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Automakers may be pushing forward on plans to introduce plug-in vehicles within the next few years, but the drive toward electric transportation could hit a yellow light if the grid isn’t prepared to handle the extra load. And it’s not just about having enough power generation to support the charging of hundreds of thousands of cars plugged into a wall socket.

David O’Brien, president and chief executive officer of Toronto Hydro Corp., said the wires in distribution networks can behave in strange ways when major changes are introduced to the system.

"I’m going to be the first guy in line to buy an electric car, and by God it’s about time," he said. "But people forget that our electricity system is designed around what we do today. It’s not a forward-thinking grid."

For example, during the hottest days of the summer, power lines can overheat and short out unless they get a chance in the evening to cool down, which tends to be the case overnight when there’s a smaller load on the system.

"If we start plugging in a bunch of cars overnight then you don’t let the system cool down enough," O’Brien said. He added that the overnight load will get even greater as the province moves to time-of-use power pricing and more people have an incentive to run power-hungry appliances at night.

It’s not a showstopper, he said, but an example of what needs to be considered as we move toward electric transportation. Companies such as General Motors, Toyota, Nissan and Ford have all announced plans to come out with plug-in cars within the next few years.

"We’ve got a couple of years now to get the industries together and start talking about how we’re going to make it work."

Included in this discussion should be ways to allow more small-scale renewable energy, such as solar and wind, onto a grid that was designed to push electricity to consumers – not take it from them, O’Brien said payday loans online. "We have to rethink our whole transmission and distribution systems," he said.

Even before these trends take hold, Toronto Hydro has been seeing an increase in the frequency and duration of outages in pockets of its network, mostly in Scarborough, Etobicoke and North York.

O’Brien said 35 per cent of the utility’s network is "beyond its life expectancy."

A $1.3 billion, 10-year rebuilding plan approved by the Ontario Energy Board will bring that figure down to only 25 per cent. Getting it to 10 per cent will take several billions of dollars, he added.

Alongside this renewal, Toronto Hydro is also preparing its customers for the introduction of time-of-use pricing in 2009, when electricity use during peak times will cost a premium and off-peak use will be rewarded with a discount.

The idea is to encourage people to shift electricity use from peak to off-peak times so overall demand is more evenly distributed throughout the day and the grid operates more efficiently. The utility has so far installed 550,000 "smart meters" and is reading information from about 400,000 of them.

A year from now all 670,000 meters will be installed and operational. Some customers are already being directed to a website that lets them get a sense of what their hydro bill will look like once time-of-use rates are formally introduced.

"I think 2009 will be a very interesting year," O’Brien said. "We’ll do a pilot project starting with 10,000 customers and over a period of time transition them (to time-of-use pricing). It will be an evolutionary process, but I see next year as the big start."

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WASHINGTON — The latest evidence of the deepening recession, already the longest in a quarter-century, came Wednesday in a pair of reports that found little relief in sight.

The U.S. service sector shrank far more than expected in November, as employment, new orders and prices plunged, hurting retailers, hotels and airlines. Meanwhile, the Federal Reserve said Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.

The Institute for Supply Management’s closely watched gauge of activity in service industries, where most Americans work, showed that for every company adding jobs, eight cut payrolls last month. That ratio led some economists to boost their forecasts for layoffs for November to levels not seen since the early 1980s.

"This is consistent with payrolls falling by about 500,000" for the month, said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y. "Let’s hope it is very wrong."

Analysts expect the nation’s jobless rate, when announced Friday, will hit 6.8 percent, on its way to a reading that they project could be closing in on 9 percent a year from now.

The view was equally gloomy in the Fed’s beige book — the latest snapshot of business activity compiled by the Fed from its 12 regional banks. It reported that "overall economic activity weakened across all Federal Reserve districts" since October.

The beige book reported that retailers were bracing for a weak holiday shopping season, manufacturing activity had slowed sharply and bank lending was contracting as the financial sector endures its worst crisis in seven decades.

Many analysts expect the Fed, which cut interest rates by a full percentage point last month, to cut rates by a half-point at its policymakers’ last meeting of the year on Dec. 16. In cutting rates, the Fed is trying to help stimulate lending and halt the economy’s slide.

A panel for the National Bureau of Economic Research on Monday said the country has been stuck in a recession since last December. At 12 months, the recession is already the longest since a severe 16-month slump in 1981-82 fast cash advance. Many economists say the downturn ultimately will set a record for the post-World War II period.

"I am looking for this recession to last 18 months, ending in June," said David Wyss, chief economist at Standard & Poor’s in New York.

In another report, the Labor Department said productivity, the amount of output per hour of work, rose at an annual rate of 1.3 percent in the July-September quarter. That was slightly higher than the 1.1 percent increase initially reported a month ago. And it was better than the 0.9 percent rise economists had expected.

Wage pressures rose at an annual rate of 2.8 percent. That was the biggest jump since a 4.5 percent rate in the fourth quarter of last year, but it fell below the 3.6 percent advance originally reported.

The Fed monitors productivity and wages to make sure inflation isn’t getting out of hand. But analysts say worries about the deepening recession would trump any inflation concerns in the minds of Fed policymakers.

The ISM report said its services sector index fell to 37.3 in November from 44.4 in October, far below the reading of 42 analysts had expected. Of the 18 industries in the survey, including warehousing, real estate, restaurants and wholesale trade, only one — health care and social assistance — reported growth.

One reason labor costs have eased is that companies have been aggressively laying off workers as demand has fallen. Job losses through October this year have totaled 1.2 million. More than half that figure came since August as the economy’s downward spiral accelerated.

Economists predict wages will remain depressed as job losses grow. Productivity growth probably will turn negative in the current quarter and the first three months of 2009 before beginning to rebound, said Nariman Behravesh, chief economist at IHS Global Insight. He forecast that productivity growth for next year will be a weak 0.9 percent.

Analysts had expected a big downward revision in productivity for the third quarter given that overall output, as measured by the gross domestic product, was revised to show a decline of 0.5 percent at an annual rate. That was a bigger drop than the 0.3 percent decrease originally reported. But the drop in output was outpaced by an even bigger decline in hours worked.

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Manulife Financial Corp. expects to report a $1.5-billion loss for the fourth quarter, the first time it has ever failed to book a profit since going public, and plans to issue new common shares to bolster its capital position.

The global insurance and financial-services group (TSX: MFC) said today it will issue $2.1 billion in new common shares to bolster its capital position.

The new stock is priced at $19.40 per share, and shares in the company were trading at $19.57 – down 89 cents – in the morning. Manulife shares have 52-week high and low of $42.14 and $16.28.

The firm said that eight institutional investors will buy $1.125 billion worth of shares in a private placement, and $1 billion worth of stock will be issued to the public through a bought deal with an underwriting syndicate.

Manulife is scheduled to report fourth-quarter results on Feb. 12, and it will be the first quarterly loss since its initial public offering in 1999.

Manulife also said that, assuming no further massive stock-market carnage, it expects to report net income of $900 million for 2008 – a "poor performance," CEO Dominic D'Alessandro characterized it, and far below analyst expectations of more than $3 billion.

"It is primarily due to the unprecedented decline in worldwide equity markets," he added.

"However, our business fundamentals continue to be very solid, as evidenced by our strong insurance sales and new business embedded value growth."

The early disclosure of expected losses was likely done as part of the requirements for the share offering memorandum, suggested Chris Blumas of Morningstar.

Even with the latest disclosure, there's still another month left in the current quarter, which means that projected losses could potentially deepen.

"Things have just gotten worse and worse over the last year and a half" on the markets, Blumas said. "When it'll stop, nobody knows."

"In the end it's still a great company with a strong core franchise, it's just that this decline in the equity markets was a risk they were willing to accept that they didn't hedge, and that's kind of bit them in the butt," he added credit report.

At the same time, Manulife said it will reduce a credit facility arranged last month with Canadian banks to $2 billion from $3 billion.

"This issue of common shares along with the renegotiated credit facilities will noticeably bolster our already strong capital position" stated D'Alessandro.

"These transactions provide us with the flexibility to absorb the accounting impact of future volatility in financial markets and, as importantly, will allow us to take advantage of acquisition opportunities that are emerging out of the current industry environment."

Reserves for variable annuity guarantees are expected to total $5 billion at year-end, up from $526 million at the beginning of the year. These reserves cover possible payments seven to 30 years in the future, but setting aside the money now is largely blamed for the anticipated fourth-quarter loss.

"It is important to note that the increase in reserves represents a non-cash charge which has been estimated as if the equity market deterioration was permanent," D'Alessandro stated.

"Should markets recover, as one would normally expect, these reserves would be released into income."

Meanwhile, Manulife said, the stock sales are expected to close Dec. 11 and will raise its consolidated capital ratio – assets relative to regulatory risk-weighted requirements – to 235 per cent, “one of the highest in the company's history."

The underwriters have an overallotment option on $150 million of additional stock at the same $19.40-per-share price.

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It’s one of the biggest if not the biggest asset for millions of Americans in or near retirement. Despite a global financial crisis, it has kept all of its value.

But we have little practical knowledge of this asset — assuming we even think about how to get the most out of it.

I am taking about Social Security retirement benefits, which by all rights should be a major component of any retirement income plan.

Consider: The average monthly Social Security retirement benefit, after a 5.8 cost-of-living increase, will be about $1,153 in 2009. To receive that much inflation-adjusted income for life, a 65-year-old man would have to pay an insurance company a lump-sum premium of about $204,000 for an immediate annuity, and a 65-year-old woman about $225,000, based on the lowest quotes I found from highly rated companies.
Is your IRA or 401(k) worth that much? In addition, Social Security offers attractive spousal and survivor benefits.

Clearly, we should pay attention to the ins and outs of Social Security. The decision of when best to start collecting benefits — as early as age 62 for reduced benefits to as late as age 70 for enhanced benefits, or anywhere in between — can hinge on many factors.

Aside from any immediate need for money, these factors include how long you expect to live, your tax bracket, whether you’re still working and whether you are single or married.

"Social Security-related decisions can be complex and there can be tradeoffs," said Carolyn Clancy, an executive from Fidelity Investments. A recent online survey commissioned by Fidelity shows many Americans lack the basic knowledge to understand these tradeoffs and make informed decisions.

A vast majority (85 percent) of 300 61-year-olds surveyed did identify age 62 as the earliest they can start collecting reduced benefits. But 56 percent didn’t know when they would receive unreduced benefits if they waited to collect same day payday loans. (The answer is age 66 for anyone born between 1943 and 1954. After that, the age of eligibility rises by two months every year until it becomes age 67 for those born in 1960 or later.)

More than half didn’t know we have to file for benefits three months before we want to start receiving them. Almost a third believed incorrectly that Social Security benefits are not taxed (up to 85 percent of benefits may be taxed depending on what other income we have).

Nearly three-quarters didn’t know that a non-working or lesser-earning spouse could be eligible for benefits based on the work record of the higher-earning spouse. More than half didn’t know that a surviving spouse could be eligible to receive the Social Security benefit of the deceased spouse if it was larger than the survivor’s own benefit.

Also, 45 percent of the 61-year-olds say they plan to start taking benefits as soon as they are eligible at age 62. The most common reason given was that they need the money.

Such an action would lower their benefits permanently. Among those planning to collect as soon as possible, 73 percent didn’t have a retirement income plan. So perhaps there is another way to bridge the income gap until full retirement age that they didn’t consider.

Also, just 22 percent said they knew exactly how much their benefits would be — and 26 percent had no idea. And yet Social Security has been mailing Americans an annual benefits estimate since 1997, and this year the agency introduced an improved benefits estimator at www.socialsecurity.gov/estimator). Fidelity also has launched a site, www.socialsecurity.com/socialsecurity, that while obviously commercial does include valuable educational information.

AskHumberto@aol.com

2008, TRIBUNE MEDIA SERVICES INC.

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