Every rate made, demanded or received by any public utility shall be just and reasonable.

History: Laws 1941, ch. 84, § 37; 1941 Comp., § 72-601; 1953 Comp., § 68-6-1.

Compiler's notes. — Sections 62-8-1 to 62-8-9 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of Chapter 62, Article 6 by Laws 1998, Chapter 108, Section 82, effective July 1, 2003 Chapter 108, Section 82 was repealed prior to taking effect by Chapter 23, Section 1, Laws 2003. Although Laws 2003, Chapter 336, Section 8, amended Laws 1998, Chapter 82, as amended, an amendment of a repealed section is ineffective.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 Laws 2003, Chapter 416, Section 5 also repealed Laws 1998, Chapter 108, Section 82, as amended, a second time, however, that repeal is of no effect as the section had previously been repealed by Chapter 23, Section 1, Laws 2003.

Cross references. — For commission jurisdiction over rates, see 62-6-4 NMSA 1978 and notes thereto.

For commission jurisdiction over water and sanitation district rates, see 73-21-16 L NMSA 1978.

Balancing of interests required. — To set a just and reasonable rate, the commission must balance the investor's interest against the ratepayer's interest. In re Timeron Water Co., 1992-NMSC-047, 114 N.M. 154, 836 P.2d 73.

Rate requests carried out under Section 62-8-7 NMSA 1978. — Section 62-8-7 NMSA 1978 is the provision under which the overall purpose of this section is carried out for the given instance of a rate request. Otero Cnty. Elec. Coop. v. N.M. Pub. Serv. Comm'n, 1989-NMSC-033, 108 N.M. 462, 774 P.2d 1050.

Commission not limited in method of valuating utility or setting rates. — Neither New Mexico case law nor the Public Utility Act imposes any one particular method of valuation upon the commission in ascertaining the rate base of a utility; nor does the spirit of the statute tie the commission down to the consideration of a single factor in establishing rates. Hobbs Gas Co. v. N.M. Pub. Serv. Comm'n, 1980-NMSC-005, 94 N.M. 731, 616 P.2d 1116.

As commission is vested with considerable discretion in determining whether a rate to be received and charged is just and reasonable. Hobbs Gas Co. v. N.M. Pub. Serv. Comm'n, 1980-NMSC-005, 94 N.M. 731, 616 P.2d 1116.

Commission's remedy for utility's imprudent decision was reasonable. — Where PNM appealed the New Mexico public regulation commission's (commission) denial of recovery in its rate base for the repurchase of 64.1 MW of capacity and certain lease renewals at Palo Verde nuclear generating station (Palo Verde), and where the commission found that PNM's decisions were imprudent on the basis that PNM had failed to demonstrate that it considered alternative courses of action, the commission's remedy of disallowing recovery for the amount PNM paid for the 64.1 MW over the net book value of that capacity and allowing PNM to recover the costs of the five renewed leases was reasonable and lawful. The commission established valuations for the 64.1 MW and the renewed lease, which it considered appropriate to protect ratepayers and result in just and reasonable rates, and such an approach is a lawful and reasonable exercise of the commission's authority to determine the rate base of a utility and its obligation to ensure that rates are just and reasonable. It was reasonable and lawful for the commission to conclude that a total disallowance was not justified. Public Serv. Co. of N.M. v. N.M. Pub. Regulation Comm'n, 2019-NMSC-012.

Commission did not exceed its authority in denying utility's recovery for costs. — Where PNM appealed the New Mexico public regulation commission's (commission) decision to deny it recovery for the costs of converting certain San Juan generating station units to a balanced draft system, which is designed to reduce fugitive emissions, on the grounds that PNM had failed to demonstrate that these costs were prudently incurred, the commission was within its authority in denying recovery, because the commission's finding that balanced draft was included in the permits for San Juan at PNM's request and not because it was required by the applicable environmental regulation was a finding specifically concerning the reasonableness of costs PNM was seeking to include in its rate base and was squarely within the authority of the commission to regulate the rates of public utilities and the obligation of the commission to ensure that those rates are just and reasonable. Public Serv. Co. of N.M. v. N.M. Pub. Regulation Comm'n, 2019-NMSC-012.

Discretion to review rates efficiently. — The statutory scheme vests broad discretion in the commission to review utility rates in an efficient and reasonable manner. Otero Cnty. Elec. Coop. v. N.M. Pub. Serv. Comm'n, 1989-NMSC-033, 108 N.M. 462, 774 P.2d 1050.

Assignment of issue to separate proceeding. — The commission may assign an issue raised in a rate request hearing to a separate proceeding. Otero Cnty. Elec. Coop. v. N.M. Pub. Serv. Comm'n, 1989-NMSC-033, 108 N.M. 462, 774 P.2d 1050.

If plant acquisition adjustment is included as legitimate plant cost, it becomes a part of the rate base upon which a rate of return is to be computed. Hobbs Gas Co. v. N.M. Pub. Serv. Comm'n, 1980-NMSC-005, 94 N.M. 731, 616 P.2d 1116.

Ordering increase in contract rate is within commission's jurisdiction. — Where the commission had entered an order authorizing a public utility to enter into a contract and to continue to charge the gas rate therein specified until further order and on the ex parte petition of the utility subsequently entered an interlocutory order making a rate increase to be effective until the commission could hold a hearing to determine and set a new and proper rate, the commission was moving strictly in conformity with the act creating it to determine one of the major questions submitted to its jurisdiction - a question of rates. Potash Co. of Am. v. N.M. Pub. Serv. Comm'n, 1956-NMSC-091, 62 N.M. 1, 303 P.2d 908.

Burden of proof on utility. — The legislature has granted the commission discretion to place the burden of proof on the utility in any rate proceeding. Otero Cnty. Elec. Coop. v. N.M. Pub. Serv. Comm'n, 1989-NMSC-033, 108 N.M. 462, 774 P.2d 1050.

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

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).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Utilities §§ 79 to 87.

Judicial relief from contract rates which have become inadequate, 6 A.L.R. 1659, 10 A.L.R. 1335.

Validity, construction and effect of provisions for the appropriation of excess income of public utility, 33 A.L.R. 488.

Variations of electric utility rates based on quantity used, 67 A.L.R. 821.

Right of public utility to make minimum monthly bill or fixed monthly service charge, 122 A.L.R. 193.

Discrimination between property within and that outside governmental districts as to public service or utility rates, 4 A.L.R.2d 595.

Special requirements of consumer as giving rise to liability, based on implied contract, for failure to furnish particular amount of electricity, gas or water, 13 A.L.R.2d 1233.

Variations of utility rates based on flat and meter rates, 40 A.L.R.2d 1331.

Amount paid by public utility to affiliate for goods or services as includible in utility's rate base and operating expenses in rate proceeding, 16 A.L.R.4th 454.

Public utilities: validity of preferential rates for elderly or low-income persons, 29 A.L.R.4th 615.

Public utility's right to recover cost of nuclear power plants abandoned before completion, 83 A.L.R.4th 183.

73B C.J.S. Public Utilities §§ 15 to 59.