. “We just want to get people in here and tell them what we do.”

The kitchen is available to rent for $125 for a five-hour block that must be used within a 30-day period. The event space, which has enough seating for 30, can be rented for $125 per day, and the business offers rentals of glassware, dishware, utensils and other party and event supplies.

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Power plants, happy with high electric rates, fight natural gas expansion Sun, 24 Jul 2016 08:00:00 +0000 Almost everyone agrees that the cost of electricity in Maine and New England is too high. Almost everyone, that is, except the region’s power plant owners.

They’ve recently stepped up their opposition to plans aimed at lowering wholesale natural gas prices by expanding pipeline capacity. These plans would pump more fuel to power plants when electricity demand peaks, increasing supply to gas-fired generators that now provide half of the region’s power.

Environmental and citizen groups grab headlines in the fight over new gas pipelines. But don’t look for these power generators to be marching around with protest signs that denounce climate change, or raising their voices at town meetings where pipeline routes are debated. Their fight is being waged quietly in legal filings at the Federal Energy Regulatory Commission in Washington, D.C., the key agency that must approve interstate power projects.

In a recent filing, two major players complain that a proposed pipeline project called Access Northeast would flood New England with natural gas, “unreasonably suppressing gas prices and wholesale power prices.”

These plant owners charge that states and utilities have concocted a “scheme” intended to “artificially suppress prices” by contracting for quantities of gas that the utilities know they don’t need.

Maine’s Public Utilities Commission approved such a “scheme” last week. It gave conditional approval to a plan in which electric customers would underwrite a contract through their power rates that would help pay for expanded natural gas capacity in New England. The project that two of the three commissioners said would provide the greatest benefit to consumers is Access Northeast, which its developer says will save New England ratepayers $1 billion in a typical year. Inadequate gas supply is costing Mainers more than $200 million a year, according to state estimates, because of the premium being charged for wholesale natural gas in New England when demand outstrips supply.


Massachusetts regulators have approved a similar plan. But efforts there to let utilities enter into long-term contracts for gas from Access Northeast are being challenged in court by the Conservation Law Foundation and the owner of Boston Harbor’s liquefied natural gas terminal.

The outcome of this complaint at FERC could affect rulings in Maine and Massachusetts, observers say.

One of the parties in the FERC case is NextEra Energy Resources, which owns Wyman Station in Yarmouth, Maine’s largest power plant.

Wyman Station in Yarmouth is owned by NextEra Energy Resources. The aging plant – fueled by oil, not gas – was put up for sale three years ago because it was considered obsolete and too costly to run. But tight natural gas supplies on the coldest winter days and lower oil prices have made Wyman valuable again.

Wyman Station in Yarmouth is owned by NextEra Energy Resources. The aging plant – fueled by oil, not gas – was put up for sale three years ago because it was considered obsolete and too costly to run. But tight natural gas supplies on the coldest winter days and lower oil prices have made Wyman valuable again.

Wyman is old and fueled by oil, not gas. It was put up for sale three years ago because it was considered obsolete and too costly to run. But tight natural gas supplies on the coldest winter days and lower oil prices have made Wyman very valuable again. ISO-New England, the region’s grid operator, pays millions of dollars each year for Wyman to stand ready in winter, in case the winter pipeline squeeze makes gas unavailable or too expensive.

NextEra is big into wind and solar these days, but it also owns the Seabrook nuclear power plant, one of the region’s largest and most important generators. Seabrook runs more-or-less constantly. Figures gathered by ISO-New England indicate that Seabrook earns tens of millions of dollars a month in the winter, thanks to higher wholesale prices.

NextEra also has a heavy hitter on its side in its complaint at FERC. Joseph Kelliher was the agency’s chairman until 2009. He’s now executive vice president for federal regulatory affairs at NextEra.

The other party is PSEG Cos. of Newark, New Jersey. It owns an oil-fired power plant in New Haven, Connecticut, and a coal- and oil-burning plant in Bridgeport, Connecticut, where it has plans to build a new gas-fired unit.

Together, they are fighting proposed, state-sponsored contracts that would support the development of Access Northeast, proposed by Houston-based Spectra Energy.

Access Northeast would boost the amount of gas flowing through the existing Algonquin and Maritimes & Northeast pipelines and provide direct connections to 60 percent of New England’s power plants. The goal is to make sure these plants have enough gas to run on the coldest days, when competing demands for heat and manufacturing make supplies tight and expensive.

Spectra plans to do this by upgrading the Algonquin line and adding LNG storage. That would bring up to 1 billion cubic feet a day of new gas, much of it from Pennsylvania shale deposits, to a region that needs more than 4 billion cubic feet on a frigid winter day. Spectra estimates that the 5,000 megawatts of electricity generated by the new gas supply could power 5 million typical homes. The target date is late 2018.

Underscoring these efforts are high electricity prices throughout New England. According to the latest comparison from the U.S. Energy Information Administration, retail residential electricity rates in April averaged 12.43 cents per kilowatt-hour in the U.S. while Maine residents averaged 14.34 cents per kwh, the lowest in the region. Connecticut residents averaged 21.15 cents per kwh that month, the highest in New England.


The administration of Gov. Paul LePage is a strong supporter of Access Northeast.

Patrick Woodcock, the governor’s energy director, points out that the difference today between whether wholesale power prices are high or low in the winter hinges directly on New England’s gas supply. Two winters ago, when a polar vortex plunged into the Northeast, gas priced for immediate delivery hit a record high and was 15 times more expensive than gas from fields in nearby Pennsylvania. The spike caused some paper mills and other factories to stop production.

Last winter, the reverse was true. Warm weather led to slack demand and very low prices.

“When power prices go up, who is receiving the extra payment?” Woodcock asked. “It’s going to the power plants, and everyone receives those higher prices, whether they’re a hydro or nuclear plant. So there’s a huge incentive for power generators to oppose additional natural gas capacity into New England.”

Woodcock said he disagrees with the characterization in the FERC filing that having utility customers help pay for expanding gas capacity is a scheme intended to “artificially suppress prices.” Any time utility regulators take action it has some impact on prices, he said, so the term “artificial” has no meaning.

NextEra didn’t respond to an interview request. But Dan Dolan, president of the New England Power Generators, said opposition isn’t directed at the actual project, but the way it would be financed.

“We don’t believe electric utility ratepayers should subsidize a new natural gas pipeline used by power plants,” said Dolan, whose trade group represents NextEra and PSEG.

Dolan acknowledged that pipeline expansions would bring more supply and cheaper gas. But he said consumers would still pay billions of dollars to build the lines, which wouldn’t be fully used on many days of the year. An unintended consequence, he said, is that cheap gas would threaten operations at the region’s two remaining nuclear power plants, Seabrook and Millstone in Connecticut.

Dolan pointed out that wholesale electricity prices are now among the lowest on record. At the same time, owners are competing with each other, spending billions to build the next generation of plants, without state subsidies.


But Tony Buxton, a lawyer who represents Maine manufacturers that use a lot of energy and lobbies for natural gas expansion, said New England still has some of the highest power prices in North America. The global glut of petroleum and natural gas – not competition – is chiefly responsible for moderating prices. Even now, gas delivered into New England is more than twice as expensive as gas in Pennsylvania, recent figures from the federal Energy Information Administration show.

That point was echoed by Richard Kruse, a Spectra vice president for regulatory issues. Kruse said electric rates will go down when Access Northeast is built, and generators will be forced to acknowledge that.

“For them,” he said, “lower costs for consumers appear to be a bad thing. The complaint is an effort to maintain the status quo, which only ensures continued high and volatile prices, given infrastructure constraints in the region.”

While the FERC filing is focused on the Access Northeast project, it provides a forum for a larger legal battle over the role of states, versus the federal government, in setting energy policy.

For instance: FERC rules help make sure the electric grid is maintained properly to keep the lights on. Reliability is one of the benefits New England states see from expanded pipeline capacity, but NextEra and PSEG say the states have failed to explain why their judgments should supersede FERC.

In the FERC filing, the two power generators say that the most economic way to meet demand in the winter is to build power plants that fire on both oil and natural gas, and to create access to LNG for gas-fired plants.

“There are many legitimate ways to lower prices for customers, such as increasing efficiency, but this (ratepayer-backed pipeline expansion) is not one of them,” they said in their complaint.


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Week in review: Natural gas plan approved; home sales, prices tick up Sun, 24 Jul 2016 08:00:00 +0000 ENERGY

PUC approves plan to expand natural gas capacity

Following more than two years of study, the Maine Public Utilities Commission on Tuesday gave conditional approval to a plan in which electric consumers would underwrite a contract through their power rates that would help pay for expanded natural gas capacity in New England. The vote – which ran counter to a PUC staff recommendation – was unanimous. However, one of the three commissioners dissented on which of two eligible pipeline projects to endorse. And they all agreed that four other New England states that are considering similar plans would have to follow suit before Maine would participate. That could be a tall order, in light of the lack of consensus over whether the region’s energy future should maintain a strong role for fossil fuels or make a quicker transition to renewable sources and high efficiency. Read the story.


Home sales and prices increase

Real estate agents across Maine reported 1,960 sales of existing, single-family homes in June, an increase of 9.6 percent compared with a year earlier. The median price for those homes rose 5.5 percent to $198,000, according to a report issued Thursday by the Maine Association of Realtors. The median indicates that half of the homes sold for more and half sold for less. For the three-month period ending June 30, home sales in Maine were up 18.3 percent from the same period of 2015, and the median price increased by 3.3 percent to $190,000, according to the report. Read the story.

Old Orchard Beach restaurant purchases building

Duffy’s Tavern & Grill has purchased the Old Orchard Beach restaurant building in which it operates, along with two adjacent structures, for $1.7 million. Duffy’s, which also operates a restaurant in Kennebunk, closed on the restaurant property at 168 Saco Ave. on Wednesday, according to Mark Sandler of Cardente Real Estate, who brokered the transaction. The sale included the 11,750-square-foot restaurant, formerly known as The Captain’s Galley, a two-unit, 1,900-square-foot apartment building and a 2,550-square-foot home, all sitting on about 5.2 acres, according to a Cardente news release. Read the story.


Lawmaker submits amendment to prevent age-based auto rate hike

The House chairman of the Legislature’s Insurance and Financial Services Committee has submitted legislation Tuesday that would prohibit insurance companies from charging older Mainers higher premiums based solely on their age. Rep. Henry Beck, a Democrat who represents parts of Waterville and Oakland, has submitted to the Revisor’s Office a proposed amendment to the Maine Insurance Code in response to insurance provider Progressive Corp. seeking permission from the state Bureau of Insurance to impose age-based increases on older drivers. Current Maine law prohibits insurers from boosting existing customers’ premiums as they age, but Beck said it isn’t clear whether the existing statute applies to new insurance consumers. Read the story.

Cross acquires Bangor competitor

Cross Insurance has expanded its reach in Maine with the acquisition of a nearby rival agency. Cross, which is one of New England’s largest insurance agencies, acquired Bangor-based Sargent, Tyler & West, according to a release from Cross. For nearly 200 years, Sargent, Tyler & West provided insurance for homes, autos, boats, motorcycles, businesses, life and health. The acquisition involves the agency’s Bangor office and its Bucksport branch, Roland Grindle Insurance Agency. Terms of the deal were not disclosed. Read the story.


DeLorme seeks review by U.S. Supreme Court

DeLorme Publishing wants the U.S. Supreme Court to review a $6.2 million penalty levied against it related to a patent infringement lawsuit. The Yarmouth-based mapmaker filed its request for a review by the nation’s top court last week. The court must now decide whether to hear the appeal. The review involves a patent infringement case that was filed nearly four years ago against DeLorme by rival BriarTek, a Virginia company that alleged DeLorme’s inReach handheld satellite communications devices infringed on BriarTek’s patent for a similar device. Read the story.


June Fitzpatrick Gallery to close

June Fitzpatrick, who has operated art galleries in Portland since the early 1990s, will close her Congress Street gallery in August, marking the third major change to the Portland gallery scene this summer. On Monday, Peggy Golden announced she had sold Greenhut Galleries, Portland’s oldest gallery, to a couple from California. In June, Susan Maasch Fine Arts also closed. Maine College of Art owns the Fitzpatrick gallery space at 522 Congress St. and is considering its options, said Raffi Der Simonian, a MECA spokesman. Fitzpatrick exhibits a range of contemporary art, including paintings, ceramics and other three-dimensional pieces. She is planning a farewell exhibition in August, a group show with longtime gallery artists. Read the story.

Parent of Barber Foods closes IPO

AdvancePierre, the parent company of Portland-based Barber Foods, raised nearly $219 million from its initial public offering, the company reported. The company said it sold 11,090,000 shares of stock at $21 a share. The $218,916,600 is what the company received after deducting underwriting discounts and commissions. As of late Friday morning, the stock was trading at $23.84 a share. Cincinnati-based AdvancePierre said it planned to use the money to repay part of its debt. Read the story.

Verso stock trades on NYSE post-bankruptcy

Verso Corp.’s stock was trading once again Tuesday on the New York Stock Exchange following the paper company’s emergence from bankruptcy. While the stock was officially relisted on Monday, it did not begin trading until Tuesday. The stock opened at $12.23 a share, and its value rose briefly as high as $13.59 before settling to around $12 for most of the day. It ended the day at $12 a share, down about 1.9 percent from the opening price. During the day’s trading, 47,769 Verso shares changed hands. The Memphis-based papermaker, which emerged from Chapter 11 bankruptcy on Friday, had been delisted from the exchange in September after its stock price fell far below the required $1 average over a 30-day trading period. The stock was moved to the Over the Counter Bulletin Board exchange, where its price fluctuated between 1 and 16 cents a share prior to the company’s Jan. 26 bankruptcy filing. Read the story.


Saddleback’s future in question

Ski industry experts say Saddleback Mountain ski resort will have a difficult time restoring its business the longer it remains closed. The owners, Bill and Irene Berry of Farmington, announced on July 20, 2015, that unless they could secure $3 million for a new chairlift, they would be forced to close Saddleback. The Berrys failed to get the financing, but by September announced they were in negotiations to sell the ski area. As winter arrived, the Berrys announced they were close to a sale. Saddleback would open by late January, they said, and anxious season-pass holders were offered perks to keep from seeking refunds. But Saddleback never opened last winter, and details of a sale never materialized. Les Otten, the former CEO of American Skiing Co., which operated several resorts, including Sugarloaf and Sunday River, in the 1980s and ’90s, and Andy Shepard, president and CEO of the Maine-based nonprofit Outdoor Sport Institute, say the longer the resort stays closed, the more difficult it will be to either regain former customers, or entice a new owner to buy the complex. Read the story.

]]> 0, 22 Jul 2016 17:35:19 +0000
Michelle Singletary: Wedding rings that won’t break the bank Sun, 24 Jul 2016 08:00:00 +0000 Many personal occasions in our lives come with so much anticipation that common financial sense becomes less common.

Exhibit A: Getting married.

Many marriages start off with people immediately living above their means with unwise amounts of money spent on engagement and wedding bands, purchased on credit. That’s often accompanied by a costly wedding celebration, also financed. Savings accounts can be decimated by marriage-related expenses – to the detriment of the newlyweds’ long-term financial goals.

Couples often delay getting married – even though they may be living together or have children – because they say they can’t “afford” to tie the knot. But getting married doesn’t have to cost much. (All you really need is a marriage license.)

A friend who was planning to propose to his girlfriend asked me if it’s true that he should spend at least two months’ worth of income on the engagement ring.

I told him that ring rule is absurd, and even more so for people carrying student loans or consumer debt. A Google consumers’ survey of 5,000 people commissioned by found that 36 percent of respondents thought the right price for a ring should be less than $1,000. But 17 percent believed that when it comes to how much to spend on an engagement ring, “money is no object.”

I recently asked readers to share their stories of engagement rings that didn’t break the bank. This is part two of the testimonies I received.

“I wear my mother’s ring and he wears his father’s ring (both are deceased),” one reader wrote. “It’s a reminder of our parents’ love.”

Another said: “I got a very respectable ring that I still wear and cherish, but (my husband) did wish it was bigger. However, I love that he did more with the money he could have spent. He paid off all his credit card debt before we got married. So, we both came into the marriage with only student loan debt, and our budget prioritizes getting rid of it!”

Loved this from a male reader: “When me and my now wife got engaged, we really didn’t care about rings. My mom and my grandmother both offered their diamonds from previous rings so my wife could design her own ring. So my mom and my now wife spent an afternoon at the jewelry store trying out simple settings until she found one she liked, that wasn’t too expensive. Plus my grandmother’s diamonds were her grandmother’s, so my wife has 5th-generation diamonds.”

Another guy wrote: “I spent $50 on my fiancee’s engagement ring, and she still thought it was too much! I couldn’t imagine being constantly worried while wearing a really expensive ring. And we spent $70 on custom-made wedding bands we got on vacation. The rings don’t mean nearly as much as our memories and what they represent – I’d rather save to retire early and spend more time together.”

The following story turned out well for one guy. But, fellas, be careful of using this money-saving strategy: “When my in-laws got engaged, my father-in-law told my mother-in-law that a large stone wouldn’t look nice on her small finger. He bought her a smaller diamond. Fast-forward almost 66 years later, and the marriage has lasted.”

One reader said she had a choice – an engagement ring or a honeymoon in Australia.

“The trip memories have been worth so much more than something I’d store in a safe deposit box,” she wrote.

Here’s a story from a reader about her sister’s wedding band: “Her ring’s diamond comes from her husband’s grandmother, but the setting was too damaged to continue to wear. When they went looking for a setting, they found the perfect one, but it was ‘on clearance.’ When they asked why, the salesperson said that no one wanted to buy a setting that had a visible inclusion. My sister snapped it up; she (treats) the inclusion as the birthmark of her ring. To be honest, I couldn’t see the inclusion, so it looked perfect to me.”

Another reader wrote: “My boyfriend (now husband of almost six years) and I went window shopping together – and I’m so glad we did. He would have spent the three months’ salary (or whatever the silly rule is). And he would have gotten me something blingy, bulky, and I probably would have been afraid to wear it.”

Speaking of being afraid to wear a bling ring, I’ll end on this note from a reader: “When I was a teen, my neighbor got engaged, and the ring was so expensive they had a lookalike fake made that she could wear while the real one stayed in a safe. Seemed incredibly ridiculous to me.”

Me too.

Michelle Singletary can be contacted at:

Twitter: SingletaryM

]]> 0 Fri, 22 Jul 2016 17:09:42 +0000
Maine employers face a new challenge: Not enough workers Sat, 23 Jul 2016 23:55:12 +0000 Maine’s labor force participation is dropping, making it more difficult to find skilled workers.

Kim Vandermeulen’s company is trying to get creative.

Since the first of the year, Alternative Manufacturing in Winthrop has added between 10 and 15 employees, and the electronics manufacturer that makes printed circuit boards is looking for five or six more workers.

Production is up 40 percent over last year, and the need to hire is very high, Vandermeulen said recently.

“We’re looking for entry level, light manual labor up to machine operators. We’ll do a lot of training for machine operators, but our preference is for someone in those positions to have some training,” he said.

Alternative Manufacturing is not alone. Across the region, “Help Wanted” signs dot the landscape. Businesses of all stripes are trying to fill positions, and they have been trying for months.

Ron Crocker works on a machine at Alternative Manufacturing Inc. in Winthrop. The company has added between 10 and 15 employees this year and is looking for five or six more workers to meet its production demands.

Ron Crocker works on a machine at Alternative Manufacturing Inc. in Winthrop. The company has added between 10 and 15 employees this year and is looking for five or six more workers to meet its production demands.

The reason behind the chronic need for workers is complicated, and it’s explained in part by the state’s unemployment rate.

On Friday, the Maine Department of Labor in conjunction with the U.S. Bureau of Labor Statistics, released the June unemployment numbers. At 3.7 percent, the state unemployment rate is up from May’s rate of 3.5 percent, but not by much.

“If you focus on that in a superficial way, it’s a great signal for economic condition,” David Findlay, an economics professor at Colby College, said.

On its face, he said, a low unemployment rate suggests a pretty healthy economic climate. “But at the same time, we’re dealing with an aging population and a labor force participation rate that’s dropping over time,” Findlay said. “I’m not sure we have as vibrant and dynamic an economy as policymakers and citizens would like. You have to look deeper.”


The unemployment rate is one measure of the strength of an economy, and some argue it’s not the best one.

Glenn Mills, chief economist at the Center for Workforce Research at the Maine Department of Labor, said the labor force, whose activity is measured by the unemployment rate, is made up of people who have jobs and people who are unemployed but actively looking for work.

That leaves large groups of people unaccounted for, Mills said, including students, retired people and homemakers, for instance. People who have become frustrated and have stopped looking for work even though they may want a job are also not counted in the labor force.

The size of the labor force can be fairly fluid, thanks to changing circumstances. Mills said that while students aren’t considered unemployed, they become unemployed as soon as they graduate and start looking for a job.

A broader measure of unemployment is the U-6 rate, which is a measure of all the unemployed, the people who want to work but have stopped looking and part-time workers who would like to work more hours.

In Maine, that’s calculated on monthly averages because the sample size is relatively small. From July 2015 to June 2016, the U-6 rate, sometimes referred to as the broader unemployment rate, is 9.3 percent.

That indicates that a larger pool of potential workers exists. But even so, companies are still having a hard time filling vacancies.

Joel Davis is in the same position as Vandermeulen. As managing director of Central Maine Meats in Gardiner, he’s trying to fill skilled positions at the fast-growing meat processing facility with mixed success.

“The more skilled workers we need – high-end butchers and meat cutters and middle management – they are harder and harder to find,” he said.

Entry-level workers are easier to find, he said, and those with a certain level of learning experience can be trained. Central Maine Meats has developed a training module with Kennebec Valley Community College that teaches the skills it requires in its employees, such as safe food handling and general math.

Once they’ve been hired, employees are on a path to build their skills and move up. “We march people along. And we pay more than minimum wage by a long shot,” Davis said.

But finding someone to work as a general manager overseeing operations has been a bigger challenge. “We’ve talked to many organizations, called headhunters, called half a dozen people looking for resumes and someone to fit that position. No go.”


Garvan Donegan is looking beyond the apparently low unemployment rate. Donegan is an economic development specialist with the Central Maine Growth Council in Waterville. The growth council is a public-private, collaborative, regional economic development agency.

“Just about every business I have talked to is hiring, looking to hire or worrying about (employee) retention,” Donegan said.

Workforce is the key challenge for any business the council is trying to recruit or retain. “We talk about tax incentives and TIFs and supply and demand economics,” he said, “but in the next year or so, we’re kind of at a critical stage in our demographics.”

Those demographics are the state’s aging population and shrinking pool of possible workers.

“Labor force participation is dropping,” Findlay said. “If fewer people are actively engaged in the labor market, it’s understandable why firms are having a hard time finding people.”

Donegan points to some bright spots that exist, including veterans and immigrants and naturalized citizens who can meet the demand for workers.

So can students. Early outreach, with pre-apprenticeship and apprenticeship programs, can connect students in area schools with businesses and allow them to test drive a career.

“We’ve been doing it most successfully with the mid-Maine Technical Center. We take some of the most thriving students and place them in a competitive interview process,” he said. That exposes them to the soft skills they need to develop to be successful employees, and they have a chance to see what working in fields as diverse as robotics, healthcare and construction is like.

“The student has the opportunity to review a career path, and the goal is to get them into a long-term position,” Donegan said.

But right now, he said, there is not a hospital or an information technology company that’s not looking for workers.

In fact, MaineGeneral Healthcare, with hospitals in both Augusta and Waterville, currently has several dozen openings for both certified nursing assistants and medical assistants – jobs that require basic certifications.

MaineGeneral spokeswoman Sarah Webster said 15 medical assistants are needed in physician practices in both Waterville and Augusta. About 30 certified nursing assistants are needed in Augusta. MaineGeneral has been working with Maine CareerCenters and the state Department of Labor to reach the unemployed and the underemployed to provide on-site training for both CNAs and medical assistants.

MaineGeneral is also making a move that often accompanies a tight labor market. It recently raised starting pay for new CNAs from $10.50 to $12 an hour.

Findlay said there’s no significant evidence that wages are rising on the national level due to competition for workers. But Mills said in Maine, wages started rising in 2014 and the trend has continued in 2015 and so far in 2016. He characterized the increase as “pretty healthy.”

Just as rising wages are one indication of a tight labor market, working more hours is another.

Vandermeulen, president of Electronic Services Corp., the parent company of Winthrop’s Alternative Manufacturing, said his employees are scheduled to work four 10-hour days a week. To meet demand, employees have volunteered to work a fifth day every Friday for a year, and many have worked every Saturday since mid-May.

Tricia York packages a product after testing it at Alternative Manufacturing Inc. in Winthrop Wednesday.(Photo by Andy Molloy/Staff  Photographer)

Tricia York packages a product after testing it at Alternative Manufacturing Inc. in Winthrop Wednesday.(Photo by Andy Molloy/Staff Photographer)

In looking for workers, Vandermeulen said his company has been with Maine CareerCenters for some pre-job training and has been hiring high school students for positions that don’t require experience in electronics or manufacturing.

“For our company, our need to add workers will be pretty consistent,” he said. “We can see out a ways because our customers need to order pretty far ahead. For six months to a year it’s going to stay consistently high. It’s going to be tight for a long time. It’s an indication that the economy is doing better, so it’s not all bad news, but it makes it harder to hire.”


]]> 57, 23 Jul 2016 21:06:55 +0000
Maine heating fuel prices dip amid high gas inventories Sat, 23 Jul 2016 19:46:50 +0000 AUGUSTA – The Maine Governor’s Energy Office says high gas inventories have contributed to a dip in price of heating fuel in Maine.

The energy office also says a rally in prices that had gone on for several months in crude oil markets has waned. U.S. crude oil inventories are lower than they were a few months ago but are still above the five-year average.

The Governor’s Energy Office says the average price for heating oil slipped two cents to $1.91 per gallon, according to a July 18 survey. Kerosene prices have also gone down a penny to $2.44 and propane prices have fallen 3 cents to $2.16 per gallon.

]]> 1 Sat, 23 Jul 2016 17:46:40 +0000
Hampden board approves controversial waste management plant Sat, 23 Jul 2016 00:34:08 +0000 The Hampden Planning Board voted unanimously to approve construction of Fiberight’s first-in-the-nation waste management plant in the town, a major step toward the controversial plant being built.

The approval this week comes after the Maine Department of Environmental Protection issued conditional final permits to Fiberight and the Municipal Review Committee, the partner organization that represents Maine municipalities that will use the plant despite eight opposition comments on the previously issued draft permits. Those opposition comments included one from the Penobscot Energy Recovery Corp., prompting a complaint from the MRC, which is still partners with the Orrington firm.

Fiberight will convert trash into biofuel and possibly other materials and sell recyclables, and the MRC believes it’s a better economic and environmental option for municipalities after their contract with PERC runs out in March 2018.

The MRC is a nonprofit organization that represents the solid waste interests of more than 100 central Maine towns and has persuaded 114 of the 187 municipalities now using PERC to join the Fiberight plan, including Oakland, China and Vassalboro.

But the MRC is still pushing to get enough towns to commit to the Fiberight project. Other questions nip at the project, including the comment PERC’s lawyers filed with the DEP, which the MRC said violates their partnership agreement and uses the towns’ money to fight the towns’ new option.

Most of the comments included in the recent DEP permitting process, including those from the law firm representing PERC, questioned the partners’ financial and technical ability to fulfill their commitments to the municipalities signing on with Fiberight and expressed concerns that the proposal didn’t follow a state statute on how to go about handling solid waste.

Law firm Bernstein Shur, commenting in a letter on behalf of PERC, asks that the Fiberight project application be denied because there isn’t enough information to consider it complete for processing, the project doesn’t follow the waste management hierarchy, the application materials have “significant internal inconsistencies,” and the project requires a determination from the U.S. Environmental Protection Agency that it does not have.

The department allowed comments on the draft permits until July 5. Bernstein Shur submitted opposition comments on behalf of PERC on the final date for submission.

The MRC’s complaint said the process used to comment breaches the agreement between USA Energy Group, the majority owner of PERC, the communities represented by the MRC and PERC Holdings LLC.

]]> 1, 22 Jul 2016 21:09:28 +0000
For third day, Southwest struggles with delays Fri, 22 Jul 2016 23:39:39 +0000 DALLAS — Southwest passengers endured a third straight day of canceled and delayed flights as the airline struggled to resume normal operations on Friday.

Tracking service FlightStats Inc. reported that by midafternoon about 300 Southwest flights had been canceled and 1,200 more delayed. Southwest canceled nearly 1,500 flights and 4,500 others were delayed Wednesday and Thursday.

Southwest Airlines Co. said it was managing through lingering disruptions. It said most of Friday’s cancellations were due to airline crews being unable to get to their flights after being stranded in other cities.

The airline said that a computer router failure caused the breakdown.


]]> 0 Fri, 22 Jul 2016 19:51:50 +0000
Airlines’ 2nd-quarter profits suggest boom times Fri, 22 Jul 2016 23:37:11 +0000 FORT WORTH, Texas — Compared with their checkered track record, major airlines are enjoying boom times.

Planes are full, and jet fuel is still much cheaper than it was last year. The four biggest U.S. carriers just reported a collective second-quarter profit of $3.9 billion.

And yet investors seem to be looking past the bottom line. They have become obsessed with fare prices – falling now for more than a year – that may foreshadow thinner profits in the future.

When the airlines held calls this month to discuss second-quarter operations, investors pressed them to reduce flights and the supply of seats in order to drive up fares. They cheered when Delta Air Lines Inc. and United Continental Holdings Inc. said that they would trim growth plans in the fourth quarter – sending shares of both higher.

And they hammered shares of Southwest Airlines Co., which announced no such pullback – and showed “no sense of urgency,” according to Wolfe Research analyst Hunter Keay. Shares plunged 11 percent, although a massive Southwest technology outage that stranded tens of thousands of its passengers the day before earnings came out may be partly to blame.

On Friday, American Airlines Group Inc. became the last of the big four to report results. American, the world’s biggest airline, earned $950 million in the second quarter, beating Wall Street expectations.

Still, profit fell 44 percent from a year ago (partly due to a tax provision), revenue per mile slipped by more than 6 percent on lower average fares, and American said that figure will fall again in the third quarter – even if by a smaller percentage.

“It’s difficult to believe we’d ever be excited” about American’s forecast of 4.5 percent to 6.5 percent lower revenue per mile, but “we’ll take it,” said JP Morgan analyst Jamie Baker.

For the second quarter, American said that, excluding one-time costs, it earned $1.77 per share. That easily beat the expected per-share earnings of $1.68 coming from analysts, according to a poll by FactSet. Revenue fell 4 percent to $10.36 billion, but that also edged out Wall Street expectations for $10.32 billion.

American’s shares rose $1.40, or 4 percent, to close Friday at $36.36.

The airlines will face more pressure for measured growth if revenue trends don’t improve this year.

Right now even business travelers, considered less stingy than vacationers, are enjoying a relative bargain. All airlines said pricing was weak for tickets bought on short notice – often by corporate travelers.

“Corporate demand is strong,” American’s president, Scott Kirby, said on a conference call, “but we have a lot of low fares, so they are getting a deal right now.”

Kirby said American will boost revenue by at least $1 billion a year once it starts offering both a bare-bones fare to compete with discounters like Spirit Airlines, and a “premium economy” ticket for people wanting a better seat.

The company is also deferring costs, delaying the delivery of 22 Airbus planes.

For the four biggest U.S. airlines, second-quarter profit and third-quarter forecast of lower revenue for every seat flown one mile:

American: 2Q net income $950 million; 3Q revenue per mile down 4.5 percent-6.5 percent

Delta: 2Q net income $1.55 billion; 3Q revenue per mile down 4 percent-6 percent.

United: 2Q net income $588 million; 3Q revenue per mile down 5.5 percent-7.5 percent.

Southwest: 2Q net income $820 million; 3Q revenue per mile down 3 percent-4 percent.

]]> 1 Fri, 22 Jul 2016 19:52:58 +0000
Occupancy rates pose challenge to Democrats Fri, 22 Jul 2016 23:36:25 +0000 PHILADELPHIA — Facing hotel bills running into the thousands of dollars, some delegates to the Democratic National Convention are planning to do like college students on spring break and squeeze as many people into a room as they can.

Nicole Lutkemuller, a Bernie Sanders delegate from Tahoma, California, said her two-bed room at the Marriott Hotel Philadelphia Downtown is costing nearly $4,000 for five nights.

So she’ll be sharing it with four other Sanders delegates she identified through a roommate matchup project on a Sanders Facebook page. Lutkemuller plans on taking a sleeping bag, and the five will trade off sleeping on the floor and the beds.

“We’re hoping for a cot, but there’s a limited number,” she said.

The high cost of hotel rooms during the convention, which runs Monday through Thursday, has been a sore point for some delegates. The prices were driven up by expected high occupancy rates, which allow hotels to command a premium. Expectations for a great summer for Philadelphia’s hotel industry were running high even before the convention, with Memorial Day weekend occupancy rates hitting the highest level in at least a decade, the city’s tourism bureau said.

Ed Grose, the executive director of the Greater Philadelphia Hotel Association, said it appeared occupancy would run above 90 percent on peak nights of the convention.

Even with demand dictating prices, hotel managers were surprised by how much some hotels were charging and by what they said was the willingness of the DNC to accept rates as proposed.

“Usually the customer will come back and say, ‘Eh, we’re hoping for something a little lower,”‘ said Kevin Murnane, general manager of the Doubletree by Hilton Center City.

In the Doubletree’s case, that’s not what happened, he said.

“The DNC – they were OK with – they don’t get involved. They just took the price, and when you see, there’s some pretty high prices. There’s some huge prices out there,” Murnane said.

He didn’t want to discuss his rates. But a Pennsylvania delegate raising money online to stay at the hotel said his delegation quoted him a discounted room rate of $2,100 for five nights.

The DNC said its convention committee negotiated individual contracts with each of the 95 hotels it worked with. In a statement, the committee said, “Negotiations for convention hotels include not only rates but many other elements of a hotel experience such as attrition, function space and food and beverage.”

Jan Bauer, a Hillary Clinton delegate from Ames, Iowa, who attended the DNC in New York in 1992, Denver in 2008 and Charlotte, North Carolina in 2012, said she was shocked by how much her room at the Marriott downtown would cost.

Because she is disabled, Bauer said she couldn’t share a room with other delegates, though some family will stay with her. She said her room is costing more than $500 a night before taxes.

The Charlotte hotel cost a little over $200 a night – still expensive, Bauer said, but nowhere near the cost this year.

Like some other delegates, she turned to online fundraisers.

But, she said, “It’s kind of embarrassing to be asking for funding.”

]]> 3 Fri, 22 Jul 2016 19:36:25 +0000
Susan Collins wants Progressive to justify bid to raise Maine seniors’ auto insurance rates Fri, 22 Jul 2016 23:35:00 +0000 Sen. Susan Collins has sent a letter to the president and CEO of Progressive Corp. asking her to justify the company’s attempts to raise auto insurance premiums for seniors in Maine.

“I was greatly concerned to learn that Progressive … has been seeking approval to indiscriminately charge higher automobile insurance premiums based solely on when existing policyholders reach certain ages,” the Maine Republican begins her letter to Tricia Griffith, Progressive’s top executive.

Progressive is seeking state approval for rate changes that would allow the company to charge older Mainers higher auto insurance premiums based solely on their age. The proposal by the Ohio-based company would apply only to new customers in Maine, according to documents filed with the state Department of Professional and Financial Regulation’s Bureau of Insurance.

A hypothetical example that Progressive provided to the bureau shows a 65-year-old being charged 6 percent more than a 64-year-old based solely on the customer having reached age 65.

Increasing rates for seniors based on their age alone would be a major departure from the way most insurance companies operate nationwide and in Maine, which has a population that leads the nation in average age. Traditionally, healthy drivers with flawless driving records see their premiums decrease as they age.

Progressive spokesman Jeff Sibel said via email that the company has not proposed raising seniors’ rates in Maine, and that it is only seeking clarification from the bureau on how it can more accurately price its customers under Maine law.

“As an industry practice, rates are developed using well-accepted actuarial principles that consider numerous factors relating to a person’s risk of loss,” Sibel said. “A major factor is loss experience, which Progressive and industry data clearly shows deteriorates as people grow older.”

Sibel said Progressive intends to respond to Collins’ questions about the company’s reasons for requesting a rate hearing about older drivers in Maine.

In her letter, Collins points out that Progressive’s proposal in Maine ultimately could have consequences for all seniors nationwide. Collins is chairwoman of the Senate Special Committee on Aging.

“There are presently 36 million American drivers age 65 or over, and every day roughly 10,000 more join their ranks,” the letter says. “For most of those seniors, their own automobile is essential to remaining active and engaged, especially those who by choice or necessity remain in the workforce.”

Collins’ letter goes on to note that research shows older drivers are less likely than younger drivers to be involved in crashes, and that they are also less likely to cause the deaths of other vehicle occupants, pedestrians, bicyclists and motorcyclists.

“In light of this data, I request justification of the proposed change,” the letter says. “Further, I would like to know whether Progressive is pursuing similar rate filings in (other) states, and whether Progressive believes that such policy is permissible under federal law.”

Earlier this week, the House chairman of the Maine Legislature’s Insurance and Financial Services Committee submitted legislation that would prohibit insurance companies from charging older Mainers higher premiums based solely on their age.

Rep. Henry Beck, a Democrat who represents parts of Waterville and Oakland, submitted to the Revisor’s Office a proposed amendment to the Maine Insurance Code in response to Progressive’s bid to get permission from the state Bureau of Insurance to impose age-based increases on older drivers.

Current Maine law prohibits insurers from boosting existing customers’ premiums as they age, but Beck said it isn’t clear whether the existing statute applies to new insurance consumers. In a June 10 decision denying Progressive’s request to raise rates for existing customers as they age, the bureau agreed that the rules regarding new customers are somewhat vague.

After denying the company’s initial rate filing and closing the case, the bureau agreed to reopen it for further discussion at Progressive’s request. The discussion would pertain only to the possibility of age-based ratings for new customers, the bureau said.

Bureau representatives said state Superintendent of Insurance Eric Cioppa would not be allowed to comment on Progressive’s rate filing until the case is closed. A meeting with Progressive has been scheduled for Aug. 16.

The request drew opposition from aging advocates such as AARP and Jessica Maurer, the state director of the Association of Area Agencies on Aging.

“To randomly suggest that 65 is a time when you’re going to get into more accidents … it’s a very random and arbitrary suggestion,” Maurer said.

About 14 percent of Maine drivers had policies through Progressive and its affiliates in 2014, according to the most recent Bureau of Insurance figures.

One factor that could be driving the company’s request is Maine’s higher-than-average rate of fatal accidents involving drivers 65 and older. According to the National Highway Traffic Safety Administration, Maine led the nation in 2012 and 2013 with the highest share of older drivers involved in fatal accidents. In 2012, the share of fatal accidents involving drivers 65 and older in the U.S. was 12.7 percent. In Maine, it was 18.6 percent. In 2013, the share nationally was 13.3 percent, and in Maine it was 20.6 percent.

Overall, Mainers paid $758 million in auto insurance premiums in 2014, according to the National Association of Insurance Commissioners.


]]> 11, 22 Jul 2016 21:58:18 +0000
Volkswagen testing emissions-cheating fix, sources say Fri, 22 Jul 2016 18:35:56 +0000 DETROIT — Volkswagen’s plan to fix most of its 2-liter diesel engines that cheat on emissions tests includes a computer software update and a larger catalytic converter to trap harmful nitrogen oxide, according to two dealers who were briefed by executives on the matter.

Limited details of the plan were made public last week at a regional dealer meeting in Newark, New Jersey, by Volkswagen of America Chief Operating Officer Mark McNabb, said the dealers, who asked not to be identified because the plan hasn’t been made public.

One dealer said the group was told that early testing of a small sample of repaired cars showed that the fix made “no discernable difference” in the cars’ mileage, horsepower or torque. Both dealers said they were told that more testing was needed and that the plans still had to be approved by the U.S. Environmental Protection Agency and the California Air Resources Board.

If the fixes don’t hurt performance and mileage, that could be a big boost for Volkswagen, which last month agreed to spend up to $15.3 billion to settle consumer lawsuits and government allegations that its diesels cheated on U.S. emissions tests. The settlement included up to $10 billion that would go to over 475,000 owners of 2-liter VW or Audi diesels, giving them the choice of selling the cars back at the pre-scandal value or getting them fixed. A fix that is satisfactory to owners would entice more of them to go for repairs, saving VW money. The $10 billion figure is the worst-case scenario for the company and includes all owners taking the buybacks. Car owners also would get payments of $5,100 to $10,000.

Volkswagen has acknowledged that the cars were programmed to turn on emissions controls during government lab tests and turn them off while on the road. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems in humans. The company got away with the scheme for seven years until independent researchers reported it to the EPA.

Even with the fixes, the VWs won’t fully comply with clean air laws because the cars were built to defeat the tests. The fixes must cut emissions by at least 80 percent, and VW must pay to mitigate any excess pollution.

At the time the settlement was announced, no fix was available, but the dealers said that VW appeared close to submitting one.

Neither the EPA nor Volkswagen would comment on details repair proposals. “Any remedies that are being discussed still need to be approved,” VW spokeswoman Jeannine Ginivan said.

Both dealers said the fix was revealed by McNabb reluctantly under questioning from Northeast region dealers toward the end of a four-hour meeting on July 15. The meeting was held to discuss how VW would implement the buyback and repair plan and included plans to have company representatives handle paperwork.

The news gave hope to the dealers, who have had to make do with a lack of new vehicles and have seen U.S. sales decline since VW admitted cheating on the tests in September of last year. So far this year, VW brand sales are down nearly 15 percent even though the overall market has grown 1.5 percent.

One of the dealers said the so-called “Generation 1” diesels – about 325,000 VW Jettas, Golfs, Passats and Beetles from the 2009 to 2014 model years – would get new software and bigger catalytic converters in January or February of next year. About 90,000 “Generation 2” Passats already have sufficient emissions systems and would get only a software update early next year. Another 67,000 “Generation 3” 2015 models would get software in October and would get additional hardware a year later, the dealer said.

Getting the fixes through the EPA and California regulators could still be a problem. The agencies in January rejected a fix for the 2-liter engines, and last week they turned down a plan to fix about 85,000 vehicles with 3-liter diesels that also cheat on emissions tests.

Alan Brown, general manager of a VW dealer in Lewisville, Texas, and chairman of the company’s National Dealer Advisory Council, said regional meetings with dealers around the country have caused most to be optimistic that better times are ahead. Details of how the cars would be fixed weren’t discussed at the meeting he attended this week, he said. But if they don’t affect mileage or performance “We’d celebrate,” he said.

Dealers also were told that they’d be reimbursed by VW for sales losses due to the scandal, and that new vehicles are coming. A small SUV built in Tennessee is due early next year, and later in the year VW plans an all-wheel-drive wagon to compete with the hot-selling Subaru Outback.

]]> 0, 22 Jul 2016 17:21:34 +0000
Portland asks residents, businesses to rate their internet provider Fri, 22 Jul 2016 16:15:21 +0000 The city of Portland is taking another step toward its goal of building an affordable municipal broadband internet network by asking residents and businesses to answer an online survey about their current internet provider.

The brief survey will help the city and network developers plan for potential improvements to internet services, according to a news release. The participation of residents and businesses is a key component to helping the city and its partners understand customer satisfaction levels with current internet service and how it can be improved via potential infrastructure investment, it said.

The survey is being conducted by Tilson Technology Management. Residents can complete the survey through Monday by going to

In November, Portland issued a request for proposals to provide a fiber-optic connection from its buildings in downtown Portland to new municipal facilities off the peninsula on Canco Road. The city said the connection could serve as “phase one” for a municipal broadband network that would offer affordable high-speed broadband service to residents, similar to what South Portland, Sanford and Rockport have announced.

Portland maintains a fiber-optic network that connects municipal buildings, such as fire stations and schools. Still, it does not provide service to any neighboring residential or commercial properties.

The expansion is necessary because the city is consolidating public works, fire and recreation operations in two buildings off the peninsula on Canco Road, not far from Cheverus High School. The consolidation will reduce the city’s presence in the Bayside neighborhood, which has been targeted for redevelopment.

What Portland is proposing is similar to the plan South Portland announced in fall 2014 to build a 4-mile network of fiber, and a plan Sanford announced in September to help fund the building of a 32-mile municipal broadband network. Rockport also has built 1.6 miles of fiber.

Time Warner Cable was selected for the connection of Canco Road, and the city has selected SiFi Networks for additional exploratory negotiations on a potential citywide fiber network.

J. Craig Anderson can be contacted at 791-6390 or at:

Twitter: jcraiganderson

]]> 4, 22 Jul 2016 18:14:33 +0000
Verizon nears $5 billion deal for Yahoo, sources say Fri, 22 Jul 2016 16:08:46 +0000 Verizon Communications is nearing a deal to buy Yahoo, beating out rival bidders for the iconic Web pioneer, people familiar with the matter said.

Verizon is discussing a price close to $5 billion for Yahoo’s core internet business, one of the people said and the deal doesn’t include the company’s patents at this stage. While other assets including Yahoo’s real estate were also on the block, it could not immediately be learned if they are part of the deal.

The companies may be ready to announce the deal in the coming days, but the agreement hasn’t been finalized and may still fall apart, the people said, asking not to be named because the deliberations are private. The two companies are in one-on-one discussions, one of the people said.

“The buyer that could make the most out of these assets has apparently won,” said Roger Entner, an analyst with Recon Analytics. “No one could get more out of Yahoo’s businesses than Verizon. ”

A representative for Verizon declined to comment. A representative for Sunnyvale, California-based Yahoo couldn’t immediately be reached outside of regular business hours.

An agreement would end a months-long bidding process for Yahoo, which began earlier this year when CEO Marissa Mayer — after keeping investors at bay for years — said the company would explore strategic alternatives, including selling its core assets that once made it the gateway to the internet.

After more than three years at the helm without delivering on a turnaround strategy, Mayer finally bowed to rising shareholder ire after the collapse of a plan to spin off Yahoo’s stake in Alibaba Group Holding in a way that would minimize the tax impact for investors. Alibaba, the largest e-commerce provider in China, emerged as the most valuable piece of Yahoo, and investors were seeking a way to realize some of those gains. After U.S. regulators failed to give prior approval for the transaction’s tax status, Yahoo was forced to jettison the plan.

AT&T and Quicken Loans founder Dan Gilbert, as well as buyout firms Vector Capital Management and TPG were also active in the bidding process until the end.

Verizon sees a complimentary set of businesses that could find a home alongside its AOL properties.

With the wireless industry maturing, Verizon has been buying up internet and advertising technology companies, including AOL, and presenting itself as the best bet to take on Google and Facebook in mobile advertising. Yahoo has millions of users, a collection of websites including Flickr, Tumblr and Yahoo Finance and Sports and some useful digital-ad tech like Flurry and BrightRoll. Together with AOL, the new Yahoo under Verizon may have a better chance of competing in a digital ad market dominated by two big players.

“This will expand Verizon’s advertising base by 200 million more visitors,” Entner said. “This will be a large driver of the advertising engine. They also can collect a whole lot more user data to make the ads more relevant. They will be in more places with better ads.”


]]> 0, 22 Jul 2016 17:26:32 +0000
Maine posts June unemployment rate of 3.7 percent Fri, 22 Jul 2016 15:08:09 +0000 Maine’s unemployment rate of 3.7 percent ticked up slightly in June, compared with May’s 3.5 percent, but is still well below June 2015’s rate.

In June of last year, the unemployment rate, which measures people who are unemployed as a percent of the labor force, was 4.4 percent, according to the Maine Department of Labor, which released June workforce estimates Friday.

The Maine data reflect national trends. The U.S. preliminary unemployment rate of 4.9 percent was up slightly from 4.7 percent in May and down from 5.3 percent one year ago.

Unemployment remained low in other New England states as well, averaging 4.4 percent. Rates for other states were 2.8 percent in New Hampshire, 3.2 percent in Vermont, 4.2 percent in Massachusetts, 5.5 percent in Rhode Island and 5.8 percent in Connecticut.

Economists generally consider a state at full employment when it consistently maintains an unemployment rate below 4 percent. Maine’s rate has been below 4 percent since December 2015.

County rates ranged from 3.0 percent in Cumberland, Knox and Sagadahoc to 5.3 percent in Aroostook.

The unemployment rate was below the statewide average in the Portland-South Portland (3.0 percent) and close to the average in the Lewiston-Auburn (3.5 percent), while Bangor came in at 3.8 percent.

]]> 11 Fri, 22 Jul 2016 12:31:25 +0000
Southwest Airlines takes a day to reboot operations Fri, 22 Jul 2016 03:07:34 +0000 DALLAS — A day after a systemwide technical outage led to more than 1,000 canceled flights, Southwest Airlines spent Thursday trying to reboot its operations. It was one of the largest network disruptions in the company’s history.

The Dallas-based company’s computer systems were back online early Thursday after about a 12-hour outage, according to company executives.

But with thousands of customers and their bags as well as flight crews stranded overnight across the country, much of Thursday was spent trying to put the pieces of its network back together.

Southwest said it canceled nearly 700 of a total 3,900 flights Wednesday and about 450 more through Thursday afternoon. Hundreds more flights were delayed.

“First of all I want to apologize to all of our customers. This is not the kind of service that we’re famous for at Southwest Airlines. … This is all on us,” CEO Gary Kelly said in an early morning interview with CNBC. “The operation just needs some time today to catch up. So it will be another tough day today, but not nearly as bad as yesterday.”

Chief Operating Officer Mike Van de Ven attributed the technical outage – which knocked Southwest’s website and many other customer-facing parts of Southwest’s operations offline, including passenger check-in, boarding passes and ticket booking – to a failed network router.

A backup system also failed, extending the outage. Ultimately the company had to replace the router and reboot 400 servers, Van de Ven said.

“We have redundant systems that should have kicked in place and they didn’t,” he said.

Wednesday’s outage translated to long lines at check-in counters and security checkpoints at airports around the country as displaced passengers tried to catch new flights Thursday.

Customers affected by Wednesday’s outage will be able to re-book their flight at no additional charge anytime in the next two weeks, the company said. They’ll also have the option to receive a refund or travel credit instead.

Kelly estimated the company missed out on up to $10 million in lost booking revenue because of the website outage. He said some of that will be made back as customers who couldn’t book Wednesday come back and buy tickets throughout the next week.

The company extended a fare sale scheduled to end Thursday by a week for customers who missed their chance to book.

“Yes, we’re worried about the financial impact of this, but what is far more important is the inconvenience that we caused our customers yesterday and today,” Kelly said.

“I feel very bad about that. We’re very apologetic and we want to just work hard to restore their confidence in us.”

]]> 1, 22 Jul 2016 07:44:53 +0000
Portland zoning board tables Airbnb case, leaving short-term rentals subject to regulation Fri, 22 Jul 2016 01:26:49 +0000 The Portland Zoning Board of Appeals tabled a resident’s appeal of an order to cease using his property for short-term rentals through Airbnb Thursday night, meaning the city could still pursue enforcement action against the homeowner and others who use their homes for short-term rentals.

A majority of board members said that they did not want to rule on an interpretation of how city zoning rules apply to short-term rentals until the City Council decides whether to revise regulations on services like Airbnb, voting 4-1 to table the appeal until February.

In an interview after the vote, resident Kenneth Thomas said he hoped the city’s zoning administrator would consider the board’s action before taking enforcement further.

“I certainly hope the 4-1 decision to table, with four members stating they were not comfortable with making a decision on this until the council has discussed Airbnb, will send a message to the zoning administrator to show restraint,” Thomas said.

The city informed Thomas in May that his use of a third-floor apartment in his home at 481 Danforth St. as an Airbnb rental was not permitted under zoning rules. Zoning administrator Ann Machado said that housing transient guests violated existing regulations in the R-4 residential zone where he lives.

Thomas is one of four Airbnb operators to receive violation notices since October. According to the Airbnb analysis website, there are 310 active Airbnb rentals in Portland.

In his appeal, Thomas’ attorney, Paul Bulger, argued that posting the unit as an Airbnb rental was an accessory use to his residence and should be permitted.

Bulger told the board Thursday that the city’s zoning rules were not structured to regulate short-term rentals, and the appropriate arena for changing the policy was the City Council.

“I want you to consider tabling this matter to allow the City Council to take this up and adopt reasonable regulation for short-term rental opportunities in the City of Portland,” Bulger said.

The council’s housing committee has discussed new regulations for services like Airbnb, but it is unclear when it could come up with a proposal.

Cities across the country have struggled with regulating Airbnb and other online services that pair customers to private rentals. Traditional lodging companies, such as hotels, are against short-term rentals because they are not bound by the same rules. Some critics in Portland have argued that online, short-term rentals take apartments off the market at the same time there is a housing shortage in the city.

Bulger said that Thomas’ situation was unique because he is involved in litigation over ownership of the property and intends to apply to rezone the house to a designation that might allow a properly permitted short-term rental.

Short-term rentals are illegal in Portland unless correctly permitted, according to the city. City staff have been issuing violation notices for short-term rentals when they receive complaints, but in Thomas’ case, the violation was discovered when housing planner Tyler Norod saw the property listed for sale and advertised as an Aribnb opportunity.

Thomas told the board he had not advertised the property for sale and filed a legal action to have it delisted. He said he welcomed city regulation on short-term rentals.

“I think it would be totally reasonable for the city to enact a fee on people who are using Airbnb,” he said. Short-term rentals have existed for a long time, but have become more visible because of the popularity of online peer-to-peer services, he said.

By requesting that the appeal be tabled, Thomas had hoped to put off enforcement of the city’s order against him, but board member Donna Katsiaficas said that was not within the board’s power.

Board member William Getz said tabling the case would not affect enforcement of the order.

“I hope it is very clear, you now know that this property is on notice and has a violation order standing,” Getz said. “We would not want our staff not to enforce things. That does not sound right or fair to other people.”

]]> 2 Fri, 22 Jul 2016 10:27:42 +0000
Mortgage rates remain near historically low levels Thu, 21 Jul 2016 22:56:47 +0000 WASHINGTON — Long-term U.S. mortgage rates edged higher this week, remaining near historically low levels as a continued enticement to prospective homebuyers.

Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage rose to 3.45 percent from 3.42 percent last week. The average rate is down sharply from 4.04 percent a year ago.

The 15-year fixed mortgage rate increased to 2.75 percent from 2.72 percent last week.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage remained at 0.5 point this week. The fee for a 15-year loan also was unchanged from last week at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.78 percent, up from 2.76 percent last week. The fee rose to 0.5 point from 0.4 point.

]]> 0 Thu, 21 Jul 2016 19:40:16 +0000
Legislative committee to review Amtrak Downeaster service Thu, 21 Jul 2016 21:46:18 +0000 AUGUSTA – A Maine legislative committee is examining oversight and cost issues through its ongoing review of the rail authority that runs Amtrak Downeaster’s train service from Boston to Brunswick.

Last year, the state Government Oversight committee voted to review the Northern New England Passenger Rail Authority following transparency and operations concerns brought by Democratic Sen. Stan Gerzofsky of Brunswick.

Committee staff on Thursday said their preliminary research hasn’t revealed any big issues with the authority’s operations, and suggested many concerns stem from the debate about the value of passenger rail service in Maine.

Committee members voted to continue its review and discussed holding a fall public hearing.

The authority’s expenditures total $123 million since 2011, and it annually receives up to $1.8 million from Maine and $7.5 million from federal funds.

]]> 1 Thu, 21 Jul 2016 17:54:58 +0000
Gardiner officials approve tax-financing deal for housing Thu, 21 Jul 2016 20:47:20 +0000 GARDINER — The developer of two proposed housing projects has the tax increment financing needed to push forward to seek funding to pay for them, but the final approval is still months away.

On Wednesday, the Gardiner City Council approved a deal that would shelter the increased value to the city from these projects if they are built. For the 30-year life of the agreement, half of the sheltered value would be paid to the developer to pay the operating costs of the housing complexes, and the city would retain the other half to be dedicated to Gardiner’s share of the School Administrative District 11’s educational assessment.

“This is an exciting possibility,” Mayor Thom Harnett said. If approved, it would create housing for older Gardiner residents who might want to give up the responsibility and cost of taking care of their homes and yards but who want to remain in Gardiner.

“We’re also in a situation where we want to develop employment opportunities at companies like Central Maine Meats and Common Wealth Poultry and the hard cider operation,” Harnett said. “People want to work there, and they need places to live.”

Developers Collaborative, the firm that wants to build affordable senior housing and affordable workforce housing on two blighted parcels on Summer Street, plans to seek tax credit financing from the Maine Housing Authority. That funding decision is expected to come at the end of the year, said Kevin Bunker, of Developers Collaborative.

The company sought this deal to improve its projects’ score with the housing authority because it’s an indication of the city’s willingness to take part in the development.

In a brief presentation to the council, Bunker said long before his company had submitted its interest in developing a medical arts building at 1 Summer St., he had been interested in one of four parcels formerly owned by T.W. Dick Co. for an affordable senior housing project.

A shift in funding priorities at the Maine State Housing Authority now indicates that workforce housing proposals will score higher in competitive funding considerations, Bunker said. So in his proposal, he has scaled back the planned senior housing and added the affordable workforce housing component to the project.

“I know there isn’t a guarantee (of funding), but I am taking the risk,” he said. He has secured the services of a civil engineering firm to put together the housing proposals to go before the Gardiner Planning Board, which meets Aug. 9 for public hearings and site plan and subdivision reviews.

The senior housing project is expected to be 28 units in a four-story building on the 24 Summer St. parcel. Workforce housing units would be built at both 24 and 59 Summer St., with 10 units in a pair of two-story buildings at 24 Summer St. and five units in a two-story building at 59 Summer St. The projects also include parking.

Under the agreement, city officials removed the parcels from the existing downtown TIF district and put them in a new affordable housing TIF district.

If the housing deal fails to secure tax credit funding, no increased value on those parcels would be generated and no TIF funds would go to either Developers Collaborative or the city.

]]> 0, 21 Jul 2016 17:25:31 +0000
Maine brewers fear mega beer merger will be ‘a net negative for beer fans’ Thu, 21 Jul 2016 20:04:48 +0000 Maine craft beer brewers reacted cautiously Thursday to word this week that the U.S. Justice Department has approved the merger of two of the world’s largest beer companies.

The department said Wednesday that it would approve the merger of Anheuser-Busch InBev and SAB Miller with the stipulation that some of the combined companies’ largest brands will be spun off and the combined company will be barred from distribution practices that could hurt smaller brewers.

The merged company will sell its stake in MillerCoors as a condition for the $101 billion deal to go through. That means AB InBev will keep its Budweiser, Beck’s and Stella Artois brands, but Miller and some European beer brands will be sold off. The company will also face restrictions on ownership of distributors and won’t be able to provide incentives to independent distributors that would increase sales of AB InBev brands at the expense of rival beers.

Smaller brewers in Maine praised the restrictions but said they still fear the deal will create a powerhouse company that will be able to control the market.

“While we are grateful that the DOJ has required certain stipulations to this unprecedented mega-merger, the simple fact is that this will still be a net negative for beer fans and the craft beer industry as a whole,” said Sean Sullivan, executive director of the Maine Brewers’ Guild. “Consumers will be left with fewer choices at the bar and grocery store.” But, Sullivan said, “it could have been worse if the stipulations regarding distribution incentives and divestiture of MillerCoors were not included.”

He said the hope among craft brewers is that restrictions on the merged company will leave enough room in the market for craft brewers to survive and thrive.

“As a new Goliath forms, trust that Maine’s craft beer brewers will be the collective David who will continue to show that prioritizing quality beer over quantity, catering to local tastes and connecting deeply with their communities is a recipe for long-term success,” Sullivan said.

Maine brewers have carved out a sizable place in the craft beer market. The state ranks sixth nationally in breweries per capita and seventh in per capita beer production.

Craft brewers are also concerned that the beer behemoth could make it more difficult and expensive for smaller brewers to get the products they need to make beer.

“The more leverage and buying power is concentrated, the more impact it could have on smaller purchasers,” said Heather Sanborn, the president of Rising Tide Brewing Co. in Portland and president of the Maine Brewers’ Guild.

But Sanborn said it was likely that regulators couldn’t adopt restrictions on commodity sales to address those concerns.

Maine Sen. Angus King was among a group of senators who late last year urged the Justice Department to require conditions to make sure that the mega-merger did not hurt craft brewers. The merged company should not be allowed “to squeeze out America’s craft brewing industry,” the senators said in a November letter to Attorney General Loretta Lynch.

The deal still requires approval of the merger from China, but the companies have agreed to sell off the maker of Snow beer, which is the world’s top-selling beer brand. That’s expected to mean Chinese regulators will approve the deal.


]]> 1, 21 Jul 2016 21:59:44 +0000
Maine home sales, median price up again in June Thu, 21 Jul 2016 18:27:55 +0000 Real estate agents across Maine reported 1,960 sales of existing, single-family homes in June, an increase of 9.6 percent compared with a year earlier.

The median price for those homes rose 5.5 percent to $198,000, according to a report issued Thursday by the Maine Association of Realtors. The median indicates that half of the homes sold for more and half sold for less.

“As the data (show), real estate sales and values continue to be strong, and conversations with Realtors across Maine indicate continued confidence in the marketplace,” association President Ed Gardner said in a news release. “New construction, including spec(ulative) homes, are more prevalent than we’ve experienced in recent years. The ‘days on market’ for sold properties has been declining during 2016, indicating qualified buyers are making their moves.”

For the three-month period ending June 30, home sales in Maine were up 18.3 percent from the same period of 2015, and the median price increased by 3.3 percent to $190,000, according to the report.

Regionally, two counties had sales increases of at least 50 percent for the three-month period. Sales were up 55.6 percent in Franklin County compared with a year earlier, and they increased by 51 percent in Lincoln County. No counties experienced a decrease in home sales, according to the report.

Changes in median sales price varied more widely from one county to the next. In Knox County, the median price for the three-month period increased by 22 percent to $225,000, the biggest price boost of any county. The biggest decrease in median price was in Washington County, where it fell 14.1 percent to $85,000.

Regionally, the Northeast experienced a 5.6 increase in June home sales and a median price of $284,800, up 1.4 percent from June 2015, according to the National Association of Realtors.

Nationwide, sales increased by 3.1 percent in June, and the median price rose by 5 percent to $284,800, it said.

]]> 0, 21 Jul 2016 19:39:18 +0000
Owner of Barber Foods in Portland wraps up its IPO, raising $219 million Thu, 21 Jul 2016 16:03:09 +0000 AdvancePierre, the parent company of Portland-based Barber Foods, raised nearly $219 million from its initial public offering, the company reported.

The company said it sold 11,090,000 shares of stock at $21 a share. The $218,916,600 is what the company received after deducting underwriting discounts and commissions.

As of late Friday morning, the stock was trading at $23.66 a share.

Cincinnati-based AdvancePierre said it planned to use the money to repay part of its debt.

AdvancePierre produces and distributes ready-to-eat sandwiches, entrees and snacks. It had revenues of $1.6 billion in 2015 and employs more than 4,000 people. Its majority shareholder is a fund managed by Oaktree Capital, an investment firm.

Barber Foods, which was founded in Portland in 1955, is best known for its stuffed chicken breasts.

]]> 0, 21 Jul 2016 12:36:38 +0000
Duffy’s purchases Old Orchard Beach properties for $1.7 million Thu, 21 Jul 2016 15:27:53 +0000 Duffy’s Tavern & Grill has purchased the Old Orchard Beach restaurant building in which it operates, along with two adjacent structures, for $1.7 million.

Duffy’s, which also operates a restaurant in Kennebunk, closed on the restaurant property at 168 Saco Ave. on Wednesday, according to Mark Sandler of Cardente Real Estate, who brokered the transaction.

The sale included the 11,750-square-foot restaurant, formerly known as The Captain’s Galley, a two-unit, 1,900-square-foot apartment building and a 2,550-square-foot home, all sitting on about 5.2 acres, according to a Cardente news release.

Duffy’s intends to continue operating the restaurant, which it had been leasing from the sellers, Michael and Gregory Mezoian, prior to the sale.

The restaurant’s owner, David “Duffy” Cluff, intends to rent out the home and the two-unit building, according to company Vice President Chris Cluff.

]]> 1 Thu, 21 Jul 2016 14:49:31 +0000
U.S. sues to block two mergers of large health insurance companies Thu, 21 Jul 2016 14:45:05 +0000 U.S. antitrust enforcers roundly rejected a pair of proposed deals that would consolidate the nation’s five biggest health insurers into three.

The Justice Department on Thursday sued to block two separate tie-ups – Anthem’s $48 billion takeover of rival health insurer Cigna and Aetna’s $37 billion bid for Humana – saying the deals would raise health care costs and reduce choices for consumers.

“These mergers would fundamentally reshape the health insurance industry,” Attorney General Loretta Lynch said at a news conference in Washington. “They would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies” and restrict competition in key markets.

Three of the companies said they would fight the lawsuits, which could tie them up in months of litigation, dragging out deals that were announced about a year ago. Cigna said it was reviewing its options under the merger agreement with Anthem, which contains language that may require it to defend a government challenge. The insurers could also agree to abandon the transactions, potentially sparking a round of new deals.

The lawsuits continue a string of merger challenges by antitrust enforcers looking to stop industry consolidation, dealing a blow to Anthem and Aetna’s bids to gain scale by snapping up rivals. The actions underpin wider sentiment within President Obama’s administration about the importance of protecting competition among health insurers. By challenging the deals, the administration has seized another opportunity to shape the future of health care – an effort to safeguard choice and affordable options for consumers – after passage of the Affordable Care Act.

Earlier this month, Obama himself wrote an essay for The Journal of the American Medical Association in which he emphasized the need for competition to keep health care affordable for consumers. Health and Human Services Secretary Sylvia Mathews Burwell, whose department is closely watching the deals because of their potential impact on the delivery of medical plans under the health care law, also highlighted the importance of competition in insurance markets in an interview with Bloomberg News on July 15.

Aetna and Humana said in a statement that they will “vigorously” fight to complete their deal. Cigna, meanwhile, cast doubt on whether its deal can be completed. Anthem said it’s ready for a court fight, but is also open to a settlement with the Justice Department.

“The DOJ’s action is based on a flawed analysis and misunderstanding of the dynamic, competitive and highly regulated health care landscape and is inconsistent with the way that the DOJ has reviewed past health care transactions,” Anthem said.

If Anthem’s bid for Cigna falls apart under antitrust scrutiny, Cigna is owed $1.85 billion, according to the terms of their agreement. Aetna would owe Humana $1 billion should its takeover fail under a U.S. challenge.

If the Anthem-Cigna merger ultimately fails, smaller insurers could become targets for Cigna, including WellCare Health Plans Inc., Centene Corp. and Molina Healthcare Inc. Anthem, meanwhile, has said it would be interested in buying assets from Aetna and Humana if they win approval for their deal conditioned on divestitures. The Justice Department can decide to settle the lawsuits if it finds asset sales by the companies resolve its concerns about the tie-ups.

Aetna did present two divestiture plans to the Justice Department in an effort to show officials that there’s sufficient competition in the market for private health plans for the elderly to allow the Humana deal to go forward, a person familiar with the matter has told Bloomberg News. Health insurers, including WellCare and Centene, offered to buy the policies up for sale, which cover about 350,000 people, the person said.

After the lawsuits were filed, Humana said it expects to record significant losses in its business selling health insurance to individuals who aren’t covered by Medicare, the U.S. program for the elderly and disabled, and would exit eight of 19 states where it sells individual plans under Obamacare.

The Justice Department signaled its opposition to the deals early on. In March, Principal Deputy Associate Attorney General Bill Baer, who is also the former head of the antitrust division and the person who decided to bring the lawsuits, told lawmakers the two takeovers are a “game changer” for the industry. He also said a year ago he would assess the industry as a whole, given the surge of deals, to make sure competition is preserved and the mergers don’t lead to higher costs for consumers.

The combinations also faced criticism from the start from consumer groups worried about higher premiums as well as from hospitals and doctors, who risk seeing lower payments from insurers that have more bargaining power. In June, a group of Democratic senators called for the Justice Department to stop the transactions.

Anthem had earlier told investors it expected the $48 billion Cigna acquisition to be approved in the second half of this year, though Cigna warned in May that the approval process could drag into 2017, citing the “complexity of the regulatory process and the dynamic environment.”

If Anthem and Cigna can overcome the government’s challenge, their combination would create the biggest U.S. health insurer by membership, topping UnitedHealth Group Inc., with total revenue of about $115 billion. The bulk of the company’s revenue – about 66 percent – would come from administrative services sold to self-insured employers. The combined company would have about 29 percent of that market, according to data compiled by Bloomberg.

If Aetna ultimately is allowed to buy Humana, it would become the biggest provider of Medicare Advantage plans, the government insurance program for the elderly. The combined company would have about 25 percent of that market, according to Bloomberg, with about half of its $115 billion in revenue coming from Medicare plans, Aetna has said.

Eight states and the District of Columbia, are joining the federal government’s suit to block the Aetna-Humana deal. Nine states and the District of Columbia joined the U.S. action against the Anthem-Cigna deal.

]]> 0, 21 Jul 2016 19:30:32 +0000
Weekly unemployment claims drop to lowest in over 3 months Thu, 21 Jul 2016 12:45:50 +0000 WASHINGTON – The number of Americans seeking unemployment benefits declined slightly last week, falling to the lowest point in 13 weeks.

The Labor Department said Thursday that weekly benefit applications dipped by 1,000 to 253,000, the lowest level since it stood at 248,000 for the week of April 16. The weekly claims applications had been at 254,000 for the previous two weeks.

Weekly claims, which are a proxy for layoffs, have been below 300,000 for 72 consecutive weeks, the longest stretch since 1973. Despite this prolonged low level, there had been worries that employment growth was slowing after weak reports in April and May. However, the anemic increase of 11,000 jobs in May was followed by a gain of 287,000 in June, easing fears that the country’s job machine might be sputtering.

The less volatile four-week average declined to 257,750, down from 259,000 the previous week.

“Claims continue to signal strength, even if the last few readings have been exaggerated on the low side by seasonal adjustment issues,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics. He said the level of benefit applications in recent weeks was evidence that there has been no significant slowdown in employment growth this summer.

Ian Shepherdson, chief economist at Pantheon Macro, said that the continuing low level of benefit applications was good news but was not likely to remain at such low levels. He said the current weekly readings were being distorted by auto plant shutdowns for the annual model year change-overs.

Even with the strong June increase in jobs, the trend in job gains has been slowing from the sizzling pace set last year. That development had been expected given that the economic expansion has now entered its eighth year.

Economists are encouraged that layoffs have not been increasing. They view that as evidence that businesses are confident that the economy will continue growing at a solid pace in the face of unexpected bumps such as the June 23 vote in Britain to leave the European Union. That development sent temporary shockwaves through global financial markets.

The U.S. economy has turned in anemic growth rates for the past two quarters, expanding at a modest pace of just 1.1 percent, as measured by the gross domestic product, in the January-March quarter. Analysts believe GDP accelerated to growth above 2 percent in the just-completed April-June quarter.

]]> 5, 21 Jul 2016 18:09:01 +0000
Herring limits expanded to prolong catch of lobster bait Thu, 21 Jul 2016 02:18:34 +0000 An interstate fishing council has extended some of Maine’s emergency Atlantic herring restrictions to Massachusetts to try to close a loophole that threatened to derail the summer supply of lobster bait.

On Wednesday, the Atlantic States Marine Fisheries Commission voted 2-1 to cut the number of days that herring boats can land fish each week within its jurisdiction from five to two, with Maine and New Hampshire representatives voting in favor of the landing day reduction and Massachusetts voting against it. Under its emergency rules, Maine had already cut its landing days down to two in an attempt to prolong the availability of fresh herring throughout the lobster season, but boats that fished that area could still land for five days if they sailed to a Massachusetts port such as Gloucester.

Maine regulators are trying to balance the lobster industry’s demand for fresh bait now, when season is just beginning but offshore herring is in short supply, with its need for fresh bait through the end of summer, when the inshore summer herring quota is in danger of running out. While lobstermen don’t like a bait shortage at any time, the industry is supporting Maine’s herring restrictions to make sure there will still be fresh bait available when they need it most.

Maine regulators who lobbied on behalf of the regional rule change say one large boat that usually fished for menhaden has begun to fish heavily for herring and bring it to Gloucester. They argued that boat, which fishermen described as 160 feet long with a 50-foot seine, could undermine Maine’s efforts to stretch the 19,400 metric ton quota of herring that can be taken from Maine’s coastal waters through September, and punish Maine’s herring fleet, which has supported the state’s effort to balance the need to prolong the quota and still keep at least some herring coming in for lobstermen to bait their traps.

“Without constraints on the landing (in Massachusetts) we would not make it into August, much less September,” said Terry Stockwell of Maine Department of Marine Resources.

New Hampshire and Massachusetts worried that the reduction in landing days might affect their whiting fishermen, which often end up catching some herring in their nets. Commission members agreed to look for ways to exempt the whiting fishery, but couldn’t figure out a way to do that on Wednesday. Stockwell, Maine’s representative, promised to raise the issue at the next meeting, which seemed to help win over New Hampshire’s support for the overall campaign to reduce herring-landing days across the region from five to two.

While Massachusetts voted against the measure, with its commissioner saying they worried that a landing reduction in Massachusetts could worsen the bait shortage for Massachusetts lobstermen, some Maine fishermen said the restrictions didn’t go far enough. In addition to the landing day reductions, Maine also implemented a hard-and-fast landing limit of no more than 600,000 pounds of herring per boat. Some Maine fishermen argued that the region should adopt a catch limit as well as a limit on the number of days that can be fished, but state officials did not make that request.

Maine did threaten to lift all of its emergency herring restrictions if the two-day landing restriction was not adopted across the region.

“The level playing field is important,” Stockwell said. “The addition of another vessel to the fishery with no landing limits and more landing days than Maine fishing vessels is profoundly unfair to our fleet. We would have no choice.”

One fisherman noted that nothing prevented the menhaden boat from surrounding itself with carrier vessels that could enable it to “gobble up” the 19,400 metric ton summer quota for the Maine coastal zone even with two-day landing weeks. Another noted that he had heard another operator was trying to outfit its trawler with seine fishing gear, as the menhaden boat had., but he wasn’t sure if he could make the gear shift fast enough to make a profitable run.

Regulators tried to calm those concerns by saying they could always meet again to adopt stricter regulations if necessary.

Maine has been struggling with how to manage the bait shortage since the spring. The dozen offshore trawlers that hunt for herring in federal waters off Georges Bank haven’t caught much yet. Some fishermen say that they simply haven’t found the fish yet, while others say it is because they want to wait until the herring schools separate from the haddock, which, as a closely regulated species, could cause closure of the entire herring fishery off Georges Bank if too many are caught in nets intended for herring.

“They can’t find herring that’s not filled with haddock, and they don’t want to hit the haddock limit and close the whole fishery down,” said New Hampshire Commissioner Ritchie White.

Several herring fishermen warned regulators Wednesday not to expect any relief from the bait shortage from the offshore fishery anytime soon.

“My captain feels it will be when the water temperatures take a plunge back down,” said Ryan Raber, the manager of the 112-foot Providian, a combination purse seiner and midwater trawler that fishes out of Portland. “Our opinion is it’s going to be late summer or early fall before we start seeing that area produce.”

Meanwhile, Maine lobstermen are struggling.

“The bait freezers are empty,” Stockwell said.

And the bait that is available is expensive.

“Prices are through the roof,” said Patrice McCarron, the executive director of the Maine Lobsterman’s Association.

Penelope Overton can be contacted at 791-6463 or at:

]]> 0, 21 Jul 2016 15:57:19 +0000
U.S. goes after Malaysian fund to recover stolen money Thu, 21 Jul 2016 01:54:51 +0000 WASHINGTON — The United States moved Wednesday to recover more than $1 billion that federal officials say was stolen from a Malaysian economic development fund and that was used for high-end real estate, fancy artwork and production of the Hollywood film, “The Wolf of Wall Street.”

The diverted funds paid for luxury properties in New York and California, a $35 million private jet and expensive paintings by Vincent Van Gogh and Claude Monet, according to federal government complaints that demand the recovery and forfeiture of the ill-gotten assets.

The complaints, filed in Los Angeles, allege a complex money laundering scheme that the Justice Department says was intended to enrich top-level officials of a government-controlled Malaysian wealth fund.

That fund, known informally as 1MDB, was created in 2009 by the Malaysian government with the goal of promoting economic development projects in the Asian nation.

Instead, officials at the fund diverted more than $3.5 billion over the next several years through a web of shell companies and bank accounts in Singapore, Switzerland, Luxembourg and the U.S., the complaints allege. About $1.3 billion raised through purportedly legitimate bond offerings was swiftly transferred to a Swiss bank account and, from there, distributed to fund officials for their own personal benefit.

“In seeking to seize these forfeited items, the Department of Justice is sending a message that we will not allow the United States to become a playground for the corrupt,” United States Attorney Eileen Decker, the U.S. Attorney in Los Angeles, said at a news conference. “And we will not allow it to be a platform for money laundering or a place to hide and invest in stolen riches.”

The more than $1 billion the government is seeking to recover reflects the amount officials were able to trace through the U.S. financial system.

Federal officials say the funds laundered into the U.S. for the benefit of 1MDB officials and their associates were used to pay for property including Manhattan penthouses; to settle gambling debts in Las Vegas casinos, to pay for a London interior decorator, expensive artwork and the for production of films, including the 2013 Oscar-nominated movie “The Wolf of Wall Street.”

“Neither 1MDB nor the Malaysian people ever saw a penny of profit from that film or from any of the other assets that were purchased with funds that were siphoned from 1MDB,” said Assistant Attorney General Leslie Caldwell, head of the Justice Department’s criminal division. “Instead, that money went to relatives and associates of the corrupt officials of 1MDB and others.”

The complaints identify by name multiple Malaysian nationals that the government alleges profited from the scheme.

Among them is Riza Shahriz Bin Abdul Aziz, who co-founded Red Granite Pictures, a movie production studio whose films include “The Wolf of Wall Street.” According to the complaint, $64 million was used to fund the studio’s operations.

Riza is the stepson of Prime Minister Najib Razak, who is not named in the complaints. But the Justice Department described Riza as a relative of an unnamed “Malaysian Official 1” – a high-ranking Malaysian government official with authority to approve all appointments and whose approval was needed for the fund’s financial commitments.

]]> 0, 20 Jul 2016 21:54:51 +0000
Southwest Airlines passengers face flight delays Thu, 21 Jul 2016 01:10:03 +0000 DALLAS — Southwest Airlines flights across the country were held up Wednesday while the airline worked to fix technology problems.

Southwest began having intermittent problems with several systems after an outage.

“We are now managing flight delays across our system, with a temporary ground stop in place for those flights that have not left the gate,” spokesman Brad Hawkins said in an emailed statement.

For about three hours, visitors to couldn’t buy tickets, check in for flights, or check their flight’s status.

Hawkins said that systems were gradually coming back, but that it might take time before the airline could resume normal operations.

Anxious customers tweeted to Southwest that they could not check in for flights.

By about 5 p.m. Central time, Southwest had canceled 16 flights, more than any other U.S. carrier, and delayed 245 others, according to tracking service

Airlines have sprawling, overlapping and complicated technology systems, and even brief outages can cause thousands of passengers to be stranded for hours.

]]> 0 Wed, 20 Jul 2016 21:39:36 +0000
Antitrust officials let maker of Budweiser take over rival SABMiller Thu, 21 Jul 2016 00:46:31 +0000 Anheuser-Busch InBev won U.S. antitrust approval for its takeover of SABMiller after the maker of Budweiser agreed to give up ownership of the Miller brand and open the door to greater competition from craft beers.

AB InBev will sell SABMiller’s stake in MillerCoors, separating the two brands, and refrain from practices that restrict distribution of smaller rival brews, thus protecting the ability of craft and import beers to compete, the Justice Department said in a statement Wednesday. The settlement will prevent any increase in concentration in the U.S. beer industry, according to the statement.

“The two largest U.S. brewers – ABI and MillerCoors – will now remain independent competitors after the deal,” Sonia Pfaffenroth, a deputy assistant attorney general at the antitrust division, said in the statement. Distributors that sell AB InBev beer “will have the freedom to sell and promote the variety of beers that many Americans drink.”

AB InBev, already the world’s largest brewer, struck the $101 billion deal because it wanted to gain SABMiller’s access to emerging markets in Latin America and Africa. After divestitures, the deal will keep Budweiser, Beck’s and Stella Artois under AB InBev’s roof, while ceding control of brands such as Miller in the U.S. and Peroni and Pilsner Urquell in Europe.

The pending deal has raised alarm in Maine’s growing craft brew community because of concerns that a megacompany would restrict distribution channels needed by small brewers to get their beer to markets such as restaurants, bars and retailers. And that it could buy up raw materials like hops, thereby shutting out craft brewers.

Maine ranks sixth nationwide for breweries per capita, and seventh nationwide for per-capita beer production. Since 2011, the number of Maine breweries has more than doubled, from 34 to 71. In 2014, they collectively employed 1,500 people and reported sales of $432 million.

Even U.S. Sen. Angus King has raised concerns about the merger. He and a bipartisan group of senators last November urged the Justice Department to protect craft brewers from potentially unfair and illegal trade practices by larger beer companies.

“As members with robust craft brewing industries in our states, we ask that you take the necessary steps to ensure that AB InBev’s purchase of SABMiller does not allow the new combined company to squeeze out America’s craft brewing industry,” the group said in its letter to Attorney General Loretta Lynch.

They asked Lynch to “vigorously scrutinize the acquisition and any divestiture plan to ensure that AB InBev does not increase its already-dominant market position through the transaction.”

The brewers still need clearance from China before they can close the transaction. Last month, people familiar with the matter told Bloomberg News that Chinese officials were close to blessing the tie-up after the companies agreed to divest the maker of Snow beer, the world’s top-selling brand.

AB InBev expects to close in the second half of the year.


The company had moved to address competition problems in the U.S. by offering to sell SABMiller’s MillerCoors 58 percent stake to Molson Coors. Still, the deal triggered concerns among U.S. lawmakers, beer distributors and craft brewers worried about AB InBev’s control over the market.

Craft brewers complained that AB InBev’s incentive system for beer distributors curbed the sale of competing beers by encouraging distributors to carry AB InBev brands.

Under the settlement with the Justice Department, which requires court approval, AB InBev is prohibited from acquiring a distributor if the purchase would cause more than 10 percent of AB InBev’s beer in the U.S. to be sold through its own distributors. The brewer also can’t provide incentives or rewards to a distributor based on the percentage of AB InBev beer the distributor sells compared with the sale of rival beers. The distribution requirements will be in place for 10 years, according to the settlement terms.

AB InBev is required to notify antitrust officials if it purchases a craft brewer, even if the size of the target falls below the legal reporting requirements, so the Justice Department can evaluate the competitive effects of any acquisition.

The agreement to allow the brewing juggernauts combine runs counter to the government’s recent moves against other big deals – the Justice Department and the Federal Trade Commission have killed proposed combinations in the cable, office supplies and oil drilling industries, among others. In this case, the companies proposed asset sales from the start that helped resolve antitrust officials’ concerns.

Shares of Molson Coors Brewing Co., which will buy SABMiller’s stake in their joint venture, climbed 2.8 percent in New York to close at $100.80. AB InBev closed down less than 1 percent at 112.95 euros in Brussels. SABMiller was little changed at 44.25 pounds in London.

Staff Writer Dennis Hoey contributed to this report.

]]> 1, 21 Jul 2016 08:25:14 +0000
Stocks continue upward move into record territory Wed, 20 Jul 2016 23:44:13 +0000 NEW YORK — Stocks took another modest step further into record territory Wednesday after several companies reported profits that were stronger than expected, if not strong. Technology stocks led the way following an encouraging report from Microsoft.

Both the Standard & Poor’s 500 index and Dow Jones industrial average set all-time highs, and the Dow marked its ninth consecutive day of gains. It’s the longest winning streak for the measure of blue-chip stocks since 2013, and it’s been a decidedly slow-and-steady one. All but one of those days had a gain of less than 1 percent.

“The problem is: Where do we go from here?” asked Randy Frederick, managing director of trading and derivatives at Charles Schwab. “I have the tendency to believe the upside is somewhat limited,” in part because stock prices have been rising faster than corporate earnings in recent years.

The Standard & Poor’s 500 index rose 9.24 points, or 0.4 percent, to close at 2,173.02. The Dow Jones industrial average rose 36.02, or 0.2 percent, to 18,595.03. The Nasdaq composite rose 53.56, or 1.1 percent, to 5,089.93.

Companies are in the middle of telling investors how much they earned in the spring, and analysts are forecasting yet another decline from year-ago levels. The low expectations have made it easier for companies to come in above forecasts.

Microsoft surged to one of the biggest increases in the S&P 500 in the first day of trading after it reported quarterly results that easily beat analysts’ expectations. The technology giant’s stock jumped $2.82, or 5.3 percent, to $55.91 after it said momentum in its cloud-computing business helped it to return to a profit in its fiscal fourth quarter.

That drove the technology sector up 1.4 percent, much more than the rest of the market.

The best-performing stock in the S&P 500 was Cintas, which jumped $9.43, or 9.7 percent, to $106.85. The company, which provides uniforms, restroom supplies and other products for offices, also reported quarterly earnings above analysts’ expectations.

So far this reporting season, earnings for nearly two out of three companies have come in above analysts’ expectations, according to S&P Global Markets Intelligence. That’s what usually happens, because analysts tend to lower their earnings forecasts for companies as each reporting season approaches.

Several reports on the U.S. economy have also come in better than expected in recent weeks, which has helped drive the run for stocks to a record.

Markets have become calm enough that the VIX, an index that measures investors’ expectations of future volatility in the stock market, fell 2.2 percent and is near its lowest level since 2014.

The S&P 500 has been on a steady ride higher since setting a record on July 1, with no days where it has swung by 1 percent during that span. That’s a sharp turnaround from the end of June, when the S&P 500 swung at least that much in six straight days, with one fear-inducing drop of 3.6 percent.

The market’s calm has also meant less demand for gold and Treasurys, traditional go-to investments during periods of fear. The price of gold fell $13 to $1,319.30 per ounce. The yield on the 10-year Treasury note, which moves in the opposite direction of its price, rose to 1.58 percent from 1.56 percent late Tuesday.

The weakest areas of the stock market Tuesday were sectors that tend to be big dividend payers, such as utilities, which lost 0.5 percent.

]]> 0 Thu, 21 Jul 2016 08:25:37 +0000
Insurance industry news Wed, 20 Jul 2016 21:21:32 +0000 NEW HIRES
Clark Insurance hired four people to work in its Portland office.
542809 Nick Jobin_Clark InsuranceNicholas Jobin joined as an associate account manager in the business insurance services department. Jobin, of Westbrook, graduated from St. Joseph’s College of Maine.



542809 Dana Hayward_Clark InsuranceDana Hayward joined as an account analyst. She lives in North Yarmouth and is a recent graduate of the University of Southern Maine.



542809 Tammy Spalding_Clark InsuranceTammy Spaulding, of South Portland, was hired as an account manager in the personal insurance department. She has more than five years of experience in the industry.



542809 Heather Clark_Clark InsuranceHeather Clark, of Windham and Westbrook, was also hired as an account analyst in the personal insurance department. She brings 13 years of insurance experience to the agency.



542809 Meghan FlynnMeghan Flynn was hired as sales assistant at Norton Insurance Agency.
Flynn, of Portland, was previously a group/corporate sales representative for Fairfield Inn Marriott in Scarborough and an insurance sales producer for State Farm Insurance.


542809 Allen_JPickfordJeremy Pickford joined Allen Insurance and Financial.
Pickford, of Camden, recently returned to Maine after a global career in marketing and retail. He obtained his license to sell property and casualty insurance in the state of Maine in December 2015.



542809 Allen_CGartleyCameron Gartley joined the personal insurance division at Allen Insurance and Financial.
Gartley, of Rockport, previously worked for Camden National Bank.



542809 Forte, TimothyTimothy Forte has joined the USI South Portland office as vice president of the Maine Operating Co.’s commercial insurance practice.
Forte began his insurance career in business development for Liberty Mutual prior to joining USI.


542809 Karen LibbyKaren Libby was promoted to director of claims at Patriot Insurance Co.
Libby has been with Patriot since 2014 and has more than 25 years of insurance claims experience.



Allen Insurance and Financial announced that four people have earned their licenses to sell life insurance in Maine. Meesha Luce, Leann McMusic, Chris Wilson and Diane Zollo are now licensed to sell life insurance. All are personal insurance account managers in Allen’s Rockland office.

Meesha Luce

Meesha Luce

Leann McMusic,

Leann McMusic,

Chris Wilson

Chris Wilson

Diane Zollo

Diane Zollo





Another three employees at Allen also received their state insurance licenses. Amanda Heal, Courtney Leonard and Samantha Runius have obtained a license to sell property and casualty insurance in Maine.
542809 Allen_AHeal2Heal, a receptionist in the company’s Rockland office, joined Allen in 2015.



542809 Allen_CLeonard2Leonard is a scanning associate in the company’s Camden office. She joined Allen Insurance and Financial in 2015.



542809 Allen_SRunius2Runius, a business insurance processor in the Camden office, joined the company in 2008.



542809 Josh Ellis 4x6 cropped 215KBJoshua Ellis, an account executive in the business insurance department of Clark Insurance, has earned the industry designation Certified Insurance Counselor.
Ellis, of Falmouth, is a graduate of Ithaca College and joined Clark Insurance in 2009.




The Maine Chapter of the Chartered Property Casualty Underwriters Society recently recognized Rachel Banister as the recipient of the 2016 Lee G. Allen President’s award of excellence.
Bannister is currently working at Patrons Oxford Insurance Co. in Auburn as a marketing supervisor.

Insurance Professionals of Greater Portland, the local chapter of International Association of Insurance Professionals, was awarded winner of Margaret M. Horvath Education Award and runner-up of the Karolyn E. Frost Public Relations Award at the Region 1 conference.

Allen Insurance and Financial of Camden announced that Jo-Ann Neal and Jennifer Wadsworth completed the National Association of Health Insurance Underwriter’s Benefits Account Manager Certification Course.
542809 Allen_JNealNeal joined the company in 2013 and works with clients on group benefits. She also assists individuals enrolling in Medicare and individual health insurance.



542809 Allen_JWadsworthWadsworth joined the company in 2014 and works with clients on group benefits with a focus on group health insurance.



542809 Allen_BSchofieldThe firm also announced that Brandy Schofield completed the National Association of Health Insurance Underwriter’s Consumer Directed Health Care Certification Course.
She is an account manager in the company’s insured benefits division.


Insurance Professionals of Greater Portland, the local chapter of International Association of Insurance Professionals, elected officers:
Adele Nichols was elected president; Amee Rice, as president-elect; Nicole Glover, as secretary; and Heather Caston-Talbot, as treasurer.

]]> 0, 20 Jul 2016 16:50:20 +0000
Technical problem delays Southwest Airlines flights Wed, 20 Jul 2016 21:21:05 +0000 Technical problems were delaying Southwest Airlines flights nationwide Wednesday, including at the Portland International Jetport.

A Southwest spokesman told the Dallas Morning News that there was an outage that caused issues with multiple technology systems.

At the Portland jetport, one Southwest flight to Baltimore scheduled to leave at 3:15 p.m. Wednesday was delayed nearly two hours because of the computer problems, said Paul Bradbury, jetport director. By 5 p.m., the flight’s passengers began the boarding process, Bradbury said.

A second flight, scheduled to depart Portland for Baltimore at 5:45 p.m., was also likely to be delayed, but how long the delay may last wasn’t known, Bradbury said around 5 p.m. He said federal rules about how long a flight crew can work each day will also become limiting factors.

“Their system will be running long,” Bradbury said. “The pilot and flight crews are still here, and their clocks are still ticking.”

]]> 0, 20 Jul 2016 17:22:00 +0000
Maine legislator submits bill to ban auto insurance hikes based solely on getting older Wed, 20 Jul 2016 18:35:19 +0000 The House chairman of the Legislature’s Insurance and Financial Services Committee has submitted legislation that would prohibit insurance companies from charging older Mainers higher premiums based solely on their age.

Rep. Henry Beck, a Democrat who represents parts of Waterville and Oakland, has submitted to the Revisor’s Office a proposed amendment to the Maine Insurance Code in response to insurance provider Progressive Corp. seeking permission from the state Bureau of Insurance to impose age-based increases on older drivers.

Current Maine law prohibits insurers from boosting existing customers’ premiums as they age, but Beck said it isn’t clear whether the existing statute applies to new insurance consumers.

“I think it’s totally logical to extend that protection to new consumers,” he said. “I’ve now filed legislation to take care of the issue.”

The proposed amendment states, “No insurance company authorized to transact business in this State shall cancel, reduce liability limits, refuse to renew or increase the premium of any automobile insurance policy of any kind whatsoever for the sole reason that the person to whom such policy has been issued has reached a certain age.”

Jess Maurer, executive director of the Maine Association of Area Agencies on Aging, said she supports Beck’s proposed amendment. Maurer said it is a myth that seniors “are out there wreaking havoc on the road.”

In fact, she said, the typical Maine senior drives less than younger drivers by consolidating trips, limits driving to daylight hours and avoids driving in adverse weather conditions.

“To randomly suggest that 65 is a time when you’re going to get into more accidents … it’s a very random and arbitrary suggestion,” Maurer said.

Beck said a plausible argument can be made that Maine’s existing insurance code already prohibits what Progressive is trying to do. The Ohio-based insurer, which covers nearly 15 percent of all Maine drivers, recently asked the Bureau of Insurance to provide its interpretation of the law. The case is still pending. The company did not respond to repeated requests from the Portland Press Herald to explain the reason for its request.

“I don’t think they’re being untoward,” Beck said. “There is some ambiguity in the law.”

Still, he said the Legislature can remove all doubt by passing his proposed amendment when it convenes for its next session. If enacted, the new law would apply to all new insurance policies issued after July 1, 2017.

“I think there will be tremendous interest from the Legislature to support this legislation,” Beck said.

Attempts Tuesday and Wednesday to reach state Sen. Rod Whittemore, the Republican co-chairman of the Insurance and Financial Services Committee, were unsuccessful. New bills will be considered in the next session of the Legislature in January.

Progressive initially asked the Bureau of Insurance to allow it to raise the rates of existing customers in Maine as they age, but the bureau denied that request in June, saying it would violate state law. A hypothetical example that Progressive provided to the bureau shows a 65-year-old being charged 6 percent more than a 64-year-old based solely on the customer having reached age 65.

In its June 10 decision, the bureau left open the possibility that Progressive could request permission to charge new customers in Maine higher premiums based on their advancing age. It has agreed to revisit the ruling for further discussion at Progressive’s request, and a meeting has been scheduled for mid-August. The discussion would pertain only to the possibility of age-based ratings for new customers, the bureau said.

The attempt to tie premium increases solely to age appears to be unprecedented in the auto insurance industry, according to the Insurance Information Institute, a trade group. While teen drivers are typically charged the highest rates, those rates decline as a driver gains experience and a driving history. Loretta Worters, vice president of communications for the institute, said older drivers are often offered discounts on their insurance premiums because of strong driving histories and other factors unrelated to age.

Progressive’s proposal was met with opposition from the state director of AARP Maine, an advocacy group for older Americans. Lori Parham said that although her organization has not engaged directly with Progressive on the pending rate case, AARP opposes any action that could limit the mobility of healthy seniors in Maine. She noted that raising rates for older drivers based on their age could necessitate improvements in public transportation if it prices seniors out of the market.

]]> 3, 20 Jul 2016 20:33:52 +0000
Kids’ L.L. Bean insulated bottles recalled for lead content Wed, 20 Jul 2016 15:50:08 +0000 The federal government has issued a recall for a child’s water bottle sold only at L.L.Bean because of concerns about lead in the exterior base of the bottles.

The U.S. Consumer Product Safety Commission issued the voluntary recall Tuesday for five styles of kids’ insulated water bottles with printed graphics. The bottles are 13.5 ounces capacity with the following color prints: Dino Bones, Flower Power, Orange Grid camo, Purple Tie Dye Butterfly and Robo Shark.

The bottles, made in China and distributed by a Spokane, Washington, company, have high levels of lead in the solder at the exterior base of the bottle. Lead is toxic if ingested by young children and can cause adverse health issues, according to the CPSC recall. No injuries or incidents have been reported as a result of exposure to the bottles.

Freeport-based outfitter L.L.Bean is offering a full refund on the bottles, which have been available since the fall of 2015. About 6,700 of the bottles were sold.

The retailer said routine testing by the manufacturer resulted in a positive reading for the presence of lead on the outside bottom of the bottle where the outer vacuum layer is sealed.

“The product was designed specifically to be lead-free and initial testing confirmed that this was the case,” said L.L.Bean spokeswoman Carolyn Beem in a statement. “The manufacturer’s ongoing quality testing subsequently indicated some of the bottles contained lead in the solder plug on the bottom exterior. When this was discovered, the manufacturer recalled all of the bottles.”

Beem said the primary concern with the product is that a child may access the lead, not that the lead would leach into the contents of the bottle interior or anything else.

“We sincerely regret disappointing our customers,” she said.

The retailer mailed letters to its customers notifying them of the recall and enclosed a prepaid mailer to return the water bottle.

The item identification number 297684 is printed on a sticker on the bottom of the recalled water bottles. Also printed on the sticker are “PO#844” and “BB2D2-LLB-R45-0413.”

Consumers can contact L.L.Bean at 800-555-9717 from 8 a.m. to 10 p.m., or online at and click on “Recall & Safety Info” for more information.

]]> 11, 20 Jul 2016 22:26:03 +0000
Cross Insurance acquires Bangor-based competitor Wed, 20 Jul 2016 14:48:02 +0000 Cross Insurance has expanded its reach in Maine with the acquisition of a nearby, rival agency.

Cross, which is one of New England’s largest insurance agencies, acquired Bangor-based Sargent, Tyler & West, according to a release from Cross.

For nearly 200 years, Sargent, Tyler & West provided insurance for homes, autos, boats, motorcycles, businesses, life and health. The acquisition involves the agency’s Bangor office and its Bucksport branch, Roland Grindle Insurance Agency.

“The Sargent, Tyler & West office in Bangor is a well-known and long-standing agency in the area,” said Alice Dyer, vice president of Cross Financial Corp., the parent company of Cross Insurance, in the release. “We have enjoyed a great competitive relationship over the years and know the agency very well. We plan to merge their accounts with our 491 Main St. office within the next several weeks. The Bucksport office will continue to be managed by Terry Grindle, and remain a separate branch office.”

Terms of the deal were not disclosed.

Cross now has 700 employees operating out of offices in Maine, New Hampshire, Rhode Island, Massachusetts, Connecticut and Florida.

]]> 0 Wed, 20 Jul 2016 22:13:56 +0000
Fox News CEO, facing charge of harassment, expected to be removed Wed, 20 Jul 2016 01:33:08 +0000 Roger Ailes, the former Republican political operative who oversaw the creation of the Fox News Channel and turned it into the leading voice of American conservatism, is expected to be removed from his position at the network amid a budding sexual harassment scandal, according to multiple reports.

Ailes, 76, has been chairman and chief executive of Fox from its inception in 1996, and he is often described as one of the most powerful figures in American media and politics. Under his guidance, Fox News grew into a pugnacious and popular news and opinion source, far surpassing the pioneering and more centrist CNN in ratings and profits.

The Drudge Report on Tuesday first broke the news of Ailes’ expected departure, without citing a source; it briefly posted a document that appeared to be parent company 21st Century Fox’s settlement agreement with Ailes. Shortly afterward, 21st Century Fox released a statement reading: “Roger is at work. The review is ongoing. The only agreement that is in place is his existing employment agreement.”

The Washington Post could not independently confirm the authenticity of the document posted by Drudge.

Tuesday’s flurry of events came just two weeks after Gretchen Carlson filed a lawsuit alleging that Ailes had sexually harassed her during her 11-year career at Fox. Carlson alleged that Ailes terminated her employment in June after she spurned his advances; Fox maintained that Carlson’s contract wasn’t renewed because her program ratings had declined.

The lawsuit appears to have set off a chain of events that led to demands for Ailes’ resignation from his bosses, media baron Rupert Murdoch and his sons, Lachlan and James. Amid an investigation of Ailes’ conduct by an outside law firm, other Fox employees came forward with sexual-harassment allegations against Ailes.

]]> 0, 19 Jul 2016 21:50:20 +0000
Three states suing Volkswagen over diesel emissions cheating Wed, 20 Jul 2016 00:35:30 +0000 ALBANY, N.Y. — New York state, Massachusetts and Maryland are suing Volkswagen and its affiliates Audi and Porsche over diesel emissions cheating, alleging that the German automakers defrauded customers, misled regulators and then sought to cover up the deception.

The lawsuits, announced Tuesday, allege that numerous employees and executives at Volkswagen knew that diesel vehicles had been equipped with software allowing them to cheat emissions testing, and that after regulators began investigating several employees tried to cover it up by eliminating data about the software.

“The allegations against Volkswagen, Audi and Porsche reveal a culture of deeply-rooted corporate arrogance, combined with a conscious disregard for the rule of law or the protection of public health and the environment,” said New York Attorney General Eric Schneiderman. “These suits should serve as a siren in every corporate board room, that if any company engages in this type of calculated and systematic illegality, we will bring the full force of the law – and seek the stiffest possible sanctions – to protect our citizens.”

In a statement, Volkswagen said it is already in talks with authorities regarding “a comprehensive national resolution of all remaining environmental issues arising from the diesel matter.” The company also noted that it has agreed to buy back or modify affected vehicles, create a $2.7 billion environmental trust and invest $2 billion on infrastructure for zero-emission vehicles.

“The allegations in complaints filed by certain states today are essentially not new and we have been addressing them in our discussions with U.S. federal and state authorities,” the company said. “It is regrettable that some states have decided to sue for environmental claims now, notwithstanding their prior support of this ongoing federal-state collaborative process.”

The legal action seeks “substantial penalties” that would be based on a calculation of the duration of the alleged violations.

While news of the rigged emissions tests first erupted a year ago, the new legal action makes several new allegations – most notably about the involvement of Volkswagen engineers and executives. The suit alleges that Volkswagen repeatedly submitted false emissions data to regulators and sought to eliminate evidence when an investigation began.

“This ‘clean diesel’ was nothing more than a dirty cover up,” said Massachusetts Attorney General Maura Healey. “Volkswagen acted as if it was above the law.”

Volkswagen also issued “sham” recall notices to some car owners and dealers in an effort to “turn down” the software, according to the New York lawsuit. Instead, some owners were told the recalls were needed for upgrades and “optimize” emissions.

At one point, when California regulators announced plans for emissions tests that threatened to expose the devices, the company’s top engineer emailed colleagues seeking help, according to the lawsuit, writing. “Come up with the story please!”

Just before the scandal broke, in August 2015, eight employees in the engineering department “promptly deleted or removed incriminating data about the devices from the company’s record,” according to the lawsuit.

]]> 2, 20 Jul 2016 08:03:42 +0000
As PCs decline, Microsoft moves into cloud storage Wed, 20 Jul 2016 00:30:09 +0000 SAN FRANCISCO — In a world where there’s a smartphone app for everything, one company – Amazon – has long been the host for an outsized share of online software and computing services.

Microsoft Corp. CEO Satya Nadella wants to change that.

Nadella has poured billions of dollars into building new data centers around the world, hoping to position Microsoft as the leading alternative to Amazon in selling online computing power – housed in remote centers or “clouds” – to internet startups and big corporations, as well as consumers.

As evidence the investment is paying off, Microsoft Corp. reported Tuesday that its Azure cloud-computing business more than doubled in sales last quarter, compared with a year earlier. That growth, combined with increases in revenue from Windows software licenses and other key segments, helped offset a big decline in revenue from the Nokia smartphone business that Microsoft largely shut down last year.

If Amazon has been the undisputed king of the cloud, analysts say Microsoft, Google and a few other tech giants are emerging as rivals. The competition could mean lower prices and more innovation, both for businesses that buy cloud-computing services and for consumers who use popular apps – from Netflix to Pinterest and Airbnb – that run in the cloud.

Amazon pioneered the cloud business almost 10 years ago, when the online retailer began renting out unused capacity on its own servers. Estimates vary, depending on how you define “cloud computing,” but analysts at Synergy Research Group say Amazon today has more than 30 percent of the market, while Microsoft has 10 percent – partly on the strength of Microsoft’s promise that its cloud services are compatible with Microsoft software that customers already have on their own computers.

IBM and Google have 7 and 5 percent, respectively. Like Microsoft, IBM reported this week that its cloud revenues increased in the last quarter, despite a broader decline in its traditional software business.

]]> 0 Tue, 19 Jul 2016 20:30:09 +0000
As the market goes, so goes November election? Wed, 20 Jul 2016 00:00:34 +0000 NEW YORK — For an idea of how a presidential election will go, you could do a lot worse than look at the stock market.

It has a record of prescience that is hard to exaggerate. Since 1928, U.S. equities have correctly signaled who will win, incumbent or challenger, 19 out of 22 times, data compiled by Strategas Research Partners LLC and Bloomberg show. When stocks are higher in the months before a vote, the sitting party has won 86 percent of elections.

People can differ on why, but to most analysts it’s a matter of influence flowing from the economy to the market and into the minds of voters. With the S&P 500 Index at a record, that’s good news for Hillary Clinton – though a lot could still go wrong in the market before November. The rally is getting old, for one thing, and some analysts wonder if Federal Reserve stimulus has made stocks a less reliable signal of economic health than they were in the past.

“The market is somewhat a mirror of the economy and the incumbent is at an advantage when it’s relatively healthy,” said Crit Thomas, senior investment strategist at Touchstone Investments in Cincinnati, where the firm oversees $15 billion. “But there are always circumstances where the market could say one thing and not have the impact it suggested in the past, relative to the elections.”

To be sure, the reputation of markets in handicapping politics took a beating in June, when stocks around the world soared prior to the U.K. referendum only to fall the most in seven years when voters chose to secede. After climbing within points of a record on June 23, U.S. stocks lost 5 percent in the two days after.

Of course, that was quickly forgotten, and political handicappers are again faced with the S&P 500 at an all-time high with its enviable prescience in picking presidential winners. The signals proved accurate in the last eight elections, including 2008, when a five-quarter equity retreat preceded Barack Obama’s victory, and 2012, when stocks rose in four of the five months before he was sent back to the White House.

The stock market has proven nothing if not resilient heading into the election year. Over 10 months, it has dodged and weaved its way through two separate 10 percent corrections and the Fed’s first interest rate increase in almost a decade. Helping propel the advance have been government reports showing strength in the services sector and hiring. A gauge that measures how much U.S. economic data is exceeding forecasts increased to the highest level since 2014 last week.

Consistent with the historical precedent, Clinton’s prospects have mirrored fluctuations in the stock market for the last eight months, a period when the two lines moved with an 84 percent correlation, according to Bianco Research LLC. Using election odds compiled by the PredictIt option site and the level the S&P 500, both peaked in November and bottomed out in February,.

Republican challenger Donald Trump’s prospects have been less correlated, a fact that may be attributable to his longer odds in a multicandidate primary during most of that period. While the Republican’s chances have almost doubled to 33 percent since November, his correlation with the S&P 500 is only 10 percent.

“The chart is basically treating Clinton as an incumbent and arguing that the economy is strong enough for her to get elected,” said Daniel Clifton, head of policy research at New York-based Strategas. Still, “the stock market will become a much better barometer in the last three months of the elections than it is today.”

Using economic proxies to forecast politics might have worked in the past but it won’t this time, according to Goldman Sachs Group Inc. analysts led by U.S. political economist Alec Phillips. More important in 2016 is how primed the electorate is for change, something that can be divined from things like GDP, the sitting president’s approval rating and how long his term has lasted, they wrote.

Moreover, those hoping to use equities as a thermometer should be aware that the stock market has rarely been as divorced from the economy as in the last seven years. Helped along by near-zero interest rates, the S&P 500 has returned 3.7 percent a quarter on average since March 2009, compared with a 0.9 percent gain in gross domestic product. That gap is the widest since World War II.

“I’m not sure past correlation means much in this type of environment,” said Hank Smith, who helps manage $8 billion as chief investment officer at Haverford Trust Co. in Radnor, Pa. “Regardless of your age, no one living today has seen an election like this, like no one living today has seen monetary policy like we’ve had in the past handful of years.”

Even if you buy that the market is smiling on Clinton, much could still go wrong. While it’s good news for Democrats that equities shook off 13 months of torpor and set a fresh high last week, there’s still five months to go before Election Day. The bull market is aging – at nearly 2,700 days – it has outlasted all but one rally in U.S. history. Significant portions of the bear case on stocks rest on this fact alone.

]]> 0, 20 Jul 2016 08:04:12 +0000
Value of home ownership in U.S. has never been greater Tue, 19 Jul 2016 22:54:21 +0000 The value of owning a home in the United States has never been greater, at least according to one figure buried in a monthly Commerce Department report.

The share of Americans’ total personal income coming from rental profit rose to a record 4.4 percent in the first quarter of 2016, data released in June show. That’s at an all-time high in figures dating back to 1947, and is up from just 0.7 percent thirty years ago.

Rental income includes landlords’ profits, according to the Commerce Department’s definition. What’s perhaps less obvious: It also includes how much owner-occupants would make if they rented out their house or apartment, after accounting for expenses including mortgage interest and property taxes or insurance.

As a result, the data offer a nice gauge of how much home ownership is worth versus other income sources, like wages or transfer payments. The figures underline an important trend – homeowners who escaped foreclosure during the financial crisis have made out in the years that followed, while renters have faced a difficult road.

Two economic trends are at play here. First, historically low mortgage rates have cut down the expenses that would eat into landlords’ profit. At the same time, tight supply has pushed rental prices in the U.S. up at more than double the rate of other goods and services.

The cost for renting a home grew by 3.5 percent in the year through June, a post-recession high and above overall price gains excluding shelter, food and energy, of 1.4 percent.

“The share of Americans renting their home is now nearing 50-year highs, and this rapid shift has occurred at a time when the rental housing stock has not had ample time to catch up,” said Ralph McLaughlin, chief economist at real estate search engine Trulia. “Investors have been able to capitalize on this shortfall by taking higher rents.”

The strong demand for rental units has become a self-reinforcing trend: Shelling out high rent payments makes it hard for households to save for a down payment. And credit standards are strict, making it difficult for those with less-than-stellar histories to acquire mortgages.

That means even as homeownership becomes a bigger portion of Americans’ total income, it is also increasingly exclusive. The U.S. home ownership rate fell to 63.5 percent in the first quarter, holding near a 48-year low.

]]> 0 Tue, 19 Jul 2016 19:05:23 +0000
With its bankruptcy concluded, Verso stock begins trading again Tue, 19 Jul 2016 21:20:52 +0000 Verso Corp.’s stock was trading once again Tuesday on the New York Stock Exchange following the paper company’s emergence from bankruptcy.

While the stock was officially relisted on Monday, it did not begin trading until Tuesday. The stock opened at $12.23 a share, and its value rose briefly as high as $13.59 before settling to around $12 for most of the day. It ended the day at $12 a share, down about 1.9 percent from the opening price. During the day’s trading, 47,769 Verso shares changed hands.

Overall, the company’s first day back on a major stock exchange was fairly lackluster with little movement in its share price and only a small percentage of shares traded, said Brad McCurtain, president of Maine Securities Corp. in Portland.

“I think it was kind of a forgettable situation,” McCurtain said.

The Memphis-based papermaker, which emerged from Chapter 11 bankruptcy on Friday, had been delisted from the exchange in September after its stock price fell far below the required $1 average over a 30-day trading period. The stock was moved to the Over the Counter Bulletin Board exchange, where its price fluctuated between 1 and 16 cents a share prior to the company’s Jan. 26 bankruptcy filing.

Verso, which employs more than 560 workers at its Androscoggin mill in Jay, filed for bankruptcy in Delaware to restructure $2.4 billion of debt. Verso is headquartered in Tennessee but incorporated in Delaware.

On Friday, the company filed documents with the U.S. Securities and Exchange Commission to implement its court-approved bankruptcy reorganization plan and issue 34.4 million shares of new stock. The new shares were issued to certain major creditors in the bankruptcy in lieu of debt repayment. Previous shareholders lost all of their shares when the company declared bankruptcy.

Based on the stock’s closing price, Verso’s new market capitalization was $412.8 million as of late Tuesday.

In the bankruptcy filing, two Maine companies were listed among Verso’s 30 largest creditors. Catalyst Paper Operations Inc. of Rumford was owed $2.2 million and Hartt Transportation Systems Inc. of Bangor was owed $1.2 million. The master list of creditors filed by Verso included the names of 30,785 businesses and individuals to whom the company owed money.

Hartt Chief Financial Officer Joanna Bradeen said her company was not among those that received Verso stock. Instead, Hartt received a portion of what it was owed in cash. The creditors that received Verso stock were primarily larger institutions to which Verso had long-term debt obligations, she said.

Most of the company’s unsecured creditors received about 25 percent of what they were owed, Bradeen said, adding that Hartt did considerably better than that.

“Every unsecured creditor got something,” she said.

McCurtain, the financial adviser, said it is likely that some former creditors who now own Verso stock will move to unload it quickly, while others may hang onto their shares to see how the company performs in its new, scaled-down iteration.

He said most typical investors probably don’t know enough about Verso at this point to be interested in buying the company’s stock.

“It wasn’t followed very heavily before the bankruptcy,” McCurtain said.

Verso had struggled financially in the years leading up to the bankruptcy. It sold off its unprofitable Bucksport mill in 2014, eliminating 500 jobs. The move was part of a complicated $1.4 billion deal that involved the acquisition and then sale of the former NewPage mill in Rumford in January of 2015. That mill is now owned by Canada-based Catalyst Paper.

At the conclusion of the NewPage deal, Verso had about $3.5 billion in annual sales and about 5,800 employees in eight mills across six states. In its bankruptcy filing, the company reported gross revenues of about $2.4 billion for the first three quarters of 2015.


]]> 2, 19 Jul 2016 20:37:55 +0000
Legislator aims to block attempt to raise car insurance rates for older drivers in Maine Tue, 19 Jul 2016 18:35:05 +0000 The House chairman of the Legislature’s Insurance and Financial Services Committee said Tuesday that he would try to block any effort by Progressive Corp. to raise car insurance premiums for seniors in Maine based solely on their age.

“Auto insurance companies should not be able to penalize seniors simply because they are getting older,” Rep. Henry Beck, D-Waterville, said in a written statement. “I am pursuing legislation that will make that completely clear, whether it involves existing customers of a particular insurance company or seniors who are shopping around for a new insurer. We have an obligation to protect the independence of Maine seniors. Fairness in auto insurance rates is part of that.”

Beck, a fourth-term House member who represents parts of Waterville and Oakland, was responding to a Portland Press Herald report on Ohio-based Progressive’s efforts to seek state regulatory approval to raise rates for seniors based on their age. The proposed change would apply only to new Progressive customers in the state.

The insurer initially asked the Maine Bureau of Insurance to allow it to raise the rates of existing customers in Maine as they age, but the bureau denied that request in June, saying it would violate state law. A hypothetical example that Progressive provided to the bureau shows a 65-year-old being charged 6 percent more than a 64-year-old based solely on the customer having reached age 65.

In its June 10 decision, the bureau left open the possibility that Progressive could request permission to charge new customers in Maine higher premiums based on their advancing age. It has agreed to revisit the ruling this month for further discussion at Progressive’s request. The discussion would pertain only to the possibility of age-based ratings for new customers, the bureau said.

The attempt to tie premium increases solely to age appears to be unprecedented in the auto insurance industry, according to the Insurance Information Institute, a trade group. While teen drivers are typically charged the highest rates, those rates decline as a driver gains experience and a driving history. Loretta Worters, vice president of communications for the institute, said older drivers are often offered discounts on their insurance premiums because of strong driving histories and other factors unrelated to age.

Progressive did not respond to requests to explain why it is seeking the rate increase for older auto insurance customers in Maine.

Progressive’s proposal was met with opposition from the state director of AARP Maine, an advocacy group for older Americans. Lori Parham said that although her organization has not engaged directly with Progressive on the pending rate case, AARP opposes any action that could limit the mobility of healthy seniors in Maine.

“We believe that legislation and regulation should prohibit companies from refusing to insure people, canceling or failing to renew policies, raising premiums, or limiting coverage based on age alone or in an arbitrary or unfair manner,” Parham said. “The proposal by Progressive is deeply concerning as it makes major assumptions about one’s driving ability based solely on their age. Health status can be a better indicator – thus the use of vision screenings and in-person exams.”

Attempts Tuesday to reach Sen. Rod Whittemore, the Republican co-chairman of the Insurance and Financial Services Committee, were unsuccessful. New bills will start to appear in the next session of the Legislature in January.

J. Craig Anderson can be contacted at 791-6390 or at:

Twitter: jcraiganderson

]]> 20, 20 Jul 2016 17:42:01 +0000
DeLorme appealing $6.2 million patent fine to Supreme Court Tue, 19 Jul 2016 17:57:38 +0000 DeLorme Publishing wants the U.S. Supreme Court to review a $6.2 million penalty levied against it related to a patent infringement lawsuit.

The Yarmouth-based mapmaker filed its request for a review by the nation’s top court last week. The court must now decide whether to hear the appeal.

The review involves a patent infringement case that was filed nearly four years ago against DeLorme by rival BriarTek, a Virginia company that alleged DeLorme’s inReach handheld satellite communications devices infringed on BriarTek’s patent for a similar device.

While the patent case was going on, DeLorme agreed not to import or sell any two-way satellite communications devices in the U.S. that might potentially violate BriarTek’s patent, although the agreement stipulated it was not an admission of guilt on DeLorme’s part. The agreement allowed DeLorme to continue to make the inReach devices in Yarmouth.

Because DeLorme initially made its inReach devices overseas and imported them into the U.S., BriarTek’s patent case was filed with the International Trade Commission.

In 2014, the ITC found that DeLorme violated that agreement because it imported parts to manufacture inReach devices in Yarmouth and fined DeLorme $6.2 million. In the meantime, however, a U.S. federal court ruled that BriarTek’s patent infringement claim was invalid.

Last November, a federal appeals court upheld the fine, while also affirming the ruling that the patent was invalid. At the time, DeLorme’s attorney, Peter Brann of Brann & Isaacson in Lewiston, called the split ruling “Kafkaesque.”

The patent suit predated the March purchase of DeLorme by Swiss company Garmin.

No date has been set for the Supreme Court to decide whether it will hear the case.

Edward D. Murphy can be contacted at 791-6465 or at:

]]> 2, 20 Jul 2016 11:09:01 +0000
Maine regulators approve expansion of gas pipeline capacity Tue, 19 Jul 2016 16:34:22 +0000 HALLOWELL — Following more than two years of study, the Maine Public Utilities Commission on Tuesday gave conditional approval to a plan in which electric consumers would underwrite a contract through their power rates that would help pay for expanded natural gas capacity in New England.

The vote – which ran counter to a PUC staff recommendation – was unanimous. However, one of the three commissioners dissented on which of two eligible pipeline projects to endorse. And they all agreed that four other New England states that are considering similar plans would have to follow suit before Maine would participate.

That could be a tall order, in light of the lack of consensus over whether the region’s energy future should maintain a strong role for fossil fuels or make a quicker transition to renewable sources and high efficiency. Industry observers also are keeping a close eye on Massachusetts, where the Supreme Court is set to decide a case in which the commonwealth’s approval of an energy contract for pipeline expansion was challenged by environmental activists. The decision could impact what the Maine PUC did Tuesday.

Whatever happens elsewhere, the PUC’s action has the effect of putting Maine on record as supporting pipeline expansion projects in which overall benefits to consumers appear to outweigh costs over the long term. It keeps the door open to broader regional cooperation, depending on what happens in other states.

It does not, however, clarify how much customers would pay on their bills, or when contracts might be signed. Any action would first need written approval from Gov. Paul LePage.

Mark Vannoy, the PUC chairman, said in an interview after the vote that the region’s heavy and growing reliance on natural gas leaves the state at risk for future price spikes. Without more pipeline capacity, he said, future prices will be higher. It’s now up to Massachusetts, Connecticut, Rhode Island and New Hampshire to act, a process he estimated could take more than 18 months.

“We’re going to be dependent on the other states and their regulatory processes,” Vannoy said.

Despite the uncertainty, the vote gave supporters of gas pipeline expansion a reason to be optimistic.

“It’s a historic decision,” said Tony Buxton, a lawyer who represents manufacturers in the Industrial Energy Consumer Group.

Although Maine uses only 9 percent of the region’s electricity, the vote gives Maine an outsized role, Buxton said, because it signals the start of a regional process.

The vote also was cheered by House Minority Leader Ken Fredette, R-Newport, a co-sponsor of the bill that created the PUC study and led to the vote.

“I applaud the decision by the Public Utilities Commission in providing leadership on the issue of lowering the cost of electricity for the Maine people and our businesses,” said Fredette. “The decision now provides a framework to work collaboratively with other New England states on a method to lower energy costs so Maine and New England can be competitive nationally for business growth, capital investments and job creation.”

But Ben Tettlebaum, a staff attorney with the Conservation Law Foundation, called it a product of failed leadership by LePage. The group is leading the challenge at the Massachusetts Supreme Court and maintains that the Maine PUC has overstated the benefits consumers can expect, while playing down the financial risks.

“The fossil fuel industry hoodwinked the PUC into gambling $1 billion of Mainers’ hard-earned money on a massive new gas pipeline,” he said. “From Day One, this LePage-appointed commission has been desperate to find any way to justify overwhelming concessions for Big Gas, no matter the cost.”


Natural gas is used to generate roughly half the electricity in the region. But as demand for gas grows, there’s not enough room in existing pipelines on the coldest winter days for power, manufacturing and heating. Amid a fast-changing energy landscape, in which low oil and gas prices and competing pipeline projects confounded past assumptions, regulators had to predict whether making consumers help pay for more gas would translate into lower wholesale electric prices, and in turn, lower electric rates.

Tuesday’s PUC decision ran counter to a recommendation last month from the agency’s staff that the state’s electricity and gas customers won’t benefit. The staff concluded that low oil and gas prices, new pipelines under construction or being permitted, and other factors could temper winter price spikes in wholesale natural gas without ratepayers getting involved.

Adding complexity to the analysis was the cancellation in April of the largest planned pipeline expansion project in the region, called Northeast Energy Direct. That project would have provided roughly two-thirds of the total new capacity. Its abrupt exit took both the largest financial risk for consumers, and the largest potential benefits, off the table.

Left to compete are two smaller projects. Access Northeast would upgrade an existing pipeline system, add liquefied natural gas storage and bring more gas to the region’s power plants. A second project, called Continent to Coast, would transport gas from Canada and the United States into the Maritimes & Northeast pipeline in Westbrook.

The law that led to the Tuesday’s action was approved by the Legislature in 2013, when a frigid winter and skyrocketing natural gas prices in New England forced factories to curtail operations on the coldest days. Worried Maine lawmakers passed a bill they hoped would prod energy companies to expand the region’s pipeline capacity. The idea is that adequate gas supply in the winter, when demand is high for both heating and power generation, will keep wholesale energy prices from spiking to levels that are well above the national averages.

The bill directed the PUC to study whether it made sense for ratepayers, through utility contracts, to buy up to 200 million cubic feet of natural gas, at an annual cost of no more than $75 million.

But much has changed since 2013.

Natural gas wholesale prices are lower now than they’ve been in more than a decade. Slack demand during a warmer-than-average winter dropped wholesale electric prices in 2015 to the second-lowest level in 12 years.

A new, $1 billion pipeline expansion called the Algonquin Incremental Market Project is 60 percent complete and set to begin pumping in November.

But at the same time, New England is losing generation from retiring nuclear power and oil units, and several new power plants planned for the future will burn natural gas.

So the PUC had to determine if Maine is at risk of experiencing another round of shortage-driven price hikes, or whether market conditions have changed in a fundamental way, making ratepayer investment unnecessary.

All three commissioners agreed that something should be done, but not on the best project. Vannoy and Bruce Williamson saw the greatest potential benefits from Access Northeast. Carlisle McLean, however, voiced concerns about whether the legal challenges to Access Northeast would keep the project from being built. Beyond the fight at the Massachusetts Supreme Court, opposition by some power plant owners to Access Northeast has been filed at the Federal Energy Regulatory Commission.

For those and other reasons, McLean thought the Continent to Coast project would make more sense. Although the benefits for Maine ratepayers are smaller, she reasoned, so are the risks.


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