This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
Southern Union Gas Company (Southern Union) sold its New Mexico gas utility assets to Public Service Company of New Mexico (PNM) in 1985. Under the Purchase and Sales Agreement, Southern Union retained liability for pre-sale claims, including those related to take-or-pay gas purchase contracts. In 1989, Southern Union settled a claim with Unicon Production Company for $3.4 million and requested PNM to file a rate increase application to recover 75% of the settlement costs. PNM filed the application on Southern Union's behalf, as required by the agreement (paras 2-4).
Procedural History
- New Mexico Public Utility Commission, October 31, 1990: The Commission dismissed PNM's initial rate increase application without prejudice, citing PNM's failure to meet its burden of proof but acknowledging jurisdiction over the matter (para 4).
- New Mexico Public Utility Commission, April 28, 1995: PNM filed a second rate increase application on behalf of Southern Union. The Commission dismissed the application with prejudice, without specifying the grounds for dismissal (para 4).
Parties' Submissions
- Appellant (Southern Union): Argued that the Commission retained jurisdiction over the matter based on its prior order approving the sale and that the Commission was obligated to assert jurisdiction due to its prior actions in similar cases. Southern Union also contended that the rate increase application was valid because it was submitted by PNM, a public utility (paras 5-7, 10).
- Respondent (New Mexico Public Utility Commission): Asserted that it lacked jurisdiction to consider the rate increase application because Southern Union was no longer a public utility and the costs were incurred by Southern Union, not PNM (paras 6-9).
Legal Issues
- Did the New Mexico Public Utility Commission have jurisdiction to consider a rate increase application submitted by PNM on behalf of Southern Union for costs incurred by Southern Union before it ceased to be a public utility?
Disposition
- The Supreme Court of New Mexico affirmed the Commission's dismissal of the rate increase application, holding that the Commission lacked jurisdiction to consider the application (para 12).
Reasons
Per Baca J. (Franchini C.J. and Serna J. concurring):
The Court held that the Commission's jurisdiction is statutorily limited to entities currently operating as public utilities. Southern Union ceased to be a public utility in 1985 after selling its assets to PNM, and the Commission explicitly found at that time that its statutory authority over Southern Union ended. The Court rejected Southern Union's argument that the Commission's prior assertion of jurisdiction in similar cases obligated it to assert jurisdiction here, emphasizing that jurisdiction cannot be conferred by past practice or Commission orders but must be based on statutory authority. The Court also found that the Commission's jurisdiction over rate increases is limited to costs incurred by the public utility itself, not by a predecessor entity. Since the costs in question were incurred by Southern Union, the Commission lacked jurisdiction to consider the application (paras 6-11).
Dissenting Opinion by Minzner J.:
Justice Minzner dissented, arguing that the decisive issue was not Southern Union's current status as a public utility but whether the expenses at issue were utility-related and affected the reasonableness of current rates. Minzner contended that the Commission had broad authority under the Public Utility Act to consider such matters and that unresolved factual issues precluded a determination of jurisdiction. She would have remanded the case to the Commission for further factual findings (paras 14-24).
Dissenting Opinion by McKinnon J.:
Justice McKinnon also dissented, asserting that the Commission had jurisdiction to consider the application because the costs were incurred by Southern Union while it was a regulated public utility. McKinnon emphasized that the Commission's statutory mandate to ensure just and reasonable rates required it to consider the application on its merits. He criticized the majority for narrowly construing the Commission's jurisdiction and argued that the Commission's approval of the Purchase and Sales Agreement obligated it to address the application (paras 25-37).