Finance and Economic

European Union Monetary Affairs Commissioner Olli Rehn will likely push Greece to do more to cut its budget deficit today as governments craft a possible rescue package for the cash-strapped nation.

Rehn will meet with Prime Minister George Papandreou as German lawmakers say euro-area officials are devising a plan to grant Greece about 25 billion euros ($34 billion) in aid should it need help financing its debt, possibly by using state-owned lenders such as the KfW Group to buy its bonds.

German Chancellor Angela Merkel and Luxembourg Prime Minister Jean-Claude Juncker signaled yesterday that Rehn will warn Greece it must do more to narrow the EU’s largest budget gap and can’t rely on taxpayers elsewhere to help until it acts. Adding to the political pressure, the fiscal strategy of Papandreou’s government may soon be tested by investors as it readies a sale of as much as 5 billion euros of 10-year notes.

“If the Greek government cannot raise the necessary funds in the commercial market, which continues to look unlikely, then bilateral loans will be forthcoming,” said Erik Nielsen, chief European economist at Goldman Sachs Group Inc. in London.

The euro weakened for the first time in four days, falling to $1.3608 from $1.3631. It declined versus 13 of 16 most-active currencies.

Deficit Reduction

Rehn arrives after European officials pored over the government’s books to verify it’s doing enough to knock 4 percentage points off its budget deficit from last year’s 12.7 percent of gross domestic product. The country has until March 16 to satisfy fellow EU governments that its deficit reduction plan is on track and faces being pressed to increase consumer taxes and lower capital spending if it can’t show sufficient progress.

Juncker, who speaks for euro-area finance ministers, yesterday indicated more will be demanded. Greece needs to “take additional actions” to pare its shortfall and “must understand that the taxpayer in Germany, Belgium or Luxembourg isn’t prepared to correct the mistakes of Greek fiscal policy,” he told Eleftherotypia newspaper.

In an interview with ARD Television, Merkel denied money has been set aside to bail out Greece and said the country has to “do its homework.” Speaking after the euro recorded its third straight monthly loss against the dollar, its longest losing streak since November 2008, Merkel said the single currency is “certainly facing the most difficult phase.”

‘May Not Survive’

Billionaire investor George Soros said on CNN yesterday that the euro “may not survive” the Greek turmoil.

Investors last week continued to question Greece’s chances of cutting its budget deficit. Greek two-year yields rose by as much as 75 basis points on Feb. 25, the most since Jan. 20. The spread between 10-year German bunds and Greek securities of a similar maturity widened 12 basis points in the week to 330 basis points payday loans with no fax.

Still, the cost of insuring against default on Greek government debt fell for the first day in more than a week on Feb. 26 on speculation the nation will pledge tougher steps. Credit-default swaps on Greece dropped 35.6 basis points to 364.02, according to CMA Datavision. The contracts are down from Feb. 4’s record 428.25 basis points.

Papandreou told the Greek parliament on Feb. 26 that the nation will “meet the challenge with whatever cost and pain we will need to go through.” Government spokesman George Petalotis said in an interview the same day that more measures will be concerned if the EU deems it necessary.

EU Limit

Greece needs to raise 53 billion euros this year and redeem more than 20 billion euros of bonds by the end of May, according to data compiled by Bloomberg. It vows to reduce its budget gap below the EU limit of 3 percent of GDP in 2012. The European Commission forecasts a debt equivalent to 124.9 percent of GDP this year.

KfW’s purchase of Greek bonds, backed by German government guarantees, would be an emergency measure as it would risk inviting investors to speculate against other euro region countries, the German lawmakers said on condition of anonymity because the information is confidential. France’s state-owned Caisse des Depots may also be involved, Greece’s Ta Nea newspaper reported Feb. 27. The Wall Street Journal said the plan may total 30 billion euros.

“Greece won’t be allowed to sink on the condition it respects its commitments to stabilize its budget,” French Finance Minister Christine Lagarde told Europe 1 radio yesterday. “We have a certain number of proposals in the euro zone, involving either private partners or public partners or both.”

Strikes

EU leaders ordered Greece on Feb. 11 to slash its budget deficit, while promising “determined” yet unspecified action to help if needed. Papandreou will on March 5 meet with Merkel, who yesterday suggested she is worried “emotions” may be spinning out of control.

Complicating the country’s efforts last week were another round of strikes and warnings from Standard & Poor’s and Moody’s Investors Service that they may soon cut Greece’s debt rating if the government flounders in reducing its deficit.

The government intends to sell 10-year notes by early March, according to a Jan. 26 statement from the Public Debt Management Agency. Fund managers who may take part in the issue say Greece must offer the biggest premium over benchmark German debt since 1998, paying a coupon of about 7 percent.

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Imagine, in an alternate universe, Ontario had been in lengthy negotiations with Samsung Group to bring 16,000 green-collar jobs to the province, part of an ambitious plan by the Korean industrial giant to manufacture and deploy green-energy gear.

But at the 11th hour the province fails to step up and Samsung goes with Michigan, New York or Ohio instead.

Opposition parties would be accusing the McGuinty government of "losing jobs to the Americans." Industry groups would be calling Ontario a laggard without vision or guts.

Now, back to this universe. Ontario is the winner.

It kept a $7 billion clean-energy deal from flowing south, and it did it by putting the right regulations and policies in place to attract that investment.

Samsung, which has committed to building four manufacturing plants in Ontario and developing 2,500 megawatts of wind and solar projects, said it and its consortium partners were lured to Ontario because this province’s new Green Energy Act and feed-in-tariff program stood out in North America.

The response so far?

Boos from the opposition, which is accusing the government of cutting a backroom deal with a foreign company that will lead to higher electricity prices.

This kind of rhetoric ignores the fact that we’re living in 2010, not 1960.

Electricity infrastructure is aging and replacing it is going to cost more – more so in a world that puts a price on carbon emissions.

The days of cheap, dirty electricity are coming to an end. There’s no way around it.

Another reaction to the Samsung deal has been panic from local power producers, including wind and solar developers, who argue they’re being treated unfairly because of special treatment given to Samsung.

Samsung is getting roughly 4 per cent more for the solar and wind power it produces than other participants in Ontario’s feed-in-tariff (FIT) program, which already pays a generous amount to producers of renewable electricity.

The government calls this extra incentive an "economic adder," which is used as a flexible negotiating tool – not unlike tax breaks used to lure foreign investment.

It’s expected this adder, which over 25 years has a net-present value of $437 million, will contribute $1.60 more a year to the average residential electricity bill.

Put another way, that’s an increase of 0.15 per cent on the power bill of a typical household.

As one industry observer said, that’s the cost of paying for a large double-double at Tim Horton’s once a year.

The $437 million also comes with many strings attached. If Samsung and its consortium partners don’t deliver on manufacturing and jobs, then they forfeit the adder.

A legitimate question, however, is whether other parties can qualify for the same kind of economic adder granted to Samsung.

At least two other consortia, both based primarily in Ontario, are attempting to establish supply chains in the province to manufacture wind turbines and create thousands of jobs.

They may not have a long track record, and they may lack the brand power and deep pockets of a Samsung, but they are local companies deserving of local support and the confidence of their own government.

Premier Dalton McGuinty made clear last week that if any other consortia – local or foreign – want to talk about manufacturing, energy development and job creation on a large scale, then he’s all ears online payday loans.

He should be held to those words, for the sake of fairness.

Speaking of fairness, why has 500 megawatts of transmission capacity been set aside for the Korean consortium when everyone else has to duke it out for access?

The industry protest on this point is understandable.

The whole point of the Green Energy Act and FIT program is to provide equal access to the grid and electricity rates that are the same for all participants.

Only 2,500 megawatts of transmission capacity are available in Ontario, and they’re particularly scarce in the areas of southwest Ontario where Samsung is being given priority.

Other developers waiting patiently for grid access see the Korean giant as a VIP being shuffled to the front of the line. They’re angry.

But on further reflection, taking this position is akin to saying the government doesn’t have a right to reserve transmission for any big project, like a natural gas power plant?

In fact, it did exactly that when it negotiated a deal to have Sithe Global, a large U.S. power developer, build an 840-megawatt natural gas plant in Brampton. It may be a hard pill for some to swallow, but why is the Samsung deal any different? Critics, however, have another concern. They charge that the McGuinty government broke protocol by striking a sole-sourced deal with Samsung. The insinuation here is that a request for proposals should have been put out so Samsung’s rivals could submit competing bids. Opposition parties, for example, are already calling this another e-health scandal in waiting.

The leap of logic here is mind-boggling. Governments put out tenders for specific things, like fleet vehicles, office equipment and IT systems as a way to notify industry of a particular need. The vague but ongoing task of building the economy and creating jobs, on the other hand, is an open invitation to anyone with a proposal, and you can bet those proposals are being shopped around to other job-hungry jurisdictions.

We’re in a seller’s market. This isn’t about Ontario ensuring competition. This is about Ontario having to desperately compete for jobs during difficult economic times.

Indeed, the province’s strategy in this regard is quite clever, even if it is somewhat sneaky. Think about it. There appears nothing in this Samsung deal that impacts the budget. The McGuinty government is, in effect, using electricity rates to cover the cost of a major economic development strategy – kind of like adding a special fee on gasoline sales to lure a major automaker to the province.

A controversial approach to be sure, particularly with the HST coming to our hydro bills in July, but certainly this is one creative way of investing in jobs without adding to a record provincial deficit.

The Samsung deal isn’t perfect, but it’s pretty darn good. Now, Mr. Premier, you just need to open your ears and land a couple of large local deals. They’re out there, in your own backyard. You just have to listen and have a little faith in Ontario entrepreneurs.

thamilton@thestar.ca

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O’FALLON, ILL. — Balke Brown Associates of St. Louis plans to start work this spring on a 232-unit, high-end apartment development near the intersection of Green Mount Road and Frank Scott Parkway East.

The CEO, Steve Brown, said he thinks Parkway Lakeside Apartment Houses will be the premier upscale apartment complex in the St. Louis area.

Brown said the $27 million project makes sense because of its location. He said there is a strong market for luxury apartments in the area around Scott Air Force Base, which employs about 15,000 people and is largely unaffected by the current recession.

"(Many) people don’t understand that Scott Air Force Base is the Number 3 employer in the St. Louis area," Brown said. "Scott is growing and adding people."

The apartments will be built on a 20-acre site on the north side of Frank Scott Parkway, about 2,000 feet west of Green Mount Road. It will be adjacent to Green Mount Lakes Apartments, built by Balke Brown Associates five years ago and later sold. The two projects are at the edge of a booming restaurant and retail district and about a minute’s drive from Interstate 64. The company owns five acres of adjacent land planned for commercial development.

The building contractor will be Holland Construction Services of Swansea. Riverstone Residential of Dallas will manage the property for Balke Brown.

Humphreys & Partners of Dallas designed it, using the "big house" concept pioneered by that firm.

The 20 two-story apartment structures will have 10 to 14 units and be designed to look like large houses. The buildings will have only single front entrances with no breezeways or exposed stairways. Many units will have enclosed parking. Other amenities will include fireplaces, patios, balconies, a clubhouse, a swimming pool, a putting green, a walking trail and a recreational lake.

Prices will range from $950 monthly for a one-bedroom apartment to $1,650 for a two-bedroom unit with two-car garage no teletrack payday loans.

Some aldermen questioned the company’s proposal to make some parking spaces a foot shorter than the city’s 19-foot requirement, but the City Council ultimately agreed to variances that will allow 11 fewer parking spaces than the 476 that otherwise would be required by city code.

Brown said the council agreed that 60 percent of those could be 18 feet rather than 19 feet deep and said the variances will allow a design that will feature 45 percent open or green space.

"We made the argument that green is better than black," he said. "I think the project would have been less eco-friendly" if built to the letter of the code.

Ted Shekell, O’Fallon’s planning and zoning director, said city officials welcome the project.

"Balke Brown has been a great part of our town so far," he said. In addition to the earlier apartment development, the company also built an office building on the other side of I-64.

Shekell said he thinks the new development will be "a good fit for O’Fallon and this area. In a tough economic environment, we’re happy to have them interested in our community. I think it’s the kind of project you need for people who aren’t looking to buy (single-family houses) right now."

Shekell said development has slowed in O’Fallon, but the city of 30,000 still had 110 new houses started in 2009. That’s down from a 15-year average of 240, but house building is a near standstill in many area communities and around the country.

"Scott is a leveling influence on the economy of this area," Shekell said. There has been a downturn but investment has not stopped."

Brown said the area "feels like a young Chesterfield" to him.

"There is no recession there," he said.

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NEW YORK–AT&T Inc. said Thursday it would no longer sponsor Tiger Woods, joining Accenture in dropping support for the world’s top golfer, who’s taking a break from the sport to focus on his marriage after his admitted infidelity.

The phone company hasn’t used Woods’ image extensively in advertising, but its logo appeared on his golf bag. That deal had been billed as a "multiyear" agreement when it was signed early in 2009, after Buick ended its endorsement one year early because of its financial woes.

Woods has also been the host of the AT&T National PGA Tour event since it started in 2007. Tour spokesman Ty Votaw said that since Woods is on indefinite leave from professional golf, he will not serve as host for the 2010 event. However, his Tiger Woods Foundation will continue to be the beneficiary of the AT&T National, under a contract that runs through 2014, Votaw said.

AT&T said it would continue to sponsor the event.

Woods won the 2009 AT&T National in July at the Congressional Country Club in Bethesda, Md.

The AT&T National tournament is moving to Aronomick Country Club in eastern Pennsylvania for the next two years as Congressional prepares to play host to the 2011 U.S. Open.

AT&T has also been the presenting sponsor of the annual Tiger Jam concert event in Las Vegas.

AT&T, which is based in Dallas, did not comment on its reasons for dropping Woods, or how much the relationship was worth.

Woods’ agent, Mark Steinberg, had no comment on AT&T’s decision.

Woods’ image has taken a beating since a late November car accident at the golfer’s Florida home was followed by an admission of extramarital "transgressions."

Consulting firm Accenture dropped the athlete two weeks ago, saying he was "no longer the right representative" of the company’s values.

Gillette, a unit of the Procter & Gamble Co., also has said it won’t air ads for its razors that include Woods or include him in public appearances.

Swiss watch maker Tag Heuer, a unit of luxury goods empire LVMH Moët Hennessy Louis Vuitton, also said that it would "downscale” its use of golfer Tiger Woods’ image in its advertising campaigns for the foreseeable future.

Electronic Arts Inc., which puts out the "Tiger Woods PGA Tour" series of golf video games, has not said what its plans are for the franchise.

Nike Inc. and PepsiCo Inc.’s Gatorade are other big sponsors that haven’t severed their ties.

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The St. Louis chapter of the Public Relations Society of America is celebrating its 60th anniversary. It was founded in 1949 by 14 local public relations professionals as the organization’s seventh chapter.

The society now has 110 professional chapters in 10 districts nationwide advance payday loans.

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Time Warner Inc. said Wednesday that its business outlook has improved, after the company posted quarterly profit and sales that fell from year-ago results but beat Wall Street’s forecasts.

The recession has cut into the company’s media subscriptions and advertising sales, which are its primary revenue streams. But its television and film units outperformed expectations in the quarter, raising the company’s hopes that it has turned a corner.

"Time Warner is firmly on track to post solid results this year in spite of the tough economic environment," said Jeff Bewkes, Time Warner’s CEO, on a conference call with investors.

The media conglomerate raised its full-year guidance, saying it expects to earn $2.05 per share for 2009. That’s better than the $1.98 per share estimate the company provided in April and is slightly higher than analysts’ consensus expectation of $2.02 per share.

The outlook excludes the effects of a $100 million restructuring at publishing unit Time Inc., which the company expects to incur in the current quarter. Time Warner confirmed that the cost-cutting would come in the form of layoffs at Time Inc. during this quarter, but the company didn’t disclose the number or timing of those job cuts.

A source familiar with the job cuts said the company had offered voluntary buyouts Tuesday night to Time Inc. employees who are members of the Newspaper Guild. Most of those employees work for Fortune, Fortune Small Business, Money, Time, Sports Illustrated and People. The company is expected meet with the remaining staff members on Wednesday, with total job cuts reaching about 500, according to the source.

Time Warner also said it still plans to spin off its AOL unit by the end of the year.

The AOL spin off will follow other recent moves at Time Warner to focus on the company’s core businesses. Earlier this year, the company completed a spinoff of its cable service provider Time Warner Cable (TWC), and the company began to reorganize Time Inc. in late 2008, laying off 600 and stopping publication of a handful of magazines in the process.

"I’m confident that the new content-focused Time Warner will be well positioned to deliver steady and attractive stockholder returns in 2010 and beyond," Bewkes added.

Shares of Time Warner (TWX, Fortune 500) fell 1% in premarket trading.

Income falls on AOL, Time Inc: The New York-based parent company of CNNMoney.com and Fortune said its net income fell to $662 million, or 56 cents per share, down 38% from a year earlier payday loans online. Results included a charge of 5 cents per share.

Without the charge, Time Warner said it earned 61 cents per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, forecasted earnings of 53 cents per share.

The company said adjusted operating income before depreciation and amortization (adjusted OIBDA), a commonly used profit metric for media companies, fell 9% to $1.8 billion, topping analysts’ expectations of $1.7 billion. Adjusted OIBDA declines at AOL and Time Inc. negated moderate growth at the company’s television networks and film units.

Profit rose modestly in the company’s TV networks and film units, but earnings were halved at AOL and Time Inc.

Advertising, magazine sales tumble: Sales for the company fell 6% to $7.13 billion, just topping analysts’ forecasts of $7.07 billion.

Revenue fell in every segment except for the company’s TV networks unit. Network sales rose 5% in the quarter, despite a 1% dip in advertising sales from the same period a year ago.

The biggest decline in sales came from the Time Inc. unit, in which revenue dove 18%. Ad sales fell 22% at the company’s publishing arm, and subscriptions were down 24% in the quarter.

The company’s filmed entertainment segment, which includes film studio Warner Bros., posted sales that fell 4% in the quarter. That decline was mostly due to a difficult comparison to the same period last year, which brought in hefty revenue from the blockbuster "The Dark Knight." The company said the new Harry Potter movie and "Final Destination" performed very well, and it was still taking in carryover ticket sales from the summer blockbuster "The Hangover."

Sales at AOL, which the company has been planning to spin off since May, fell 23% on an 18% decline in online ad revenue.

Time Warner’s results come a day after rival Viacom (VIA) reported profit jumped 15%, even as advertising sales slumped.

Also on Wednesday morning, cable provider Comcast (CMCSA, Fortune 500) reported 22.5% earnings growth. Comcast is reportedly in negotiations to buy General Electric’s (GE, Fortune 500) NBC Universal unit, but some analysts believe Time Warner is also in the running for the Peacock Network. 

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Morgan Stanley’s riskier trading operations have stolen the thunder from its growing brokerage — at least for now.

Strong fixed income sales and trading revenue and improved investment banking underwriting results broke a three-quarter losing streak as Morgan Stanley belatedly joined rivals like Goldman Sachs Group Inc in returning to the black after the collapse of the financial sector a year ago.

The New York-based bank reported third quarter net income of $498 million, or 38 cents a share, beating analysts’ average forecast of 27 cents a share, according to Thomson Reuters I/B/E/S.

Morgan Stanley shares were up 7 percent to $34.80 in afternoon trading on the New York Stock Exchange after earlier touching a 13-month high of $35.00.

In the 2008 third quarter the bank earned $7.7 billion, or $7.38 a share, boosted by a one-time accounting gain from declines in the value of its debt.

Scarred by the collapse that claimed competitors like Lehman Brothers, Morgan Stanley has pledged to play a more conservative hand as it develops its brokerage business.

Co-president James Gorman is set to succeed Chief Executive John Mack — credited with keeping the bank alive during the darkest days of the crisis, but criticized for struggling to manage risk — early next year.

Many analysts view Gorman’s appointment as evidence that Morgan Stanley is trying to dial down the riskier trading business in favor of a steadier stream of income from the wealth management business payday loans with no fax.

MAKING UP GROUND

Morgan Stanley Chief Financial Officer Colm Kelleher said in an interview that the third-quarter results were an “affirmation” that the firm’s strategy was bearing fruit.

The third-quarter rebound came largely because of solid results in trading, a riskier area of the business.

“They made up the ground on the trading side,” said Brad Hintz, an analyst with Sanford C. Bernstein in New York and former treasurer at Morgan Stanley. “The issue that Morgan Stanley faced is they cut too deeply in fixed income and markets came back more quickly than they anticipated.”

Kelleher said during a call with analysts that the firm is about halfway through a hiring spree it initiated earlier this year to restock its trading and sales ranks. Kelleher said more than 400 were expected to be hired.

“It is good that they are starting to see some of the early benefits of that,” said Michael Hecht, an analyst with JMP Securities.

The firm’s institutional securities group, which includes the advisory, underwriting and trading units, posted pre-tax income of $1.3 billion in the quarter. 

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Northrop Grumman Corp beat rival Boeing Co to win a major $3.8 billion contract to maintain and service the U.S. Air Force’s fleet of KC-10 refueling tankers, the Pentagon said on Thursday.

Boeing holds the current contract for servicing the aircraft, which expires in January, and has provided support for the KC-10s for more than a decade.

Boeing said it was disappointed by the Pentagon’s decision.

“We presented a competitive proposal that leveraged Boeing’s tremendous experience from over 80 years of building and maintaining tankers as well as inventing boom technology,” Boeing spokesman Forrest Gossett said.

“We now need to review the Air Force’s selection decision and process before deciding on our next course of action.”

Large Pentagon contracts are often appealed to the U.S. Government Accountability Office, the audit arm of Congress.

The Air Force had planned to award the contract in June 2008, but a decision was delayed because bidders submitted insufficient cost and pricing data.

“This is a stunning upset,” said defense analyst Loren Thompson with the Virginia-based Lexington Institute. Boeing has been servicing this plane since it was first introduced, Thompson said, adding “so for Boeing to lose to Northrop is truly amazing.”

Northrop, with its European partner, Airbus-maker EADS, is also in a battle with Boeing to win a contract to supply at least 179 new tankers to the Air Force, work that could be worth up to $50 billion.

The Air Force’s oldest tankers are the KC-135s, some of which are 50 years old.

The Air Force’s refueling fleet includes nearly 60 KC-10s, which were purchased in the 1970s and are modified DC-10 aircraft made by McDonnell Douglas, which was bought by Boeing in 1997.

(Reporting by Julie Vorman and Andrea Shalal-Esa; editing by Andre Grenon and Tim Dobbyn)

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Despite its name, the Airport Currency Exchange, a bare-bones operation across Interstate 70 from Lambert International Airport, doesn’t trade in euros, pesos or British pounds.

Instead, you can pay your electric, gas and phone bills there. And if you’re short on funds, the exchange can give you a short-term, high-interest loan. Missouri’s Public Counsel wants that to end.

The state’s consumer advocate for utility issues is hoping to prevent payday loan stores from doubling as utility payment centers.

In a recent filing with utility regulators, the Public Counsel asked for sweeping changes in billing and payment practices that include eliminating various payment fees. The proposal also would require utilities to open company-run payment centers and end the relationship between utilities and payday lenders.

Deputy General Counsel Mike Dandino said customers who most often used payday loan services were poor, elderly or living paycheck to paycheck. Many of the same customers either face threats of disconnection or have fallen behind on bills, making them easy targets for high-interest loans.

"It is not in the interest of consumers to have utility companies steer customers to these predatory lenders," Dandino said in the filing.

The Public Service Commission has yet to act on the petition. If the five-member commission decides to go ahead with a formal rule-making process, it would takes months and involve taking public comments and a hearing.

The recommendations are sure to draw stiff opposition from AmerenUE, Laclede and AT&T. They say that opening and operating payment centers across the area would be too expensive and that eliminating other payment sites would mean a loss of convenience for customers who may have to travel farther to pay their bills.

Richard J. Mark, senior vice president of energy delivery at AmerenUE, said the utility tried to provide customers as many options as possible, including payment centers spread across its 25,000-square-mile service area.

Eliminating even some of those options could especially hurt customers in rural areas and those who need to pay bills immediately to avoid disconnection, he said.

"By eliminating options, you really create hardships for customers," Mark said in an interview.

Nationally and in Missouri, payday loan stores have drawn increased scrutiny from regulators and consumer groups in recent years.

In 2007, the National Consumer Law Center, a nonprofit consumer advocacy group, urged regulators to end the relationship. The group said the added convenience of having more locations to pay bills was outweighed by steering vulnerable customers into the hands of those pitching high-interest loans.

Payday loans are generally defined as short-term cash advances usually secured by a post-dated personal check. In Missouri, the maximum loan is $500 and interest charges can’t total more than 75 percent of the principal.

Still, the average interest rate on a payday loan in Missouri last year was 431 percent, or $47.95 on the average two-week loan of $231 — a reason the state has been criticized for its lax regulation of payday lenders, at least compared with neighboring states.

"Regulated monopolies and the state PSC should not be a in a position where they’re encouraging the use of these services," said John Coffman, a lawyer and former Missouri Public Counsel who has in the past worked for consumer groups including AARP and Consumer Council of Missouri car loans.

The Public Counsel’s proposal doesn’t include evidence that utility customers are taking out high-interest loans to pay their bills; it only suggests that the relationship between utilities and payday lenders makes doing so more convenient.

In fact, prohibiting utility payments at payday loan stores also doesn’t guarantee that a cash-strapped customer won’t take out a high-interest loan and use the proceeds to pay their bill at a supermarket or bank.

About half of AmerenUE and Laclede customers still pay their bills by mail, and only about 10 percent pay in person through a third-party agent. And most of those do so at grocery stores or banks, not payday loan stores, spokesmen said.

Neither utility has a direct relationships with payday lenders. Both companies contract with FirsTech Inc. to recruit and run a network of agents and transmit payments.

Transaction fees at payment centers are capped at $1, and utilities get no part of the money. In fact, AmerenUE and Laclede subsidize the fees received by businesses that serve as payment agents.

The utilities also get no part of convenience fees charged for credit and debit card payments made electronically.

AmerenUE customers who want to pay online or by phone with a credit or debit card are assessed a $3.50 "convenience fee" by Speedpay, the vendor. Laclede similarly offers customers the ability to pay with a credit or debit card through ChoicePay for a $2.95 fee.

Justin Gioia, a Laclede spokesman, said that of the 40 percent of customers who pay their bills electronically, less than 2 percent use the convenience fee option. Only 4 percent of AmerenUE customers pay by credit or debit.

Both utilities offer customers free options for paying bills electronically via check or direct debit.

Regardless, the Public Counsel sees the convenience fees as unnecessary and wants regulators to require utilities to operate company payment centers.

AmerenUE’s Mark said the cost of renting and staffing offices across much of the state for the benefit of a relative few customers who would use them would be expensive and an unfair burden on the rest of the utility’s customers.

Eliminating credit and debit card convenience fees, a piece of which goes to the credit card companies such as Mastercard and Visa, would also mean higher rates for all customers, not just those who use the service, he said.

Meanwhile, AT&T is challenging the accuracy of the Public Counsel’s rule-making petition, which claims the telephone company is charging customers $2.49 if they want to receive a paper copy of their local phone bill.

"AT&T Missouri does not charge customers to receive a paper copy of their AT&T local telephone bill," company spokesman Kerry Hibbs said in an e-mail.

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WOOD RIVER — A $19.5 million hotel development is expected to be the next big project in a continuing commercial boom in the city’s east end.

The national economy may be in recession, but commercial growth continues in the area near Illinois Route 255, a controlled-access highway that links the area to Interstates 255 and 270. Construction continues northward on the highway, which eventually will connect to U.S. Route 67 in Godfrey.

Aventurs Development LLC, of St. Louis, plans to develop a 14-acre site west of Route 255 and north of Route 143. Mark Hubbs, one of the company’s principals, said it will include a 110-room Holiday Inn Express, a Country Kitchen restaurant and several gas stations and convenience stores.

"We’re excited about Wood River," Hubbs said. "It’s convenient to St. Louis. I think it’s a hidden gem. Nationally, the economy is down, but Wood River, they’re kind of creating their own economy."

Aventurs was originally a partner in the hotel project with YTB International, an Internet travel company that has its headquarters nearby. Hubbs said YTB opted out and Aventurs decided to buy the land and complete the project free credit report instantly. He said the hotel should attract significant business from YTB representatives visiting the home office and construction workers involved in the $3.6 billion expansion now under way at the nearby Wood River Refinery.

Wood River Mayor Fred Ufert said hotels in his area have been operating at 85 percent capacity.

"There’s a need for hotel rooms," he said. "It’s a great thing for us."

Ufert credits the new highway with recent retail growth that has included a new Super Wal-Mart in 2006, new Walgreens and CVS stores and two new car dealerships. (One relocated from a nearby Wood River location, and one relocated from Alton.)

The mayor said the city’s sales tax revenue has increased this year despite the recession and said city officials expect continued growth. He said it’s not only the new stores boosting those numbers but also the many workers who are employed in the refinery expansion.

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