United Water New Mexico, Inc. v. New Mexico Public Utility Com'n, s. 23151

Decision Date17 January 1996
Docket Number23264,Nos. 23151,s. 23151
Citation910 P.2d 906,121 N.M. 272,1996 NMSC 7
PartiesUNITED WATER NEW MEXICO, INC., formerly known as Rio Rancho Utilities Corporation, Petitioner, v. NEW MEXICO PUBLIC UTILITY COMMISSION, and the City of Rio Rancho, Respondents, and The Thirteenth Judicial District Court, Real Party in Interest. CITY OF RIO RANCHO, a New Mexico Home Rule Municipal Corporation, Petitioner, v. NEW MEXICO PUBLIC UTILITY COMMISSION, Respondent.
CourtNew Mexico Supreme Court
OPINION

FROST, Justice.

The City of Rio Rancho (Rio Rancho) and Rio Rancho Utilities Corporation (RRUC)1 appeal from a decision of the New Mexico Public Utility Commission (PUC) blocking Rio Rancho's condemnation and acquisition of RRUC's water utility systems. Rio Rancho and RRUC argue that the PUC had no jurisdiction over the condemnation action. We agree and therefore vacate the PUC's decision.

I. FACTS

In 1994 the citizens of Rio Rancho voted in favor of acquiring RRUC. Rio Rancho initiated a condemnation action against the utility in district court on October 28, 1994, which RRUC vigorously contested.2 On March 2, 1995, the trial court granted Rio Rancho the right to immediate possession of RRUC's water and wastewater systems. Rio Rancho and RRUC subsequently entered into a stipulated agreement regarding the amount of just compensation due to RRUC. The district court entered an order approving the stipulated amount, and, on June 30, 1995, Rio Rancho took possession of RRUC's facilities.

In January 1995, during the pendency of the condemnation action, RRUC filed a Petition for Declaratory Order with the PUC, Case No. 2623. The petition sought clarification of the PUC's jurisdiction over the condemnation action and inquired about the necessary PUC approvals regarding a forced transfer. On February 14 Rio Rancho filed a motion with the PUC to dismiss RRUC's petition, alleging in part that the PUC lacked jurisdiction over the transfer. In March the PUC denied Rio Rancho's motion to dismiss and requested RRUC to submit briefing for a hearing on the transfer.

The RRUC moved to withdraw its petition in April, stating that the court's order granting Rio Rancho immediate possession together with parties' stipulated agreement resolved any questions about the transfer. The PUC denied RRUC's motion and ordered RRUC to file an application for approval of the sale and abandonment of its water and sewer systems.3 In May RRUC submitted its application for approval of the transfer of its systems to Rio Rancho. The PUC then appointed a hearing examiner to evaluate RRUC's application in PUC Case No. 2623. In July the hearing examiner concluded that Rio Rancho was a necessary party to the administrative proceeding and ordered the city to file testimony in the case. Rio Rancho entered a special appearance, objecting to the PUC's jurisdiction over itself and the transfer. The PUC rejected Rio Rancho's argument.

Rio Rancho then filed a petition for a writ of mandamus with this Court in August, asking us to dismiss the administrative case before the PUC for lack of jurisdiction. On September 20 we denied the petition without prejudice as premature, holding that Rio Rancho could renew its petition after the PUC's hearing. Rio Rancho then submitted testimony to the hearing examiner.

In October RRUC filed a petition for a writ of mandamus with this Court, asking us to direct the PUC either to dismiss the PUC action for lack of jurisdiction or to issue its ruling by November 15. RRUC also requested a stay that would keep in effect the stipulation between Rio Rancho and RRUC regarding the reasonable value of the facilities pending resolution of all the issues. The stipulation was originally set to expire on October 30. Rio Rancho joined in the petition but opposed the stay. We granted a temporary stay pending oral argument, which was set for November 8.

On November 7 the PUC issued its final order, concluding that it had jurisdiction over the transfer and denying RRUC's application for approval of the transfer as not being in the public interest. At oral argument on November 8, we lifted the temporary stay regarding the stipulation and ruled that we would treat RRUC's petition for writ of mandamus as a notice of appeal from the PUC's decision. We now reverse the PUC. Because we find that the PUC lacked jurisdiction over the transfer in this case, we need not address the correctness of the PUC's decision denying the transfer.

II. STANDARD OF REVIEW

As this Court recently noted in Morningstar Water Users Ass'n v. New Mexico Public Utility Commission, 120 N.M. 579, 583, 904 P.2d 28, 32 (1995), the determination of whether the PUC has jurisdiction over the parties or subject matter in a particular case is a question of law, and the scope of the PUC's jurisdiction is defined by statute. We explained in Morningstar that, although reviewing courts generally confer considerable deference to the PUC's determinations of legal questions that implicate agency expertise or fundamental policies, they "will accord 'little deference' to the agency's own interpretation of its jurisdiction." Id.; see also El Vadito de los Cerrillos Water Ass'n v. New Mexico Pub. Serv. Comm'n, 115 N.M. 784, 787, 858 P.2d 1263, 1266 (1993). Consequently, we review anew the question of the PUC's jurisdiction.

III. PUC JURISDICTION OVER CONDEMNATION ACTIONS

The question before us in this case is whether the PUC has jurisdiction over the contested condemnation of a public utility's water and sewer facilities by a municipality.4 The Public Utility Act, §§ 62-1-1 to -13-14 (Repl.Pamp.1993 & Cum.Supp.1995), sets out the general scope of the PUC's authority over public utilities. Section 62-6-4(A) of the Act provides in relevant part, "The [PUC] shall have general and exclusive power and jurisdiction to regulate and supervise every public utility in respect to its rates and service regulations...." However, the Act also states that the PUC has no regulatory authority over a municipality unless the municipality voluntarily submits itself to PUC regulation.5 Section 62-3-3(E) (noting that municipalities are expressly excluded under the Public Utility Act unless they elect to be regulated); § 62-6-5 (providing voter election procedure for submitting to PUC regulation); see also Morningstar, 120 N.M. at 587, 904 P.2d at 37 (discussing PUC's lack of authority over municipalities). In the present case, Rio Rancho has not elected to submit itself to PUC regulation.

The PUC argues that it has jurisdiction over the transfer under the statutes governing the sale or abandonment of a utility. See § 62-6-12(A)(4) (sale); § 62-9-5 (abandonment). Section 62-6-12(A)(4) provides:

A. With the prior express authorization of the commission, but not otherwise:

....

(4) any public utility may sell, lease, rent, purchase or acquire any public utility plant or property constituting an operating unit or system or any substantial part thereof; provided, however, that this paragraph shall not be construed to require authorization for transactions in the ordinary course of business.

Section 62-9-5 provides:

No utility shall abandon all or any portion of its facilities subject to the jurisdiction of the commission, or any service rendered by means of such facilities, without first obtaining the permission and approval of the commission. The commission shall grant such permission and approval, after notice and hearing, upon finding that the continuation of service is unwarranted or that the present and future public convenience and necessity do not otherwise require the continuation of the service or use of the facility; provided, however, that ordinary discontinuance of service or use of facilities for nonpayment of charges, nonuser or other reasons in the usual course of business shall not be considered as abandonment.

Although the PUC acknowledges that it would have no authority over Rio Rancho after the municipality acquires RRUC's facilities, it maintains that it does have jurisdiction over RRUC's transfer of those facilities to Rio Rancho as either a sale of a system or an abandonment of service. The PUC therefore argues that, regardless of the trial court's decision, RRUC must petition for and receive the PUC's approval before the condemnation transfer can be completed. The PUC contends that it also has jurisdiction over Rio Rancho as a necessary party to the transfer proceedings.

The question of jurisdiction turns on the proper interpretation of the sale and abandonment statutes. "Our interpretation of the statute[s] must be consistent with legislative intent, and our construction must not render the statute[s'] application absurd, unreasonable, or unjust." Aztec Well Servicing Co. v. Property & Casualty Ins. Guar. Ass'n, 115 N.M. 475, 479, 853 P.2d 726, 730 (1993).

Because neither statute explicitly includes condemnation actions, we must determine whether the statutes include such actions by implication. We conclude that the proper reading of the statutes dictates that neither statute encompasses condemnation actions. Our conclusion is supported by the plain language of the statutes and by the...

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