Opinion ID: 1428299
Heading Depth: 3
Heading Rank: 3

Heading: Commission's Authority to Order Interim Rate Relief

Text: {16} We first address U S West's assertion that the Commission lacked the authority to decrease rates before the completion of a general rate case. [2] This assertion lacks merit. Our prior decisions have established the principle that the Commission has a wide degree of discretion in its rate-making authority. In fact, `[i]t is difficult to conceive of a more clear and all-inclusive grant of power to a government agency' than the grant of ratemaking power found in Article XI, Section 7 of the New Mexico Constitution. U S West 1995, 121 N.M. at 161, 909 P.2d at 721 (quoting Mountain States Tel. & Tel. Co. v. New Mexico State Corp. Comm'n, 90 N.M. 325, 331, 563 P.2d 588, 594 (1977) [hereinafter Mountain States 1977 ]). We also have recognized the `elementary rule of law that the power to grant a particular relief carries with it all the incidental, necessary, and reasonable authority to grant that which is less.' Mountain States 1977, 90 N.M. at 335, 563 P.2d at 598 (quoting Pacific Tel. & Tel. Co., 78 Pub. Util. Rep. New Series (PUR) 491, 493 (Cal. Pub. Utils. Comm'n 1949)). Thus, the Commission's ratemaking authority `carries with it the incidental and implied power to grant interim rate relief, if the facts warrant such summary relief.' Id. (quoting Pacific Tel. & Tel. Co., 78 Pub. Util. Rep. New Series (PUR) at 493); cf. U S West 1993, 116 N.M. at 551, 865 P.2d at 1196 (concluding that the Commission's authority to suspend proceedings can be implied from its broader, express power to dismiss proceedings). See generally Stefan H. Krieger, The Ghost of Regulation Past: Current Applications of the Rule Against Retroactive Ratemaking in Public Utility Proceedings, 1991 U. Ill. L.Rev. 983, 1012 n. 163 (listing other states that rely on inherent authority to set interim rates subject to surcharge or refund). {17} When it was determined that an applicant for a rate increase was losing over one million dollars per month considering what had been determined to be its fair rate of return and it became obvious that it would be a considerable length of time before permanent rates could be fixed, this Court concluded that the Commission had a constitutional duty to fix interim rates that would minimize the confiscation of [the applicant's] property. Mountain States 1977, 90 N.M. at 335-36, 563 P.2d at 598-99. It is not unreasonable to infer that the Commission would have a similar power to commence an investigation and order an interim reduction in rates for the benefit of ratepayers when a significant regulatory lag threatens its ability to ensure that rates are just and reasonable. Cf. Pueblo Del Sol Water Co. v. Arizona Corp. Comm'n, 160 Ariz. 285, 772 P.2d 1138, 1140 (App.1988) (rejecting a utility's argument that interim rates may be made subject to increase, but not decrease, as an effort to have [one's] cake and eat it too); United Tel. Co. v. Mann, 403 So.2d 962, 966 (Fla.1981) (concluding that there is no logical reason for distinguishing between rate increase proceedings and rate decrease proceedings in the context of determining a commission's authority to order interim relief); Florida Power Corp., 8 Pub. Util. Rep. 4th (PUR) 95, 97 (Fla. Pub. Serv. Comm'n 1975) ([I]t is illogical to contend that one segment of the utility industry ... may receive interim relief while another must be required to operate under unreasonable or unfair rates while the lengthy regulatory process runs its course.); Farmland Indus., Inc., 943 P.2d at 481 (concluding that a commission's power to establish and maintain just and reasonable rates is not limited to increasing rates). {18} U S West contends that we cannot make such an inference in favor of an interim rate reduction in this case because, unlike U S West, neither the government nor the ratepayers have a liberty or property interest at stake that is entitled to the substantive and procedural protections afforded by the Due Process Clause. While it is true that no individual ratepayers are parties to this case and the government is not a person within the meaning of the Due Process Clause, see City of Albuquerque v. Chavez, 1997-NMCA-054, ¶ 12, 123 N.M. 428, 941 P.2d 509, it does not follow that the Commission is without authority to protect the interests asserted by its staff and the Attorney General under these circumstances, cf. id. ¶¶ 13-14 (concluding that a municipal ordinance prohibiting arbitrary and capricious actions affords the government the same right to a fair hearing that is guaranteed to persons under the Due Process Clause); Las Cruces Prof'l Fire Fighters v. City of Las Cruces, 1997-NMCA-031, n. 3, 123 N.M. 239, 938 P.2d 1384 (same). In their terms and in their structure, the ratemaking provisions in our state constitution at the time of this proceeding require the Commission to balance the interests asserted by U S West and the interests asserted on behalf of ratepayers to arrive at a rate that is reasonable and just. N.M. Const. art. XI, § 7; see U S West 1993, 116 N.M. at 551, 865 P.2d at 1195. Neither [interest] is paramount. Mountain States Tel. & Tel. Co. v. Corporation Comm'n (In re Rates and Charges of Mountain States Tel. & Tel. Co.), 99 N.M. 1, 7, 653 P.2d 501, 507 (1982) [hereinafter Mountain States 1982 ]. {19} Further, the Commission's authority to initiate a rate investigation, order an interim reduction in rates, and employ methods of rate control other than a general rate case is consistent with the law in other jurisdictions. See generally National Association of Regulatory Utility Commissioners, Utility Regulatory Policy in the United States and Canada: Compilation 1993-1994, at 24, 35-43 tbls.9-13 (1995). Indeed, U S West has been a party to such an interim rate reduction in at least one other jurisdiction, see U S West Communications, 114 Pub. Util. Rep. 4th (PUR) 174 (Utah Pub. Serv. Comm'n 1990), and we recognize that the fashioning of such interim relief may achieve a practical solution to the increasingly vexing rate regulation problem of regulatory lag, Chesapeake & Potomac Tel. Co. v. Public Serv. Comm'n, 330 A.2d 236, 242 (1974). For these reasons, we conclude that the Commission had the power to grant interim rate relief.