Albuquerque Bernalillo County Water Utility Authority v. New Mexico Public Regulation Commission

property!, face contamination of their and that opinion compels and] neither a conclusion that the contamination has affected the water Plaintiffs entitled to recover for a that, result, supply the area and as a trespass that occurred before owned the Plaintiffs’ cattle will not drink the water.” land. ¶

2007-NMCA-024, 5, 141 212, 153 N.M. P.3d Accordingly, for the reasons stated argued 46. The defendant in that case opinion this and in our proposed notice of standing the Black Trust did not have summary disposition, we affirm. 1) bring language suit since while the in the IT IS SO ORDERED. quitclaim conveyed predecessor’s deed WE CONCUR: title, “right, property and interest” in the itself, convey personal did causes of FRY, Judge CYNTHIA A. Chief 2) action the cause of action accrued VANZI, Judge LINDA M. injury occurred, property when the prior acquisition which was to the trust’s ¶ property. Id. 12. Court This did not question

address the of whether the deed adequate convey personal was causes of 2010-NMSC-013 action, and instead held that New Mexico 229 P.3d 494 rule, applies discovery and that under ALBUQUERQUE rule, the cause of action did not BERNALILLO accrue acquired until COUNTY WATER UTILITY property. after the trust ¶ AUTHORITY, Appellant, Supreme Id. 14-15. Our Court affirmed it, too, portion holding, this of our ad v. only rule, discovery dressed without dis NEW MEXICO PUBLIC REGULATION cussing whether or not the deed itself con COMMISSION, Appellee, veyed any personal causes of action. See McNeill, 2008-NMSC-022, ¶ 37, 143 N.M. 740, 182 P.3d 121. Company Public Service of New opinions Both in McNeill addressed Mexico, al., et Intervenors. only question of whether the Black Trust standing bring had the claims at issue in Energy New Mexico Industrial that case. Since the contamination of the Consumers, Appellant, property alleged in McNeill continued while v. the Black property, Trust owned the we be- Regulation New Mexico Public opinion lieve both our Supreme and our Commission, Appellee, opinion simply Court’s in that ease held that standing bring trust had suit for that continuing injury, since it was discovered Company Public Service of New Mexico acquired until after the trust title to the land. Attorney General of the State We do not believe that either decision re- Mexico, of New Intervenors. question party solved the of whether a can trespass solely recover for a that occurred 31,268, 31,273. Nos. property while the was owned someone Supreme Court of New Mexico. (We degree else. note that to the that the trespass appeal at issue in this continued March during ownership property, Plaintiffs’ trespass.) Plaintiffs have recovered for that

Therefore, we conclude that neither this opinion Supreme

Court’s nor our Court’s opinion general in McNeill conflicts with the Coal, rule stated in Garver and Caledonian

24

Sheehan, Stelzner, P.A., Sheehan & Nann Winter, NM, M. Albuquerque, Appellant for Albuquerque County Bernalillo Utility Water Authority. Gould, Fe, NM,

Peter Jude Santa Ap- for pellant Energy New Mexico Industrial Con- sumers. Hirasuna, Margaret

Robert Y. Caffey-Mo- quin, Barton, Fe, NM, David P. Santa Appellee. Ortiz, Benjamin

Patrick T. Phillips, Albu- NM, querque, Stratvert, P.A., Miller Robert Clark, NM, Albuquerque, H. for Intervenor Company Public Service of New Mexico.

OPINION

MAES, Justice. Albuquerque County Bernalillo Water (ABCWUA) Utility Authority and New Mexi- (NMIEC) Energy co Industrial Consumers appeal from the Final Order of the New (the Regulation Mexico Public Commission PRC), claiming improperly the PRC an emergency awarded fuel purchased and adjustment power cost clause to the Public (PNM) Company Service of New Mexico un- 62-8-7(E)(l) (2003, der NMSA Section 2007) as amended and 17.9.550.1 to 12/30/2001) (here- (Recompiled 550.17 NMAC 550). inafter Rule affirm We the Final Or- der of the PRC.

I. FACTS AND PROCEDURAL HISTO- RY 21, 2007, February On PNM filed a seeking

rate case with the in- PRC purchased power crease and fuel and cost (FPPCAC) unpredictable are pursuant purchased power costs so adjustment clause 62-8-7(E)(l) in a rate case Rule A that cannot be calculated and Section (3) instead,” and through to and call for an FPPCAC the users FPPCAC “flow[s] Ap- proposed provide fails reason- electricity the FPPCAC increases decreases fair, costs,” just proper service at and Purchased able and plicable Fuel and Power 550.6(D) and, therefore, “pro- designed and is not to en- reasonable rates Rule NMAC utility earnings power generated and stability for sure that electric vide[s] purchased power purchased and at the lowest reasonable cost. See when electric fuel costs 550.17(A)(l)-(3). later, days permit[s] prompt credits Rule rising costs are and Thirteen fuel and exceptions electric PNM Recommended to customers when filed power declining.” Rule purchased Decision, claiming, part, costs are relevant 550.17(A)(l)-(3) 550.6(B). provides that Rule a FPPCAC under Rule 550. was entitled to utility 1.2.2.37(C)(1)(a) (09/01/2008). shall have a FPPCAC included “[n]o See NMAC utility tariff’ demonstrates its unless 20, 2008, and the March PNM On (1) purchased power the cost of fuel Electrical International Brotherhood significant percentage total are of the Workers, joint No. motion Local filed service; cost Emergency At- requesting an FPPCAC.1 (2) purchased power the cost of fuel joint tached motion affidavit of to the was the periodically contains costs which fluctu- Eldred, President Charles N. Executive Vice precisely ate and cannot determined Financial Officer PNM. Eldred Chief case; in a rate that, following the issuance averred rejecting re- Recommended Decision PNM’s purchased power utility’s fuel FPPCAC, rating quest PNM’s credit designed policies practices fifty- stock hit a downgraded, price was generated assure that electric low, two and it was “to access purchased at the lowest week unable reasonable paper cost. the commercial market” or “to issue long expressed term Eldred his belief debt.” 8—7(E)(1) § (providing also See 62— absolutely necessary that a if FPPCAC “is pur- be “consistent with the FPPCACs must PNM avoid further of its is to deterioration Act, Utility including poses of the Public rating junk credit bond status.” serving goal providing reasonable fair, just proper service reasonable differed ma- The FPPCAC classes”). rates to all customer terially previously from the sub- FPPCAC hearing mitted Specifically, examiner. assigned the case to a hear- the fol- contained ing § examiner. See NMSA 8-8- lowing suggested Attorney conditions 4(C)(3)(a) (1998). 6, 2008, March follow- On Utility General and the PRC’s Division Staff discovery ing extensive and two weeks of (Staff): “(a) approval prior purchased ... hearings, the hearing examiner issued a Rec- (‘PPAs’) power great- agreements terms Decision, pro- which ommended included (b) year; replacement power er than due one findings posed and a recommendation plant outages to be recovered [would] not request for a FPPCAC PNM’s should be FPPCAC; (c) and, through the demand denied because PNM had failed fulfill the charges through not be [would] recovered regulatory requirements set forth in Rule Additionally, Emergency the FPPCAC.” hearing Specifically, 550. examiner other FPPCAC contained (1) found that it doubtful whether PNM’s is purchased mitigate power designed fuel and costs constitute a conditions which are during peak significant percentage impact of the total cost of on customer bills service, periods provide incentives PNM failed establish that additional management fuel mix fuels with to PNM control costs to “consists of volatile Among [fluctuating] prices” and that are controllable. “its fuel extent appeal. 1. The International Brotherhood of Electrical Workers, party is not a to this Local No. 611

29 27, 2008, charged May factor pur- them are that the fuel tended to at least or approxi- Emergency FPPCAC will mately days beyond original suant be 48 April 9 capped at per and that re- [kilowatt] deadline.” $.01 ABCWUA and NMIEC claimed power plant due to placement costs avail- expedited procedural schedule did ability weighted average plant lower than a “not allow the Staff Intervenors suffi- availability factor cannot be recovered cient propound discovery time to and ade- prior approval of the [PRC]. without Also quately analyze responses PNM’s before the Emergency included in the FPPCAC is a fifing deadline their testimony,” own condition that all recovered costs thereby effectively denying process them due subject will it to audit and refund if the of law. procedural The PRC entered a order the [PRC] determined to have extending days, April the deadline five 14. imprudently been incurred. Following argument, oral the PRC entered procedural extending second order the dead- light In of the serious financial con- twenty-five days, line additional May by PNM, cerns raised the PRC established 30-day, PRC found that “a rather than following expedited procedural schedule requested 48-day, extension of time from for the consideration and review of the original April fifing 9 deadline for the Emergency FPPCAC. testimony, Staff give and Intervenor should Public Notice March PNM Direct March 28, 2008 time, Staff Intervenors sufficient Testimony consis- Deadline for intervention 8, 2008 April rights, tent with process their due to take 9, 2008 Testimony StaffTntervenor April discovery prepare testimony.” their PNM Rebuttal Testimony April Hearing April public After holding hearings from Additionally, Emergen- the PRC severed the 17, 2008, May through May majority case, cy underlying FPPCAC from the the PRC Commissioners issued a Final Or- reasoning Emergency that “the FPPCAC es- granting request der PNM’s for an Emer- sentially is a signifi- new FPPCAC First, gency FPPCAC. the PRC found that cantly [previous- different from purchased PNM’s fuel and costs con- ly] proposed by PNM” and “the record stitute 20.167% total costs of of its service. the rate closed.”2 Although [in case] is now Although yet “not the PRC had determined the PRC established a new docket number ‘significant what percentage’ constitutes a FPPCAC, for the No. 08-00092- utility’s pur- total service for cost of UT, would, course, it noted that “of take 17.9.550.17(A)(1),” poses of applying the ordi- administrative notice of evidence rele- nary meaning “significant,” term of the vant to the Joint and the Motion significant determined that “20% is FPPCAC that rate case] [the percentage total cost of PNM’s service.” 17.1.2.37(D) permitted by extent NMAC.” The PRC noted that its conclusion bol- was The PRC also PNM to ordered address cer- stered the fact that PNM’s “Base Fuel testimony tain issues its direct and sus- largest category Cost is the second of cost” pended implementation Emergen- and, therefore, relatively small percentage “a cy including May FPPCAC “until and change in can a significant those costs have 2008.” impact on PNM.” objec- NMIEC filed Second, expedited PRC found that PNM had procedural tions the schedule the time, joint requisite showing a “made that pur- and motion for extension of the its sixty power requesting days filing periodically from the chased and costs fluc- fuel testimony response. precisely PNM’s direct to file a tuate and in cannot be determined 550.17(A)(2). Essentially, they requested “that the dead- rate case.” See Rule The testimony fifing require line for the be ex- PRC held that 550 does not their “Rule case, underlying Although approve original In the rate PNM found it the PRC did the Order, “unnecessary ... to address the merits of the FPPCAC in its Final it cautioned that its [original] light filing “disapproval adopt- FPPCAC” of “PNM's should not be construed as in Emergency ing relatively expe- approving any [Recommended the FPPCAC and the or Deci- conclusions, procedural findings, sion's] dited schedule” attendant or orders.” thereto. against de- purchased power fuel costs and fuel costs and showing purchase power that other The PRC creases in PNM’s costs. ‘volatile’, fluctuate more than some are or Legislature, it en- explained that “the when According- providing service.” other cost of 62-8-7(E), a statuto- acted created [Section] “[although and costs ly, PNM’s coal nuclear general ry prohibition exception historically less than the cost have.fluctuated ratemaking by expressly against piecemeal gas,” PRC determined that natural the giving authority promulgate the the [PRC] costs, nonetheless, “‘periodically fluc- these of, among mat- governing rules the use other meaning of that plain tuate’ under the ters, power adjustment purchased and fuel and rejected The ABCWUA’s phrase.” PRC Additionally, that clauses.” the PRC noted PNM’s fuel and that NMIEC’s assertions nearly “every utility in has a New Mexico power predictable, are not- purchased costs party fuel and that in this case “[n]o clause” nor had ing that neither ABCWUA NMIEC any legal presented in has [the case] rate way pre- “in ... what any those identified arguments justify ignoring sev- or factual and what future costs are methodol- dictable years treating PNM or precedent eral precisely ogy could be used to determinen [differently] from Emergency the FPPCAC in rate future in this or other those costs all of other utilities their these proceeding.” FPPCACs.” Lastly, that electric to ensure PNM’s rejected The PRC also ABCWUA’s generated purchased the power is at Emergency that claim NMIEC’s 550.17(A)(3), cost, Rule lowest reasonable see FPPCAC, purchased recovers which fuel authority PRC its under Rule exercised power through per uniform kilowatt costs “impose condition on Emer- 550 to and in- charge, hour results unreasonable pay gency FPPCAC that PNM shall for equitable The PRC noted that its rates. prudency review of its costs of fuel long-standing policy, as reflected in Rule purchase power The ordered costs.”3 PRC pow- require purchased has been fuel and per er to be recovered on a uniform costs prudency shall be review conducted [t]he result, every kWh As a FPPCAC basis. by an team of to be auditor or auditors effect in Mexico recovers those costs New of, by, selected and under direction Adopting proposal that manner. UNM’s The review shall com- prudency [PRC]. significant abrupt de- represent would practicable menced as after PNM soon parture long-standing policy from implements its practice that could affect the interests of shall continue until all of costs flowed ratepayers, other and their and thus utilities through to its customers under beyond scope proceeding. of this subject review. FPPCAC have been of the five Two PRC Commissioners paid prudency All costs PNM review join Final did Order. Commissioner regulatory shall be treated as a asset Lujan, represen- R. Ben PRC Chairman and ratepayers PNM and from its recovered the Final tative for District “Voted no” on the rates established PNM’s Marks, rep- Order and Commissioner Jason general proceeding. next for District filed a dissent. resentative rejected agreed majori- ABCWUA’s and Marks with the Commissioner ty NMIEC’s claim that has met the statuto- “PNM threshold clause,” “piecemeal ratemaking” ry requirements a fuel but dis- FPPCAC constitutes increases in PNM’s sented from the Final Order because because does not offset power of its FPPCAC 3. To further ensure that PNM’s electric eliminate from calculation sales”; generated purchased lowest reason- Factor effect of the S02 allowance cost, authority (3) able the PRC exercised significant upfront purchased fuel and following order the additional modifications of Underground with PNM’s Coal associated Emergency weighted the FPPCAC: the aver- Company, San Sales Contract with Juan Coal factor, age capacity which below PNM re- moves, long pro-rated such wall must be "over as costs, purchased power cover fuel and "should period the that such benefit its rate- same 86.4%, proposed be rather than the 82.9% payers." PNM”; (2) required should also be “PNM Emergency representation FPPCAC failed to contain “an equal protection and of the retaining portion additional of condition the laws” in violation the of Fourteenth Amend- purchased power fuel and risk for PNM.” ment to the Federal Constitution. Specifically, Commissioner Marks would Statutory imposed split

have “an on the fuel Regulatory B. and 80/20 Claims clause, being PNM at risk for 20% of with ABCWUA and NMIEC also claim the difference between allowable fuel costs in Emergency that the vari- FPPCAC violates currently most recent rate case and regulations ous state and governing statutes claimed costs.” public Specifically, utilities. ABCWUA and (1) NMIEC claim that the Emergency II. ISSUES ON APPEAL 62-8-7(E) FPPCAC violates Section because Following the of denial their motions it is purposes inconsistent “with the of the reconsideration, Act, Utility ABCWUA and NMIEC Public including serving goal the appealed directly to this Fi- providing Court from the proper of reasonable and service at 1978, fair, nal (2) Order of just rates”; the PRC. See NMSA and reasonable the (1993) § (providing right 62-11-1 Emergency of direct against “discriminates PRC). appeal from the final of order customers the lowest responsibili- cost variety ABCWUA and ty,” NMIEC raise in violation of NMSA Section 62-8- claims, many overlap (1993, substantially. (3) which prior amendments); to 2008 purpose clarity, For the economy improperly permitted we PRC PNM treat the have combined their claims into asset, two broad costs of the regulatory audit general categories enumerated below. thereby requiring pay consumers to twice for

regulation, in violation of NMSA Sec- (4) A. (2005); Constitutional Claims independent tion 62-8-8 audit regulatory oversight, lacks sufficient in viola- ABCWUA NMIEC claim that (5) 550; tion of Rule PNM failed to file new deprived procedural them of due showing proposed schedules process lawof in violation Fourteenth changes, 8—7(B); in violation of Section 62— Amendment to the Federal Constitution be- (6) the Emergency FPPCAC violates (1) public notice, cause emphasized which 550.17(A)(2), Rule because PNM failed to condition, PNM’s dire financial inade- was establish that its purchased “cost fuel and quate misleading because the PRC ulti- periodically contains costs which fluc- mately decided that PNM’s financial condi- precisely tuate and cannot be determined in tion was “not relevant to the issue of whether a rate ease.” granted PNM should be (2) FPPCAC”; expedited procedural III. STANDARD OF REVIEW provide schedule did not sufficient time to adequate discovery, review, allow for anal- party challenging ysis (3) FPPCAC; Com- PRC’s decision bears the burden to demon King missioners David and Carol K. Sloan arbitrary strate that the decision “is improperly many pro- capricious, failed to attend of the not supported by evi substantial ceedings, thereby dence, depriving of a scope agency’s outside the au (4) heard; full opportunity and fair thority, to be or otherwise inconsistent with law.” King Sandy Commissioners Jones im- N.M. Energy Indus. Consumers v. N.M. properly Comm’n, failed 2007-NMSC-053, to recuse themselves Regulation from the Pub. ¶ proceedings, thereby depriving (NMIEC) NMIEC of a 168 P.3d 105 impartial (internal fair hearing. Additionally, AB- quotation marks and citation omit ted); CWUA claims that § PRC’s failure to defer see also NMSA 62-11-4 (“The dissenting vote the two party appealing Commis- burden shall sioners, great- “represent significantly who to show that appealed the order from is unreasonable, unlawful”). er number of PNM customers than the re- In reviewing Commissioners,” maining deprived decision, three by looking “we ‘begin PRC’s adequate “customers [of] those districts two interconnected factors: whether de- 32 Commc’ns, Corp. law, Inc. v. N.M. State question West presents question

cisión 1192, 548, 549, two; Comm’n, P.2d 116 865 fact, of the N.M. or some combination agency’s independent judgment (applying is within the 1193 matter the whether ” violation). NMIEC, expertise.’ field of to claimed constitutional specialized ¶ 533, 2007-NMSC-053, 13, 142 N.M. 168 Morningstar Users (quoting 105 Water P.3d Inadequate was Public Notice Whether Comm’n, 120 N.M. Pub. Util. v. N.M.

Ass’n Misleading (1995)). 582, 28, 579, 31 P.2d 904 claim that and NMIEC ABCWUA respect questions to “With present case was public the notice the to deter fact, to record we look the whole misleading, in violation of inadequate and supports substantial evidence mine whether process due of law. right procedural their to ¶ Id. 24. the decision.” [PRC’s] argues that Specifically, “[t]he record, the court reviewing whole In the time and re- spent significant who parties, demon- that the evidence must be satisfied issue, addressing financial were sources the decision. the strates reasonableness unfairly prejudiced process due denied exclusively part be No evidence no by lack the [PRC] of notice if to upon it would be unreasonable relied longer proceeding emer- considered reviewing needs to find do so. The court financial condition gency and viewed PNM’s light of the evidence that is credible Additionally, argues NMIEC irrelevant.” for a and that is sufficient whole record “changed emergency, from an that the case accept adequate to mind to reasonable applica- case into a routine rate interim relief support reached the conclusion tion,” process required it to be re- and “due agency. change.” noticed reflect (citation omitted). Although we view the Id. “It well settled that light in the most favorable evidence process requirements fundamental due decision, decision uphold we will PRC’s are reasonable no an administrative context evi- only if substantial supported it is present opportunity be heard and tice and evidence on rec- Id. “Substantial dence. N.M. Jones v. State claim defense.” demonstrating ord as whole evidence Comm’n, 434, 436, 671 P.2d Racing 100 N.M. decision, agency’s of an reasonableness (1983) (internal 1145, quotation marks 1147 replace reweigh the evidence nor we neither omitted). be Notice “should citation own.” fact finder’s conclusions with our it be gesture; than a mere should more Rent-A-Center, Inc., 2009- v. DeWitt calculated, upon reasonably depending ¶ 12, NMSC-032, 341 146 212 P.3d N.M. case, to practicalities peculiarities of the omitted). (citation parties pending ac apprise interested IY. DISCUSSION opportunity pres them an tion and afford Inc., Commc’ns, ent their U S West case.” A. Constitutional Claims 1999-NMSC-016, ¶ 29, 127 N.M. 980 constitutionality of (internal quotation marks and cita P.2d 37 rulings this Court with a present PRC’s omitted). tion General notice of issues law, which we review de novo. question of hearing presented is sufficient Dep’t, Fe Archuleta v. Santa Police See process requirements. due comport with ¶ 19, 2005-NMSC-006, N.M. v. Oil Conserva Exploration Santa Fe Co. de standard of re (applying P.3d 1019 novo 103, 111, Comm’n, 114 N.M. P.2d tion violations); process S West view to due U (1992). 819, 827 Comm’n, Commc’ns, Corp. Inc. v. N.M. State 29, 2008, ¶ 15, publish- 1999-NMSC-016, the PRC On March present proceedings in the rulings ed agency’s that an notice (holding P.2d 37 The no- Albuquerque case in the Journal. party was “afford respect whether reprinted entirety tice the PRC’s process is due under Fourteenth ed Establishing Proce- March 2008 Order States Constitu Amendment the United review”); Opening New Docket. U dural Schedule subject to de novo S tion that, March The notice stated on because the record Case No. 07-00077- joint asking had motion closed, PNM filed UT is now the [PRC] finds the implement PRC to Joint Motion should be considered in separate Accordingly, docket. the [PRC] what as an Emer- [PNM] characterizes] FPPCAC, docket, which, eontend[s], opened has a new gency Case No. 08- [PNM] 00092-UT, and will move Joint into consideration Motion [addresses takes] Utility suggestion of Divi- into that case. All further pleadings [PRC’s] (“Staff’) filing pending regarding sion Staff in PNM’s Joint Motion should be 07-00077-UT, solely No. case Case and in- filed in Case No. 08-00092-UT. will, designed course, clude[s] conditions that The of [PRC] take administra- impact mitigate the on customer bills dur- tive notice of evidence relevant to the peak ing periods provide additional Emergency Joint Motion and the FPPCAC management incentives to PNM to control is in Case No. 07-00077-UT to the 17.1.2.37(D) by the extent are controlla- permitted extent NMAC. ble.... All other relevant evidence must filed

Case No. 08-00092-UT. support request of In [its] [PNM has] foregoing properly notice submitted the Affidavit of N. El- Charles public arguments informed the of raised dred, PNM’s Executive Vice President and application for Emergency PNM’s an Financial Chief Officer with the Joint Mo- expedited procedural FPPCAC [PNM], According tion. Mr. Eldred’s by Contrary schedule established the PRC. expe- Affidavit demonstrates that PNM is NMIEC, to the assertions of ABCWUA and riencing problems, serious cash flow is at nothing in the notice indicated that PNM’s losing grade of ratings risk investment financial condition was relevant to the sub experiencing and is of loss overall finan- of stantive issue whether PNM is entitled to integrity____ cial Emergency an FPPCAC the merits under primary of One reasons for PNM’s 62-8-7(E)(l) Rather, Section and Rule 550. condition, weakened financial Mr. Eldred plainly the notice stated that PNM’s financial contends, appropriate lack is the recov- expedited condition relevant to pro was ery -rapidly escalating pur- fuel and adopted by cedural schedule Spe PRC. costs____ chased cifically, that, explains light the notice “[i]n approving Mr. an Eldred states by regard the serious concerns raised” PNM positive message FPPCAC would send a ing crisis, an imminent financial the PRC had community the financial that the [PRC] expedited procedural decided to “establish an properly balancing serious about the inter- schedule for consideration review ratepayers est investors with those of Emergency “[protect] pub FPPCAC” and, hopefully, quiet the concerns to some Accordingly, lic interest.” we conclude that extent about PNM’s financial condition. inadequate the notice was neither nor mis FPPCAC, believes, an Without Eldred Mr. leading. rating is “inevitable” PNM’s credit Alternatively, NMIEC claims that the downgraded junk

will be bond status. constitutionally notice was deficient because “In light the serious concerns public it “informed the that the case involved pro- raised [PNM]” “as matter request disagree. for interim relief.” We interest,” public tecting stated notice Nothing public in the notice indicated that that the PRC had proceedings pertained the PRC before an expedited procedural exclusively

established] interim relief under Section Indeed, schedule for the consideration review 1.2.2.27 of the Administrative Code. However, only FPPCAC. if interim relief was issue before the PRC, public hearing because the FPPCAC essen- then a would have 1.2.2.27(D) is a See tially significant- required. new that is FPPCAC been NMAC ly proposed different from the (“[Requests for interim relief other than in- 07-00077-UT, upon PNM in Case No. terim rate relief be acted application [E]mer- PNM’s appears to rebut hearing.”). NMIEC public

without gency however, mis- FPPCAC.” the notice was argue, to that “Emergency it to an leading referred because right to due general, “In {28} FPPCAC,” the same as which believes con process proceedings in administrative per- not We are an “Interim FPPCAC.” opposing party’s templates only notice of “emergency” and “inter- The terms suaded. opportunity to meet claims and a reasonable synonymous. The term “emer- im” are ¶ 32, Archuleta, 2005-NMSC-006, them.” as serious situation gency” “[a] is defined (internal quota 1019 108 P.3d happens unexpectedly occurrence that omitted). Thus, “due and citation tion marks action,” immediate whereas demands may adhere process is in nature and flexible as interval of “interim” is defined “[a]n term protections requisite procedural to such event, period process, or one time between demands.” U S West particular situation temporary.” The American another ... Inc., 1999-NMSC-016, ¶ 25, Commc’ns, 127 Dictionary Heritage English Language of the (internal quotation P.2d 37 N.M. 980 ed.2000). (4th Thus, “Emergen- an 913 omitted). reviewing A marks and citation cy an issued on an FPPCAC” is court’s basis, procedural an “In- expedited whereas process is due in an determination what FPPCAC, temporary is a terim FPPCAC” proceeding administrative results from pending a of the PRC. issued final decision (1) balancing private “the interest that pub- properly Because the PRC informed (2) action”; be affected the official will decided, general to we lic of the issues deprivation an “the erroneous risk comported with due conclude that notice used, procedures such interest process requirements. value, any, if of additional probable this point Our conclusion on also dis- procedural safeguards”; and or substitute “ig- that the poses of NMIEC’s claim interest, including [g]overnment’s “the procedures regard- and rules nored its own the fiscal and the function involved and ing The PRC interim rate relief.” did burdens that the additional administrative and, interim rate relief to PNM there- award requirement procedural substitute fore, procedures in delineated Section entail.” would inapplicable present case. 1.2.2.27were ¶ Eldridge, 424 (quoting 26 Mathews v. Id. 1.2.2.27(A) provided (“Except as in Sec- See 319, 335, 18 S.Ct. L.Ed.2d U.S. 1978, in tions 65-2A-11 and 70-3-16 NMSA (1976)). interests, balancing we In these pleading, addition to the usual contents of a proceedings as a must “consider whole.” extaordinary pleading allege must such (internal quotation Id. marks citation irreparable injury as of immediate and facts omitted). justify would the commission’s exercise prior facing that it was granting interim relief PNM averred discretion decision.”). due, at reject crisis immediate and critical financial final We therefore part, appropriate in to “the lack of claim. least NMIEC’s recovery rapidly escalating pur fuel and Indeed, power PNM claimed chased costs.” Expedited Procedural Whether was so severe that financial condition Deprived ABCWUA Schedule dealing “experiencing difficulties it was Due Process of NMIEC of Procedural procure power sup counterparties to Law plies gas and natural serve customers.” Thus, application next PNM’s for an ABCWUA NMIEC argue implicated public the substantial expedited procedural schedule FPPCAC uninterrupted deprived procedural process of interest in an efficient and them of due gas. and natural Specifically, they supply law. claim that the PRC electric 62-3-1(A)(1) (1967, prior § period NMSA granted them an insufficient of time See amendments) (recognizing discovery public “adequate which to conduct and to testimony public utilities affect the interest prepare expert file needed public large testimony telephonically.” “essential listen to the Ad- render services general public”). ditionally, questions number whether King Commissioners and Sloan even “re- However, public this must be interest hearings they viewed the record of the failed against balanced ABCWUA’s NMIEC’s prior rendering attend their decision.” private just utility interest and reasonable (B) pri- § (recognizing rates. See 62-3-1 The record reflects that the PRC proper vate interest in “reasonable and ser- public hearings applica- conducted on PNM’s rates”). “fair, just vice” at and reasonable May 12, tion Emergency for an on FPPCAC Accordingly, prong we turn to the second of 15,16, 17, King 2008. did Commissioner probable the Mathews to determine “the test hearings not attend the on held the afternoon value, any, pro- if of additional or substitute 12, May 2008, 16, of morning May of Mathews, safeguards.” cedural 424 U.S. at 2008, morning 17, May or the of afternoon 335, 96 S.Ct. 893. 2008. did Commissioner Sloan not attend We conclude that additional exten- hearings 12, morning May held on the of little, any, if sions of time would have had 2008, morning 17, May or the or afternoon of First, probative present value in the ease. absence, Despite 2008. their both Commis- parties ample the record reflects had King sioner in and Sloan voted favor of the opportunity present regarding to evidence awarding Final an Emergency Order PNM PNM’s entitlement to an FPPCAC under FPPCAC. 62-8-7(E)(l) and Rule

Section 550 underlying rate case and that the PRC took In statutory the absence administrative notice of this evidence. Sec- provision contrary, process neither due ond, granted the PRC ABCWUA concept hearing requires nor the a fair time, extending NMIEC two extensions of taking testimony “that the actual be before period required the time in which were the same officers as are to determine the responsive testimony to file their from twelve Sehopler, matter involved.” E.H. Annota forty-two days. substantially was This tion, Administrative Decision Not Officer than longer three-day period time Taken, When Present Evidence Was 18 required which PNM to file direct was its 606, (1951). Rather, § A.L.R.2d 3 “the ma testimony, only eighteen days shy of the jority comply cases that in hold order to sixty-day period originally requested by time process only required it is due ABCWUA and NMIEC in their Joint Motion present testimony when is tak members for an Extension Procedural Schedule. testimony en participating review the before circumstances, present Under the we cannot in the decision.” Lewandoski v. Vermont conclude that denial PRC’s third 446, 1384, Colleges, State 142 Vt. 457 A.2d arbitrary, capricious, extension of time was (1983); 1387 see also v. Beeson Schmidt or unreasonable. See Nat’l Council on Inc., 1170, Heating, Plumbing & 869 P.2d Comm'n, Comp. Corp. Ins. v. N.M. State 107 (Alaska 1994) 1179 (holding that an adminis 278, 558, (1988) (“The 286, N.M. 566 756 P.2d evidentiary trative officer’s attendance at presumption ... is [agency’s] that the deci- is hearings necessary” long “not so as the reasonable.”). sion was officer transcript reviews the documenta ry rendering decision); prior to evidence the Absence of Whether Commission- v. 212 Coffeyville Hosp., Clairborne Mem’l King ers and Sloan from the Public (1973) (“[A]n Kan. 510 1202 P.2d Hearings Deprived ABCWUA of Proce- merely administrative decision is not invalid dural Due Process of Law because, change personnel due to- a be death, illness, transfers, deprived claims that it resignation, was cause of procedural process right reasons, due a full or similar who was not officer present taken, hearing and fair because “Commissioners made when the evidence was decision, Sloan, King participated provided who [of voted favor in the he FPPCAC,] personally Emergency upon did not at- was and acts the evidence considered absence.”). many proceedings tend and did not in his received 36 right impar- process fair dural due The on ABCWUA burden hearing. tial Final unreasonable that the Order show King and Commissioners or unlawful because following facts are rel- additional evidentiary record failed review the Sloan hearing At claim. con- evant NMIEC’s § 62-11- prior rendering a See decision. 24, 2008, King April on Commissioner ducted allegation that the commissioners 4. “[M]ere granted inter- proposed that PNM should [is] the entire record insuffi not consider did application for an im relief on its v. District Utils. Comm’n cient.” Pub. responded Jones FPPCAC. Commissioner Court, P.2d 777 Colo. relief, that, PRC should in lieu of interim (en banc); Comp. also Nat’l Council see application a final decision on PNM’s render (“The Ins., 756 P.2d at immediately fol- for an [agency’s] presumption ... is that the deci public hearings. lowing the conclusion of Pirnie, reasonable.”); Taub v. sion was explained Jones Commissioner 3, 144 N.E.2d 5 N.Y.2d 165 N.Y.S.2d my get what just I fear that we in—here’s (1957) (“[I]n aof ‘clear’ revela the absence really a giving not them concern is. We’re body no ‘made tion that the administrative request their for a FPPCAC decision [on no inde independent appraisal and reached all us case]. in the rate I think under- conclusion’, pendent decision will not be its possibility exists that we stand that disturbed.”). However, has failed they need a fuel be convinced that could any evidence to present to this Court with easy way say That’s about as a to clause. King support its claim that Commissioners go If to a—if yet. I’m not convinced we evidentiary to and Sloan failed review go May public to 15th hear- [for we a Ac prior rendering to decision.

record days to deci- ings], take several render reject process cordingly, ABCWUA’s due we appealed, gets sion it’s adverse claim. hands I think that we’ve tied our into then any an putting into kind of interim relief persuaded Although we not that a thing appeal. I could see this pending occurred, process violation we nonethe- due my going year. opin- on a I don’t think — Commis- repeated find absences of less year. is ... PNM doesn’t have a I’ve ion Sloan, as well as King sioners Commis- enough & Poors. stuff from Standard seen Lujan, evidentiary Ben R. from the sioner begging, have in people These been here hearings by the PRC to be cause conducted question pleading crying. There’s no The Commissioners of the PRC for concern. my PNM some relief here. in mind needs obligation statutory have a constitutional and keep company if killing How do we from actively fully pro- in the participate goes through appeal process this an Const, ceedings them. art. before See N.M. way appeal of an there that in the event 1; XI, § § the PRC does not 8-8-4. Where provide we interim That’s that can relief? examiner, authority hearing delegate to a question my question. Because that’s a but, rather, evidentiary hearing conducts an weighing I’m now right that is whether Commissioners, complement a full before give them an interim fuel clause. not excep- unexplained absences should be acknowledged Commissioner Jones tion, rather than rule. proposal might his have “di- that alternate King’s or “muddied” Commissioner lute[d]” King Commissioners Whether and, therefore, he motion for interim relief Improperly Failed to Recuse Jones for consideration of Commissioner moved in the Due Themselves Violation of original King King’s motion. Commissioners Process Clause granting in PNM and Jones voted favor explained King interim relief. Commissioner NMIEC claims Commissioners King “prejudged the outcome of Jones very, receiving crying all not We have prior case the evidence” wolf. We’re today. and, therefore, very That’s improperly to recuse serious situation not failed get proce- going gloss going over. It’s in violation of NMIEC’s themselves 37 See, e.g., States, we days Liteky worse ahead if don’t take v. United 510 U.S. 540, 541, today. action de- 114 127 decisive There’s S.Ct. L.Ed.2d 474 (1994) (“[J]udicial my rulings about that. I think alone bate mind we’re almost never days to see in the next constitute valid basis for a bias or going partiality few when motion.”); Hernandez, forward, going recusal State v. Moody comes it’s to be 115 6, 20, (1993) N.M. P.2d (holding still I worse and so think we need to take “[p]ersonal bias cannot inferred from action. ruling”); Corp. adverse United Nuclear v. However, remaining did Commissioners Co., 155, 249, Atomic Gen. N.M. 629 P.2d and, favor of the vote motion conse- (“Rulings party adverse to a quently, granted. interim relief was not necessarily personal do not evince a bias Thereafter, filed a NMIEC motion prejudice part judge against requesting King and Commissioners Jones rulings if even are later found have ease, present recuse from the themselves incorrect.”). legally Accordingly, been we claiming “prejudged had the out- reject claim NMIEC’s that Commissioners come of this case in favor of [PNM] before King’s and Jones’s votes in favor of interim full evidentiary record been [had] devel- disqualification relief their mandated from all motion, oped.” In support of its NMIEC proceedings. further argued that the Commissioners’s votes Nonetheless, NMIEC relief, favor of interim as well as their accom- claims the Commissioners’s comments statements, panying “clearly establish that during April hearing the 24 demonstrated [they] already have their up made minds they already up “had made their minds” emergency about the fuel clause.” about the of present merits We case. King de- Commissioners and Jones by recognize that a “comments Commission motion, explaining they nied NMIEC’s er which prejudgment may constitute consti impartial could and would “make a fair and tutionally any subsequent hearing taint so as based decision on record to be devel- ensuing to invalidate the order of the oped.” They believed that [PRC].” Mountain States Tel. & Co. v. Tel. completely NMIEC have misunder- Comm’n, 7, Corp. 501, 99 N.M. 653 P.2d stood Commissioner Jones’ comments dur- curiam); (per 507 see also NMSA ing April meeting. Contrary to (“A 8-8-18(A)(l) (1998) 1978, § commissioner assertions, NMIEC’s neither Commission- hearing or examiner shall recuse in himself er King Jones nor Commissioner to voted any adjudicatory proceeding in he which is merits, approve, on impartial unable to make a fair and decision Fuel proposed by Clause PNM in this or in which is there reasonable doubt about case. whether he impartial can make a fair and Rather, supported granting we both decision, including pre ... when he has ... PNM an INTERIM rate clause that would evidentiary a judged disputed fact in involved be in effect a final until decision were hearing.”). However, proceeding prior a to in on issued this case PNM’s allegations prejudice “not all of bias or are of Fuel Clause.... type proceeding a render fundamen require tally disqualification unfair or of supported giving We PNM interim Commc’ns, a decisionmaker.” U S West solely way give fuel clause as a to PNM Inc., ¶ 41, 1999-NMSC-016, some interim until of relief we and the rest 980 P.2d opportunity the [PRC] had the to deter- mine, case, based on the record this To determine whether a a permanent

whether more fuel or clause prejudg Commissioner’s remarks constitute given some other should relief PNM. ment sufficient to violate the constitutional law, right process to due of is It well established that rulings inquiry adverse not a not do constitute valid basis is whether the [t]he [eommis- disqualification personal actually prejudiced, based on or or sion]ers bias are biased whether, prejudgment disputed factual issue. but the natural course Commissioners, repre- “who possible dissenting events, two is an indication of there sitting average [person] temptation to an significantly greater number of PNM sent a try or the ease with bias for judge remaining three Commis- than customers him presented [or against any issue sioners,” thereby depriving the “customers allegations of inquiry measures This her]. adequate representation districts [of] those objective by an stan- prejudice or bias in violation equal protection of the laws” .... dard to the Feder- of the Fourteenth Amendment (internal ¶ 42 quotation marks and cita Id. al Constitution. omitted). conducting inquiry, we In this tion mindful that composed of five Com- The PRC judge basis [o]pinions missioners, formed each of elected from whom occurring facts introduced or events 1978, § NMSA 8-7-2 different district. See proceedings, of the current the course (1997). of the five different The boundaries do constitute a prior proceedings, pursuant are “established districts partiality for a motion unless basis bias Boundary Adjustment Act [1-3-10 Precinct they deep-seated favoritism or display ap- 1-3-14 NMSA and revised and 1978] judgment antagonism that fair would make secretary August proved of state as Thus, judicial during impossible. remarks 8-7-5(A) (2001); § 2001.” NMSA the trial that are critical or the course of (2001) (codi- 1978, §§ to -10 see NMSA 8-7-6 to, counsel, of, or disapproving even hostile PRC dis- fying the boundaries of five cases, ordinarily parties, or do their tricts). partiality challenge. support a bias or ¶ Liteky, (quoting 510 U.S. Id. purpose Boundary Precinct Ad- The 1147). S.Ct. justment [1-3-10 Act 1-3-14 NMSA timing King’s of Commissioners comply is to criteria estab- 1978] remarks indicate that were and Jones’s pursuant provisions lished Sub- in the rate on the evidence adduced based (c) 141 of 13 of Section Title of the section case, testimony the direct filed well Code in order to obtain an United States present in case. Absent evidence PNM the populations of the of election enumeration contrary, that presume the we will to precincts by the of the census in bureau information these remarks “were based on federal decennial order the census the pro ... outside the of obtained course provide such enumeration data to the to Id.; Neigh ceedings.” see also Siesta Hills legislature purposes of New Mexico Albuquerque, v. 1998-NMCA- borhood Ass’n legislative reapportionment. ¶ 19, 670, 028, (up 954 102 124 N.M. P.2d disqualify holding city councilor’s refusal to (1995). 1978, § to NMSA 1-3-11 Pursuant the appellant because had failed to herself 8-8-4(D), only majority “a vote the Section of produce indicating any evidence that the for a final of commission is needed decision case). prejudged the the merits of councilor the commission.” ‘“display a remarks do not Because these deep-seated antagonism that favoritism Essentially, ABCWUA claims judgment impossible,’ would make fair "U S that 8-7-6 8-7-10 violate Sections ¶ Commc’ns, Inc., 1999-NMSC-016, 44, West person, principle of the one one vote the 254, Liteky, (quoting 127 N.M. 980 P.2d 37 equal protection clause because the PRC dis 555, 1147), 114 at we conclude 510 U.S. S.Ct. equally apportioned on tricts are not the King properly that Commissioners Jones Finch, population. of Connor v. 431 basis Cf. themselves. declined recuse 407, 1828, 416, 465 U.S. 97 S.Ct. 52 L.Ed.2d (1977) (“The Equal Protection Clause re the PRC’s Failure to Defer to Whether Dissenting quires nearly of legislative

the Vote of the Commis- that districts be Equal sioners the Protection Violated equal population, person’s so that each vote Clause given equal weight the election of calculating the representatives.”). “In devia ABCWUA claims that districts, inquiry among the relevant improperly failed defer the votes of tion

39 any approxi whether vote of citizen is interpretation ambiguous regula of its own mately weight tions,” Servs., equal any of other In re Envtl. Rhino 2005- ¶ citizen, provide NMSC-024, aim being 13, 138 133, 117 fair 939, N.M. P.3d representation effective for all citizens.” especially subject regulation where the City Board Estimate New York v. implicates agency expertise, Rio Grande of of Morris, 688, 701, 109 1433, 103 U.S. S.Ct. Chapter Mining Sierra Club v. N.M. (1989) (internal quotation ¶ L.Ed.2d 717 marks Comm’n, 2003-NMSC-005, 17, N.M. omitted); citations id. 109 S.Ct. However, 61 P.3d 806. we are not bound (holding that population deviation of by agency’s interpretation we may “one-person, 78% ide violated one-vote independent our substitute own judgment for al”). agency agency’s interpre “if the ... tation is unreasonable or unlawful.” The record is devoid of evidence Ass’n, Morningstar Water Users 120 N.M. at regarding the population density relative (noting 904 P.2d at 32 “it is each of the five PRC districts or maxi law”). interpret function the courts to mum among deviation the districts. The statutory guide The canons of construction provide burden is on ABCWUA to this Court interpretation regula our of administrative with an adequate record to review the merits tions. Johnson v. N.M. Oil & Conservation (“The appeal. § its claims 62-11^4 See Comm’n, 1999-NMSC-021, ¶ 27, 127 N.M. party burden shall be on appealing 120, 978 P.2d 327. appealed show that the order from is unrea sonable, unlawful.”); v. see also Brown statutes, construing “When 2004-NMCA-040, Trujillo, ¶ 34, 135 N.M. guiding principle our is to determine and (noting parenthetically 88 P.3d 881 NMIEC, give legislative effect to intent.” party seeking “the review has the burden of ¶ 20, 2007-NMSC-053, adequate providing an record review “In discerning Legislature’s P.3d 105. appeal”). issues on Because has intent, we are aided classic canons of burden, failed to fulfill its we will not review construction, statutory and [w]e look first to equal protection claim. statute, plain language giving ordinary meaning, words their unless the Statutory Regulatory B. Claims Legislature in indicates a different one was The PRC’s re “decisions Energy Corp. tended.” Marbob v. N.M. Oil areas, quiring expertise highly technical ¶ Comm’n, 2009-NMSC-013, 9, Conservation determinations, utility such as rate ac are (internal 24, 146 quotation N.M. 206 P.3d 135 corded considerable deference. Less defer omitted). “Statutory marks and citation lan however, ence, reviewing is warranted when guage unambiguous that is clear and must be determinations outside the realm of the given Colgate, effect.” V.P. Clarence Co. v. expertise.” [PRC]’s El Vadito de Los Ceril (1993). 471, 473, 722, 115 P.2d N.M. 853 724 Comm’n, los Water v. Ass’n N.M. Pub. Serv. “Only ambiguity if an proceed exists will we 784, 787, 1263, 115 N.M. 858 P.2d 1266 statutory analy further in our construction (citation omitted). Statutory “is construction Energy Corp., sis.” Marbob 2009-NMSC- purview not a matter within the of the ¶ 013, 9, 146 24, N.M. 206 P.3d 135. and, therefore, af expertise” [PRC]’s “‘we little, any, ford if deference to the on [PRC] Emergency 1. Whether FPPCAC Vio- NMIEC, 2007-NMSC-053, this matter.’” 62-8-7(E) lates Section ¶ 19, 533, (quoting 142 P.3d 105 N.M. ABCWUA and NMIEC claim Pub. N.M. Serv. N.M. v. Pub. Co. Util. of Section FPPCAC violates Comm’n, ¶ 14, 1999-NMSC-040, 128 N.M. 62-8-7(E) “reason- because it fails ensure 860). Accordingly, apply we P.2d fair, proper just able service at and and de novo standard of review to the PRC’s 62-8-7(E). Spe- rates.” reasonable Section rulings regarding statutory construction. Id. cifically, argue ABCWUA and NMIEC contrast, By unlawfully permits Court “[t]his pur- will defer generally agency’s pass to an reasonable PNM “to on increased fuel and consumer; thereby on fuel costs volatile without examination power costs chased utility in- public with stable providing in which its costs areas of the other increased,” stream, ensur- or its revenues while at the same time have decreased come pay in- thereby requiring only pays consumers for the fuel ing that consumer enjoys increased PNM actually costs while creased incurred. purchased power costs and profits. 550.6(B)-(D). utility to require a Rule To See purchased power and costs offset its fuel 62-8-7(E) unam- plainly and Section cost-savings areas un- against in other would fuel, “taxes or cost biguously provides that nature of the direct and automatic dermine may be recovered gas purchased power” or recovery system inherent cost 62-8- automatically via FPPCAC. Section 62-8-7(E), By enacting FPPCACs. Section NMIEC, 2007-NMSC-053, 7(E); also see FPPCACs, Leg- explicitly permits ¶ which 533, 168 P.3d 105. “The has that the ben- plainly islature determined purpose of a flow [FPPCAC] recovery system or of such an efficient cost electricity the increases de- efits users might Applicable outweigh possible Fuel Purchased burdens that creases per delivered impose costs kilowatt-hour of on and “is consistent Power consumers Utility Act, Rule energy above or below Base Cost.” includ- purposes of the Public 550.6(D). “provide the stabili- FPPCACs for goal providing ing serving the reasonable utility fuel costs ty earnings when electric fair, just reason- proper service power rising and costs are purchased able to all customer classes.” rates when permit prompt to customers credits claim, howev- and NMIEC purchased power costs electric fuel 62-8-7(E) er, must be construed Section 550.6(B). Thus, declining.” utili- Rule narrowly prohibit cost-shifting mecha- through the only ties “collect FPPCAC the In support in a nism inherent FPPCAC. actually pur- expended for fuel amount NMIEC, rely in which their claim 550.6(C). Rule chased costs.” energy certifi- this Court held renewable recovery cost is “a Automatic eligible automatic cost re- cates are not requir- general rule exception” to narrow 62-8-7(E) plainly covery because Section “notice, approval” in ing hearing, and unambiguously limits to “tax- allowable costs ¶ NMIEC, 2007-NMSC-053, 31, 142 cases. fuel, gas power.” purchased es cost of determining In N.M. 168 P.3d ¶ NMIEC, 2007-NMSC-053, N.M. par- appropriate in a whether a FPPCAC is (internal quotation marks 168 P.3d 105 62-8-7(E) case, requires the ticular Section omitted). light “In [this] and citation alia, consider, inter “whether language, interpreted] we plainly exclusive particular adjustment clause of a existence 62-8-7(E) narrowly and decline[d] Section Public purposes with the consistent ” language is not read into it which there.... Act, goal Utility including serving the ¶33 (internal quotation marks and cita- Id. proper service at providing reasonable omitted). tion fair, rates just and to all customer reasonable (“It 62-3-l(B) § is the See also classes.” hold, did as NMIEC ABCWUA {58} public policy of the state that the declared suggest, that the entire statuto- NMIEC interest, of consumers and the the interest subject ry governing FPPCACs scheme require regulation of investors interest Rather, it simply held narrow construction. supervision public utilities of such statutory phrase “taxes cost of that or proper shall end that reasonable and services fuel, gas power” be con- purchased or must fair, just reasonable available narrowly, plain its strued consistent with rates____”). ¶¶ unambiguous language. Id. 31-33. Be- FPPCAC, Emergency pres- in the cause the FPPCACs, very na their case, recovery cost ent limits automatic ture, direct and automatic re authorize the fuel, gas purchased pow- fuel, “taxes or cost of or gas, covery utility’s actual er,” reject and NMIEC’s Indeed, purpose we ABCWUA’s purchased power costs. claim. place burden of of a FPPCAC is to

41 However, person any in or ABCWUA claims within classification sub- reply Emergency ject corporation brief that the FPPCAC any person [to] within 62-8-7(E) it any violates Section because relies any classification to prej- unreasonable on forecasted increases in PNM’s fuel and disadvantage. udice or public utility No costs, purchased power than rather the his shall and maintain establish unreason- method, year whereby torical test the PRC able differences to rates of service ei- utility’s operating “evaluates a costs for a ther as between localities or as between specified preceding period twelve-month classes of service. utility’s past experience guide

uses the as a prohibit “[This] section does not in variations requirement.” utility’s future revenue rates, it require ‘equal nor does service.’ Servs., 2000-NMSC-012, In re PNM Gas Rather, prohibits ‘unreasonable differ ¶ 6, 1, During 129 1 N.M. P.3d 383. in ences’ rates of service between localities. pendency appeal, of this PRC filed a arbitrary Section 62-8-6 thus forbids varia claim, motion to arguing strike ABCWUA’s rates, tions in permitting while variations due that it had not been raised in ABCWUA’s differing costs service to different ar Our brief-in-chief. review of ABCWUA’s Albuquerque eas.” v. Pub. N.M. Serv. that, although brief-in-chief reveals AB Comm’n, 521, 531, 115 N.M. 854 P.2d argument support CWUA this raised of its (1993) (“Allowing municipalities 358 to con procedural process due evi substantial tract with utilities for service rates to their claims,4 dence it failed to raise the issue as a not, facto, ipso inhabitants does violate Sec separate basis for reversal of the PRC’s Fi 62-8-6.”); Albuquerque tion also see v. N.M. nal well Order. It is established we will Comm’n, 2003-NMSC-028, ¶ 25, Pub. Serv. not address issues “raised for the first time (holding, N.M. P.3d rele Fairweather, reply brief.” State v. part, utility vant properly appor 863 P.2d undergrounding tion costs to those “custom (1993). Accordingly, the motion to PRC’s jurisdiction requiring ers located within the hereby granted. strike is undergrounding”). Emergency 2. Whether the FPPCAC Vio- Olmstead, D. Rates John Man lates 62-8-6 Section PNM, ager testimony concern submitted next claims that ABCWUA . ing impacts the “customer of PNM’s Emer Emergency FPPCAC violates 62-8-6 Section gency explained FPPCAC.” Olmstead that a because it establishes and maintains “unrea- implements FPPCAC that different rates sonable differences as to rates service.” based on different customer classifications Specifically, argues inappropriate recovery method of rate improperly FPPCAC discrimi- because against nates “efficient-use customers 1) proposal PNM’s high load factors customers who con- specifically requests recovery of in- [electricity during] off-peak” sume hours be- expenses creases in fuel what above was purchased power cause it fuel and recovers allowed in NMPRC Case 07-00077-UT. uniform per kilowatt hour charged The amount to customers for charge. class, vary by base fuel does provides, 62-8-6 Section rel vary recovery and to of those addi- part, evant expenses tional not consis- class is public utility shall, adopted rates of tent in design [n]o as to ser- with the rate vices, grant jus- make unreasonable or cost NMPRC Case 07-00077-UT preference advantage any corporation tified. brief-in-chief, explained supra part

4. In its claims ABCWUA that it for the reasons IV.A.2. AB- procedural deprived process Emergency was of due of law CWUA that the also claims FPPCAC procedural by expedited supported because the schedule did is not substantial because evidence historical, permit explore accuracy projected, time the sufficient it is based on rather than projected pur- reject of PNM's fuel and fuel the increase in costs. We this claim for reasons power rejected explained part We chased costs. have this claim hereinafter IV.B.ó.b. infra (general- rate classes 2) larger customer by varies rate Having [t]he an that FPPCAC (per ly) rate elements have lower fixed cost some customers mil cause class in usage) the the ... than is the case on basis of change rate classes kWh Thus, bill when cost their base rate classes. smaller customer combined charge. re- plus Emergency This FPPCAC ... revenues their FPPCAC these that to PNM per in a revenue shortfall on a kWh basis—with- sults are recovered true-up under the that be corrected class revenues cannot out consideration Emergency the FPPCAC. provision of a basis recovered on “fixed” are otherwise class-by-class were sig- FPPCAC Charges) If a is a (e.g., Customer —there [PRC], by the the amount adopted responsibili- cost distortion in the nificant switching from rate could shortfall the This a classic classes. is ties between rate fact, million. exceed if design” $0.5 [PRC] In the “rate issue. adopt “per proposal kWh” the were 3) by class that varies rate An FPPCAC dramatically price incorrect would send in rates that exceed result some could signals larger to the customer classes. cap that per FPPCAC the kWh $0.01 proposed in this case to limit PNM has Viewing in the foregoing evidence impacts. al- This would not customer decision, light most favorable to PRC’s some FPPCAC PNM recover low Emergency is we that FPPCAC conclude they ap- had though even been costs evidence. See supported substantial company proved recovery at a level. ¶ 24, NMIEC, 2007-NMSC-053, N.M. class-by-class FPPCAC were If a (“We 533, in P.3d 105 view evidence [PRC], by the adopted amount deci light [PRC]’s most favorable cap limits could the shortfall due every support inference sion and draw million. exceed $1.7 decision, uphold but we will not [PRC]’s Emergency whether When asked supported by if it is not substan decision fairly apportions recovery (citation omitted)). cost FPPCAC Olm tial evidence.” classes, an- across Olmstead different testimony, long-standing policy of stead’s swered, fuel costs are allo- ‘Yes. Increased PRC, plain language and the of Rule per cated kWh basis in a manner entire- on that amply support the PRC’s determination ly principles.” with cost causation consistent per charge hour is the uniform kilowatt cost equitable and efficient method of most testimony, In addition to Olmstead’s Athough conflicting ex recovery. evidence “long- has reflects that the PRC record isted, that it is well established “evidence pur- ... standing policy require fuel and conflicting opinions in two the record does costs recovered on chased to be not mean that the decision arrived Indeed, “every per kWh uniform basis.” At unsupported substantial evidence.” in effect in New Mexico recovers FPPCAC v. N.M. Serv. torney General N.M. Pub. long- that those manner.” This Comm’n, 685 P.2d standing policy reflected Rule (1984). Accordingly, we conclude Fuel Pur- provides which “[t]he Emergency does not violate FPPCAC Adjustment Factor shall chased Power Cost 62-8-6. Section kWh, expressed per and the resultant $ monthly charge or credit shall be shown the FPPCAC Violates Section Whether monthly

each bill.” Rule 550.16. customer’s 62-8-8 However, points out E3e, Ph.D., ABCWUA and NMIEC claim Tysseling, President of John C. (d/b/a improperly per- Energy, FPPCAC Inc. Economic Environ- Consultants), indepen- to treat the costs of the dispro- that “a mits PNM mental testified asset, a regulatory cus- dent audit as which portionate impact larger occurs on the ratepayers from be recovered proposed tomer rate classes” “when Specifically, claim surcharge is on PNM’s base rates. applied already imposes in- Specifically, Tysseling that Section 62-8-8 per kWh basis.” utilities, supervision fee on spection and explained that

43 may ratepayers the tion Emergency which be recovered from of the FPPCAC and is bene- and, therefore, by their ficial ensuring base rates the to consumers that PNM’s Emergency ratepayers power electric generated FPPCAC forces is at the lowest pay utility regulation. cost, for twice reasonable we conclude that the costs the audit are a legitimate operating expense following background The additional that PNM recover from ratepayers its necessary for our of this claim. In is review through its base rates. Order, pru- Final the found that a its PRC dency review of the However, ABCWUA and NMIEC necessary provide par- was order to the “[i]n ratepayers claim that PNM’s will required be and ties PNM customers assurances that pay utility regulation twice for under Sec- electric generated pur- PNM’s is and tion imposes 62-8-8. Section 62-8-8 “in- an at the chased lowest reasonable cost.” How- spection supervision and fee” on utili- “[e]ach ever, the PRC had “neither resources nor ty doing subject business in this state and expertise adequate pruden- conduct an jurisdiction the control and of the commission cy review” of the FPPCAC. respect with regula- to its rates or service Consequently, pruden- that the PRC held tions.” inspection supervision “[T]he cy by review must an “be conducted auditor charged fees are in fact fees for the services by, or team of auditors to be selected of the Public super- Service Commission in of, under the direction [the PRC].” The PRC vising inspecting these rural co- electric “pay ordered PNM to the costs of for operatives.” Waterworks, United v. Inc. review,” prudency permitted but PNM to Comm’n, 2000-NMCA-057, N.M. Pub. Util. regulatory ¶ treat those costs “as a asset” that 11, 262, 129 5 (quoting N.M. P.3d 584 N.M. may be ratepayers recovered “from (1962)). Att’y Op. However, Gen. 62-16 through the rates established PNM’s next amount of the fee is based on the PRC’s general rate proceeding.” actual operation, costs of or on the amount of regulation utility receives, but, rather, that a obligation The “has an PRC on a percentage utility’s “gross re- utility expenses necessary to allow are ceipts from transacted in business New Mex- service, providing utility that benefit rate year.” ico for the preceding calendar Section payers, and prudently that are incurred.” In (providing 62-8-8 that the amount of fee ¶ Servs., 2000-NMSC-012, re PNM Gas percent is five hundred six thousandths of a (internal quotation N.M. P.3d 383 gross receipts). Additionally, utilities annual omitted). example, marks and'citation For but, directly PRC, paid fee is not expenses federal taxes and the associated rather, deposited “directly is into the State legitimate rate operating with a case are all fund,” general “may it appropriated where be utility may costs recover from its by Legislature it Att’y sees fit.” N.M. ratepayers through its base rates. See id. (1978); Op. Gen. 78-10 NMSA cf. (“Because proceedings part rate are a (1957) (“All moneys § 63-7-21 un- collected utility normal course business provisions Chapter 194, der the Laws by proceedings, because rate establishing ..., deposited shall the state rates, just and reasonable are conducted for by general treasurer and him credited to the ratepayers the benefit both and sharehold fund.”). ers, widely accepted rate case ex penses aspect utility’s are one operating inspection supervision of a fee is in a general defray recoverable administrative fee intended to Co., proceeding.”); operation by In re Zia Natural levying Gas PRC’s costs of a tax or ¶ 2000-NMSC-011, gross tariff receipts on the annual (“[A] body regulatory subject supervision P.2d 564 cannot utilities arbi to the PRC’s trarily disallow company nothing federal taxes control. The of the fee amount has paid obliged pay, by assuming has or is to do utility’s regulation, with a cost of savings money generated tax under a capital structure which amount of fee exist.”). independent nothing money does Because has to do with the allocated to necessary Thus, proper audit for the Legislature. administra- the utili- recover, monthly along 1 on a basis ei- 550 Form ty supervision fee does and supporting schedules indirectly, the costs of with number directly or PRC’s ther expenses and showing the fuel clause related regulation. Although ABCWUA’s rejected balancing basis may on this and account. NMIEC’s claim be the case, alone, that, the present the note we (cid:127) collected, organized Data shall be and by an conducted prudency review will be audits be maintained so future can auditor, the PRC. independent rather than by the staff. [PRC] conducted such, prudency the review As the costs of (cid:127) reports presentations shall Written and by the PRC or recovered will not be borne quarter and each [PRC] be made inspection and su- by through the the State period. time Ad- at the of the audit end Accordingly, we pervision fee. conclude may reports presentations and ditional properly permits the FPPCAC requested by desig- or be its [PRC] regulatory as a PNM to treat these costs by agent [au- nated or recommended rate- may be asset that recovered from ditor]. payers PNM’s base rates. (cid:127) may, required prepare to The be [auditor] testimony and written and submit Independent Lacks Audit Whether on stand for cross examination its work Regulatory Oversight Sufficient prudence audit related to the review. indepen- claims that the ABCWUA needed, As is to be available [auditor] regulatory over- dent audit lacks sufficient witness, drafting assist as with sight “specify the PRC failed because testimony, ques- direct cross-examination details, it did not indicate how the audit tions, motions, regu- briefs and and other protect ratepayers, would conducted to be latory activities. timing explain and it or describe the did scope RFP The summarized process.” audit Without mechanics prudence review follows: oversight, ar- regulatory sufficient (cid:127) major utility The fuel elements of gues violates that the prudence by clause be for shall reviewed “the Rule it fails to ensure that 550 because [auditor] [PRC] selected utility’s power policies and purchased fuel ensure that and accurate reasonable practices designed are assure being costs are recovered from retail generated and purchased electric ratepayers. The [auditor] should review Rule lowest reasonable cost.” procedures practices policies, PNM 550.17(A)(3). regulations all compliance background following The additional major components fuel costs included necessary claim. to our resolution of this in the fuel clause. Order, After PRC’s Final the issuance of the (cid:127) collected, organized Data shall be seventy-seven page PRC submitted prudence maintained so that future re- (RFP) Request Proposals 08- for Case No. by the views can be conducted [PRC] purpose The of the RFP was “to 00330-UT. staff. provide qualified profes- select [auditor] (cid:127) report A be made to the status should auditing prudence sional review services outlining key costs, each month activi- [PRC] purchased power of PNM’s fuel and summarizing prudence current ties and filings fuel related clause documentation findings. review At the end the re- through May period of June view, summarizing prudence report scope 2009.” The RFP summarized the will re- review and areas of concern be audit as follows: presenta- quired. reports and Additional (cid:127) clause All cost elements of PNM’s fuel may requested by the [PRC] tions be shall and reviewed for accura- be audited agent designated or recommended cy compliance by the se- [auditor] the [auditor]. only by the lected ensure [PRC] (cid:127) required prepare appropriate being [auditor] recovered testimony Rule written and to ratepayers. retail files and submit from PNM added.) (Emphasis purpose stand for examination on its work cross The of the stat- prudence provide related to the audit the public ute is to both the PRC and the needed, the to be [auditor] review. As is any proposed with advance notice of rate witness, available as a assist with the changes changes before go those into effect. drafting testimony, of direct cross-exami- present case, In the PNM notified the {77} motions, questions, nation briefs and changes proposed PRC of the in the Emer- regulatory other activities. 20, 2008, gency FPPCAC on March the date reflects, foregoing As the record the {74} joint on which filed its motion for an independent subject reg- audit is to extensive Emergency public FPPCAC. The was noti- ulatory oversight in Case No. 08-00330-UT. changes fied of these on March the reject therefore ABCWUA’s claim that We public published date which on notice was in Emergency FPPCAC 550. the violates Rule Albuquerque the Emergency Journal. The FPPCAC, as the by modified PRC’s Final Nonetheless, ar Order, 2, 2008, into went effect June brief, in gues, reply for the first time its approximately sixty days later. “waiting emergency hearing until the after and the Final to set forth Order the details respect With filing of new significantly impaired audit parties’ the the schedules, the record reflects that PNM filed ability to ensure the audit in a will result underlying new in schedules the rate in case meaningful policies review PNM’s 62-8-7(B). accordance with Section Howev- practices gener and that electric its er, proceedings present in case were purchased ated at the lowest reasonable underlying from severed rate case. explained, previously cost.” As we not will PNM did file another set of new sched- for in address issues “raised the first time ules until after the issuance of the Final Fairweather, reply brief.” at granting request Emergency Order for an 463, 863 P.2d 1084. We therefore decline Specifically, FPPCAC. the Final Order re- to review claim. ABCWUA’s quired PNM to file new schedules for the “Emergency containing terms and Emergency Whether the 5. FPPCAC Vio- conditions consistent Final [the] with Or- 62-8-7(B) lates Section der[,] days ... no later than 5 after the date improp- ABCWUA claims that PNM timely this Final Order is issued.” PNM erly failed to file new schedules in violation of 27, 2008, May filed new schedules on and the 62-8-7(B). 62-8-7(B) pro- Section Section Emergency into FPPCAC went effect six that, vides later, days on June 2008. orders, the commission [u]nless otherwise public change utility any no make shall We conclude that PNM com duly rate that been has established plied requirements with substantive days’ except thirty after com- notice to the 62-8-7(B). First, gave Section PNM mission, plainly which shall notice state the public approximately sixty days PRC and changes proposed to be made in rates proposed changes notice of the rate in the then force and the time when Second, Emergency FPPCAC. PNM filed changed go into rates will effect and other new schedules accordance the Final information re- as the commission rule Emergency Order before FPPCAC went quires. utility give shall also notice reject into effect. We therefore ABCWUA’s proposed changes to other interested claim that the FPPCAC violates may All persons as the commission direct. 62-8-7(B). Section changes filing be proposed shall shown kept open new schedules shall be FPPCAC Vio- Whether public inspection. The commission 550.17(A)(2) Rule lates may changes in good cause shown allow days’ requiring thirty rates next claim without ABCWUA and NMIEC notice, pre- improperly under that it concluded that conditions purchased power “cost of fuel and scribe. PNM’s statutes” the separately fluctuate defined periodically costs which contains ordinary meaning consider the in a court “must precisely determined and cannot 550.17(A)(2). First, likely have been in the minds ABCWUA most Rule case.” “periodic” challenge legislators”). the PRC’s construc- The term enacting and NMIEC that claiming “[h]appening appearing the PRC Rule as or tion of defined reappear- “Rule 550 does Recurring that ... or improperly regular concluded intervals purchase power time; showing that require ing intermittent.” The from time to ” “improperly and Dictionary costs are ‘volatile’ Heritage and fuel En- American ed.2000). ... (4th from PNM proof the burden The glish Language shifted 1307 that vary and show Intervenors Staff ir- [to] “[t]o term “fluctuate” is defined purchased power costs could fuel and PNM’s as if regularly ... To rise and fall in or in in a rate Sec- determined” case. precisely Thus, pur- be and at 677. fuel waves.” Id. ond, challenge ABCWUA and NMIEC “periodically fluctuate” if power costs chased evidence, claiming that the sufficiency of from time to irregularly and fall rise that to establish was insufficient evidence plain language of light time. In power peri- purchased costs fuel PNM’s rule, properly that the PRC we conclude precisely be odically fluctuate and cannot require that “Rule 550 does not determined in a rate case. determined and fuel showing purchase power that costs ‘volatile’, more than some are or fluctuate Improperly the PRC Construed a. Whether providing other cost of service.” 550.17(A)(2) Rule argu- ABCWUA’s We next address begin analysis plain with the We our shifted improperly ment the PRC that provides that language of Rule which to Staff and Intervenors to proof burden of utility in- have a FPPCAC A. No shall purchased fuel prove that PNM’s complies in cluded its tariff unless in a precisely rate costs can be determined requirements of NMPSC Rule Order, Final the PRC held that case. In its design in the of its NMAC] [17.9.550 proof, stating PNM had fulfilled its burden of application files an tariff and arguments “persuaded by that PNM’s it was requesting approval with the Commission purchased power that fuel and costs its utility of a The shall of its use FPPCAC. in a precisely determined [could be not] testimony along with its initial tar- submit contrary argu- respect to the case.” With under filing application iff NMPSC by parties, opposing raised ments showing that all [17.9.550NMAC] Rule 550 arguments that these noted in of purposes [17.9.550.6 stated by opposing parties’] [the are undercut by tariff that: are met NMAC] any way identify in what failure to those are and what predictable future costs (2) purchased power the cost of fuel and methodology precisely could be used periodically fluctuate contains costs which in this those future costs or determined in a precisely cannot be determined Similarly, any proceeding. none other rate rate case. any arguments parties advance 550.17(A)(2). imposes rule a bur- Rule The showing and how whether evidence (1) proof utility prove that den of price in shown previous fluctuations power con- purchased of fuel and its “cost precisely, have even PNM could been fluctuate,” and periodically tains costs which reasonably, in a rate determined case. fluctuating precise- “cannot be these costs agrees further with PNM’s [PRC] The Id. ly a rate ease.” determined projection future contention costs is made “periodical purchased power fuel and phrase Because fact substantially by the we more difficult ly defined Rule fluctuate” purchased power costs can fuel and dictionary to ascertain its com PNM’s turn to growth, load meaning. v. and will affected ordinary mon and State Cf. ¶ demand, R., 2009-NMSC-050, changes changes N.M. in customer Nick off-system sales revenues. (noting P.3d 868 that when a “term (Citations omitted.) Thus, setting the PRC did not purposes is off-sys- the amount of proof shift the opposing burden of tem generated sales will be and cred- parties; simply the PRC oppos- held that the during ited to customers period ing parties had failed to discredit or rebut rates effect. availability of such demonstrating PNM’s evidence that its fuel sales margins and the level of derived from purchased power periodically fluc- depends them upon prices, future market precisely tuate and cannot be determined in plant availability, needs, and customers a rate case. vary which can significantly year from year. FPPCAC, The use of a b. Whether FPPCAC is off-system flow, which sales credits assures Supported by Substantial Evidence that customers are credited ap- with the Lastly, and NMIEC propriate off-system level of during sales claim that the evidence was insufficient to period effect, that rates are in no more establish that purchased PNM’s fuel and Finally, and no less. by discussed Dr. power periodically costs fluctuate and cannot Hadaway Samuel testimony, in his the fi- precisely determined in a rate case. In nancial perceive markets utility that claim, support of their they point to evidence without a operates FPPCAC greater with (1) indicating the record that PNM had compared risk utility to a a has knowledge ability advance pre and/or rating FPPCAC. Credit agencies in- and costs, dict purchased power future fuel and vestors take that risk factor into account (2) PNM’s coal and nuclear fuel costs “are determining utility’s when a rating credit subject long-term contracts and rela Thus, and capital. its cost of utility stable,” tively “only and tiny portion does not have a potentially FPPCAC is PNM’s fuel costs are volatile and that competitive disadvantage in the financial [PNM’s] total annual fuel cost could be rea markets. sonably estimated.” Sterba, Jeffrey Chairman, E. Presi- following evidence, The additional dent and Chief Executive Officer of PNM which was adduced in the underlying rate Resources, Inc. principal and its subsidiary, ease and of which the PRC took administra- PNM, testimony also offered direct with re- notice, tive is relevant Hugh to this claim. spect to PNM’s need for a FPPCAC. Sterba Smith, W. PNM’s Senior Vice President of explained that Resources, Energy offered direct testimony respect to PNM’s need for a FPPCAC. will increasing percent Gas be an of our explained Smith power fuel base. agreements Purchased likely will operated PNM has have variable fuel without a costs based on years, however, gas prices. Replacement since 1994. In natural power recent coal, prices prices high for all nuclear are and volatile and natu- due to national fuels— gas ral substantially prices gas increased market for price and coal. Gas —have become more volatility volatility volatile. by price Increased is evidenced 50% 60% means that it increasingly swings. difficult to The current fixed base rate meth- predict the pur- future costs of fuel recovery od of fuel cost for PNM is based power chased purpose for the of establish- prices on historical and limited estimates ing appropriate rates, fuel cost level prices. low, of future If the estimate is too one that will be reflective period company cannot recover costs. PNM approved when the rates will be in effect. was unable to recover about million in $50 A FPPCAC is the way most effective purchased increased fuel costs match fuel costs with fuel revenues so past years over the two due to the lack of a pay only customers for the actual fuel and fuel clause. This is one of the factors ad- purchased power by costs incurred versely affecting PNM. standing. our credit Rat- short, In the FPPCAC eliminates the diffi- ing agencies and impact investors view the cult and predicting replacement controversial task of power expense on cash the level years of these costs into the flows the absence of a fuel clause as Equally future. predict difficult to for significant Hadaway risk. Dr. discusses reimbursement, percent which is over of this detail. The result in further this costs are Operating coal cost. capital the total higher is a cost of perceived risk costs, construc- prices labor for ultimately passed customers. affected on to that is method, like and concrete a fuel tion materials steel current without Under changing coal owners unforeseen events like clause, only way company’s operating safety These volatility is to standards. high mine protected from can be through to passed directly PNM. rate calcula- are prices in the base costs project high prevent long-term contract does [PRC]. approved have tions and however, from fluctuat- cost of coal San Juan high, If the estimate too EJF-1R, Exhibit ing. Please see PNM customers price risk shifts per mega- a dollar The fixed which shows than actual costs. pay more basis, price to remove fluctuations due accurate watthour provide also fails method seen, encourage changes can be coal load. As signals, important which costs, megawatthour efficiency. way per the fuel on a dollar Either even economic basis, year- move, higher or fluctuate month-to-month purchase power prices deter- precisely lower, to-year, risk when cannot be someone absorbs the adjust- in rate An mined case. base rate method is used. fixed fairly the risk and clause balances ment also testimo- Ferland offered rebuttal {88} accurately costs for custom- tracks instead stability]” disputing the of ny “relative}] sum, regu- existing In [PNM]. ers explained Ferland PNM’s nuclear costs. cus- latory longer is no viable for model spot price market of uranium oxide that the changes of PNM because of the tomers 2004,” (U808) years prior the few was “[i]n portfolio, prices, supply market our stable, ap- “relatively prices with between need to en- energy environment and the per pound.” Howev- proximately $8 $17 efficiency. energy courage DSM er, Ferland, succeeded E. James who swift, dra- {87} there been have [s]ince Energy Vice President of uranium, Smith as Senior with spikes price matic of PNM, testi- offered rebuttal Resources seeing price market tenfold increase and coal mony disputing that nuclear' PNM’s time, making quick re- over that before long- usually through “are costs obtained rising of concern treat. With level prices fuel are contracts so that future emissions, term grow- fuel there is a about fossil fairly predictable.” Ferland testified ing the nuclear level consensus industry begin the U.S. will soon true fuel and coal it is that nuclear [w]hile leading demand for expand, to increased longer- generally are obtained not sure that contracts, uranium. The market not are term these contracts result, meet As a we supply will demand. Longer-term con- fixed-price contracts. clearly of fluctuat- entered a new era security have some provide tracts are used fuel ing nuclear costs. availability. for fuel uranium, purchases for Palo Verde For foregoing evi- conclude that the We time, set layered in over from a diverse findings supports amply the PRC’s dence delivery price suppliers, to avoid the purchased power fuel and that PNM’s supplier. buying fuel from one risk all precisely fluctuate and cannot be periodically PNM’s urani- Longer-term contracts and Although in a rate conflict- case. determined purchasing strategy ensure a reliable um existed, appeal the issue on ing evidence they nucle- prevent supply, fuel but do there evidence to not whether was sufficient fluctuating. ar costs from but, rather, contrary wheth- support result findings Likewise, supports the made supply PNM’s contract is er the evidence coal DeWitt, 2009-NMSC-032, ob- the PRC. See price a fixed contract. San Juan ¶ Indeed, 212 P.3d 341. single source. 146 N.M. tains all its coal from a only if conflict- rejected order is components for PRC’s “[t]he There are two main cost the evidence capital ing renders incredible evidence PNM’s San Juan coal contract: Qwest Corp. v. operating support cost decision.” element and the investment Comm’n, Regulation ty N.M. Pub. 2006- simple starts with the showing up task of ¶ NMSC-042, 38, 143 P.3d 478 for work. (internal quotation marks and citation omit- parries The PRC general legal

ted). conflicting Because the evidence fails principles that understandably excuse occa- to render incredible sup- the evidence that sional and de minimus absences from com- decision, ports the PRC’s affirm we the Final mission or proceedings, board long so Order of the PRC. members proceed- review the full record of ings before vote on the matter at hand. V. CONCLUSION fact, rule, In general aas boards and com- reasons, foregoing For the we con- enjoy missions presumption to that effect. properly granted clude that the PRC PNM’s However, desultory performance of these request for an FPPCAC. We vastly commissioners exceeds the context therefore affirm the Final Order of the PRC. from which principles these arise. No case cited to us grand involves absences on this IT IS SO ORDERED. a scale. way being And we have no as- sured that individual commissioners —the CHÁVEZ, WE CONCUR: EDWARD L. 60% who were absent from more than Justice, half of SERNA, Chief M. PATRICIO hearings actually did review a record of DANIELS, Justices, CHARLES W. — proceedings. Significantly, after four full BOSSON, RICHARD C. (dissenting). Justice days hearings involving complex, technical BOSSON, (dissenting). Justice matters, the commissioners voted a mere five The PRC expedited conducted an days barely time, enough one would later — hearing emergency request PNM’s for an think, record, to prepare the full much less adjustment automatic fuel During clause. it. review days testimony four before the Commis- important. This is Members of {95} sion, banc, sitting en the record reflects the boards and commissions are allowed to re- following participation by lack of individual view the compensate record and for the occa- commissioners. One of the commissioners precisely sional absence because the alterna- personally attended hearings, none of the voting on matters not reviewed—would tive— only participated by teleconference for a deny process due law participants day and a half. Another commissioner at- public alike. Faced with at least the hearing tended one and was absent for all violation, potential process for a due the PRC the rest. Another commissioner attended for rely should do pre- more than on a naked days only. Only two two of the five commis- sumption they record, that reviewed the es- personally sioners —a mere 40% the PRC — pecially light of the bothersome evidence days attended all four worth hearings. suggesting that commissioners did no such attempts The PRC to defend such a {93} thing. performance by dismal citing regu- to its own The Commission’s own Code of Con- permit lations which commissioners to ab- principle” duct states the “irrefutable that “a they stain from appoint attendance when public public office is a trust.” It further hearing testimony, examiner to take receive states that the pub- Commission “needs the evidence, and recommend a decision to the respect lic’s that confidence its full Commission. The appoint PRC also will community be used on behalf of the aas “preside” one of its own to hearings. over earned; Respect whole.” must be it does not Fair enough. nagging The little detail with automatically flow upon assumption of office. argument, course, this is that the Commis- record, In the face I compelled of this am appoint sion did hearing not examiner or indulge wonder how we can these commis- preside, one of its own to but elected to hear any presumption implies sioners that itself, proceedings sitting the full PRC en performance faithful of their duties. Simply put, banc. the Commission shoul- And, responsibility hearing dered the importantly, question this case more end, beginning from responsibili- and that permeates appeal. the remainder of this Re- having been elected adjustment types clause—-now this fuel these call that issues— many acquired special purpose having first time for that granted PNM for the expedited, expertise emer- in these matters. about in an years-—came necessarily truncated proceeding gency however, convinced, I am not for consider- process deliberative the normal obligation meeting our we are constitutional just PNM had weighty matter. ing such to a commission that reaches when we defer proceeding, exhaustive been such as under circumstances its decisions hearing examiner recommended in which the forget that PRC commis- these. Let us very adjustment clause or against this fuel capacity; quasi-judicial in a sioners sit many very much like it. PRC staff one go complex, matters that adjudicate technical joined opposition to auto- parties other our public interest of to the heart adjustment, preferring instead matic fuel judicial con- We would never tolerate state. ordinary prove in the that PNM need this; I see to be more like no reason duct PRC had proceeding. a rate course of permissive of PRC commissioners. rec- yet hearing ruled on the examiner’s I this decision and would reverse decision, seemingly when PNM ommended PRC its deci- remand for the to reconsider and filed appeal process the normal aborted adjust- grant PNM an fuel sion to automatic emergency declaring the present petition clause, ultimately a decision could ment impend- immediate to an need for relief due out, only proceeding but after a full be borne ing crisis. fiscal ordinary giving protes- these in the course hearing a mere The PRC scheduled a opportu- full adequate and others a tants away time months fraction of the two —a nity present opposition. their case complex required to typically consider such near, Then, hearing drew questions. yet emergency evaporated,

PNM’s fiscal kept emergency to its time-table and requests for ad- protestants their denied opportunity prepare time ditional analyze complex technical evidence. The 2010-NMSC-016 grant the fuel PRC then based decision to 229 P.3d 523 adjustment upon petition clause less Mexico, STATE of New emergency upon relief and more evidence Plaintiff-Appellee, being proceeding initial rate that was still appealed. v. judges, when As we take comfort Tracy JOHNSON, Alvin Defendant- performed orderly, in an routine duties are Appellant. practice and consistent with normal manner 29,664. circumstances, No. we procedure. Under those presumption regularity. Con- rely on a Supreme Court of New Mexico. however, versely, when matters fall outside norm, experience us to exercise teaches March healthy circumspection. dose of caution and notice of need for further We are on

inquiry. point I am at that with the PRC. only This Court constitutional- body the final

ly empowered that can review majority rightly of the PRC. orders As notes, traditionally we afford those decisions deference, affirming in all but high level of rarest defer to circumstances. We because, theoretically, com- at least in a position better to decide missioners

Case Details

Case Name: Albuquerque Bernalillo County Water Utility Authority v. New Mexico Public Regulation Commission

Court Name: New Mexico Supreme Court

Date Published: Mar 19, 2010

Citation: 229 P.3d 494

Docket Number: 31,268, 31,273

Court Abbreviation: N.M.