Opinion ID: 1219567
Heading Depth: 4
Heading Rank: 1

Heading: The Corporate Financial Model (CFM).

Text: The attorney general argues that the Commission improperly relied on the CFM submitted by PNM to conclude that corporate earnings would be too low under total exclusion, raising several claims regarding the validity of the model, its underlying assumptions, and its fitness for the purpose for which it was used. The merits of this issue are not yet ripe for our review. The question of corporate earnings will be considered again, and in greater depth, in the rate case, where PNM's financial health will be considered as a factor in determining reasonable rates. See Final Order, 101 Pub.Util.Rep. (PUR) 4th at 159-60. Thus, the issues of the return to investors and earnings under different capacities will recur, giving the attorney general and others the opportunity to contest the model's efficacy, offer alternatives, and present new evidence on the issue. Although the question can be presented solely in legal terms, i.e., was the Commission's reliance arbitrary, capricious, and unsupported by substantial evidence, fact finding has not been completed on the issue, additional evidence may change the tenor of the arguments or moot them entirely, and the Commission has not yet exercised the full breadth of its discretion. Critical to this question is that, although the Commission has determined not to exclude the capacity, it has not yet determined either its prudence or the timing of its inclusion (the phase-in issue). See id. The attorney general contends that: While it is true that the Commission did not use the CFM's to set rates, they were using them to conclude, in effect, that rates set under this particular alternative would produce earnings which were too low. This, however, is precisely why this issue is not fit for review  it will come into much greater focus after the Commission has decided what the rates will be and how capacity will be phased in. Under the Abbott test, a court also must determine the potential hardship to the parties caused by postponing review. For this issue, as for the others to be examined, no harm results from delayed review. The final order has no immediate effect on consumers  no rates will go into effect until after the conclusion of the final hearing of this trilogy. See, e.g., Toilet Goods Ass'n v. Gardner, 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697 (1967) (case not ripe despite final agency action, when regulations, prior to enforcement, did not force a change in petitioner's position); Midwestern Gas Transmission Co., 589 F.2d at 622-25 (D.C.Cir.1978) (administrative action not cause of hardship when effect will not be felt until conclusion of entire agency proceedings; preliminary order did not cause parties to alter position).