Happy New Year from Local Energy News!

Thanks to all of you for supporting Local Energy News this past year, and I really appreciate all the nice compliments and suggestions you've given me.

I've been off-line for a couple of months while tending to an illness in the family, but I have spent much of that time doing research for a project I plan to do in 2009. You'll hear all about it here, and I look forward to your participation. The commentary below offers a preview, but there's lots more to come!

We also plan to bring back our Local Energy News podcast in a new format that includes an interview each week. Let me know if there's a guest you'd like to see on the show.

Best wishes for a happy and healthy 2009!

 - Mark Sardella

The New Cooperatives

Consumer cooperatives such as member-owned grocery stores have been around for a long time, but a new breed of cooperatives with broader goals than their predecessors are now being created. The new model retains the traditional co-op focus of providing discounted goods and services to members, but it does so by creating and managing an array of for-profit companies in and around the local community. These subsidiary companies are separately incorporated, but the parent cooperative retains majority ownership in them, thereby ensuring that the core principles of service to the members and to the larger community are honored.

Perhaps the best example of this new cooperative model is Co-op Power in Greenfield, Massachusetts. (See www.cooppower.coop.) Co-op Power sells memberships for $975, payable in installments, and charges dues of $25 per year. Members are entitled to discounted energy products and services, including home energy audits and low-cost solar hot-water systems. But the real kicker is that the money raised through memberships is being leveraged to start Northeast Biodiesel LLC, a worker-owned company that will use waste oil to produce 10 million gallons of biodiesel fuel annually. When Northeast Biodiesel begins earning profits, a portion of those profits will be returned to the members of Co-op Power as “patronage dividends”, based on how much they spent on products and services offered by the co-op.

One advantage to this new cooperative model is the multitude of opportunities for financial participation it offers. In addition to selling membership shares, which entitle members to a single vote on matters put before them, the parent cooperative can raise capital through the sale of non-voting shares to its members and to qualified investors. Cooperatives are also often eligible for grants, and the federal government offers loan guarantees to co-ops. The subsidiary companies owned by the cooperative can sell equity, take on debt, or pre-sell the output of any production facility it builds. Investment opportunities in cooperatives are likely to attract ethical investors, who are typically less demanding and more patient than their Wall Street counterparts.

This new cooperative model could be what finally enables communities to move beyond theorizing about sustainability and instead begin putting some serious hardware on the ground. And it doesn’t have to be limited to food and energy – a cooperative could own controlling interest in a wide variety of product and service companies in the local community. Taken to the limit, community members could create companies capable of providing all their essential goods and services, ensuring they are produced and distributed according to a set of values they establish.

Could that level of cooperation between producer and consumer, if replicated on a massive scale, render obsolete the global finance system that has turned our economy into a casino? It just may be our best shot.

Energy Efficiency in Commercial Buildings

Several years ago I made a good living doing facility energy audits, and after auditing several million square-feet of commercial buildings, I realized that virtually all buildings suffer from the same mistakes: inefficient lighting, outdated controls, poorly maintained equipment, etc. So I took the "recommendations" sections of my reports and wrote a general document for facility managers. I recently updated it, and posted it here. I also made up a checklist for doing energy audits, which is posted here.

I hope you find these documents helpful. Don't be fooled by the recent holiday in energy prices...this is a good oppportunity to get your facility in shape!

PNM Stock Tumbles 7 Percent in One Day

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?