El Paso Electric Co. v. N.M. Pub. Regulation Comm'n, No. 32,183.

• Docket Nº: No. 32,183.
• Citation: 2010 -NMSC- 048, 149 N.M. 174, 246 P.3d 443
• Case Date: October 26, 2010
• Court: Supreme Court of New Mexico

149 N.M. 174
246 P.3d 443
2010 -NMSC- 048

EL PASO ELECTRIC COMPANY, Appellant,
v.
NEW MEXICO PUBLIC REGULATION COMMISSION, Appellee,andDoña Ana County and Otero County, Intervenors.

No. 32,183.

Supreme Court of New Mexico.

Oct. 26, 2010.

[246 P.3d 444]

Law Offices of Randall W. Childress, P.C., Randall W. Childress, Stacey J. Goodwin, Tucker Law Firm, P.C., Steven L. Tucker, Santa Fe, NM, for Appellant.Robert Y. Hirasuna, Santa Fe, NM, for Appellee.Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A., Nann M. Winter, Albuquerque, NM, Thomas R. Figart, Las Cruces, NM, Bryant, Schneider–Cook Law Firm, P.A., Daniel A. Bryant, Ruidoso, NM, for Intervenors.

OPINION SERNA, Justice.

{1} This opinion resolves a direct appeal by El Paso Electric Company (EPE) of a Final Order issued by the New Mexico Public Regulation Commission (Commission ¹).

[246 P.3d 445]

In re An Investigation into El Paso Elec. Co.'s Recovery of Cnty. Franchise Fees from Its Ratepayers, No. 09–00421–UT (PRC Jan. 26, 2010). The Final Order required EPE to stop including franchise fee charges on the bills of customers in Doña Ana and Otero counties and to refund over five million dollars to customers in those counties. We hold that franchise fee charges fall outside the Commission's jurisdiction and vacate and annul the Final Order.

BACKGROUND

{2} EPE is an electric utility company that operates in southern New Mexico. At issue in this case are agreements EPE has with Doña Ana and Otero counties (Counties) regarding franchises granted for the use of county rights-of-way to deliver electricity to county residents and businesses.² These franchise agreements, codified as county ordinances, impose upon EPE fees for the rights granted. Prior to 1999, EPE passed on franchise fees to all of its customers as part of the base rate for electricity. Since 1999, franchise fees have been collected by EPE through line item charges to customers within the jurisdictions of the respective counties.

{3} The franchise agreement between EPE and Doña Ana County, signed March 9, 1999, requires EPE to pay annually two percent of gross receipts and $105,000 “for and in consideration of the granting of this Agreement, and as rental and/or tax for the occupation and use or easement and right of way over, upon, and beneath the County Property[.]” The Otero County agreement requires EPE to pay annually, “[f]or and in consideration of the right, privilege and franchise herein granted,” “a street rent which is equal to two (2%) percent of the gross receipts of the sale of electricity[.]” The total amounts collect from ratepayers and paid to the Counties by EPE since 2004, and at issue in this appeal, are $288,987 in Otero County and $5,366,804 in Doña Ana County.

{4} The Commission initiated an investigation into these two franchise agreements and issued an order to show cause, dated December 10, 2009, requiring EPE to demonstrate “why the Commission should not find that the franchise fees or taxes imposed under the [Counties'] franchise ordinances are unlawful under New Mexico statutes, and if so, why the Commission should not” require EPE to immediately stop collecting the fees from customers and refund any fees already collected. No public hearing was ever scheduled on this matter. The Commission issued the Final Order on January 26, 2010, concluding that it had jurisdiction because “franchise fees are rates that are charged in connection with it [ sic ] utility service and thus are subject to the jurisdiction of the Commission.” The Final Order required EPE to stop passing through franchise fee charges and to refund to the ratepayers the amounts collected since 2004.

{5} On February 22, 2010, a panel of this Court granted an emergency stay of the Commission's order pending resolution of this appeal on the merits and granted the Counties' motion to be added as parties. This case is before us pursuant to NMSA 1978, Section 62–11–1 (1993). We address only the dispositive question in the case of whether the Commission had jurisdiction over the fees collected by EPE pursuant to franchise agreements with the Counties.

DISCUSSIONStandard of Review

{6} The Commission, though a constitutionally created body, N.M. Const. art. XI, § 1, may exercise only its statutorily authorized jurisdiction. Plains Elec. Generation & Transmission Coop., Inc. v. N.M. Pub. Util. Comm'n, 1998–NMSC–038, ¶ 9, 126 N.M. 152, 967 P.2d 827. We review the Commission's determination of its jurisdiction, an issue of law, de novo. United Water N.M., Inc. v. N.M. Pub. Util. Comm'n, 1996–NMSC–007, 121 N.M. 272, 274–75, 910 P.2d 906, 908–09 (“[W]e review anew the question of the [Commission]'s jurisdiction.”); Morningstar Water Users Ass'n v. N.M. Pub. Util. Comm'n, 120 N.M. 579, 583, 904 P.2d 28, 32 (1995) (concluding that an agency's determination of its own jurisdiction is a question of law that deserves “little deference” from the courts (quoting

[246 P.3d 446]

El Vadito de los Cerrillos Water Ass'n v. N.M. Pub. Serv. Comm'n, 115 N.M. 784, 787, 858 P.2d 1263, 1266 (1993))); see also Rule 12–216(B) NMRA (stating that jurisdictional challenges may be raised for the first time on appeal); Sims v. Mechem, 72 N.M. 186, 188, 382 P.2d 183, 184 (1963) (same). We vacate and annul a Commission order as “unreasonable or unlawful” if the Commission wrongfully exerted jurisdiction over a case. NMSA 1978, § 62–11–5 (1982); see also N.M. Indus. Energy Consumers v. N.M. Pub. Reg. Comm'n (NMIEC), 2007–NMSC–053, ¶ 19, 142 N.M. 533, 168 P.3d 105 (“We will reverse the agency's interpretation of law if it is unreasonable or unlawful.”).

{7} Our de novo review of the Commission's jurisdiction requires us to engage in statutory construction. “When construing statutes, our guiding principle is to determine and give effect to legislative intent.” NMIEC, 2007–NMSC–053, ¶ 20, 142 N.M. 533, 168 P.3d 105. “[W]e strive to read related statutes in harmony so as to give effect to all provisions [.]” Id. Unless an ambiguity exists, we apply statutes as written. Albuquerque Bernalillo Cnty. Water Util. Auth. v. N.M. Pub. Reg. Comm'n (ABCWUA), 2010–NMSC–013, ¶ 52, 148 N.M. 21, 229 P.3d 494.

Commission Jurisdiction Over Public Utility Rate Making

{8} The Legislature mandated public utility regulation in the Public Utility Act (PUA), NMSA 1978, Sections 62–1–1 to –6–26.1 and –8–1 to –13–14 (1953, as amended through 2009). The policy of the PUA includes ensuring that utility services are provided at “fair, just and reasonable rates.” Section 62–3–1(B). The Commission enforces this policy through its “general and exclusive power and jurisdiction to regulate and supervise every public utility in respect to its rates and service regulations and in respect to its securities [.]” Section 62–6–4(A). Additionally, the Commission has jurisdiction over tax, fuel, gas, and purchased power adjustment clauses. Section 62–8–7(E); see also NMIEC, 2007–NMSC–053, ¶ 22, 142 N.M. 533, 168 P.3d 105 (stating that the rate-making process jurisdiction conferred on the Commission by the PUA includes jurisdiction over general rate cases and automatic adjustment clauses).

{9} The PUA defines “rate” as

every rate, tariff, charge or other compensation for utility service rendered or to be rendered by a utility and every rule, regulation, practice, act, requirement or privilege in any way relating to such rate, tariff, charge or other compensation and any schedule or tariff or part of a schedule or tariff thereof.

Section 62–3–3(H). The factors used by the...