Opinion ID: 2600461
Heading Depth: 3
Heading Rank: 5

Heading: Construction of the East Mesa Project to Serve West of I-25.

Text: {31} Doña Ana argues separately that the PRC erred in preventing the construction of the East Mesa Project to serve its existing customers west of I-25. Doña Ana argues that the PRC did not specifically find that the construction of the project would interfere unreasonably with Moongate's service or system. The PRC only found that the use of the project facilities to serve customers in the disputed area would interfere unreasonably with Moongate's service or system. In the absence of such a finding, Doña Ana argues, the PRC did not have jurisdiction to prevent the construction. {32} Although the PRC did not specifically find that the construction of the East Mesa Project would interfere with Moongate's service or system, such a finding is implicit in the PRC's order. The record supports this finding. Even if the proposed tanks and lines were only used to serve customers west of I-25, Doña Ana's and Moongate's pipes would run parallel for some three miles, making leak detection and repair difficult. This is evidence of both interference and duplication, and we conclude that it is sufficient to support the PRC's conclusion that any construction would result in unreasonable interference with Moongate's service or system. {33} Finally, we recognize that the prospect of federal preemption may have influenced the PRC's decision. The PRC may have fashioned its order to address the federal preemption that could result if Doña Ana were allowed to construct any facilities in the disputed area. See 7 U.S.C. § 1926(b) (2000) (protecting the service area of federal indebted water providers who have made service available to an area). Although it appears that Doña Ana has not yet made available (service) to the disputed area, [3] the East Mesa Project may make such service available. If the area were then a part of Doña Ana's protected service area, Moongate would not be permitted to serve new customers in the area, and the PRC's ability to coordinate service could be limited. Seeking to address this concern, the PRC's order included the suggestion that Doña Ana could reapply for permission to construct its tanks after obtaining a binding waiver of its federal rights in the area. Doña Ana argues that the PRC did not have the authority to condition its right to build the East Mesa Project on its waiving rights as a federally protected entity. We believe the PRC did have such authority as a matter of state law. Whether § 1926(b) limits or preempts the PRC's consideration of these federal rights is a question of federal law. {34} The Tenth Circuit provided a partial answer to this question when it held that Doña Ana had not established that it currently had a § 1926(b) right to serve future customers in the [d]isputed [a]rea. Moongate Water Co. v. Doña Ana Mut. Domestic Water Consumers Ass'n, 420 F.3d 1082, 1088 (10th Cir.2005). The Tenth Circuit also held, based on the PRC order now under review, that [u]nder state law Doña Ana is restricted from extending service to the [d]isputed [a]rea, so it will have no occasion to invoke any right under [§ 1926(b)]. Id. at 1089. The Tenth Circuit stated that although a state or local government may not act `to take away from an indebted rural water association any territory for which the association is entitled to invoke the protection of § 1926(b),' id. at 1090 (quoting Pittsburg County Rural Water Dist. No. 7 v. City of McAlester, 358 F.3d 694, 716 (10th Cir.2004) (emphasis omitted)), Doña Ana has no vested § 1926(b) protection in the [d]isputed [a]rea. Id. The Tenth Circuit concluded that the PRC Order is not preempted by § 1926(b) with respect to the [d]isputed [a]rea. Id. The parties have not asked us to re-examine this holding. {35} To the extent that the Tenth Circuit left this matter unresolved, we conclude that our own review would be premature. We do not know at this time whether the PRC will, in fact, approve construction after Doña Ana obtains a federal waiver. Only after this approval will it be clear whether the basis of the PRC's decisions was Doña Ana's status as a federally protected water provider under § 1926(b). It is not clear whether this protected status is a sound or permissible basis for PRC decision making. Under state law this appears to be clearly relevant to the PRC's planning to avoid waste and duplication of water services. Federal law, however, may not permit this consideration. We leave this for a future court to determine, when the question is properly presented.