This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Cities of Albuquerque and Santa Fe, along with the Counties of Bernalillo and Santa Fe, challenged a tariff approved by the New Mexico Public Regulation Commission (PRC). The tariff allowed the Public Service Company of New Mexico (PNM) to recover costs incurred from complying with local ordinances requiring utility systems to be placed underground. The local governments argued that the tariff violated common law, interfered with their police powers, and exceeded the PRC's statutory authority (paras 1-2).
Procedural History
- New Mexico Public Regulation Commission: Approved the tariff proposed by PNM, allowing cost recovery for undergrounding utility systems.
Parties' Submissions
- Appellants (Local Governments): Argued that the tariff violated the common law rule requiring utilities to bear relocation costs, interfered with their police powers, exceeded the PRC's statutory authority, resulted in discriminatory rates, violated the anti-donation clause of the New Mexico Constitution, and breached the Procurement Code (para 1).
- Appellees (PRC and PNM): Defended the tariff as a reasonable mechanism to allocate costs of undergrounding utility systems, arguing that it protected ratepayers outside the affected localities and was consistent with the PRC's authority (paras 12-14).
Legal Issues
- Did the tariff violate the common law rule requiring utilities to bear relocation costs for public health and safety projects?
- Did the tariff unlawfully interfere with the police powers of local governments?
- Did the tariff exceed the PRC's statutory authority?
- Did the tariff result in discriminatory rates?
- Did the tariff violate the anti-donation clause of the New Mexico Constitution?
- Did the tariff violate the Procurement Code?
Disposition
- The Supreme Court of New Mexico vacated the tariff, finding it unlawful and exceeding the PRC's statutory authority (para 29).
Reasons
Per Serna J. (Maes CJ., Minzner, Bosson, and Chávez JJ. concurring):
Common Law Violation: The tariff violated the common law rule that utilities must bear the cost of relocating facilities for public health and safety projects. The tariff improperly shifted these costs to local governments or their residents, contrary to established principles (paras 14-15).
Police Powers: The tariff unduly infringed on the police powers of local governments by limiting their ability to regulate public ways and requiring them to bear costs for safety-related projects (paras 11, 14).
Statutory Authority: The PRC exceeded its statutory authority by adopting a tariff that lacked an exception for safety-related projects. The Legislature had not authorized the PRC to displace the common law rule in this context (paras 16-22).
Discriminatory Rates: The Court found no unreasonable discrimination in the tariff, as it aimed to allocate costs to those directly benefitting from undergrounding projects. The PRC's approach was supported by substantial evidence (paras 24-26).
Anti-Donation Clause: The tariff did not violate the anti-donation clause, as it did not constitute a donation of public funds but rather a cost allocation mechanism (para 27).
Procurement Code: The tariff fell within a statutory exception to the Procurement Code for publicly regulated utility services, and thus did not violate the Code (para 28).
Conclusion: The Court vacated the tariff and remanded the matter to the PRC for further proceedings, emphasizing that safety-related relocation costs should be treated as a cost of service borne by all ratepayers (paras 29-30).