Community Public Service Co. v. New Mexico Public Service Commission

• Decision Date: 21 March 1966
• Docket Number: No. 7739,7739
• Citation: 1966 NMSC 53,414 P.2d 675,76 N.M. 314
• Parties: , 64 P.U.R.3d 412 COMMUNITY PUBLIC SERVICE COMPANY, Petitioner-Appellant, v. The NEW MEXICO PUBLIC SERVICE COMMISSION, and Joseph A. Bursey, Phil Lucero and L. J. Chambard, Commissioners, and Otero County Electric Cooperative, Inc., Respondents-Appellees.
• Court: New Mexico Supreme Court

Page 675

414 P.2d 675

76 N.M. 314, 64 P.U.R.3d 412

COMMUNITY PUBLIC SERVICE COMPANY, Petitioner-Appellant, v. The NEW MEXICO PUBLIC SERVICE COMMISSION, and Joseph A Bursey, Phil Lucero and L. J. Chambard Commissioners, and Otero County Electric Cooperative, Inc. Respondents-Appellees.

No. 7739.

Supreme Court of New Mexico.

March 21, 1966.

Rehearing Denied June 1, 1966.

Atwood & Malone, Bob F. Turner, Roswell, Alfred P. Whittaker, Rockville, Md., and Bennett L. Smith, Ft. Worth, Tex., Gen. Counsel for Public Service Co., appellant.

Boston E. Witt, Atty. Gen., John Jennings, Sp. Asst. Atty. Gen., Santa Fe, for N.M. Public Service Comm.

William M. Siegenthaler, Artesia, John E. Hall, Albuquerque, for Otero County Elec. Coop.

MOISE, Justice.

We are here called upon to pass on the constitutionality of Ch. 89, N.M.S.L.1961, insofar as it attempted to place rural electric cooperatives under the Public Utility Act for certain purposes by including them within the definition of 'public utility.' The act amended § 68--3--2(F)(1) by adding the italicized words:

"Public utility' or 'utility' means every person not engaged solely in interstate business and except as hereinafter stated, that now does or hereafter may own, operate, lease or control:

(1) Any plant, property, or facility for the generation, transmission, or distribution, sale or furnishing to or for the public of electricity for light, heat, or power or other uses, including corporations organized under sections 45--4--1 through 45--4--32 New Mexico Statutes Annotated, 1953 Compilation; known as the Rural Electric Co-operative Act; * * *.'

At the same time nothing was done to change § 45--4--3(d), N.M.S.A.1953, which reads:

'A cooperative shall have power: * * *

(d) To generate, manufacture, purchase, acquire, accumulate and transmit electric energy, and to distribute, sell, supply, and dispose of electric energy in rural areas to its members, to governmental agencies and political subdivisions, and to other persons not in excess of ten per centum (10%) of the number of its members; * * *.'

Petitioner, hereinafter referred to as 'Community' is a public utility within the definition of that term in § 68--3--2(F), N.M.S.A.1953, prior to its amendment in 1961. Respondent, Otero County Electric Cooperative, Inc., hereinafter referred to as 'Otero,' is a corporation organized under the Rural Electric Cooperative Act (§§ 45--4--1 to 45--4--32, N.M.S.A.1953) and holds a certificate of convenience and necessity issued pursuant to § 68--7--1.1, N.M.S.A.1953. Respondent, The New Mexico Public Service Commission, hereinafter referred to as 'Commission,' was established by § 68--4--1, N.M.S.A.1953.

Community here appeals from a district court judgment affirming an order of the Commission in a proceeding under §§ 68--9--1 to 68--9--5, N.M.S.A.1953, wherein the Commission granted a certificate of public convenience and necessity to Otero to serve the Sun Valley Subdivision near Alto, New Mexico. Community timely raised the constitutional issues, and here appeals from the decision of the trial court upholding the statute. It argues that the 1961 amendment is void because it constitutes an arbitrary and unreasonable classification. It asserts that this is so because cooperatives are included under the Act though not required to render service to the general public and no provision is made for complete regulation of rates charged by them (§ 68-- 5--4.1, N.M.S.A.1953) or securities issued by them (§ 68--5--8, N.M.S.A.1953), whereas Community must render service to the public generally and its rates and financing are completely supervised and controlled. On the other hand, Otero is here asserting that it is a public utility and accordingly entitled to the protection of the act; and, further, that the special privileges accorded in §§ 68--5--4.1 and 68--5--8, supra, are based upon a reasonable classification.

In Socorro Electric Coop., Inc. v. Public Service Co., 66 N.M. 343, 348 P.2d 88, we held that an electric cooperative was not open for the use and service of all the members of the public who might require it, and that therefore, a cooperative could not be a public utility. See Llano, Inc. v. Southern Union Gas Co., 75 N.M. 7, 399 P.2d 646. In the light of this decision, it seems fairly evident that by Ch. 89, N.M.S.L.1961, and particularly by the amendment to § 68--3--2(F)(1), supra, it was the purpose of the legislature to overrule this court and make rural electric cooperatives into public utilities. That the legislature could accomplish this purpose, Community does not question. However, it does assert that it could not be done in the manner attempted, and that the act is unconstitutional for the reasons set out above.

One recent decision of this court should be noticed. In Edington v. New Mexico Public Service Commission, 74 N.M. 647, 397 P.2d 300, we reviewed the history of the Public Utility Act down to and including the 1961 amendment. Concerning the claim of denial of equal protection of the law raised by Edington, we determined that no complaint would be heard since before the 1961 amendment the Commission had no jurisdiction of the cooperative or of its rates where there was an overlap between its service and that of Edington whereas, subsequent thereto, the Commission did have power to fix rates of both when there was an overlapping or conflicting certificate of convenience and necessity and, consequently, Edington could not possibly have been adversely affected by the amendment.

In the instant case, a direct conflict between the rights and privileges of Community and Otero under § 68--7--1, supra, presents itself. This would not occur if Otero were not a public utility. Further, the Commission specifically found that, 'Otero's rates are fixed by its Board of Trustees and are not subject to regulation by the Public Service Commission.' These characteristics distinguish this case from Edington, and out of these differences the right to question the constitutionality of the amendment results.

While we recognize that absolutely equal treatment of parties performing similar service is not demanded in order for a legislative act to withstand an attack on its constitutionality, Dominion Hotel v. State of Arizona, 249 U.S. 265, 39 S.Ct. 273, 63 L.Ed. 597; Gruschus v. Bureau of Revenue, 74 N.M. 775, 399 P.2d 105, it is nevertheless imperative that where classification is attempted, the same must be reasonable and based on real differences bearing a proper relationship to the classification, and there must be uniformity of treatment within each class. State v. Pate, 47 N.M. 182, 138 P.2d 1006; Burch v. Foy, 62 N.M. 219, 308 P.2d 199.

The amendment to the definitions in § 68--3--2, supra, would make Otero a public utility, along with Community. Because of this change in the law, there arose a duty not previously present under § 68--7--1, supra, for Community to obtain a permit before undertaking the construction here in question. However, this is not all. Whereas Community thereby had new restrictions placed upon it, Otero was still not made subject to the same regulation and control which Community was under, as provided in § 68--5--4.1, supra, nor does it have the duty to serve the public generally. As a matter of fact, by the terms of its charter, issued under § 45--4--3(d), supra, its power to serve persons other than its members, governmental agencies and political subdivisions is limited to a number not in excess of 10% of the number of its members. Section 68--5--4.1, supra, denies the Commission jurisdiction over rates of cooperatives such as Otero 'except in any territory in which an overlapping or conflicting certificate of convenience and necessity has been issued to and exercised by any other public utility for the same class of service * * *.' At the same time, the Commission has 'general and exclusive power and jurisdiction to regulate and supervise * * * rates and service regulations * * *' of Community. § 68--5--4, N.M.S.A.1953.

Can we say that the different treatment accorded a utility such as Community under the law from that accorded Otero is reasonable and based upon real differences in the two companies? In answering the question, we repeat that both are 'public utilities' under the definition of § 68--3--2(F), supra. When we consider the additional facts that under its charter Otero does not and cannot serve the public generally and...