2023 New Mexico Statutes › Chapter 62 - Electric, Gas and Water Utilities › Article 3 - Public Utility Act; Preamble and Definitions › Section 62-3-1 - Declaration of policy.

A. Public utilities, as defined in Section 62-3-3 NMSA 1978, are affected with the public interest in that, among other things:
(1) a substantial portion of public utilities' business and activities involves the rendition of essential public services to a large number of the general public;
(2) public utilities' financing involves the investment of large sums of money, including capital obtained from many members of the general public; and
(3) the development and extension of public utilities' business directly affects the development, growth and expansion of the general welfare, business and industry of the state.
B. It is the declared policy of the state that the public interest, the interest of consumers and the interest of investors require the regulation and supervision of public utilities to the end that reasonable and proper services shall be available at fair, just and reasonable rates and to the end that capital and investment may be encouraged and attracted so as to provide for the construction, development and extension, without unnecessary duplication and economic waste, of proper plants and facilities and demand-side resources for the rendition of service to the general public and to industry.
History:
1953 Comp., § 68-3-1, enacted by Laws 1967, ch. 96, § 2; 2008, ch. 24, § 1.
ANNOTATIONS
Repeals and reenactments.
— Laws 1967, ch. 96, § 2, repealed former 68-3-1, 1953 Comp., relating to declaration of policy, and enacted a new section.
Compiler's notes.
— Sections 62-3-1 to 62-3-5 of the Public Utility Act are still effective as the repeal of Chapter 62, Article 3 by Laws 1998, Chapter 108, Section 82, effective July 1, 2003 was repealed prior to taking effect by Chapter 23, Section 1, Laws 2003. Although Laws 2003, Chapter 336, Section 8, amended Laws 1998, Chapter 82, as amended, an amendment of a repealed section is ineffective.
See
Quintana v. N.M. Dep't of Corrs., 100 N.M. 224, 668 P.2d 1101 (1983). Laws 2003, Chapter 416, Section 5 also repealed Laws 1998, Chapter 108, Section 82, as amended, a second time, however, that repeal is of no effect as the section had previously been repealed by Chapter 23, Section 1, Laws 2003.
The 2008 amendment,
effective May 14, 2008, in Subsection B, provided that capital and investment should provide for demand-side resources.
Telecommunications.
— The Public Utilities Act does not apply to telecommunication services.
In re Qwest Communications Int'l, Inc.
, 2002-NMSC-006, 131 N.M. 770, 42 P.3d 1219.
Public regulation commission derives its authority and jurisdiction
from the New Mexico Public Utility Act.
City of Sunland Park v. N.M. Pub. Regulation Comm'n
, 2004-NMCA-024, 135 N.M. 143, 85 P.3d 267, cert. denied, 2004-NMCERT-002, 135 N.M. 169, 86 P.3d 47.
Goals of utility regulation have been established.
— The legislature has established certain goals which utility regulation and supervision are intended to achieve: reasonable and proper services should be made available to the public at fair, just and reasonable rates, and capital and investment should be encouraged and attracted for the plants and facilities which are to render that service.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Utilities excluded from commission's jurisdiction.
— Absent a regulatory provision stating otherwise, or absent a willingness of the utility to serve "an indefinite public," any utilities not expressly brought within the scope of The Public Utility Act are excluded from the commission's jurisdiction.
Morningstar Water Users Ass'n v. N.M. Pub. Util. Comm'n
, 1995-NMSC-062, 120 N.M. 579, 904 P.2d 28.
Section lists some, but not all, points of public interest.
— A preamble is a declaration by the legislature of the reasons for the passage of the statute and is helpful in the interpretation of any ambiguities within the statute to which it is prefixed; however, the points of public interest in this section are not the only ones contemplated by the legislature.
Griffith v. N.M. Pub. Serv. Comm'n
, 1974-NMSC-024, 86 N.M. 113, 520 P.2d 269.
Supervision of foreign public utilities.
— Foreign public utilities authorized to do business in this state are subject to the same supervision as utilities incorporated under the laws of this state.
El Paso Elec. Co. v. Real Estate Mart, Inc.
, 1979-NMSC-023, 92 N.M. 581, 592 P.2d 181.
Public service commission's (now public regulation commission's) powers only come from statute.
— The public service commission (now public regulation commission) is an administrative body created by statute and must therefore find its authority and jurisdiction conferred upon it either expressly or by necessary implication from the same statutory authority.
N.M. Elec. Serv. Co. v. N.M. Pub. Serv. Comm'n
, 1970-NMSC-097, 81 N.M. 683, 472 P.2d 648.
Commission may not distinguish between forms of ownership in rate-making.
— The New Mexico legislature has made no distinction between public utilities operated as individuals, firms, partnerships, companies or corporations. Nowhere in the New Mexico Public Utility Act is the commission given authority, for the purpose of rate-making, to make a distinction between a public utility operated as a corporation from one operated as a sole proprietorship.
Moyston v. N.M. Pub. Serv. Comm'n
, 1966-NMSC-062, 76 N.M. 146, 412 P.2d 840.
Order that refund be passed on to consumers.
— Public service commission (now public regulation commission) has no express or implied statutory authority to order the flow-through of refunds to electric company from power supplier to consumers.
N.M. Elec. Serv. Co. v. N.M. Pub. Serv. Comm'n
, 1970-NMSC-097, 81 N.M. 683, 472 P.2d 648.
Where refund was not trust fund for consumers.
— Where refund was ordered paid over to power company by the federal power commission without any restrictions, and there was nothing in the order indicating an intention on the part of the commission to create a "trust fund" for the benefit of the ultimate consumers, the refund did not constitute a trust fund belonging to company's customers.
N.M. Elec. Serv. Co. v. N.M. Pub. Serv. Comm'n
, 1970-NMSC-097, 81 N.M. 683, 472 P.2d 648.
Charitable contributions and lobbying expenditures not passable to consumers.
— A commission order which essentially prohibited utility companies from including charitable contributions and lobbying expenditures in their cost of service, and from thereby passing those expenses on to the ratepayers was a reasonable exercise of the commission's authority pursuant to Subsection B.
El Paso Elec. Co. v. N.M. Pub. Serv. Comm'n
, 1985-NMSC-085, 103 N.M. 300, 706 P.2d 511.
Advertising costs passable to consumers.
— A commission order which allowed utility companies to include in their cost of service, and pass on to their ratepayers, expenditures for "informational" advertising (e.g., safety, billing practices, etc.), but not expenditures for "institutional" advertising (e.g., enhancement of corporate image), and which required that a utility show by "clear and convincing" evidence that an advertising expense is allowable was a reasonable exercise of the commission's authority pursuant to Subsection B, to insure that utility services are available "at fair, just and reasonable rates."
El Paso Elec. Co. v. N.M. Pub. Serv. Comm'n
, 1985-NMSC-085, 103 N.M. 300, 706 P.2d 511.
Rate increases to compensate predecessor utility for expenses.
— The public service commission (now public regulation commission) did not have jurisdiction over rate increases requested by a natural gas distribution company to compensate the company's predecessor, which was not currently a public utility, for expenses incurred by the latter in fulfilling its function as a public utility.
Southern Union Gas Co. v. N.M. Pub. Util. Comm'n
, 1997-NMSC-056, 124 N.M. 176, 947 P.2d 133.
Lowering gas rate to reimburse for overpayment is subject to bankruptcy stay provisions.
— Lowering of gas rate to reimburse customers for previous overpayments is not a rate setting function of the public service commission and, as such, was subject to bankruptcy stay provisions.
In re Jal Gas Co.
, 44 B.R. 91 (Bankr. D.N.M. 1984).
Financial affairs of public utilities are strictly regulated.
— It is the public policy of the state to require strict regulation of the financial affairs of public utilities, to the end that they may be adequately financed and, among other things, render service at reasonable rates.
Hogue v. Superior Utils., Inc.
, 1949-NMSC-056, 53 N.M. 452, 210 P.2d 938 (1949).
Both ratepayers and investors must be justly treated.
— In the determining of a proper rate of return under the statute, enough actual dollars must be produced that both ratepayers and investors are justly and reasonably treated.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Commission is vested with considerable discretion
in determining whether a rate to be received and charged is just and reasonable.
Hobbs Gas Co. v. N.M. Pub. Serv. Comm'n
, 1980-NMSC-005, 94 N.M. 731, 616 P.2d 1116.
Commission not limited in factors to be considered in setting rates.
— Neither New Mexico case law nor the Public Utility Act imposes any one particular method of valuation upon the commission in ascertaining the rate base of a utility; nor does the spirit of the statute tie the commission down to the consideration of a single factor in establishing rates.
Hobbs Gas Co. v. N.M. Pub. Serv. Comm'n
, 1980-NMSC-005, 94 N.M. 731, 616 P.2d 1116.
Commission must consider income taxes in fixing rates.
— Rates which failed entirely to take federal and state income taxes to which unincorporated utility's operations had been subjected into account as operating expenses are unfair, unjust, unreasonable and discriminatory, and an amount equal to the tax the utility would pay, if incorporated, was a reasonable and realistic amount to be deducted from the utility's taxable income for rate-making purposes.
Moyston v. N.M. Pub. Serv. Comm'n
, 1966-NMSC-062, 76 N.M. 146, 412 P.2d 840.
Evidence must show rate fixed is reasonable and will achieve goals.
— District court's holding below that commission's order was unreasonable and unlawful because it did not simply turn the cost of capital percentage directly into a rate of return was upheld by supreme court because it found there was little or no evidence that the particular rate chosen by the commission would achieve the statutory goals and therefore was unreasonable.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Valuation methods must be supported by substantial evidence.
— Where gas company seeking rate increase proposed to trend the general plant account items by using a nationally recognized index, but the commission instead inserted its own method - to simply use the untrended original cost, although the witness who strongly supported this approach admitted that he did not know whether this would accurately establish the reproduction cost of the items, the court held the commission's order was unreasonable, being unsupported by substantial evidence.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Commission may not remove entire construction item because interest was included.
— The district court erred in failing to hold unreasonable and unlawful the commission's removal of $673,574 of construction work in progress from the company's rate base on the reasoning that it had included the interest on that amount, $4904.62, when the object was to determine accurately the value of the company's property.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Utility cannot contract against its negligence in performing duties.
— A public service corporation, or a public utility such as an electric company, cannot contract against its negligence in the regular course of its business or in performing one of its duties of public service or where a public duty is owed or where public interest is involved.
Southwestern Pub. Serv. Co. v. Artesia Alfalfa Growers' Ass'n
, 1960-NMSC-052, 67 N.M. 108, 353 P.2d 62.
Requiring exhaustion of administrative remedies is constitutional.
— The requirement of the Public Utility Act that a person first exhaust his administrative remedy before resorting to the courts does not violate N.M. Const., art. VI, § 13, granting general jurisdiction to the district courts except as elsewhere limited in such constitution.
Smith v. Southern Union Gas Co.
, 1954-NMSC-033, 58 N.M. 197, 269 P.2d 745.
Procedure may not be changed arbitrarily.
— Although the public service commission (now public regulation commission) should be able to change its procedure, it should not arbitrarily or capriciously do so without good reasons.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Motion to bring record of previous case before court properly stricken.
— It was not error on the part of the district court to strike the commission's motion for an amended praecipe, where this motion would have had the effect of bringing the record of a previous case before the court, and the record of that case was not a part of the record in the instant case.
Southern Union Gas Co. v. N.M. Pub. Serv. Comm'n
, 1972-NMSC-072, 84 N.M. 330, 503 P.2d 310.
Indians on reservation are not subject to regulation.
— Indians acquiring gas resources from sources wholly upon Indian reservations within the state of New Mexico are not public utilities subject to regulation by the public service commission (now public regulation commission) of New Mexico. 1953 Op. Att'y Gen. No. 53-5690.
Indians operating a gas distribution system wholly on an Indian reservation regardless of the manner in which they acquire the gas on the reservation are not subject to the laws of the state of New Mexico in relation to regulation as public utilities. 1953 Op. Att'y Gen. No. 53-5690.
Selling television signals does not require certificate.
— There does not exist any requirement that a business, consisting of sale of television transmission signals, obtain a certificate of convenience and necessity from either the public service commission (now public regulation commission) of New Mexico or the corporation commission (now public regulation commission) of New Mexico before commencing to do business. 1954 Op. Att'y Gen. No. 54-5942.
Individual selling water to municipal utility is regulated utility.
— An individual operating a water service and selling at wholesale water to a municipally owned utility would be a public utility to the extent this operation effects the public interest and as such would be subject to the jurisdiction of the public service commission (now public regulation commission). 1953 Op. Att'y Gen. No. 53-5715.
General jurisdiction does not cover water and sanitation districts.
— The legislature did not intend to place water and sanitation districts under the general jurisdiction of the public service commission (now public regulation commission). 1971 Op. Att'y Gen. No. 71-56.
Commission is given jurisdiction of water and sanitation district rates.
— Water and sanitation districts have not been declared to be subject to the jurisdiction of the public service commission (now public regulation commission) except in the limited area of approving the district board's rates, tolls and charges. 1971 Op. Att'y Gen. No. 71-56.
Law reviews.
— For article, "The Regulation of Public Utilities," see 10 Nat. Res. J. 827 (1970).
For note, "The Public Service Commission: A Legal Analysis of an Administrative System," see 3 N.M.L. Rev. 184 (1973).
For note, "Conservation, Lifeline Rates and Public Utility Regulatory Commissions," see 19 Nat. Res. J. 411 (1979).
For article, "Cost of Service Indexing: An Analysis of New Mexico's Experiment in Public Utility Regulation," see 9 N.M.L. Rev. 287 (1979).
For comment, "Regulation of Electric Utilities and Affiliated Coal Companies - Determining Reasonable Expenses," see 26 Nat. Res. J. 851 (1986).
For article, "State Regulation in a Deregulated Environment: A State-Level Regulator's Lament," see 27 Nat. Res. J. 799 (1988).
For 1984-88 survey of New Mexico administrative law, see 19 N.M.L. Rev. 575 (1990).
For note, "Administrative Law - The Constitutional Limits of the Power to Regulate:
Duquesne Light Co. v. Barasch
", see 20 N.M.L. Rev. 199 (1990).
For article, "Current Utility Regulatory Practice from a Historical Perspective," see 32 Nat. Res. J. 289 (1992).