Five things you should know about interesting companies, people and trends in and around the Old North State:
— N.C. State Senator Bob Rucho, House Majority Leader Mike Hager and other North Carolina lawmakers held a hearing in Raleigh Monday to discuss various energy issues. During the meeting, Becki Gray, head of outreach at the conservative-leaning John Locke Foundation, sent out a Tweet noting, “ @SenatorBobRucho gets clarification from Utility Commish: reduction in corporate income tax results in lower utility rates.”
Sounded like great news, so I called the N.C. Utilities Commission and spokesman Sam Watson directed me to a filing showing that the corporate income tax reduction, from 5% to 4%, that takes effect Jan. 1, will reduce energy costs by 0.008 cents per kilowatt hour. (Presumably, that is because Duke Energy Corp. is passing on its savings from the tax cut.) The average N.C. household uses about 1,000 kilowatts a month, so that is a savings of eight cents a month, or about 96 cents a year. Not a typo – that’s 96 cents, Watson confirmed. If you have a big holiday lights display or you like to keep the temp down in the low 60s in August, you might use 2,000 kilowatts and save $2. It follows a similar reduction that took place a year ago, saving folks another buck or two. Better than nothing, for sure, but don’t count on the savings to pay for that cup of Starbucks.
Here’s the filing if you want to see the Utilities Commission’s explanation, which only a diligent utilities lawyer could ever find on their website. http://starw1.ncuc.net/NCUC/ViewFile.aspx?Id=7ff282d4-0430-4e52-8cc4-ed716b80b037
— South Carolina Gov. Nikki Haley will give the Republican response to President Obama’s last State of the Union address, marking a nice honor for a talented leader who has exceeded many people’s expectations during her tenure in Columbia. A lot of people think she will be the Republican vice presidential candidate in November. While South Carolina’s economy has improved, growth in the Palmetto State hasn’t benefited a lot of residents by one important measure. Median household income in 2014 remained 14% less than in 1996, adjusted for inflation. And South Carolina ranks 43rd in median household income. Same is true in many states, unfortunately.
Here’s an explainer: http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-State
— Chapel Hill drug developer Cempra Inc. (CEMP) is raising $175 million in a secondary stock offering. It’s the kind of stock that appeals to the speculative-minded investor. It went public in 2013 at about $6, and traded at more than $40 in July 2015. Since then, it tumbled as low as $10 before recovering. It closed at $28.73.
— Speaking of speculative drug stocks, we asked the winners of a state stock-picking competition for high schools students to suggest their favorite picks. The winners Alex Matthews and David Styers attend Highland School of Technology – they beat 719 other teams from across the state in the three-month competition. We published their selections in our January edition, and wouldn’t you know that one of David’s picks for 2016 was Durham-based Chimerix (CMRX), which declined more than 80% last week when a clinical trial produced disappointing results? Glad there wasn’t real money involved in that contest.
— Speaking of struggling investors, how about that Omaha guy named Warren Buffettt? Shares of Berkshire Hathaway (BRK.A, BRK.B) declined more than 12% in 2015, much more than the Dow, S&P 500, Nasdaq. No wonder he urges investors to buy and hold for decades. One suspects Berkshire, which has a big position in Bank of America and owns newspapers in Greensboro, Winston-Salem and various North Carolina cities, will have a much better 2016.
http://www.bloomberg.com/news/articles/2016-01-04/why-buffett-s-50th-anniversary-was-a-dud-for-investors-4-charts
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.