Business Today

PEOPLES GAS RATE HIKE ENDORSED: Florida regulators recommend that Peoples Gas System receive most of the immediate rate increase it wants. The natural gas unit of TECO Energy Inc. of Tampa has requested an interim 1.6 percent increase for its residential customers to take effect as soon as this month. The proposed increase would raise $5.4-million. Staff members of the Florida Public Service Commission recommended the utility be approved for $5.1-million in short-term relief. PSC commissioners will act on the issue at their Aug. 20 meeting. A separate request to increase Peoples Gas rates by up to 18 percent is to be addressed in October.

ENERGY PRICES MANIPULATED: Investigators found evidence of price manipulation and deceit by Enron as the energy trader aggressively sought to profit from California's volatile power markets, a Federal Energy Regulatory Commission report said. The staff recommended the commission pursue "possible misconduct" charges against three Enron affiliate companies and two investor-owned utilities that did business with Enron. The staff report estimated in 2000 and 2001, Enron accumulated profits from electricity trades in the West of about $1.8-billion. It was unclear how much of that came from questionable trading practices.

ENRON INSIDERS SEEK MORE MONEY: Five insiders who reaped $7-million in the year before Enron collapsed are asking a bankruptcy court for extra pay. They include the wife of former chief executive Jeffrey Skilling. The five insiders joined 49 other laid-off employees in opting out of a tentative agreement that would give some 3,550 workers up to $13,500 each in severance. Instead, they filed individual claims with several seeking hundreds of thousands of dollars more. Bankruptcy Judge Arthur Gonzalez will decide at month-end if those individuals should receive anything, and how much.

SCOTTS BUYS LAWN CARE OPERATIONS: The Scotts Co., the nation's largest maker of lawn and garden products, said it has bought nearly all lawn care operations from Centex Home Team Services, a division of Centex Corp. The purchase will increase Scotts LawnService operations in Florida, Texas and Georgia. Terms weren't disclosed.

IBM REVEALS 15,600 LAYOFFS: After months of surreptitious layoff notices, technology giant IBM revealed that it's cutting more than 15,600 jobs, or 5 percent of its work force. The total, which IBM never announced publicly, appeared in a filing with the Securities and Exchange Commission. About half of the fired workers have left the company, and all were notified by June 30.

MORE COMPANIES TO EXPENSE STOCK OPTIONS: Merrill Lynch, Goldman Sachs Group, Morgan Stanley and other financial companies will begin treating stock options as an expense and try to influence rulemakers on how the cost is determined. Allstate, Household International and the rest of the 18 publicly traded members of the Financial Services Forum, a lobbying group, will make the change, said Rick Lazio, a former congressman who runs the organization. More than three dozen companies in July said they would heed calls by billionaire investor Warren Buffett, Fed chairman Alan Greenspan and other advocates to make options a cost. Bank of America and SunTrust Banks also are making the switch.

PHARMACIA SPINS OFF MONSANTO: Drugmaker Pharmacia Corp. has spun off its controlling stake in Monsanto Co. to clear the way for Pfizer Inc., the world's biggest drug company, to acquire No. 9 Pharmacia by year-end. Pharmacia gave its own stockholders the 220-million Monsanto shares it owned as a special, tax-free dividend. The shares represented an 84 percent stake in Monsanto. The spinoff of the agricultural products business comes barely two years after Pharmacia bought Monsanto. Both operations will continue without layoffs or other major changes.

STATES LOSE ON ONLINE CIGARETTE SALES: States are losing millions in taxes as more people buy cigarettes from Internet vendors who routinely ignore a federal law requiring them to report sales to local regulators, according to a General Accounting Office report. The trend could undercut efforts by cash-strapped states to raise revenues by hiking cigarette taxes. New Jersey and New York state both have a $1.50-per-pack tax, the nation's highest. California alone has estimated a tax loss of approximately $13-million from May 1999 through September 2001 because of the failure of online vendors to comply with the law.

MICROSOFT INVESTIGATES POSSIBLE FLAW: Microsoft Corp. is investigating claims that its popular Internet Explorer software has a loophole that lets attackers pose as legitimate Web site operators, potentially giving them access to computer users' names, passwords and credit card numbers. Although Microsoft said it's too soon to judge the severity of the problem -- and even whether the flaw exists -- some programmers and consultants said it could threaten the security of everything from online banking to Web-based commerce.

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