Businessin brief: High court hears utilities’ case
The Supreme Court on Tuesday appeared to side with power suppliers in a series of contract disputes with electric utilities stemming from the 2000-‘01 California energy crisis.
A public utility in Snohomish County, Wash., and several Nevada companies argue that the power suppliers contributed to the overall manipulation of the Western energy market. They are seeking to set aside long-term contracts they signed with power suppliers. During the crisis, electricity prices soared 15-fold.
The Federal Energy Regulatory Commission has concluded that the crisis resulted from increased demand, bad weather and market manipulation by energy traders such as the now-defunct Enron Corp.
But Walter Dellinger, a lawyer for the power companies, urged the justices to uphold the integrity of the contracts, which he said enabled the utilities to procure electricity at fixed prices at a time when short-term prices were highly volatile.
Most of the justices seemed to side with Dellinger. Justice David Souter said the utilities’ argument would set a broad precedent that “no contracts are enforceable if they’re made during times of market volatility.”
The utilities asked FERC to set aside the contracts in late 2001 and 2002, but FERC refused to do so in a 2003 ruling.
Baghdad
Officials say Iraq will buy Boeings
Iraq will place an order for 40 Boeing aircraft and for a smaller number from Canada’s Bombardier, an Iraqi official said Tuesday.
Boeing Co. spokesman Jim Condelles in Seattle declined to comment.
Government spokesman Ali al-Dabbagh told state-run television that a decision had been made to buy 40 new airplanes from Boeing that will be delivered within 10 years.
He did not provide any details on the planned Boeing order and was not immediately available to comment further.
He said that an unspecified number of aircraft would be purchased from the Canadian company, but again provided no details.
New York
Oil futures close higher than $100
Oil futures shot higher Tuesday, closing above $100 for the first time as investors bet that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. At the pump, gas prices rose further above $3 a gallon.
There was no single driver behind oil’s sharp price jump; investors seized on an explosion at a 67,000-barrel-a-day refinery in Texas, the falling dollar, the possibility that OPEC will cut production next month, and continuing tensions between the U.S. and Venezuela.
Gasoline and heating oil prices appeared to be leading the advance, rising faster in percentage terms than oil because of the blast Monday at Alon USA’s Big Spring, Texas, refinery, which could be shut down for two months.
Light, sweet crude for March delivery rose $4.51 to settle at a record $100.01 a barrel on the New York Mercantile Exchange after earlier rising to $100.10, a trading record. It was the first time since Jan. 3 that oil had surpassed $100.