The Utility Franchise

NMSA 1978 ch. 62, art. 9

in effect

NMSA 1978, § 62-9-1 New construction; ratemaking principles

62-9-1. New construction; ratemaking principles A. No public utility shall begin the construction or operation of any public utility plant or system or of any extension of any plant or system without first obtaining from the commission a certificate that public convenience and necessity require or will require such construction or operation. This section does not require a public utility to secure a certificate for an extension within any municipality or district within which it lawfully commenced operations before June 13, 1941 or for an extension within or to territory already served by it, necessary in the ordinary course of its business, or for an extension into territory contiguous to that already occupied by it and that is not receiving similar service from another utility. If any public utility or mutual domestic water consumer association in constructing or extending its line, plant or system unreasonably interferes or is about to unreasonably interfere with the service or system of any other public utility or mutual domestic water consumer association rendering the same type of service, the commission, on complaint of the public utility or mutual domestic water consumer association claiming to be injuriously affected, may, upon and pursuant to the applicable procedure provided in Chapter 62, Article 10 NMSA 1978, and after giving due regard to public convenience and necessity, including reasonable service agreements between the utilities, make an order and prescribe just and reasonable terms and conditions in harmony with the Public Utility Act [Articles 1 through 6 and 8 through 13 of Chapter 62 NMSA 1978] to provide for the construction, development and extension, without unnecessary duplication and economic waste. B. If a certificate of public convenience and necessity is required pursuant to this section for the construction or extension of a generating plant or transmission lines and associated facilities, a public utility may include in the application for the certificate a request that the commission determine the ratemaking principles and treatment that will be applicable for the facilities that are the subject of the application for the certificate. If such a request is made, the commission shall, in the order granting the certificate, set forth the ratemaking principles and treatment that will be applicable to the public utility's stake in the certified facilities in all ratemaking proceedings on and after such time as the facilities are placed in service. The commission shall use the ratemaking principles and treatment specified in the order in all proceedings in which the cost of the public utility's stake in the certified facilities is considered. If the commission later decertifies the facilities, the commission shall apply the ratemaking principles and treatment specified in the original certification order to the costs associated with the facilities that were incurred by the public utility prior to decertification. C. The commission may approve the application for the certificate without a formal hearing if no protest is filed within sixty days of the date that notice is given, pursuant to commission order, that the application has been filed. The commission shall issue its order granting or denying the application within nine months from the date the application is filed with the commission. Failure to issue its order within nine months is deemed to be approval and final disposition of the application; provided, however, that the commission may extend the time for granting approval for an additional six months for good cause shown. D. Notwithstanding the time lines contained in Subsection C of this section, for applications certified by the economic development department pursuant to Subsection F of Section 62-6-26 NMSA 1978, the commission shall issue an order granting or denying the application within six months from the date the application is filed with the commission. Failure to issue the commission's order within six months is deemed to be approval and final disposition of the application; provided, however, that the commission may extend the time for granting approval for an additional three months for good cause shown. E. In an application for a certificate of public convenience and necessity for an energy storage system, the commission shall approve energy storage systems that: (1) reduce costs to ratepayers by avoiding or deferring the need for investment in new generation and for upgrades to systems for the transmission and distribution of energy; (2) reduce the use of fossil fuels for meeting demand during peak load periods and for providing ancillary services; (3) assist with ensuring grid reliability, including transmission and distribution system stability, while integrating sources of renewable energy into the grid; (4) support diversification of energy resources and enhance grid security; (5) reduce greenhouse gases and other air pollutants resulting from power generation; (6) provide the public utility with the discretion, subject to applicable laws and rules, to operate, maintain and control energy storage systems so as to ensure reliable and efficient service to customers; and (7) are the most cost effective among feasible alternatives. F. As used in this section: (1) "energy storage system" means methods and technologies used to store electricity; and (2) "mutual domestic water consumer association" means an association created and organized pursuant to the provisions of: (a) Laws 1947, Chapter 206; Laws 1949, Chapter 79; or Laws 1951, Chapter 52; or (b) the Sanitary Projects Act [Chapter 3, Article 29 NMSA 1978]. Laws 1941, ch. 84, § 46; 1941 Comp., § 72-701; 1953 Comp., § 68-7-1; Laws 1965, ch. 289, § 10; 1967, ch. 96, § 1; 1990, ch. 95, § 1; 2000, ch. 51, § 1; 2005, ch. 340, § 1; 2019, ch. 65, § 25; 2025, ch. 71, § 4.

NMSA 1978, § 62-9-1.1 Additional authority with respect to water and sewer utilities

62-9-1.1. Additional authority with respect to water and sewer utilities A. Notwithstanding any other provision of the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978], or any provision of the Municipal Code [Chapter 3 NMSA 1978, except Article 66], or any privilege granted under either act, if any municipality that has not elected to come within the terms of the Public Utility Act, as provided in Section 62-6-5 NMSA 1978, constructs or extends or proposes to construct or extend its water or sewer line or system or water pumping station or reservoir into a geographical area described in a certificate of public convenience and necessity granted by the commission to a public utility rendering the same type of service, the commission, on complaint of the public utility claiming to be injuriously affected thereby, shall, after giving notice to the municipality and affording the municipality an opportunity for a hearing with respect to the issue of whether its water or sewer line, plant or system actually intrudes or will intrude into the area certificated to the public utility, determine whether such intrusion has occurred or will occur. If the commission determines such an intrusion has occurred or will occur, the municipality owning or operating the water or sewer utility shall cease and desist from making such construction or extension in the absence of written consent of the public utility involved and approval of the commission. B. The authority and jurisdiction conferred by Subsection A of this section shall be in addition and cumulative to the independent authority of the commission to determine territorial disputes between public utilities and between mutual domestic water consumer associations and public utilities as provided in Section 62-9-1 NMSA 1978, which provisions shall govern the resolution of a territorial dispute between a municipality that has elected to come within the terms of the Public Utility Act, as provided in Section 62-6-5 NMSA 1978, and any other public utility rendering the same type of service. Provided, however, in the event that a certificate of public convenience and necessity granted to such a municipality overlaps, or conflicts with, a valid certificate previously issued by the commission and exercised within the term required under Section 62-9-4 NMSA 1978, the municipal utility shall be permitted to continue operation of its plant, line and system in existence upon the effective date of this 1991 act and the other public utility may continue service in the area covered by its certificate, subject to the other provisions of the Public Utility Act. C. For purposes of this section, "municipality" means any municipality that has a population of more than two hundred thousand as determined in the most recent federal decennial census and is located in a class A county. Laws 1991, ch. 143, § 2.

NMSA 1978, § 62-9-2 Applications by utilities brought under the Public Utility Act

62-9-2. Applications by utilities brought under the Public Utility Act A. Within sixty days after the effective date of this 1967 act, each utility brought within the jurisdiction of the commission by virtue of this 1967 act shall file with the commission an application, in such form as may be prescribed by the commission, for a certificate of public convenience and necessity covering its present plant, lines and system. Upon proof of the existence and operation of the plant, lines and system upon the effective date of this 1967 act, the commission shall grant the certificate to the utility. B. In the event the certificate granted a utility under Subsection A of this section overlaps or conflicts with a valid certificate heretofore issued by the commission and exercised within the time required under Section 62-9-4 NMSA 1978, both certificates shall be valid and both utilities shall be permitted to continue service subject to the other provisions of the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978], as amended. 1953 Comp., § 68-7-1.1, enacted by Laws 1967, ch. 96, § 7; 1993, ch. 282, § 35.

NMSA 1978, § 62-9-2.1 Applications by sewer utilities brought under the Public Utility Act

62-9-2.1. Applications by sewer utilities brought under the Public Utility Act Within six months after the effective date of these 1987 amendments to the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978], each sewer utility brought within the jurisdiction of the commission by virtue of these 1987 amendments to the Public Utility Act shall file with the commission an application, in such form as may be prescribed by the commission, for a certificate of public convenience and necessity covering its present plant, lines and system. Upon proof of the existence and operation thereof upon the effective date of these 1987 amendments to the Public Utility Act, the commission shall grant to the utility such certificate. The commission shall enter upon a hearing to determine whether the rate or rates of such a sewer utility in effect on the effective date of these amendments to the Public Utility Act are just and reasonable pursuant to Subsection D of Section 62-8-7 NMSA 1978 upon the filing with the commission of protests signed by ten percent or more of the ratepayers receiving sewer service from such a sewer utility. For purposes of this section, each person who receives a separate bill equals one ratepayer and each person who receives multiple bills equals one ratepayer. The protest shall be signed by the person in whose name service is carried. The protests shall be filed no later than sixty days after the filing with the commission of an application by the sewer utility for a certificate of public convenience and necessity as prescribed by this section. Each sewer utility filing an application for a certificate of public convenience and necessity under this section shall be required at the time of filing to give written notice to its ratepayers of the filing of its application and the ratepayers' rights to protest its rates under this section. Laws 1987, ch. 52, § 4; 1993, ch. 282, § 36.

NMSA 1978, § 62-9-3 Location control; limitations

62-9-3. Location control; limitations A. The legislature finds that it is in the public interest to consider any adverse effect upon the environment and upon the quality of life of the people of the state that may occur due to plants, facilities and transmission lines needed to supply present and future electrical services. It is recognized that such plants, facilities and transmission lines will be needed to meet growing demands for electric services and cannot be built without in some way affecting the physical environment where these plants, facilities and transmission lines are located. The legislature therefore declares that it is the purpose of this section to provide for the supervision and control by the commission of the location within this state of new plants, facilities and transmission lines for the generation and transmission of electricity for sale to the public. B. A person, including any municipality, shall not begin the construction of any plant designed for or capable of operation at a capacity of three hundred thousand kilowatts or more for the generation of electricity for sale to the public within or without this state, whether or not owned or operated by a person that is a public utility subject to regulation by the commission, or of transmission lines in connection with such a plant, on a location within this state unless the location has been approved by the commission. For the purposes of this section, "transmission line" means any electric transmission line and associated facilities designed for or capable of operations at a nominal voltage of two hundred thirty kilovolts or more, to be constructed in connection with and to transmit electricity from a new plant for which approval is required. C. Application for approval shall contain all information required by the commission to make its determination, be made in writing setting forth the facts involved and be filed with the commission. The commission shall, after a public hearing and upon notice as the commission may prescribe, act upon the application. The commission may condition its approval upon a demonstration by the applicant that it has received all necessary air and water quality permits. A public utility regulated by the commission may submit an application pursuant to Section 62-9-1 NMSA 1978 for a certificate of public convenience and necessity prior to filing an application for location approval pursuant to this section in order to determine the need for the generating plant or transmission line prior to determination of the appropriate location. D. Approval shall not be required for additions to or modifications of an existing plant or transmission line. E. The commission shall approve the application for the location of the generating plant unless the commission finds that the operations of the facilities for which approval is sought will not be in compliance with all applicable air and water pollution control standards and regulations existing or will unduly impair system reliability. The commission shall not require compliance with performance standards other than those established by the agency of this state having jurisdiction over a particular pollution source. F. The commission shall approve the application for the location of the transmission lines unless the commission finds that the location will unduly impair important environmental values or the operation of the proposed transmission lines will unduly impair power system reliability. G. An application shall not be approved pursuant to this section that violates an existing state, county or municipal land use statutory or administrative regulation unless the commission finds that the regulation is unreasonably restrictive and compliance with the regulation is not in the interest of the public convenience and necessity, in which event and to the extent found by the commission, the regulation shall be inapplicable and void as to the siting. When it becomes apparent to the commission that an issue exists with respect to whether a regulation is unreasonably restrictive and compliance with the regulation is not in the interest of public convenience and necessity, it shall promptly serve notice of that fact by certified mail upon the agency, board or commission having jurisdiction for land use of the area affected and shall make the agency, board or commission a party to the proceedings upon its request and shall give it an opportunity to respond to the issue. The judgment of the commission shall be conclusive on all questions of siting, land use, aesthetics and any other state or local requirements affecting the siting. H. A public utility subject to the jurisdiction of the commission may elect to file an application pursuant to this section with the commission for location approval of an electric transmission line or associated facilities designed for or capable of operation at a nominal voltage of one hundred fifteen kilovolts or more but less than two hundred thirty kilovolts if: (1) the public utility files an application for construction, extension, rebuilding or improvement of the electric transmission line or associated equipment under any applicable county or municipal land use statute, ordinance or administrative regulation; and (2) the agency, board or commission of the county or municipality disapproves the application. For purposes of this subsection, "disapprove" means the failure of the county or municipal agency, board or commission to issue a final order approving the application within two hundred forty days of the public utility's filing of a complete application with the agency, board or commission. An application shall be deemed complete if within fifteen working days of the public utility's filing of the application, or a supplement or amendment thereto, the agency, board or commission fails to send written notice to the public utility enumerating the specific requirements under the applicable county or municipal land use statute, ordinance or administrative regulation that the application fails to satisfy. I. Upon consideration of the application and the standards set forth in Subsection G of this section, the commission may authorize construction, extension, rebuilding or improvement of the transmission line or facilities notwithstanding the prior disapproval of the county or municipal agency, board or commission. The judgment of the commission shall be conclusive on all questions of siting, land use, aesthetics and any other state or local requirements affecting the siting. J. Nothing in this section shall be deemed to confer upon the commission power or jurisdiction to regulate or supervise any person, including a municipality, that is not otherwise a public utility regulated and supervised by the commission, with respect to its rates and service and with respect to its securities, nor shall any other provision of the Public Utility Act be applicable with respect to such a person, including a municipality. K. The commission may approve an application filed pursuant to this section without a formal hearing if no protest is filed within sixty days of the date that notice is given that the application has been filed. The commission shall issue its order granting or denying the application within six months from the date the application is filed with the commission; provided, however, that: (1) if a public utility simultaneously files an application for approval of location of a transmission line pursuant to this section and an application for a certificate of public convenience and necessity pursuant to Subsection B of Section 62-9-1 NMSA 1978, the commission shall issue its order granting or denying the applications within nine months from the date the applications are filed with the commission; provided, however, that the commission may extend the time for granting approval an additional six months for good cause shown; (2) if a public utility files an application for approval of location of a transmission line pursuant to this section after its application for a certificate of public convenience and necessity has been approved pursuant to Subsection B of Section 62-9-1 NMSA 1978, the commission shall issue its order granting or denying the application for approval of location of a transmission line within ninety days from the date the application is filed with the commission; and (3) if a public utility files an application for approval of location of a transmission line pursuant to this section while its application for a certificate of public convenience and necessity is pending pursuant to Subsection B of Section 62-9-1 NMSA 1978, and the application for a certificate is subsequently approved, the commission shall issue its order granting or denying the application for approval of location of a transmission line within ninety days from the date the application for certificate of public convenience and necessity is approved. L. Failure to issue its order approving or denying an application filed pursuant to this section within the time periods set forth in Subsection [J] K of this section is deemed to be approval of the application; provided, however, that the commission may extend the time for granting approval for a transmission line that is subject to this section for an additional nine months upon finding that the additional time is necessary to determine if the proposed location of the line will unduly impair important environmental values. M. In determining if the proposed location of the transmission line will unduly impair important environmental values, the commission may consider the following factors: (1) existing plans of the state, local government and private entities for other developments at or in the vicinity of the proposed location; (2) fish, wildlife and plant life; (3) noise emission levels and interference with communication signals; (4) the proposed availability of the location to the public for recreational purposes, consistent with safety considerations and regulations; (5) existing scenic areas, historic, cultural or religious sites and structures or archaeological sites at or in the vicinity of the proposed location; and (6) additional factors that require consideration under applicable federal and state laws pertaining to the location. 1953 Comp., § 68-7-1.2, enacted by Laws 1971, ch. 248, § 1; 2001, ch. 303, § 1; 2005, ch. 339, § 6; 2005, ch. 340, § 2.

NMSA 1978, § 62-9-3.1 Limited regulation of certain jointly owned generation facilities

62-9-3.1. Limited regulation of certain jointly owned generation facilities No municipality or H class county shall hereafter begin construction or operation of any jointly owned generating facility within this state without first obtaining from the commission a certificate that public convenience and necessity require or will require such construction or operation; provided, however, that the commission's regulation shall be limited to such determination unless the municipality or H class county has elected to come under the general supervision of the commission as provided by law. Laws 1979, ch. 260, § 18.

NMSA 1978, § 62-9-3.2 Application for determination of right-of-way width

62-9-3.2. Application for determination of right-of-way width A. Unless otherwise agreed to by the parties, no person shall begin the construction of any transmission line requiring a width for right of way of greater than one hundred feet without first obtaining from the commission a determination of the necessary right-of-way width to construct and maintain the transmission line. For the purposes of this subsection, "construction" does not include acquisition of rights of way, preparation of surveys or ordering of equipment. B. For the purposes of this section, "transmission line" means any electric transmission line and associated facilities requiring a width for right of way of greater than one hundred feet. C. Application for the right-of-way width determination shall contain all information required by the commission to make its determination, be made in writing, setting forth the facts involved, and be filed with the commission. D. The applicant shall cause notice of the time and place of hearing on the application for the right-of-way determination to be given to any owner of property proposed to be taken and, if applicable, to the person in actual occupancy of the property. Notice shall be given by mailing a copy by ordinary first class mail at least twenty days before the time set for hearing. Proof of the giving of notice shall be made on or before the hearing and filed in the proceeding. E. The commission shall, after public hearing, act upon the application. F. The commission shall issue its order granting or denying the application within six months from the date the application is filed with the commission. Failure to issue its order within six months is deemed to be approval of the application. Laws 1980, ch. 20, § 18; 1993, ch. 282, § 37; 2001, ch. 303, § 2.

NMSA 1978, § 62-9-4 Authority exercised

62-9-4. Authority exercised A certificate of convenience and necessity shall remain in full force and effect for the period designated by the commission unless such authority is modified or becomes void because the authority has not been exercised within such period. 1978 Comp., § 62-9-4, enacted by Laws 1980, ch. 20, § 19.

NMSA 1978, § 62-9-5 Abandonment of service

62-9-5. Abandonment of service No utility shall abandon all or any portion of its facilities subject to the jurisdiction of the commission, or any service rendered by means of such facilities, without first obtaining the permission and approval of the commission. The commission shall grant such permission and approval, after notice and hearing, upon finding that the continuation of service is unwarranted or that the present and future public convenience and necessity do not otherwise require the continuation of the service or use of the facility; provided, however, that ordinary discontinuance of service or use of facilities for nonpayment of charges, nonuser or other reasons in the usual course of business shall not be considered as abandonment. In considering the present and future public convenience and necessity, the commission shall specifically consider the impact of the proposed abandonment of service on all consumers served in this state, directly or indirectly, by the facilities sought to be abandoned. Laws 1941, ch. 84, § 48; 1941 Comp., § 72-703; 1953 Comp., § 68-7-3; Laws 1983, ch. 250, § 3; 2005, ch. 276, § 1.

NMSA 1978, § 62-9-6 Certificates; application; issuance

62-9-6. Certificates; application; issuance Before any certificate may be issued under Sections 62-9-1 through 62-9-6 New Mexico Statutes Annotated, 1978 Compilation, a certified copy of its articles of incorporation or charter, if the applicant be a corporation, shall be on file in the office of the commission. Every applicant for a certificate shall give such reasonable notice of its application as the commission may require and shall file in the office of the commission such evidence as shall be required by the commission to show that such applicant has received the consent and franchise from the municipality wherein construction and operation is proposed. The commission shall have power, after hearing, to issue said certificate, as prayed for, or to refuse to issue the same, or to issue it for the construction or operation of a portion only of the contemplated facility, line, plant or system, or extension thereof, or for the partial exercise only of said rights or privilege, and may attach to the exercise of the rights granted by said certificates such terms and conditions in harmony with the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978], as amended, as in its judgment the public convenience and necessity may require. Except as otherwise provided in Section 62-9-2 New Mexico Statutes Annotated, 1978 Compilation, in determining whether any certificate shall issue as prayed for, the commission shall give due regard to public convenience and necessity including, but not limited to, any reasonable service agreement between the applicant and another utility and unnecessary duplication and economic waste. Whenever a public utility is engaged or is about to engage in construction or operation without having secured a certificate of public convenience and necessity as required by the provisions of the Public Utility Act, as amended, any interested person may file a complaint with the commission. The commission may, with or without notice, make its order requiring the public utility complained of to cease and desist from such construction or operation until the commission makes and files its decision on said complaint or until the further order of the commission. The commission may after hearing, after reasonable notice, make such order and prescribe such terms and conditions in harmony with the Public Utility Act, as amended, as are just and reasonable. 1953 Comp., § 68-7-4, enacted by Laws 1967, ch. 96, § 8.

NMSA 1978, § 62-9-7 Legislative declaration; voluntary service agreements

62-9-7. Legislative declaration; voluntary service agreements A. The legislature declares that the existing scheme of public utility regulation is adequate to exempt voluntary service agreements, as approved and regulated pursuant to the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978], from the antitrust laws. B. In exercising its authority pursuant to Chapter 62, Article 9 NMSA 1978, the commission may, after public hearing upon at least twenty days notice, approve voluntary service agreements between utilities providing similar service proposing the delineation between themselves of one or more service areas in which each shall be entitled to furnish service, if the commission first determines that the proposed delineation of service areas is consistent with the public convenience and necessity and otherwise conforms to the Public Utility Act. C. Voluntary service agreements that the commission, after public notice and hearing, has previously approved are deemed to comply with Subsection A of this section and to have the same effect as if approved pursuant to Subsection B of this section. D. Approval of a voluntary service agreement shall not affect the duties and restrictions imposed upon a public utility pursuant to Chapter 62, Article 8 NMSA 1978. Laws 1991, ch. 121, § 1.

Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18565/index.doFetched: 10/20/2026