A. The commission may prescribe reasonable and adequate service regulations and standards of service rendered or to be rendered by any utility and may prescribe such regulations for the examination and testing of such service and for the measurement thereof.

B. In order to assure reasonable and proper utility service at fair, just and reasonable rates, the commission may investigate:

(1) Class I transactions to determine the reasonableness of the cost and contract conditions to the utility in any such transaction; and

(2) Class II transactions or the resulting effect of such Class II transactions on the financial performance of the public utility to determine whether such transactions or such performance have an adverse and material effect on such service and rates.

C. A public utility engaging in any Class I or Class II transaction shall have the burden to produce such evidence and information as is sufficient to demonstrate:

(1) that such Class I transaction has resulted in reasonable cost and contract conditions to the utility; and

(2) that such Class II transaction or the resulting effect of such Class II transaction on the financial performance of the public utility has not materially and adversely affected the utility's ability to provide reasonable and proper utility service at fair, just and reasonable rates.

If the commission finds that the utility has failed to meet its burden, the commission may issue orders consistent with the authority granted to the commission under the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978] to assure the provision of such service at such rates. Any such order that explicitly and directly requires the production of information shall be in accordance with Section 62-6-17 NMSA 1978.

D. The commission may issue such orders in connection with an evidentiary proceeding involving a public utility as it finds appropriate and necessary to assure that appropriate cost allocations are made and that no cross-subsidization occurs between the utility and an affiliated interest.

E. The commission shall, by November 30, 1982, promulgate rules and may amend such rules thereafter, to implement the provisions of Subsections B, C and D of this section, including the manner of conducting such investigations and making such determinations, and the specification of such reporting requirements as may be reasonably necessary and as are consistent with the provisions of this 1982 act.

F. For a period of thirteen months from the effective date of this subsection, no utility or affiliated interest shall engage in a new Class II transaction described in Paragraph (1) or (2) of Subsection K of Section 62-3-3 NMSA 1978, nor during that period shall any utility or affiliated interest controlled by a utility engage in any nonutility activity not carried on prior to that effective date except as is necessary to protect or dispose of an asset, unless such nonutility activity had been the subject of substantial negotiations and had been publicly announced prior to the effective date of this section.

F. For a period of fifteen months from the effective date of this subsection, no utility or affiliated interest shall engage in a Class II transaction described in Paragraph (1) or (2) of Subsection K of Section 62-3-3 NMSA 1978, nor during that period shall any utility or affiliated interest controlled by a utility engage in any nonutility activity not carried on prior to that effective date except as is necessary to protect or dispose of an asset.

History: Laws 1941, ch. 84, § 31; 1941 Comp., § 72-519; 1953 Comp., § 68-5-19; Laws 1982, ch. 109, § 9.

Compiler's notes. — The 1982 amendment added two Subsections F.

The term "the effective date of this subsection," referred to in each Subsection F, probably means the effective date of the 1982 act.

Sections 62-6-4 to 62-6-26.1 of the Public Utility Act are still effective as the repeal of Chapter 62, Article 6 by Laws 1998, Chapter 108, Section 82, effective July 1, 2003 Chapter 108, Section 82 was repealed prior to taking effect by Chapter 23, Section 1, Laws 2003. Although Laws 2003, Chapter 336, Section 8, amended Laws 1998, Chapter 82, as amended, an amendment of a repealed section is ineffective. See Quintana v. N.M. Dep't of Corrs., 100 N.M. 224, 668 P.2d 1101 (1983). Laws 2003, Chapter 416, Section 5 also repealed Laws 1998, Chapter 108, Section 82, as amended, a second time, however, that repeal is of no effect as the section had previously been repealed by Chapter 23, Section 1, Laws 2003.

The term, "this 1982 act," referred to in Subsection E, means Laws 1982, ch. 109, which is compiled as 62-3-3, 62-6-17, 62-6-19, 62-8-7, 62-11-1 to 62-11-3, 62-11-5 and 62-11-6 NMSA 1978.

Cross references. — For denial of service by utility being petty misdemeanor, see 30-13-2 NMSA 1978.

Primary purpose of extending commission's jurisdiction to Class I transactions was to protect against allocation of some of a regulated utility's profits to its unregulated affiliate. Gas Co. v. N.M. Pub. Serv. Comm'n, 1984-NMSC-002, 100 N.M. 740, 676 P.2d 817.

Commission may impute gas processor's unreasonable revenues to affiliate utility. — Where a company processed natural gas for its affiliate gas utility in a Class I transaction and had unreasonable revenues when compared to similar natural gas processors, the commission was authorized to impute some of those revenues to the affiliate gas utility for rate-making purposes. Gas Co. v. N.M. Pub. Serv. Comm'n, 1984-NMSC-002, 100 N.M. 740, 676 P.2d 817.

Variations in rates not ipso facto discriminatory. — Section 62-8-6 NMSA 1978 does not prohibit variations in rates, nor does it require "equal service." Rather, it prohibits "unreasonable differences" in rates of service between localities. Allowing municipalities to contract with utilities for service rates to their inhabitants does not, therefore, ipso facto, violate Section 62-8-6 NMSA 1978. City of Albuquerque v. N.M. Pub. Serv. Comm'n, 1993-NMSC-021, 115 N.M. 521, 854 P.2d 348.

Company restructuring. — This section allows the commission to disapprove a public utility holding company restructuring prior to its completion. Public Serv. Co. v. N.M. Pub. Serv. Comm'n, 1987-NMSC-124, 106 N.M. 622, 747 P.2d 917.

The commission properly disapproved a public utility holding company restructuring prior to its completion. This restructuring would have changed the status of certain subsidiaries of the utility to a status which can be called "sisters" (a subsidiary of a holding company of which the utility also is a co-equal subsidiary), which are not, under Section 62-3-3A NMSA 1978, included within the definition of an "affiliated interest." Therefore, this holding company structure would have prevented the commission's access, under Section 62-6-17 NMSA 1978, to the books and records of the "sister" necessary to ensure the reasonableness of transactions between that "sister" and the utility. Public Serv. Co. v. N.M. Pub. Serv. Comm'n, 1987-NMSC-124, 106 N.M. 622, 747 P.2d 917.

Law reviews. — For note, "The Public Service Commission: A Legal Analysis of an Administrative System," see 3 N.M.L. Rev. 184 (1973).

For note, "Conservation, Lifeline Rates and Public Utility Regulatory Commissions," see 19 Nat. Res. J. 411 (1979).

For article, "Cost of Service Indexing: An Analysis of New Mexico's Experiment in Public Utility Regulation," see 9 N.M.L. Rev. 287 (1979).

For 1984-88 survey of New Mexico administrative law, see 19 N.M.L. Rev. 575 (1990).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Utilities § 236.

Service of government as excuse for failure of carrier to discharge duty to individual, 8 A.L.R. 162.

Right of public utility company to discontinue its entire service, 11 A.L.R. 252.

Statutory requirement of adequate service and facilities by public utility as affecting liability for loss of private property through inadequate supply of water to extinguish fire, 27 A.L.R. 1279.

Public service commission's power to require extension of gas service into new territory, 31 A.L.R. 333.

Duty of public utility to duplicate service, 52 A.L.R. 1111.

Validity of contract which impairs or tends to impair the ability of a public service corporation to serve the public, 58 A.L.R. 804.

Constitutionality of statute or ordinance requiring public utility to supply fixtures or accessories or incidental service to customers free of charge or for fixed charge, 115 A.L.R. 1162.

Special requirements of consumer as giving rise to implied contract by public utility to furnish particular amount of electricity, gas or water, 13 A.L.R.2d 1233.

73B C.J.S. Public Utilities § 73.