Shares of PNM Resources, the holding company that owns the subsidiary that provides electricity to Santa Fe and Albuquerque, tumbled more than 7 percent today to close at just $9.63 per share. A number of electric utilities are taking a bath on Wall Street, in part due to their heavy reliance on credit markets that are now “clogged” because of “troubled assets”. But PNM’s stock has been falling for a year and a half, and has lost 70 percent of its value since its high of $32.55 just 18 months ago. The company is also undergoing an investigation by the New Mexico Environment Department after a reported release of fly-ash at the San Juan Generating Station in Waterflow.

Although the falling stock price is undoubtedly hurting some New Mexico residents who invested in PNM Resources, the bulk of the stock is held by global investment funds. The largest voting stake is held by Bill Gates, who owns about 9 percent of the company. Other funds, including the trillion-dollar Barclays Global, have smaller stakes. Investment funds have a singular purpose, which is to make piles of money into larger piles of money, and they seemed to be pretty good at it – at least until recently.

The meltdown on Wall Street will increase the cost of capital for the $1.3 billion in projects that PNM is planning over the next five years. Those higher costs will flow through to ratepayers, while PNM will reap a guaranteed 10.1 percent return on the investment. As a first step in paying for the projects, PNM filed for a rate increase of $123 million, to take effect next year, which would raise rates by 18 percent. Residential customers would see an increase in their bills of about 23.5 percent. These increases will be on top of this year’s two rate increases: PNM was awarded a $33 million increase in April, and in May they were given the right to raise rates as needed, without public hearings, to cover increases in their fuel costs. This allowance is expected to cost ratepayers an additional $62 million a year.

Could it be time to consider an alternative energy supply for Santa Fe?