Springer Electric Cooperative, Inc. v. City of Raton

661 P.2d 1324, 99 N.M. 625
CourtNew Mexico Supreme Court
DecidedApril 5, 1983
DocketNo. 13892
StatusPublished

This text of 661 P.2d 1324 (Springer Electric Cooperative, Inc. v. City of Raton) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Springer Electric Cooperative, Inc. v. City of Raton, 661 P.2d 1324, 99 N.M. 625 (N.M. 1983).

Opinion

OPINION

RIORDAN, Justice.

Springer Electric Cooperative, Inc. (Cooperative) brought suit to enjoin the City of Raton (Raton) and the Raton Public Service Company (RPSC) from constructing certain electric service lines within five miles from Raton’s municipal boundary and for a declaratory judgment as to the service rights of the two utility systems in the territory within five miles of Raton’s municipal boundaries. The district court denied Cooperative relief and declared that unrestricted competition between the two utility systems was permitted. Cooperative appeals. We reverse in part and affirm in part.

The issues on appeal are:

I. Whether the district court erred in finding that Raton has not exercised or attempted to exercise any dominion over Cooperative’s franchise rights in violation of Section 3-24-7, N.M.S.A.1978.

II. Whether the district court erred in finding that certain Customers of RPSC who live within the disputed area are indispensable parties pursuant to N.M.R.Civ.P. 19, N.M.S.A.1978 (Repl.Pamp.1980).

Cooperative is a rural electric cooperative corporation, incorporated on October 30, 1944, pursuant to the Rural Electric Cooperative Act, presently compiled as Sections 62-15-1 through 62-15-32, N.M.S.A.1978 (Orig.Pamp. and Cum.Supp.1982). Cooperative renders electric utility service in five northeastern New Mexico counties, one of which is Colfax County which includes Ra-ton and the area outside its municipal boundaries. On March 15, 1967, Cooperative became a public utility and on June 20, 1967, was granted a Certificate of Public Convenience and Necessity by the New Mexico Public Service Commission to serve the area outside Raton’s municipal boundaries.

Prior to 1945, Raton acquired a municipal electric system by creating and incorporating RPSC as a municipally owned corporation with a twenty-five year franchise to operate Raton’s municipal electric facilities. All of RPSC stock is held by trustees for the sole benefit of Raton. All net utility revenues of RPSC go to Raton and are pledged to support revenue bonds to finance utility capital improvements.

On January 25, 1979, Cooperative received information that RPSC proposed to furnish electric service to three separate residential lots about 2.1 miles east of Ra-ton’s municipal boundaries. On January 26, 1979, the manager of Cooperative verbally informed the president of RPSC that Cooperative had adequate facilities and active service in the proposed residential area and that only Cooperative was the proper utility to furnish electric service to the consumers in the three individual residential lots. On February 16, 1979, Cooperative notified RPSC by letter of its facilities in the proposed residential area, of its ability, willingness, and intention to render any electrical service needed, and of its objection to any RPSC attempt to serve the three proposed residential lots. On February 23, 1979, RPSC notified Cooperative that it had begun construction of a service lines to serve the three proposed residential lots and that it was not only entitled but intended to do so under the claim that it was part of the statutory service area of the municipality. Thereafter, RPSC completed construction of the service lines.

Cooperative then brought suit against Raton and RPSC to enjoin both from furnishing electric utility service to the three residential lots and to obtain a declaration of respective rights in the five mile area. Cooperative claimed that the operation of the municipal electric utility through RPSC is ultra vires and illegal.

After a hearing, the district court found that the Rural Electric Cooperative Act was to be construed in light of Article IV, Section 26 of the New Mexico Constitution, which forbids the granting of any “exclusive right, franchise, privilege or immunity”, and that the Rural Electric Cooperative Act does not confer upon Cooperative an exclusive service territory in rural areas lying within five miles of Raton’s municipal boundaries. The district court further found that it had no statutory authority or common law jurisdiction to apportion specific territories to the parties as their exclusive service areas. Also, the district court found that Cooperative was entitled to continue the use of its rights, privileges and franchises and its transmission and distribution lines without being subject to the dominion or any interference by Raton, RPSC, or both.

On appeal, Cooperative does not contend that it has been granted or that it possesses an exclusive franchise to sell electricity in the five mile area outside Raton. Rather, Cooperative argues that the legislature limited Raton’s right to serve in that area, and that this legislative limitation does not constitute an unconstitutional exclusive franchise in violation of Article IV, Section 26.

Raton, however, claims that there is no evidence of any interference by Raton with its lines nor evidence of an attempt by Raton to regulate or exercise dominion over Cooperative’s transmission and distribution system or activities because Raton has at all time acknowledged Cooperative’s right to serve customers and to compete within the five mile zone specified in Section 3-24 — 7. Therefore, Raton argues that the district court correctly declared the rights of the parties. We disagree.

I Section 3-24-7

In order to determine the rights and any limitations of electrical utility competition between a rural electric cooperative and a municipality, we must begin by construing Section 3-24-1, N.M.S.A.1978 (Cum.Supp. 1982), which provides in pertinent part:

A. Any municipality may, by ordinance, acquire, operate and maintain an electric utility for the generation and distribution of electricity to persons residing within its service area. The service area of a municipality includes:
(1) territory within the municipality;
(2) territory within five miles of the boundary of the municipality in the case of any municipality heretofore acquiring or operating any municipal electric utility or part thereof in the territory within five miies of the boundary of the municipality in conformity with the provisions of Chapter 132, New Mexico Laws, 1945, or as subsequently amended. . . . [Emphasis added.]

Chapter 132 of the 1945 N.M. Laws (Chapter 132) provides in pertinent part:

Section 11. The provisions of this Act shall be applicable to any and all incorporated towns or villages which have contracted to purchase or construct any such public utility by written contract duly and legally entered into within one year prior to the passage of this Act, except where pledges have been made to any contemplated R.E.A. project, any such municipal corporation shall yield to any R.E.A. project where such lines or service will be extended to others in the rural area adjacent to any municipal limits and including any extensions as granted by this Act.
Section 12.

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Bluebook (online)
661 P.2d 1324, 99 N.M. 625, Counsel Stack Legal Research, https://law.counselstack.com/opinion/springer-electric-cooperative-inc-v-city-of-raton-nm-1983.