IRS chief’s resignation demanded, received, accepted. Acting IRS chief Steven Miller resigned Wednesday in the wake of the agency’s admission it unfairly screened Tea Party groups seeking tax exempt status from 2010 onward. President Obama called the screening “inexcusable” and emphasized that the IRS was the very last place where he would “tolerate [that] kind of behavior.” The White House also released the letter from Treasury Secretary Jack Lew in which Miller’s resignation was demanded.
U.S. oil boom fuels non-OPEC supply growth. Thanks to U.S. shale oil, demand for OPEC crude will remain largely unchanged over the next five years, the IEA said in its semi-annual report. “Output growth from North America dominates the medium-term growth profile,” as U.S. liquids production should increase by 2.8M barrels per day by 2018, accounting for half of non-OPEC growth during the period. Total U.S. output five years from now should reach 11.9M barrels per day, or around 20% of the projected total of 59.3M barrels per day of non-OPEC supply.
French economy slips into recession. France slid into recession during Q1 as the French economy contracted 0.2% Q/Q after shrinking by the same amount in Q4. With unemployment at record levels and President François Hollande’s popularity at all-time lows, the country faces an uphill battle to right the ship as it struggles to bring its deficit in line with the EU-mandated 3%, while simultaneously restoring growth. Economists project a 0.2% contraction for the full year and a survey of French citizens shows just 11% believe Hollande can bring down the jobless rate by year’s end.
Germany avoids recession, revises down Q4 GDP data. Unlike its less economically fortunate eurozone core compatriot France, Germany managed to avoid falling into recession in Q1, albeit by the narrowest of margins. The German economy expanded by 0.1% during the quarter, less than the 0.3% growth economists expected, as harsh winter weather, falling exports, and lackluster investment took their toll. Germany’s statistics office also revised down its GDP data for Q4, saying the economy shrank by 0.7% during the period, more than the 0.6% contraction previously reported. The data come on the heels of ZEW’s investor confidence reading which showed persistent worries about the state of the eurozone economy writ large continue to weigh on sentiment.
U.S. oil boom fuels non-OPEC supply growth. Thanks to U.S. shale oil, demand for OPEC crude will remain largely unchanged over the next five years, the IEA said in its semi-annual report. “Output growth from North America dominates the medium-term growth profile,” as U.S. liquids production should increase by 2.8M barrels per day by 2018, accounting for half of non-OPEC growth during the period. Total U.S. output five years from now should reach 11.9M barrels per day, or around 20% of the projected total of 59.3M barrels per day of non-OPEC supply.Read More
Natural Gas Storage Facts
EIA (Energy Information Administration) reported a net injection of 99 Bcf (billion cubic feet) for the week ending May 10, 2013.
Inventories are at 1,964 Bcf, which is down 26.1% or 694 Bcf from last year and 83 Bcf below the 5-year average or 4.1%.
Natural gas spot and futures prices generally increased at most trading locations during the report week (Wednesday, May 8 – Wednesday, May 15). The Henry Hub spot price increased from $3.86 per MMBtu last Wednesday to $4.03 per MMBtu yesterday.
At the New York Mercantile Exchange (Nymex), the price of the near-month (June 2013) natural gas futures contract increased from $3.978 per MMBtu last Wednesday to $4.070 per MMBtu yesterday.
Working natural gas in storage increased to 1,964 billion cubic feet (Bcf) as of Friday, May 10, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). An implied storage injection of 99 Bcf for the week moved storage levels 694 Bcf below year-ago levels, and 83 Bcf below the 5-year average.
The natural gas rotary rig count, as reported by Baker Hughes Incorporated, decreased by 4 units to 350 as of Friday, May 10. The oil rig count rose by 9 units to 1,412.
The average NGPL composite price increased about 6 cents, or about 1 percent, over last week to $9.44 per MMBtu.
12/24-Month Strip (NYMEX) Price
12 Month Strip 24 Month Strip
$4.114 MMBtu $4.177 MMBtuRead More
Crude Oil Price: $95.16
Crude-Oil Futures Settle up 86 Cents at $95.16/Barrel
Crude-oil futures prices settled higher Thursday, climbing on hopes for rising demand as the peak summer gasoline demand season approaches.
Prices also were propped up early by weakness in the dollar after disappointing U.S. economic data, including a bigger-than-expected rise in new claims for jobless benefits and a sharp drop in housing construction.
While the data suggest a sputtering recovery in the U.S. economy, which could keep limit demand growth in the world’s biggest oil consumer, analyst said it was, conversely, sending bullish signals to the oil market.
“We had bad data across the board, but that just means the Fed will continue the stimulus and that is supportive for the market,” said Gene McGillian, broker and analyst at Tradition Energy.
Light, sweet crude oil for June delivery on the New York Mercantile Exchange settled 86 cents higher, at $95.16 a barrel. ICE North Sea Brent crude for June delivery expired 12 cents higher, at $103.80 a barrel.
Traders said the market is looking beyond signs of oversupply and weak demand and hoping for a shift in fundamentals as the peak summer driving season nears.
U.S. crude oil stocks stand near their highest level since April 1981, and demand for gasoline was weak ahead of summer driving season, while inventories have climbed.
Carl Larry, analyst at Oil Outlooks and Opinions, said traders appear to be looking beyond weekly oil inventory data with a hope that gasoline use will pick up in the summer months and that refiners will need to pare down crude oil stocks to meet consumer needs.
The Energy Information Administration projects gasoline demand will slip to a 12-year low during the peak spring-summer driving season. But demand is expected to rise seasonally to 9 million barrels a day, on average, in June-August, compared with the 8.34 million barrels a day reported by EIA for last week.
Reformulated gasoline for June delivery settled up 1.52 cents, at $2.8822 a gallon, but down from an earlier one-month intraday high. June heating oil settled 2.86 cents higher, at $2.9087 a gallon.Read More
Reg Down: $0.00710
Reg Up: $0.00933
NYC LBMP: $0.04084
AEP GEN HUB LMP: $0.03769
Mass. Boston Day Ahead LMP: $0.03924
Illinois Hub Hourly LMP: $0.039215Read More
- Look for much warmer temperatures and gusty winds today for much of the region, especially for New England.
- A few showers are expected across northernmost sections of New England.
- Scattered afternoon thunderstorms will develop along a frontal boundary in the Mid-Atlantic.
- Today’s highs will be mainly in the 70s and 80 across much the region.
- A few areas of northern Maine will see highs in the upper 50s and 60s.
- High pressure will bring dry and warm weather to much of the region today, especially for the Southeast and Carolinas.
- Scattered thunderstorms can be expected today from eastern Texas to much of Arkansas and northern Louisiana with a slow moving upper-low.
- Highs will range from the upper 70s to upper 80s across most of the region.
- Highs mainly in the 90s across the western half of Texas today.
- A dry day is in store from Minnesota through the Great Lakes with high pressure poking south from Canada.
- Scattered thunderstorms are possible today from the western Dakotas through Nebraska/Iowa to the Ohio Valley along a warm front/stationary front.
- A few thunderstorms could turn severe, with large hail and damaging winds over western sections of South Dakota to Nebraska.
- High temperatures will range from the upper 70s to mid 80s over much of the area today.
- Cooler upper 50s and 60s from far northern WI to northern MI.
- Showers and thunderstorms will be scattered across much of northern California, Oregon, Idaho and Montana as moisture continues to ride in from the Pacific.
- Clouds and precipitation in the Northwest will keep temperatures mainly in the 60s today.
- The rest of the region will be mainly dry.
- The Intermountain region and Great Basin will see highs up into the 80s today.
- Today’s highs in the 70s to near 80 along the Front range.
- Highs in the 90s to near 100 degrees in the Desert Southwest.
Tropical Storm Alvin Heads Out to Sea
Tropical Storm Alvin, the first named storm of the 2013 eastern Pacific hurricane season, formed off the coast of Mexico on Wednesday
Alvin is forecast to become a hurricane as it moves away from land. No significant impacts are expected.
The latest forecast path and wind speeds from the National Hurricane Center.Read More
For seven years and counting, Rapid Power Management has chosen to support the HP Bryon Nelson PGA Championship. The event is being held this week (May 13 through 19). Proceeds from the HP Byron Nelson Championship benefit Salesmanship Club Youth and Family Centers. The nonprofit organization helps transform children’s futures by creating new possibilities for success through education and mental health treatment programs for families in the greater Dallas area. In 2012, the HP Byron Nelson Championship contributed over $5 million to Salesmanship Club Youth and Family Centers. Since its start, the Championship has raised more than $127 million for charity — more than any other PGA TOUR event. For more information on the charities supported, please visit: http://www.hpbnc.org/byronnelson/charity/Read More
Project Leasing: Take Advantage of Low Interest Rates and Low Monthly Payments
In today’s economic environment, many private and public organizations are faced with tight operating and capital budgets. These restrictive budgets are hindering organizations from investing in necessary purchases to ultimately reduce operating expenses.
A common way to reduce operational costs is to address and adjust how efficiently facilities are consuming power. For example, up to 80% of a commercial building’s electricity charges can come from lighting alone. Replacing or retrofitting old, obsolete lighting with a more efficient system will save money but is a significant upfront purchase. Because of this, leasing can be an attractive and financially viable option.
Project leasing can allow you to increase your buying power by purchasing at today’s prices and low interest rates while stretching out tightly budgeted money over several fiscal years.
General Characteristics of a Lease
A lease is collateral-based finance product, utilizing the advantages of fixed term, fixed rate and fixed periodic payments. It eliminates a significant equity investment by the customer and fixes the cash flows to simplify the budgeting process.
The lessor looks to use the leased equipment as the primary source of revenues and cash flows from which to repay lease obligation.
Financing can include “soft costs” such as installation, maintenance, freight, etc. as a part of the lease investment.
Why Consider Leasing?
1. 100% financing. Since leasing generally provides 100% financing, companies are attracted by the minimum upfront expenses and down payments required by other financing alternatives. Tangential out-of pocket expenses like shipping, freight, installation and engineering can be included in the financing.
2. Leasing is a fixed expense. With the uncertainty of interest rates and inflation, it is advantageous to lock-in long term expenses with today’s dollars. In addition, you have the opportunity to pay for the equipment from the savings realized (i.e. energy efficiency, utility rebates, and federal tax deductions).
3. Preserves existing lines of credit. Growing businesses generally have substantial credit needs to finance their development. By diversifying lending relationships, your business maximizes its access to credit and you never “put all of your eggs in one basket.”
4. Tax advantages. Leasing provides substantial tax advantages, in some cases providing a 100% write-off of the monthly lease payment. This is especially attractive to businesses subject to Alternative Minimum Tax.
5. Eliminates Cost of Waiting. With energy efficiency equipment time is literally money. With leasing, you can prevent the delays in equipment acquisition if you budget 6-12 months in advance and have not allowed for this particular purchase. With energy efficiency projects, one year of lost energy savings is usually greater than the entire cost of financing!
What Projects Can Be Leased?
Many energy efficiency measures can financed through a leased and multiple projects can be combined into a single lease. Examples include:
- Lighting – Lighting technologies are constantly improving. Today’s systems are not only energy efficient, they produce better illumination and have lower maintenance costs than older systems.
- Power Factor – Many industrial and manufacturing plants face a power factor penalty from their electric utility on every bill. Installing a capacitor bank to correct power factor can save thousands each month.
- Solar – Harvesting energy from the sun is another way to save on electricity costs by increasing energy efficiency and decreasing dependence on the utility grids.
- HVAC – Upgrades to HVAC systems improve energy costs with newer, more proficient technology. Aside from saving energy, you could reduce noise and lower maintenance costs.
Leases can be structured on varying term lengths to accomplish a company’s goals, whether that is quicker ownership or higher positive cash flow. Below is an example of a lighting & power factor project:
Energy project leasing may not be a fit for all companies, but for many, it can provide an alternative finance mechanism. Let RPM help you explore the opportunity to capture energy cost savings today, without little to any upfront cash outlay through leasing.
CREZ: Competitive Renewable Energy Zone
In 2008, the Public Utility Commission (PUC) approved a transmission plan proposed by ERCOT to create more than 2,300 miles of transmission lines linking west Texas wind power generation with the densely populated areas in central and east Texas. The plan identified areas in west Texas where wind generation had the greatest potential and determined the transmission infrastructure needed to move the power to market. The CREZ project was initiated by the state legislature in 2005 to create a competitive market for wind power in Texas.
Thirteen transmission companies have contracted with the PUC to move the power east, which was the largest financial barrier for west Texas wind generators. The total project was estimated at $4.93 billion, which was expected to be paid back by residential electricity consumers over the next decade. However, cost overruns have increased the total project cost by about 40% to $6.8 billion – or $800 per residential consumer. The project is expected to be completed by December 2013.
New Home Product: Nest Thermostat
Forget programmable thermostats — this ‘smart’ thermostat learns your behaviors and sets itself by mimicking your heating and air conditioning habits. Most programmable thermostats are complicated and time consuming to use, leaving no real benefit over a standard one.
People often leave their homes for work, vacation, a day out, etc. without adjusting the temperature. Nest learns your patterns and programs itself after a few times of use and can also be controlled from your smart phone.
Only 11% of programmable thermostats today are built to conserve energy. The Nest products ability to adapt to lifestyles allows an average user up to 20% savings on heating and cooling bills.
Installing Nest can be as simple as installing a new light fixture. Three out of four users installed the thermostat themselves in thirty minutes or less.
To see whether or not your home system is compatible with Nest please call 855-4MY-NEST. For more information, reviews and photos, visit www.nest.com.
Gross Domestic Product (GDP) rose at a 2.5% annual pace in the first three months of 2013. This was driven primarily by a rise in consumer spending. Consumer spending rose at the fastest pace since the end of 2010. On the other hand, cuts in government spending dragged on the economy in the first quarter.
Though the GDP rose 2.1% from Q4 2012 economists were expecting a stronger rate of 2.8% growth.
Economic growth isn’t as likely to be as strong in the second quarter due to the public sector cutbacks and lack of job growth in March.Read More