Opinion ID: 1387075
Heading Depth: 2
Heading Rank: 5

Heading: the distinction between mutual domestic water consumer associations, water users associations, and municipal water utilities

Text: Morningstar variously categorizes itself as a mutual domestic water consumer association and as a water users' association. Despite the similar nomenclature, these are two distinct types of water providers that are governed by two different sets of laws.
The statutory history of the term mutual domestic water consumer association demonstrates not only that the term has virtually disappeared from New Mexico law since 1965, but also that Morningstar's status as a water users' association is the product of a totally different statutory genealogy than the one to which mutual domestics belong. Mutual domestics can be traced to the precursors of the Sanitary Projects Act, Sections 3-29-1 to -19. According to the current SPA, the definition of an SPA association includes any association organized under Laws 1947, Chapter 206, Laws 1949, Chapter 79 or Laws 1951, Chapter 52, as well as any association organized under the provisions of the Sanitary Projects Act. Section 3-29-2(B). The 1947, 1949, and 1951 laws are the direct lineal ancestors of the SPA. The 1947 laws appear to have first created the entity called a Mutual Domestic Water Consumers' Association. The purpose of this act was to fund rural community water service projects. [1] This body of law was not called the Sanitary Projects Act. The 1947 laws were repealed by the 1949 laws, [2] and the 1949 laws were repealed by the 1951 laws. [3] Mutual domestics continued to be the subject of regulation in each successive body of law. The 1951 laws were repealed in 1957, [4] and for the first time these enactments were called the Sanitary Projects Act. The 1957 act expanded state funding beyond mutual domesticswhich provided only water servicesto include funding of sewer projects. The 1957 SPA was amended in 1965. [5] This version of the act created the sanitary projects fund to finance the provisions of the SPA. 1965 N.M.Laws, Ch. 300, § 14-28-10. At the same time, the law directed that the balance of the then existing mutual domestic water consumers association fund was to be transferred into the new SPA fund. Id. With the 1965 amendments, the term Mutual Domestic Water Consumers' Association(s) made its last appearance in the SPA. Though we know of no scholarly studies of this mesmerizing area of law, we believe that after the 1965 laws were enacted no new mutual domestics were formed. Nevertheless, the SPA as now codified and amended, is the governing statute for mutual domestics, should any still be in existence. Cf. N.M.Att'y Gen.Op. 62-99 (1962) (discussing the SPA as governing the conduct of a Water Consumers Association). Mutual domestics are at issue in this case because the term was, without explanation, included in the 1990 amendments to Section 62-9-1 of the PUA. See 1990 N.M.Laws, ch. 95. Only by showing that it is a mutual domestic, can Morningstar, under the PUA, claim protection from Farmington's intrusions. It is important to clarify that the PUA does not regulate any SPA association. El Vadito, 115 N.M. at 788, 858 P.2d at 1267. However, the PUA does expressly protect one type of SPA associationmutual domesticsfrom intrusion by a public utility. See 62-9-1. Morningstar raises the legitimate point that, of all the types of utilities organized under the SPA, it is odd that only mutual domestics formed before 1965 should be singled out for protection in the PUA. Moreover, the term mutual domestic water consumer association is not defined anywhere in the current New Mexico statutes. It is arguable that the legislature intended the expression mutual domestic water consumer association to signify that any water provider formed under the SPA should be protected by Section 62-9-1. However, the language of the statute encourages no such interpretation. The statute explicitly protects only mutual domestics and we must presume that the legislature intended this limited scope. Nevertheless, because Morningstar is not a mutual domestic or any other kind of SPA provider, these questions are irrelevant to this case.
Article 5 of Chapter 73 is unofficially entitled Water Users' Associations and it is a completely separate body of law from the SPA. Morningstar's articles of incorporation, dated September 26, 1977, state that owners of land in San Juan county have on this day formed a corporation under § 73-5-1 through § 73-5-9, N.M.S.A., 1978. Morningstar affirmed this fact in the companion case to this one, Morningstar I, 309 N.M. at 120, 901 P.2d at 727. No evidence or documentation supports Morningstar's assertions in this case that it is a mutual domestic governed by the SPA. Chapter 73, Article 5 water users' associations are not expressly included nor excluded from the PUA. We cannot presume that these providers are outside the Commission's jurisdiction simply because they are not mentioned in the PUA statutes and regulations. Legislative silence by itself is not an expression of legislative intent. See El Vadito, 115 N.M. at 788, 858 P.2d at 1267 (The PUA's silence as to whether the Commission has jurisdiction over SPA associations, by itself, proves to be inconclusive on the issue of whether the Commission has jurisdiction by necessary implication over SPA associations.). In interpreting this omission we must look at the objectives the legislature sought to accomplish and thereby interpret the statute to achieve these purposes. Garcia v. Thong, 119 N.M. 704, 706, 895 P.2d 226, 228 (1995). While the inclusion of one group of water providers in the PUA does not automatically mean that all others are excluded, the legislature did offer insight into its intentions in this regard on at least one occasion. See Wilson v. Rowan Drilling Co., 55 N.M. 81, 109, 227 P.2d 365, 383 (1950) (The maxim `expressio unius est exclusio alterius' is only an aid to construction and not a rule of law.). The legislature went through quite a bit of trouble to bring within the PUA a type of electric providerrural electric cooperativesthat had been exempted from the PUA. These cooperatives are governed by the Rural Electric Cooperative Act, NMSA 1978, §§ 62-15-1 to -33 (Repl.Pamp.1993). The legislature probably acted in response to our decision in Socorro Electric Cooperative, Inc. v. Public Service Co., 66 N.M. 343, 345, 348 P.2d 88, 89 (1959). In that case an electric cooperative filed a petition with Commission to protest the intrusion by a certificated electric company into the cooperative's service territory. Id. This Court found that the PUA expressly exempted cooperatives from regulation by the Commission. Id. at 347, 348 P.2d at 90. Having no jurisdiction over the cooperative, the Commission could not grant it any affirmative relief. Id. at 349, 348 P.2d at 91-92. After Socorro the legislature attempted, with 1961 N.M.Laws, Ch. 89, § 2, to bring rural electric cooperatives within the definition of public utility in the PUA. See NMSA 1953, § 68-3-2(F)(1) (Supp.1961); Community Pub. Serv. Co. v. New Mexico Pub. Serv. Comm'n, 76 N.M. 314, 317, 414 P.2d 675, 677 (1966), cert. denied, 385 U.S. 933, 87 S.Ct. 292, 17 L.Ed.2d 213 (1966). However, we found this attempt to be unconstitutional in Community Public Service Co. v. New Mexico Public Service Commission. In that case, we noted that cooperatives were not required to render service to the general public and that the Commission had no power to regulate their rates and financing; they were therefore not public utilities. Id. at 317-18, 414 P.2d at 677-78. In contrast, other certificated electric utilities were required to render service to the public generally and their rates and financing were completely regulated. Id. at 316-17, 414 P.2d at 676. We concluded that cooperatives were at a decided advantage to other certificated utilities and the legislative attempt to include rural electric cooperatives into the PUA was unconstitutional. Id. at 318-19, 414 P.2d at 677-78. Probably in response to this opinion the legislature went back to the drawing board and, in 1967 N.M.Laws, ch. 102, § 4, redrafted the Rural Electric Cooperative Act to say that should any provision of the Rural Electric Co-operative Act ... be held to be repugnant to any provision of the Public Utility Act ... the latter shall be controlling and the former shall be held repealed to the extent of the repugnancy. See NMSA 1953, § 45-4-32 (Supp.1967); NMSA 1978, § 62-15-32. The fact that the legislature persisted in bringing within the PUA a previously excluded class of electric providers suggests the legislature intended to limit the definition of public utility to an enumerated list of specific types of utilities. See El Vadito, 115 N.M. at 788, 858 P.2d at 1267 (stating that SPA utilities are exempt from the PUA absent a provision that affirmatively brings them within the Commission's jurisdiction). The only exception to this rule seems to be when a utility belonging to a non-enumerated class begins to act like a public utility; that is, when it crosses the indistinct line between a private coalition serving its own select members and becomes a utility that opens its services to the public at large. See Id. at 789, 858 P.2d at 1268 (An SPA association operating as a public utility would be subject to the Commission's exclusive regulatory jurisdiction, as any other public utility would be.). It may also be possible for a member of a non-enumerated class to elect to come within the PUA, though it is unlikely many utilities would volunteer for this bureaucratic burden. Cf. Electric v. Commission, 81 N.M. at 685, 472 P.2d at 650 (stating Commission had no authority over electric company that did not invoke Commission's jurisdiction). We conclude that, 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 PUA are excluded from the Commission's jurisdiction. See El Vadito, 115 N.M. at 790, 858 P.2d at 1269 (referring to indefinite public). In the case of water users' associations, this conclusion is supported by the fact that the Commission steadfastly insists that it has no jurisdiction over water users' associations. Additionally, Morningstar has offered no evidence to show that, as a water users' association, it is subject to the PUA. Moreover, according to the statutes by which they are governed, water users' associations are intended to be a private coalition of owners of lands, reservoirs or irrigation ditches who organize an association for their mutual advantage. See § 73-5-1. They are not intended or required to serve any and all members of the general public within a specific geographical area. In fact, as indicated above, there is no support in the record for Morningstar's claim that it has an actual water supply service territory as if it had some kind of property rightas does a PUA public utilityin a specific geographical region. Though water users' associations can acquire lands and rights-of-way for their reservoirs, canals, ditches and works, the areas they serve seem to be defined largely by the property interests of their members. See §§ 73-5-9; see also § 73-5-1. Therefore Morningstar does not come within the Commission's regulatory jurisdiction.
Municipalities may own and operate water facilities. These facilities are established and governed by NMSA 1978, §§ 3-23-1 to -10 (Repl.Pamp.1995), and by NMSA 1978, §§ 3-27-1 to -9 (Repl.Pamp.1995). Under Section 62-3-3(E), with two exceptions, all municipal water facilities are excluded from the PUA. Under the first exception, a municipality can choose to submit itself to full regulation by the PUA under Section 62-6-5, which states that any municipality desiring to avail itself of all the benefits of the Public Utility Act [Articles 1 to 6 and 8 to 13 of Chapter 62 NMSA 1978] and of the regulatory services of the commission may elect to come within the provisions of that act and to have the utilities owned and operated by it, either directly or through a municipally owned corporation, regulated and supervised under the provisions of that act. When a municipality so elects, in the manner provided in this section, it shall be subject to all the provisions of the Public Utility Act. Section 62-6-5 (flush language). Farmington has not chosen to become subject to the PUA. The second exception applies to municipalities with a population of more than two hundred thousand. Section 62-9-1.1(C). If such a municipality has not elected to submit to PUA regulation, and if it intrudes into a geographical area described in a certificate of public convenience and necessity granted by the commission to a public utility rendering the same type of service, the commission has the jurisdiction to hold a hearing on the matter and, if necessary, order the municipality to cease and desist its planned intrusion. Section 62-9-1.1(A). This exception seeks only to limit the unbridled expansion of a large municipality's water system; the municipality itself does not come under the complete PUA regulatory scheme. Since Morningstar is not a PUA-regulated utility, and Farmington's population is less than two hundred thousand, this exception in inapplicable to this case. Despite the fact that it provides water services to the public, under the PUA Farmington is not a public utility. The Commission has no jurisdiction over Farmington. It is thus apparent that neither Morningstar nor Farmington are public utilities for the purposes of the PUA. The Commission would have jurisdiction over this dispute if two of Morningstar's claims were correct: (1) that Morningstar is a mutual domestic, and (2) that Farmington is a public utility under the PUA. If either claim fails, then Morningstar cannot seek protection from Farmington's intrusion into its territory under Section 62-9-1. Since Morningstar is not a mutual domestic, and no provision or exception brings Morningstar within the PUA, there is no way for the Commission to exercise jurisdiction over this dispute. We therefore will only briefly discuss whether the notwithstanding clause of Section 62-9-1, has any effect on Farmington's status under the PUA.