Briefly

Bonneville Power earnings best since 2000-01

The Bonneville Power Administration posted earnings of $126 million in 2005, its strongest financial performance since the electricity crisis of 2000-2001.

The Northwest’s dominant electricity marketer will retain the money to shore up its reserve, said spokesman Ed Mosey.

Portland-based Bonneville has struggled with low water levels that lessen electricity generation at the federal agency’s large network of dams throughout the Columbia River drainage during the past several years.

In 2004, for example, Bonneville reported earnings of $66 million. In 2003, earnings were $37 million.

Mosey said Bonneville has about $550 million in reserves.

“We know the importance of keeping adequate reserves,” Mosey said.

After bumping rates during and immediately after the electricity crisis, the agency began the year by passing a 7.5 percent rate reduction. It recently announced another 1.6 percent rate reduction, set to begin in 2006.

Potlatch board OKs final REIT conversion steps

Potlatch Corp.’s board of directors has approved the final steps needed to convert the company into a timber real estate investment trust, or REIT, company officials announced Tuesday. The change will occur on Jan. 1.

Potlatch owns 1.5 million acres of timberland in four states. Operating as an REIT will lower Potlatch’s taxes and boost distributions to stockholders, according to company officials. Potlatch will pay out 65 cents per share to each stockholder in the first quarter of 2006.

In addition, the company will make a one-time distribution of $440 million to $480 million to stockholders. The distribution is required as part of Potlatch’s REIT formation, said spokesman Mike Sullivan. It empties the company coffers of accrued earnings that had been saved for other purposes.

In addition, company officials will schedule a future stockholder vote to increase the number of authorized Potlatch shares from 40 million to 100 million. The additional shares could be used to buy land, for future stock splits, or to raise money for other expenses. Some stock could be sold to cover the one-time distribution, Sullivan said. The distribution will occur during the first quarter, when Potlatch’s cash reserves tend to be lower, he said.

Spokane BBB warns of money order scam

The Spokane-based Better Business Bureau chapter warned Tuesday of a money order scam that has roped in members of Numerica Credit Union recently.

The scam has caused members of the credit union “two big losses … just within the last week,” the BBB said in a press release.

Thieves posing as students, tourists or overseas military personnel ask victims to cash counterfeit money orders or cashier’s checks, keep a portion of the money as a gift, and wire the rest to an overseas address, the organization said. They find victims through Web sites and resume-posting sites.

A Numerica official said the scams seem legitimate and that the victims are professionals who aren’t “ignorant of Internet risks.”

New home starts rose sharply in November

Washington New home construction unexpectedly increased in November at the fastest pace in seven months in what could be a final flourish for the nation’s 5-year-old housing boom.

The Commerce Department reported that construction activity rose by 5.3 percent in November from the October pace, when housing construction had fallen by 6.6 percent.

Analysts were taken by surprise by the size of the rebound, which pushed construction of homes and apartments to a seasonally adjusted annual rate of 2.123 million units. They had been forecasting a more modest 0.3 percent rise.

However, they said the November performance does not change their view that housing is peaking and will move to lower levels next year under the impact of rising mortgage rates.

A second report on Tuesday indicated that wholesale inflation moderated in November with wholesale prices declining by 0.7 percent. It was the biggest drop in 2 1/2 years and was led by big declines in gasoline and other energy prices.

Analysts, however, said they expected inflation pressures to return in coming months with homeowners facing winter heating bills that will be significantly higher than a year ago.

Ford recall stalled by replacement part delays

Washington Ford Motor Co. said Tuesday that replacement parts used in its recall of 3.8 million pickup trucks and sport utility vehicles would not be available until February because of production delays.

In September, the automaker recalled 1994-2002 model-year vehicles amid complaints of engine fires linked to the cruise control switch system. The recall, the fifth-largest in U.S. history, covered the F-150 pickup, Ford Expedition, Lincoln Navigator and Ford Bronco.

Dealers were told to install a fused wiring harness to act as a circuit breaker in the system. The harness would cut off electrical current to the switch if the current increases.

Ford told the National Highway Traffic Safety Administration in early September that the replacement parts were expected to be available in mid-October. But Ford spokeswoman Kristen Kinley said the supplier and the company ran into delays producing the wiring harnesses.

Fannie Mae expecting 8.4% drop in home sales

Washington Mortgage finance company Fannie Mae predicted Tuesday that U.S. home sales are set to decline by as much as 10 percent in 2006 as higher interest rates and housing market jitters reverse a five-year run that helped fuel consumer spending and economic growth.

Fannie Mae economists said their “best guess” is that sales will fall 8.4 percent, to 7.62 million units. That would be the first annual decline since 2000, when national sales dipped slightly, said David Seiders, chief economist of the National Association of Home Builders.

But even Fannie’s predicted level for 2006 would be the third-strongest year on record for home sales.