Opinion ID: 1219567
Heading Depth: 4
Heading Rank: 3

Heading: The Commission Arbitrarily and Capriciously Failed to Distinguish Between Prudent and Imprudent Investment.

Text: The attorney general has combined several claims under this general assertion. He argues that the Commission determined fairness and acceptability of an excess capacity plan without considering the prudence of investment decisions that created the excess. The attorney general contends that `fairness' is necessarily dependent upon the prudence of the plant in question and the decision was therefore arbitrary and capricious. He also alleges a violation of due process in that he was unable to present evidence on this point. We resolve this issue through a combination of our deference to the Commission's discretion and the ripeness doctrine. The Commission decided to trifurcate the proceedings based on the magnitude of the evidence and the size of the record generated by the proceeding. See Final Order, 101 Pub.Util.Rep. (PUR) 4th at 131. The Commission acted reasonably in breaking this case into manageable parts, and we will not review further the decision to sever in light of its legislative mandate to determine reasonable rates within statutory time constraints. See NMSA 1978, §§ 62-8-1, -7(C) (Repl.Pamp. 1984); Otero County Elec. Coop., Inc. v. New Mexico Pub. Serv. Comm'n, 108 N.M. 462, 465, 774 P.2d 1050, 1053 (1989); see also NMSA 1978, Section 62-10-6 (Repl. Pamp.1984) (Commission has discretion to order separate hearings on separate matters). Moreover, the ongoing nature of these proceedings makes our review at this juncture inappropriate. The Commission expressly stated in the final order that the prudence hearing will continue and that the impact of this case on the prudence analysis cannot be determined until that case is heard. 101 Pub.Util.Rep. (PUR) 4th at 180-81. We do not perceive any due process violations when, as here, the attorney general will be able to present evidence on the question of prudence at the prudence hearing. We find the attorney general's other claims speculative  the Commission has not yet determined if and to what extent investment in any plant is imprudent, or how imprudence would effect its rate treatment. It certainly has not, by its actions in this case, determined that ratepayeris must pay for imprudent investment. Consequently, we find that the factual record is not adequately developed on this question to allow review, and we leave it to the Commission to determine in the first instance its treatment of this matter. The attorney general also argues that the Commission improperly changed its methodology by bringing plant into rates in a manner other than based on the most recent in-service date. We find it impossible to evaluate this alleged change in methodology, because the phase-in of specific capacity into rates has not yet been determined. It is true that the Commission excluded 130 MW of SJ-4, which the attorney general argues was more recent than PVNGS and should therefore not be excluded before PVNGS. It is not clear that the Commission is bound to a first-in methodology. Even if it were, however, we cannot discern any arbitrary or capricious action at this time, because the Commission has not yet determined how, or even if, PVNGS Units 1 and 2 will be phased into rate base.