Brian Dake

Pilot Program Allowing 18-year-old Long-Haul Truck Drivers Could Boost Industry

A Wisconsin trucking CEO said a new program permitting 18-year-olds to travel across state lines may help boost his company’s apprenticeship opportunities.

A provision in the bipartisan infrastructure law that passed in late 2021 allows 18-year-olds to become interstate truckers. Formerly, truckers needed to be 21 years old to do that work.

Green Bay-based Schneider trucking has long struggled to hire as many drivers as demand would support. Speaking on Wisconsin Public Radio’s “The Morning Show” on Thursday, Schneider CEO Mark Rourke said the new program will help.

“We don’t have a great apprenticeship program to take somebody right out of high school and build their skills,” Rourke said. “It’s a positive development.”

The pilot program became law in January, but there are plenty of questions remaining about the program’s rollout, especially around safety concerns. Rourke said it remains to be seen how insurance companies price insurance on younger truck drivers. High insurance premiums could continue to keep recent high school graduates off the road for interstate travel.

More broadly, the trucking industry has long pushed for a federal law to lower the age for potential drivers. In 2019, a congressional report found that young commercial drivers are more likely to be involved in crashes than older ones. Trucking industry lobbyists noted that 18-year-olds are already allowed to drive tractor-trailer trucks; they just can’t cross state lines, making them ineligible for long-haul jobs.

The federal pilot apprenticeship program requires 400 hours of additional safety training.

Wisconsin Public Service Commission Awards $125 million in Broadband Expansion Grants

Last Thursday, the Public Service Commission of Wisconsin (PSC or Commission) awarded funding from the state’s Broadband Expansion Grant Program. The Commission awarded $124,967,392 for 71 projects that will expand broadband internet to more than 82,912 residential and 4,566 business locations currently unserved or underserved. The projects receiving awards will impact 45 counties. The grant awards will leverage $185,780,074 of matching funds from recipients.

The broadband expansion grants invest in construction projects for internet service in areas of the state that are challenging to connect due to population density or geography. Since 2014, 434 grants have been awarded through the grant program from state and federal funding to projects impacting 71 counties.

A list of the 2022 grant recipients can be found here.

A map of 2022 grant recipients can be found here.

Utilities Say Wisconsin Coal Plants will Operate Longer Due to Energy Supply Constraints

Several Wisconsin coal plants will remain online years longer than planned.  Madison-based Alliant Energy and Milwaukee-based We Energies said those delays and economic challenges will postpone operation of clean energy projects.

Utilities also expressed concerns about maintaining reliable power as the regional grid operator has said 15 states, including Wisconsin, could see an energy shortage of 2,600 megawatts next year.

Alliant previously announced plans to shut down its 400-megawatt Edgewater coal plant in Sheboygan by the end of this year and its 1,100-megawatt coal plant in Columbia County by 2025. Now, the utility said Edgewater will continue to operate until mid-2025 while Columbia is now slated to retire by mid-2026.

“That adjusted timing allows our company some flexibility beyond 2022 to manage that regional capacity and (those) supply chain challenges as we move forward with adding that solar and other resources to diversifying that energy mix,” said David de Leon, president of Alliant’s utility in Wisconsin.

We Energies announced Thursday that plans to shut down its coal-fired units at the South Oak Creek coal plant in Milwaukee County will be delayed by a year. The utility now plans to retire two units by May 2024 and its last two units by late 2025.

“The decision to postpone the retirement dates for these units is based on two critical factors: tight energy supply conditions in the Midwest power market and supply chain issues that will likely delay the commercial operation of renewable energy projects that are currently moving through the regulatory approval process,” Scott Lauber, president of We Energies, said in a statement.

If We Energies retired plants on schedule, the utility argued it would be more costly to make up for that shortfall in power generation by buying power on the market.

“Not only might that not be there because there could be capacity issues, but even if it was there, it’s going to be very, very expensive,” said Brendan Conway, We Energies spokesperson. “Based on current prices, literally tens of millions of dollars more a year to buy (power) on the market as opposed to running the plant on those peak days.”

David vs. Goliath on Soaring Health Costs

Self-insured employers have been fighting the good fight against runaway health costs for their companies and for their workers for decades, without much help from state and national politicians. But a ray of sunshine has emerged: the courts.

A cause-driven law firm, Fairmark Law, has filed a federal class-action law suit in Wisconsin on behalf of self-insured employers and their employees against one of the state’s biggest hospital conglomerates, Advocate Aurora Health. The firm is charging monopolization and price gouging. The David versus Goliath suit was filed in the name of a small company, Uriel Pharmacy based in East Troy, Wisconsin.

The Medical Industrial Complex (MIC) of big hospital corporations and giant health care insurers has increased its rates close to 8% per year over the last two decades. That gouging has had the cumulative effect of raising the cost of care for a family of four to $22,000 to $30,000, depending on which consultant is keeping score.

In contrast, the most astutely managed company health plans have limited inflation to 2% to 3% per year. Total costs for a family can run $12,000 to $14,000 per year. That’s still expensive, but not outrageously so. (Note: The pure medical side of American health can be exemplary.)

That massive cost discrepancy is at the heart of the Fairmark case against Advocate Aurora.

Fairmark looks at the courts as one way to overcome anti-competitive contracting and imbalance of power between smaller payers and the Medical Industrial Complex.

Its Wisconsin case will be buttressed by a recent Rand Corp. analysis that ranks the state 4th highest in the country in comparison to Medicare payments. Our hospitals charge private companies three times what they pay Medicare.

Advocate Aurora Health has a monster merger in the works with Atrium Health of North Carolina. It’s hard to see any operating synergies between those two distant operations. But the combination would gain leverage for higher prices with the nation’s largest health insurers.


Governor Evers Issues Order Barring Price Gouging on Gas and Diesel Fuel

Wisconsin’s governor is warning gas stations in the state not to raise prices too high. His new executive order, however, is unlikely to make gas any cheaper.

Governor Tony Evers on Tuesday signed an executive order forbidding price gouging.

“This emergency order will help prevent bad actors from taking advantage of Wisconsin drivers as they fill up the tank to get to work, school, supplies and resources for their businesses, or get their product to market,” the governor said in a statement.

Evers’ order declares that “a period of abnormal economic disruption” exists in Wisconsin, and bans gas stations from hiking prices more than 15% above the highest price in the state.

AAA on Tuesday said the average price for a gallon of regular gas in Wisconsin is $4.82.

But the state’s Petroleum Marketers said local gas stations are not the one responsible for high prices.

“A myriad of factors impacts the price consumers pay at the pump, including: the cost of crude oil; federal/state taxes; boutique fuel requirements; and credit card swipe fees which remain the highest expense after labor for gas station owners,” the Wisconsin Petroleum Marketers & Convenience Store Association said in a statement.

Democratic lawmakers are applauding Gov. Evers’ new order.

“Gas and diesel prices are a major concern for Wisconsinites right now,” Sen Melissa Agard, D-Madison, said. “It is egregious that big oil companies are taking advantage of regular folks while padding their own pockets.”

New Elections Commission Chair Hopes to Restore Faith in Wisconsin Elections

The recently-selected chair of the Wisconsin Elections Commission said Monday he hopes to help restore voter’s faith in the state’s elections.

Republican attorney Don Millis was appointed to the WEC on June 8 by Assembly Speaker Robin Vos. Two days later, the six-member board selected him as its new chair.

In an appearance on WPR’s “The Morning Show,” Millis said he wants to “return to a time in which people could rely on or have faith in the election process.” He said “safeguards” such as voter ID and a statewide voter registration did not prevent challenges to the results of the 2016 and 2020 presidential elections.

“I think there’s less faith in the confidence that elections, election results reflect the true vote than at any time in our history,” Millis said.

Millis laid out his ideas for using federal funding to increase audits of voting machines following elections. He said his goal would be an audit of 10 percent of voting machines statewide after each general election.

“That’s a process in which you rerun the ballots and then you hand count the ballots to see what the error rate (is),” Millis said.

In 2018 and 2020, those random audits covered about 5 percent of voting equipment across the state. Neither audit found issues or anomalies with the machines checked.

“There’s a couple reasons for (auditing),” Millis said. “One is to make sure that the machines are running properly. The other is educational, because despite the best efforts of our clerks, often people will not make marks the way they should.”

Midwest Energy Grid Operator Alerts about Possible Summer Blackouts

An energy grid operator for the first time is warning power companies in Wisconsin of the possibility of rolling blackouts this summer.

Midwest Independent System Operator power grid issued the alert to the state’s electricity providers.

MISO’S notice is a regional alert and WPS spokesman Matt Cullen said steps would be taken in the event of an emergency, but it’s unlikely to happen in the Badger State.

“It’s never come to the point where MISO has ordered us to reduce the amount of electricity that we are delivering,” Cullen said.

Wisconsin Public Service has more than 450,000 electric customers and more than 333,000 natural gas customers in 27 counties in eastern, northeastern northern, and central Wisconsin, and a small portion of Michigan’s Upper Peninsula.

Midcontinent Independent System Operator is an independent, not-for-profit organization that delivers electric power across 15 U.S. states and the Canadian province of Manitoba.

Federal Reserve Bank Raises Interest Rate by 75-basis Points in Historic Move to Fight Inflation

The Federal Reserve on Wednesday raised its benchmark interest rate by 75-basis points for the first time in nearly three decades as policymakers intensify their fight to cool red-hot inflation, a move that threatens to slow U.S. economic growth and exacerbate financial pressure on Americans.

The 75-basis point hike, the first since 1994, underscores just how serious Fed officials are tackling the inflation crisis after a string of alarming economic reports. The move puts the key benchmark federal funds rate at a range between 1.50% to 1.75%, the highest since the pandemic began two years ago.

Officials also laid out an aggressive path of rate increases for the remainder of the year. New economic projections released after the two-day meeting showed policymakers expect interest rates to hit 3.4% by the end of 2022, which would be the highest level since 2008.

“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices and broader price pressures,” the Fed said in its post-meeting statement.

EIA Expects Continued High Energy Prices through 2023

The U.S. Energy Information Administration (EIA) forecasts that a variety of U.S. energy prices will remain historically high through 2023, including oil, natural gas, coal, and electricity, according to EIA’s June 2022 Short-Term Energy Outlook (STEO).

“We continue to see historically high energy prices as a result of the economic recovery and the repercussions of Russia’s full-scale invasion of Ukraine,” said EIA Administrator Joe DeCarolis. “Although we expect the current upward pressure on energy prices to lessen, high energy prices will likely remain prevalent in the United States this year and next.”

EIA forecasts that high natural gas and coal prices will result in an increased share of renewables in U.S. generation, largely offset by a decline in coal’s share. Wind and solar generation will likely contribute more than 11% of U.S. electricity this summer, after providing less than 10% in the summer of 2021. The natural gas share is forecast to decline over the next two years although at a slower rate than coal.

Key takeaways from the STEO forecast include:

  • The Brent crude oil price will average $108 per barrel during the second half of 2022, as tight global inventories and significant geopolitical uncertainties continue to put upward pressure on crude oil prices despite an increase in production to pre-pandemic levels.
  • U.S. refinery utilization will average 94% in the third quarter of 2022, close to the highest levels of the past five years. A 5% decrease in refinery capacity between 2019 and 2022 will keep refining margins above the five-year average.
  • The Henry Hub natural gas price will average $8.69 per million British thermal units during the third quarter of 2022, up from May’s average of $8.13. This increase is due to strong demand for U.S. LNG exports and for natural gas in the electric power sector, which will keep U.S. natural gas inventories below their previous five-year average.
  • Electricity generation will increase by 2.1% in 2022, with the largest increases from renewable energy. With the forecast addition of 20 GW of solar capacity, solar power will account for nearly half of all the new U.S. generating capacity this year.

U.S. Producer Prices Soar 10.8% in May

U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from inflation that shows no sign of slowing.

Tuesday’s report from the Labor Department showed that the producer price index — which measures inflation before it reaches consumers — rose at slightly slower pace last month than in April, when it jumped 10.9% from a year earlier, and is down from an 11.5% yearly gain in March.

On a monthly basis, producer prices climbed 0.8% in May from April, above the previous month, when they increased 0.4%.

Energy prices, led by gas, rose 5% just in May from April. Another big driver of the price gains last month was a sharp 2.9% increase in the cost of truck freight hauling, a sign that supply chain problems still aren’t fully resolved. Food costs were unchanged.

The Federal Reserve is expected to hike its short-term interest rate by three-quarters of a point on Wednesday, the largest increase since 1994, as it ramps up its efforts to rein in higher prices.

The producer price data captures inflation at an earlier stage of production and can sometimes signal where consumer prices are headed. It also feeds into the Federal Reserve’s preferred measure of inflation, the personal consumption expenditures price index.