Consol profits hit 15-year high

Higher prices for coal and natural gas helped Consol Energy Inc. record its highest profits in 15 years, as total revenues jumped more than 35 percent, the Cecil, Washington County-based company said Thursday.

However, Consol's joint venture to construct an $800 million synthetic gasoline plant near Wheeling, W.Va., has fallen through, as partner Synthesis Energy Systems wasn't able to secure financing.

For the quarter ended Sept. 30, Consol's profits totalled $90.1 million, or 49 cents a share, compared to a loss of $5.4 million, or 3 cents a share, one year ago.

"The strength of coal and gas markets over the last 12 months has allowed us to continually and systematically lock in higher prices that drive the average price up as older contracts are replaced with newer, higher priced ones," CEO J. Brett Harvey said, in a statement. The record performance came despite coal production problems, the company said.

Total revenues were nearly $1.2 billion, up from $868.4 million in the year-earlier period. For the quarter, Consol's average price for natural gas rose year-over-year by 41.5 percent, while coal prices jumped 26.8 percent.

Analysts surveyed by Thomson Reuters, on average, expected earnings of 46 cents per share on revenue of $1.1 billion.

Houston-based Synthesis Energy said that "due to the difficult financial environment, SES and Consol Energy will cease funding the engineering design package for the Benwood synthetic gasoline project." Benwood, is located three miles south of Wheeling.

Consol remains committed to building a coal gasification plant in northern West Virginia, and is looking for a new partner, spokesman Tom Hoffman said.

"We're keenly interested in developing a coal conversion facility, in Northern West Virginia," Hoffman said. "With expiration of the joint venture agreement, we are now free to talk with other technology partners. We bring capital, coal and maybe land, but we don't have the technical expertise."

The new coal-to-gas plant was projected to annually convert a 1.2-million-ton mixture of newly mined coal, plus coal generally inseparable from rock, into 793,800 tons of methanol for chemical industry usage, or 100 million gallons of regular unleaded gasoline.

The new plant would use coal from Consol's Shoemaker Mine, which is undergoing modernization, including installation of a conveyor system, to be completed in 2010. The new coal gasification plant could have been on-line as early as 2012, Consol estimated.

The complete plant would employ 60 full-time workers.

"We're still committed and Consol is still committed, and they are the biggest piece in the project," West Virginia Gov. Joe Manchin's spokeswoman, Lara Ramsburg said.

The Manchin administration and the Regional Economic Development Partnership in the West Virginia counties of Ohio, Marshall and Wetzel had agreed to providing financing and tax incentives over a 10-year period for the project once jobs had been created.

Consol's shares closed yesterday at $26.31, down $1.52.

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CMU's 'Red' Whittaker dominates field

In the early 1980s, a young, newly minted Ph.D. at Carnegie Mellon University suggested freeing robots from the repetitiveness of manufacturing and the protection of university laboratories.

Robots that could work in the rugged, unpredictable world outside long were the talk of science fiction. But William "Red" Whittaker persuaded his university bosses to establish the Field Robotics Center and put the red-haired professor in charge.

"At the outset, it was fragile," Whittaker said. "Fragile, no chance, odds against it. It was like crawling out of the primeval ooze. Critics were saying: 'This isn't really science; it's not really a technology.' "

The naysayers, though, didn't get Whittaker down.

"There was too much to do," he said. "There was then, and there is now."

Today, the university celebrates the 25th anniversary of field robotics and its founder's 60th birthday. Roboticists from around the world are flying in for the occasion, and dozens more are posting congratulatory notes to an Internet guest book.

"The Field Robotics Center is the pioneer in the field and has a huge reputation," said Hugh Durrant-Whyte, research director at the Australian Centre for Field Robotics. "It is the benchmark to which we all aspire. They were the first in the field, and they're still the biggest and the best."

Field robotics means exactly that -- robots that work in the field, whether moving dirt at a construction site, collecting asteroids in Antarctica, racing across a desert or drilling for water on the moon.

They do the dull and dirty and dangerous work.

"Any time that work requires that a human would use special clothing or a suit, a protective suit, that's a pretty good indicator that there is a hazard that would motivate the use of a robot," Whittaker said.

That's what led to the center's first robot -- the Remote Reconnaissance Vehicle. In 1983, the six-wheeled buggy became the first to enter a flooded basement at Three Mile Island Nuclear Generating Station near Harrisburg. Four years earlier, the station's Unit 2 suffered a partial meltdown.

The robot returned video footage of the basement. A year later, the Remote Core Sampler brought back samples of the contaminated walls.

Nearly every year afterward produced another rugged robot or two from the Field Robotics Center -- ranging from dirt movers and diggers to rover prototypes meant to explore distant planets.

Field robots are subtly entering everyday life.

In vehicles, field robots are in electronic stability controls, which sense when a driver loses control and apply brakes to certain wheels to reduce the chance of a rollover. They work in the automatic parallel-parking features in luxury vehicles.

The Defense Advanced Research Projects Agency's Urban Challenge in 2007 pitted 11 driverless vehicles against one another. Carnegie Mellon's Chevrolet Tahoe won the $2 million prize.

The contest accelerated research in autonomous driving -- vehicles that can sense where they are, analyze conditions and decide the best course of action.

"For me, this is really a straight story about augmenting the driving productivity or quality or safety on the road and off the road -- lane-keeping cruise control, crashless pullout from intersections, emergency braking that is augmented beyond what human reaction or human force would do," Whittaker said.

Caterpillar Inc., which recently opened offices on Washington's Landing to work more closely with Carnegie Mellon roboticists, is developing driverless trucks that could haul material through underground mines. It's the latest project in a partnership that started while the Field Robotics Center was in its infancy.

"Let's face it," said Sam Kherat, manager of Caterpillar's Pittsburgh Automation Center -- Carnegie Mellon is recognized worldwide "as a hub of robotic technology."

Robots are working their way into agriculture, helping the 2 percent of the U.S. population involved in food-making increase their productivity, said John Reid, John Deere's director of product technology and innovation at Moline Technology Innovation Center in Illinois.

"Where we see robotics influencing agriculture today is in GPS navigation," he said. "We still have operators on machines, but they're steered automatically across the field. ... Maybe one day the technology can be worked out where operators won't be on the machines."

In about a decade, robots could help astronauts harvest water from the moon.

"The idea is to go to the moon and participate with human astronauts in the exploration of the moon," said Brian Wilcox, a roboticist and principal investigator at NASA's Jet Propulsion Laboratory. "The part that Red and his folks have been working on is designing and building a rover that can go down into the permanently shadowed craters of the moon and drill down for water-ice."

While the Field Robotics Center is working on a lunar rover for NASA, Whittaker has a team building one to enter the Google Lunar X Prize competition -- which offers up to $25 million to the first team that gets an autonomous rover moving on the moon and sending back video evidence -- by the end of 2010.

What comes afterward is anybody's guess, said Matt Mason, director of Carnegie Mellon's Robotics Institute.

"I don't try to speculate on what Red should or will do next," Mason said. "I simply wait and am amazed."

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Rostraver firm to add 1,500 workers

Solar Power Industries Inc., a Rostraver company that manufactures solar cells, plans to hire up to 1,500 employees by 2011, a company official said Thursday.

Business is booming, so the company says it will lease 500,000 square feet of space in Sony Corp.'s giant plant in East Huntingdon.

"It's a great story for our company and the region," said Robert L. Lazzari, vice president-resource management for Solar Power Industries.

Lazzari discussed the company's expansion plans at a news conference in Pittsburgh where state officials announced a $400,000 investment to help the 3 Rivers Clean Energy Partnership develop training programs for workers needed by alternative energy companies in the region.

Recently, German-owned Flabeg Corp. said it expects to eventually employ 300 at a $30 million plant to be built near Pittsburgh International Airport to make glass and mirror components for solar panels in large-scale solar power plants.

O'Hara-based Converteam, an independent supplier of power-conversion equipment for wind turbines, said it added 100 employees this year and plans to add another 130 through 2009.

Solar Power Industries is building two 30,000-square-foot buildings next to its headquarters in Rostraver so it can start hiring more employees, Lazzari said.

"We currently have about 200 workers at Rostraver, and I will need between 150 and 200 people in each one of those new buildings," he said. "By mid-next year I need a total of 500 people because of the business we are getting. We have long-term contracts that are just waiting for us to expand our production capabilities."

The first building should be open within about two weeks, he said. The second building will be open in December.

Lazzari said Solar Power has leased space that Sony is no longer using at its Westmoreland County television assembly plant.

"We need to expand. I will need another 1,000 people there by 2011," he said.

In February, the state announced $5.1 million in grants and loans for the company, which pledged to create 396 jobs within three years.

Sony spokesman Michael Koff said Lazzari's statements were "somewhat premature."

"We have been in discussions with them, but there is nothing definite concerning the available space we have here," said Koff. "We are not in a position to say whether an agreement has been finalized or not."

Employment at the Sony plant, once more than 3,000, is down to about 790 after downsizing last year, Koff said. About 1 million square feet of space is available at the complex on a 450-acre site in Hempfield and East Huntingdon. The manufacturing plant contains 2.8 million square feet of space -- 42 acres under roof.

"We've been working with Solar Power because we believe they have tremendous growth potential," said John A. Skiavo, CEO of Economic Growth Connection of Westmoreland. "We've been hoping they will be able to finalize negotiations although I don't think they are quite there yet."

In addition to business in the United States, Solar Power is getting orders from Germany, Spain and China, Lazzari said.

"We make solar panels that go on buildings, and we also make shingles that can go into homes," he said.

In 2007, Solar Power announced a partnership agreement with Open Energy Corp., a California renewable energy company, to develop a solar roof able to convert sunlight to electricity and run devices within a home.

The federal Energy Information Administration projects that renewable energy should grow significantly, said EIA analyst Chris Namovicz.

Through July, solar power production in the United States stood at about 80 trillion BTUs, compared to 72 trillion in the same period of 2007, he said.

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Columbia Gas bills to increase $8 month

State utility regulators approved a rate increase for Columbia Gas of Pennsylvania Inc. customers that will raise an average residential bill by 6.3 percent -- or about $8 a month -- effective Tuesday.

The state Public Utility Commission voted 5-0 Thursday to raise the company's natural gas distribution rate by $41.5 million a year, less than the $59.9 million the company sought early this year.

Columbia has linked its request for a higher rate to its ongoing pipeline replacement projects, but spokesman George Stark said it also "is truly covering a lot of different pieces we have been maintaining" such as technology improvements, employees' wages and health care and other rising costs.

Bills for residential customers who use 7.2 thousand cubic feet of gas, or mcf, each month, for example, will rise from $127 to $135 a month.

This is the company's first distribution rate hike in 12 years. The increase, as originally proposed, would have raised homeowners' bills by about 11 percent.

The company has about 412,000 residential and commercial customers in 26 Pennsylvania counties.

The PUC settlement sets conditions. Columbia will raise its contribution to a program that helps low-income families weatherize their homes and conserve gas by $1.3 million, to a total $3 million, for example, and must improve call response times.

The company also can raise its customer charge, a flat rate that all customers pay for meter reading and maintenance, by 69 cents to $11.50.

Columbia, part of NiSource Inc., is spending $72 million a year to rebuild aging pipelines, with the goal of replacing 2,400 miles over the next two decades.

While the work is throughout the service territory, some major projects have been in Coraopolis and in Ellwood City, Butler County; Richeyville, Washington County, York and Bellefonte, near State College, Stark said.

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Laser weapon gets $5.2 million boost

In the not too distant future, the military expects to have the capability to use a laser beam to shoot down incoming missiles or even artillery shells.

Thanks to $5.2 million in federal funding announced Wednesday, II-VI Inc., a Butler County-based laser-optics manufacturer, hopes to move forward development of that Star Wars-sounding technology.

It will use the money to produce the materials used in high-powered, solid-state lasers needed by the Department of Defense, said CEO Francis J. Kramer at the company's Clinton headquarters.

"II-VI has a long history of developing advanced materials, and we look forward to the challenges of developing these laser materials," Kramer said.

The company's ceramic Yttrium Aluminum Garnet materials, know as YAG for short, can be configured to produce a high-powered laser light, he explained.

"The Department of Defense is trying to develop a 100-kilowatt laser that can be used to shoot down a shoulder-launched missile," he said. "This material that's being worked on right now is designed to produce a 25-kilowatt laser. When that's done it will be developed into a 100-kilowatt laser in the next phase."

The technology is desirable because it can be used to destroy targets with minimum "collateral damage" in populated areas, said II-VI officials.

"When fighting insurgents and in closely packed areas, you really can't use other ways to try to knock down missiles," Kramer said. "So you need to have something that just knocks down the missile and destroys it. A laser weapon can do that."

There are a number of other so-called "laser-host" materials being developed by others, according to Kramer. However, II-VI believes its ceramic equivalent materials hold the most promise.

"The ceramic process we use is very similar to ceramic processes used throughout the industry to make other items -- anything from porcelain to more technical products," said John Q. Dumm, process development and research engineer. "The difference with our materials is that it is so low in defect count that there is nothing to block the light from coming through."

The company, which employs about 2,500 people, including 550 at its Clinton location, expects about 25 jobs will be created with the help of the federal funding, said James Martinelli, vice president, government and military affairs.

About half of those jobs likely will be added at its Clinton headquarters, with others added at another II-VI facility in the Tampa, Fla., area, he said.

Officials estimated it will take about five years to complete process development.

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Airport area to hatch business incubator

The Airport Area Chamber of Commerce's long-awaited business incubator will soon become reality.

The chamber has partnered with DiCicco Development Inc. to build a one-story, 50,000-square-foot building in the Cherrington Commerce Park in Moon, officials with DiCicco and the chamber said Wednesday. Construction of the facility, near the intersection of Beaver Grade and Ewing roads, will begin in the spring.

Chamber President Sally Haas said she has been trying to secure funding and a partner for the project for several years and had to turn away businesses seeking such space. Previously discussed locations included the Imperial Business Park in North Fayette.

"This is a key initiative in growing and retaining business in the airport corridor," Haas said. "Statistics show that 87 percent of businesses that begin in an incubator stay in business well beyond five years."

A business incubator rents ready-to-use office space to fledgling enterprises, allowing them to focus on building their business rather than shopping around for affordable office space.

"Especially with the downturn in the economy, people need an environment that provides them with a lot of the things that otherwise they'd have to be investing in on the front end," Haas said. "This gives them that infrastructure."

Haas and DiCicco principal Sam DiCicco Jr. presented tentative plans for the building to the Allegheny County Redevelopment Authority's board of directors. The board approved authorization to pass through a $1 million Redevelopment Assistance Capital Program construction grant for the project. The grant comes from Gov. Ed Rendell's Office of the Budget.

DiCicco will match the grant, Haas said.

The incubator also might be used by out-of-town or international businesses scoping out the region for possible expansion, she said. The incubator will be in a state-designated Keystone Innovation Zone, which offers new businesses operating there up to $100,000 in tax credits and eligibility for certain state grants.

DiCicco said the incubator can be configured for one or several tenants, as needed.

Randy Forister, senior development director of the Allegheny County Airport Authority, which manages the Imperial Business Park, said he is excited about the deal.

"It's a forward-thinking project with a lot of elements that will help bring new businesses to Southwest Pennsylvania," he said.

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American Eagle 'down-sizing' into kidswear

Today's kids have a lot to say about what they wear.

A core team of 22 people at American Eagle Outfitters Inc. found that out as they spent a year studying the children's clothing market.

"We went across the country and talked to hundreds of moms, and hundreds of 8-, 9- and 10-year-old girls and boys," Chris Fiore of the South Side-based company said Wednesday.

"We went to their homes and to their schools, and picked their brains about what they like and don't like."

American Eagle will find out, starting today, whether it has hit on the right combination -- the first collection in its new 77kids by american eagle brand debuts for sale online only.

The first 150 designs for toddler boys and girls and older children are pioneers of sorts for the company's fourth clothing brand. The collection is American Eagle's first step into the $10.4 billion-a-year children's clothing-store market.

As 77kids gets rolling, American Eagle's year-old headquarters at SouthSide Works will be a center of activity.

While design and production work are run from a New York office, all marketing, merchandising and electronic commerce operations come out of the Hot Metal Street buildings. That even includes photography for the Web site, said Fiore, senior vice president for the brand.

American Eagle announced 77kids in January, just as most retailers were starting to hit on hard times.

The weak economy likely will dampen sales at first, said George Van Horn, senior analyst at IBISWorld Inc., a Los Angeles-based market research firm. Still, "the outlook over the next five years shows there are a lot of good reasons to get into this sector that they hasn't been exposed to before."

The 77kids brand targets ages 2 to 10, within a population segment that's projected to grow by at least 0.8 percent a year for the short term.

"We expect the share of first-born children to go up -- those are the kids who tend to get the stuff, and aren't prone to hand-me-downs," Van Horn said.

Fiore said he realizes the challenges of convincing parents and kids through computer screens to buy merchandise that will be judged by touch and fit. That's why, he said, the fashions come with trademarked guarantees for durability and softness.

"We did wash every item 77 times, and we photographed it and stand behind it. It's not just marketing gibberish," Fiore said, adding the results are documented on the site. Free shipping and returns are offered to spur sales, and an online "size wizard" and printable footwear chart ensure a good fit.

The brand name is a reference to American Eagle's 1977 founding date, and 7s are sprinkled throughout its promotions.

Seven "gotta have" outfits for boys and girls are modeled on the site, and the company is sending seven boys and seven girls who win a sweepstakes to Los Angeles with family members for a Nov. 14 Jonas Brothers concert. The 77kids site will play the concert two days later.

The clothing is priced for value, Fiore said. Although it differs substantially from American Eagle styles for teens and early 20s customers, "the basic DNA of the AE designs has been infused into the 77kids assortment."

That means lots of denim, with jeans for older kids priced at $19.50 to $39.50. Hoodies, T-shirts, jackets and cargo pants are in the mix, but so are sparkly dresses.

It's all designed to land in the common ground between the durable, safe, good-quality and value-priced clothing that parents want, and the cool, soft and stylish items -- sometimes based on their older siblings' or celebrities' fashions -- that children crave, he said.

Retail analyst Seth Jayson said the 77kids styles that he has seen resemble AE items. "That's a formula that has worked well for them, with AE and aerie," he said, referring to the company's dormwear and underwear brand.

The Martin + Osa brand for older customers has struggled, partly because prices were too high at first, said Jayson of The Motley Fool, which owns American Eagle stock through its Million Dollar Portfolio. He owns shares as well.

With the children's brand, "they really need to make sure they deliver the right value proposition to people who come in right now," Jayson said. "If you scare them now, it might end up choking the concept off."

Top retailers, such as Gymboree and Tween brands, have struggled in recent times, Jayson noted. And Talbots closed its children's stores this year.

American Eagle has said its online launch for 77kids is a way to gauge customers' tastes and to tweak styles before the first stores open late in 2009. Orders will be shipped from a distribution center in Ottawa, Kan.

The company's sales, like those of most retailers, have declined in the past year. American Eagle's stock has lost about half its value this year and closed at $10.26 yesterday, down 80 cents.

September same-store sales were down 6 percent compared to a year ago, although e-commerce sales were up 33 percent.

"The good news is, they are still making a lot of cash," Jayson said, "and I don't worry that a recession will sink them."