STATEWIDE

STATE APPROVES CON ED’S ELECTRICITY RATE HIKES

Electricity rates for Consolidated Edison customers will increase for the first time in a decade under a $325 million plan approved Wednesday by state regulators. The rate hike affects 3.1 million Con Ed customers in New York City and Westchester County. Under the plan, company revenues would increase by $104.6 million starting April 1, and $220.6 million in April 2007, the state Public Service Commission said. Residential customers’ monthly electric bills will increase by $1.19 this year and by $1.97 in 2007, said Con Ed spokesman Michael Clendenin. Meanwhile, the average small business would see its monthly bill rise by $1.07 this year and $3.32 in 2007. There will be a freeze on rates during the second year of the plan, Mr. Clendenin said. The state approval, Mr. Clendenin said, will allow the company to continue making infrastructure investments to keep pace with growing demand. PSC Chairman William Flynn said the rate plan “fairly balances” the company’s need to pay for infrastructure investments with provisions that are “beneficial to customers.” Included in the plan is funding for a $37.5 million program to assist low-income electricity customers.

– Associated Press

MARKETS

OIL SURGES TO A RECORD ON CONCERN DEMAND IS OUTPACING SUPPLY

Crude oil surged to $56.69 a barrel, an all-time high, as a promise of increased output from OPEC failed to ease concern that demand is rising faster than supply.

A report that American gasoline inventories fell more than expected last week helped push prices yesterday past the previous record of $55.67, set October 25. The Organization of Petroleum Exporting Countries, meeting Tuesday in Iran, agreed to boost quotas by 500,000 barrels a day, or 1.9%. Saudi Oil Minister Ali al-Naimi warned of higher demand later this year.

“There is little OPEC can do to get more on the market,” said John Kilduff, senior vice president of energy risk management with Fimat USA in New York. “OPEC has ended up marginalizing themselves. The increase in quotas only highlights their lack of spare capacity.”

Crude oil for April traded as high as $56.69 in after-hours electronic trading on the New York Mercantile Exchange, the highest intraday price since the contract was introduced in 1983. It was at $56.55 at 9:27 a.m. Sydney time.

– Bloomberg News

BUY OUTS

TWO BIDS OFFERED FOR TOYS ‘R’ US

Two investment groups reportedly each made offers of more than $5.5 billion for all of New Jersey-based Toys ‘R’ Us Inc., the nation’s second-biggest toy retailer, which has been considering separating its toy business from its more lucrative Babies ‘R’ Us operations.

The Wall Street Journal reported yesterday that the buyout specialist Kohlberg Kravis Roberts & Co. and an investment group led by Cerberus Capital Management LP have each made offers for the whole company. It cited unidentified people familiar with the matter.

The newspaper said the Toys ‘R’ Us board was scheduled to meet yesterday to evaluate offers and could decide this week. It said bidders who previously offered to buy the toy chain remain under consideration, however.

Toys ‘R’ Us, based in Wayne, N.J., announced in August it wanted to separate the toys and babies units. It has given no substantive guidance since, aside from reiterating that an evaluation on restructuring would be completed by July.

Its toy business has been hurt by price cutting from the big discount chains such as Wal-Mart Stores Inc., the nation’s biggest toy seller.

– Associated Press