Opinion ID: 1387075
Heading Depth: 3
Heading Rank: 3

Heading: Municipal water facilities

Text: 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.