Sw. Pub. Serv. Co. v. N.M. Pub. Regul. Comm'n

Opinion

The slip opinion is the first version of an opinion released by the Chief Clerk of the Supreme Court. Once an opinion is selected for publication by the Court, it is assigned a vendor-neutral citation by the Chief Clerk for compliance with Rule 23- 112 NMRA, authenticated and formally published. The slip opinion may contain deviations from the formal authenticated opinion.

2 Opinion Number:

3 Filing Date: January 16, 2025

4 NO. S-1-SC-39432

7 Appellant,

8 and

12 Intervenors-Appellants,

13 v.

16 Appellee,

17 and

23 and COALITION OF SUSTAINABLE 1 Intervenors-Appellees.

2 In the Matter of the Commission’s 3 Adoption of Rules Pursuant to the 4 Community Solar Act, NMPRC 5 Case No. 21-00112-UT

8 Hinkle Shanor, LLP 9 Dana S. Hardy 10 Timothy B. Rode 11 Santa Fe, NM

12 Erika M. Kane, Lead General Counsel 13 Austin TX

14 for Appellant

15 Russell R. Fisk, Associate General Counsel 16 Erin E. LeCocq, Special Counsel 17 Santa Fe, NM

18 for Appellee

19 Jason Marks Law, LLC 20 Jason A. Marks 21 Albuquerque, NM

22 Keyes & Fox LLP 23 Lee Ewing 24 Denver, CO

25 for Intervenors-Appellees Coalition for Community Solar Access, Renewable 26 Energy Industries Association of New Mexico 1 PNM Resources, Inc. 2 Stacey J. Goodwin, Associate General Counsel 3 Albuquerque, NM

4 Wilkinson Barker Knauer LLP 5 Debrea A. Terwilliger 6 Denver, CO

7 for Intervenor-Appellant Public Service Company of New Mexico

8 El Paso Electric Company 9 Nancy B. Burns, Deputy General Counsel 10 Santa Fe, NM

11 Montgomery & Andrews, P.A. 12 Jeffrey J. Wechsler 13 Kari E. Olson 14 Santa Fe, NM

15 for Intervenor-Appellant El Paso Electric Company

16 Office of the City Attorney 17 Jennifer Vega 18 Jocelyn A. Garrison 19 Las Cruces, NM

20 Stevens Law LLC 21 Anastasia S. Stevens 22 Santa Fe, NM

23 for Intervenor-Appellee City of Las Cruces

24 New Energy Economy 25 Mariel Nanasi 26 Santa Fe, NM 1 for Intervenor-Appellee New Energy Economy

2 Stephanie Dzur 3 Albuquerque, NM

4 for Intervenor-Appellee Coalition for Sustainable Communities New Mexico

6 NO. S-1-SC-39558

9 Appellant,

10 v.

13 Appellee.

14 In the Matter of the Commission’s 15 Adoption of Rules Pursuant to the 16 Community Solar Act, NMPRC 17 Case No. 21-00112-UT

20 Hinkle Shanor, LLP 21 Dana S. Hardy 22 Timothy B. Rode 23 Santa Fe, NM

24 Erika M. Kane, Lead General Counsel 1 Austin TX

2 for Appellant

3 Russell R. Fisk, Associate General Counsel 4 Erin E. LeCocq, Special Counsel 5 Santa Fe, NM

6 for Appellee

7 AND

8 NO. S-1-SC-39611

11 Appellant,

12 v.

15 Appellee.

16 In the Matter of Implementation 17 and Administration of the Community 18 Solar Program, Case No. 22-00020-UT

19 In the Matter of the Compliance 20 Filing of Southwestern Public Service 21 Company Pursuant to 17.9.573.9 22 NMAC, Case No. 22-00240-UT

23 In the Matter of the Application of El Paso 24 Electric Company for Approval 25 of Tariffs Necessary for 1 Implementation of the New Mexico 2 Community Solar Program and 3 Accounting Order, Case No. 22-00243-UT

6 Hinkle Shanor, LLP 7 Dana S. Hardy 8 Timothy B. Rode 9 Santa Fe, NM

10 Erika M. Kane, Lead General Counsel 11 Austin TX

12 for Appellant

13 Russell R. Fisk, Associate General Counsel 14 Erin E. LeCocq, Special Counsel 15 Santa Fe, NM

16 for Appellee

17 AND

18 NO. S-1-SC-39678

21 Appellant,

22 v.

25 Appellee. 1 In the Matter of Implementation 2 and Administration of the Community 3 Solar Program, Case No. 22-00020-UT

4 In the Matter of the Compliance 5 Filing of Southwestern Public Service 6 Company Pursuant to 17.9.573.9 7 NMAC, Case No. 22-00240-UT

8 In the Matter of the Application of El 9 Paso Electric Company for Approval 10 of Tariffs Necessary for 11 Implementation of the New Mexico 12 Community Solar Program and 13 Accounting Order, Case No. 22-00243-UT

16 Hinkle Shanor, LLP 17 Dana S. Hardy 18 Timothy B. Rode 19 Santa Fe, NM

20 Erika M. Kane, Lead General Counsel 21 Austin TX

22 for Appellant

23 Russell R. Fisk, Associate General Counsel 24 Erin E. LeCocq, Special Counsel 25 Santa Fe, NM

26 for Appellee

2 ZAMORA, Justice.

3 {1} In this appeal we decide whether the Community Solar Rule, 17.9.573 NMAC

4 (7/12/2022 as amended through 10/22/2024) (the Rule), is contrary to various

5 provisions of the Community Solar Act (the Act), NMSA 1978, §§ 62-16B-1 to -8

6 (2021, as amended through 2022), and is therefore “unreasonable or unlawful,”

7 NMSA 1978, § 62-11-5 (1982). Among other things, Appellant Southwestern Public

8 Service Company (SPS) and Intervenors Public Service Company of New Mexico

9 (PNM) and El Paso Electric Company (EPE) (the Utilities)1 challenge the Rule’s

10 prohibition against subtracting transmission costs from a utility’s community solar

11 bill-credit rate as an unlawful subsidy under the Act. See 17.9.573.20(D) NMAC;

12 see also § 62-16B-7(B)(8) (setting forth requirements for “a community solar bill

13 credit rate mechanism,” including that “non-subscribers shall not subsidize costs

14 attributable to subscribers”). We hold that prohibiting the subtraction of transmission

15 costs from the bill-credit rate is a reasonable exercise of the policy-making authority

16 delegated under the Act to the New Mexico Public Regulation Commission. We

1 Unless otherwise noted, SPS is joined in its substantive challenges to the Rule by PNM and EPE. The City of Las Cruces and four advocacy organizations also intervened and filed an answer brief in support of the Rule and the various orders challenged in this appeal. 1 therefore affirm the Commission on that issue. See § 62-11-5. We similarly hold that

2 the other provisions of the Rule challenged by the Utilities are neither unreasonable

3 nor unlawful, and we affirm the Commission’s adoption of the Rule in full. See id.

4 {2} We also must decide (1) whether the Rule must be vacated and annulled

5 because of possible ex parte communications after the close of the rulemaking record

6 purportedly in violation of statute and due process and (2) whether the Commission

7 violated the statute and due process by rejecting SPS’s original, proposed bill-credit

8 rate without a hearing. Answering both questions in the negative, we affirm the

9 Commission’s orders challenged in this appeal.

11 {3} This consolidated appeal centers on the Commission’s efforts to promulgate

12 and enforce rules to implement the Community Solar Act. In brief, the Act provides

13 for the creation and development of community solar facilities, which are subscriber-

14 owned or operated facilities that produce solar-generated electricity, are located

15 within a public utility’s service territory, and are interconnected to the utility’s

16 distribution system. See § 62-16B-2(D) (defining “community solar facility”); § 62-

17 16B-3(A)(2) (setting forth requirements for the location and interconnection of

18 community solar facilities); § 62-16B-4(A) (providing for ownership of community

19 solar facilities). A community solar subscriber receives a credit from the utility on

2 1 the subscriber’s electric bill, calculated by multiplying a per-kilowatt-hour rate

2 determined by the Commission by up to one hundred percent of the electricity the

3 subscriber consumed. Section 62-16B-2(D); see also § 62-16B-2(C) (defining

4 “community solar bill credit rate”); § 62-16B-5(A)(1) (setting forth subscription

5 requirements). The Rule’s requirements for establishing the bill-credit rate are the

6 subjects of several challenges in this appeal.

7 {4} The Act, which was signed into law in April 2021, mandates an aggressive

8 timeline for promulgating rules to establish a community solar program. See 2021

9 N.M. Laws ch. 34, § 7; see also § 62-16B-7(B) (“The Commission shall adopt rules

10 to establish a community solar program by no later than April 1, 2022.”); see also §

11 62-16B-7(E) (requiring a comprehensive report to “the appropriate interim

12 legislative committee” by November 1, 2024, “on the status of the community solar

13 program, including . . . an evaluation of the effectiveness of the [C]ommission’s

14 rules to implement the [Act] and any recommended changes”). The Act also

15 prescribes a detailed list of ten subject areas the eventual rules must address through

16 a broadly inclusive rulemaking process. See § 62-16B-7(B); see also § 62-16B-7(D)

17 (requiring the Commission to “solicit input from relevant state agencies, public

18 utilities, low-income stakeholders, disproportionately impacted communities,

19 potential owners or operators of community solar facilities, Indian nations, tribes

3 1 and pueblos and other interested parties in its rulemaking process”).

2 {5} In response to the Act’s timeline and detailed rulemaking requirements, the

3 Commission opened a rulemaking docket in May 2021 and contracted with a

4 specialized consulting firm to “advise and assist with regard to the . . . rulemaking

5 . . . , including substantive issues such as the content of any rule as well as procedural

6 issues such as facilitating stakeholder engagement in the process.” The Commission

7 also announced the formation, “within the Commission, [of] a Community Solar

8 Action Team (the ‘Team’),” composed of two commissioners and unnamed

9 representatives of the Commission’s Utilities Division Staff, Office of General

10 Counsel, and Chief of Staff, “among others.” The Team’s stated purposes were to

11 “take a leading role in the rulemaking process, [to] interface with [the consultant],

12 and [to] endeavor to maximize stakeholder engagement.”

13 {6} After five months of soliciting input through workshops and working groups,

14 the Commission filed its Order Issuing Notice of Proposed Rulemaking (the Notice)

15 in late October 2021. The Notice summarized the Commission’s informal

16 proceedings, culminating in the consultant’s comprehensive status report

17 summarizing stakeholder input and providing recommendations for the proposed

18 rule. The Notice also included the proposed rule itself, which the Commission

19 acknowledged was incomplete due to “insufficient time and insufficient resources

4 1 to formulate a comprehensive proposed rule in the informal proceedings.”

2 Accordingly, the Notice included a list, recommended by the Team, of “Additional

3 Issues to be Addressed in Formal Comment Process.”

4 {7} After the comment period ended, the Commission issued its Order Adopting

5 the Rule on March 30, 2022, two days before the statutory deadline. See § 62-16B-

6 7(B). In addition to providing the text of the final rule, the order summarized the

7 formal comment process and identified the parties who had submitted comments

8 during the comment period, including the Utilities. For each issue raised during the

9 comment period, the order summarized the comments received, provided the Team’s

10 recommendations and reasoning for addressing the issue in the final rule, and stated

11 the Commission’s decision.

12 {8} A spate of motions followed, challenging the Order Adopting the Rule. In

13 response, the Commission issued its Order on Rehearing on May 18, 2022, partially

14 granting five motions for rehearing, reconsideration, and clarification of the Order

15 Adopting the Rule, denying four motions seeking similar relief on other grounds,

16 and partially granting SPS’s and EPE’s request for procedural clarifications.

17 Relevant here, the Commission denied many of the Utilities’ substantive challenges

18 to the Rule. The Commission also rejected the Utilities’ argument that the Team’s

19 recommendations after the close of the record may have amounted to prohibited ex

5 1 parte communications.

2 {9} SPS first appealed to this Court from the Order on Rehearing and the Order

3 Adopting the Rule, challenging various provisions of the Rule as contrary to the Act

4 and challenging the Commission’s reliance on the Team’s recommendations after

5 the close of the record as a violation of statute and due process. PNM and EPE

6 intervened in the appeal and joined SPS’s arguments except as noted later in this

7 opinion.

8 {10} While SPS’s first appeal was pending, it filed its first advice notice with the

9 Commission under the Rule, which included a proposed bill-credit rate that openly

10 excluded transmission costs contrary to Rule 573.20(D). See 17.9.573.20(D) NMAC

11 (“The utility shall not subtract any costs of transmission from the solar bill credit

12 rate calculation.”). The Commission rejected the bill-credit rate without a hearing,

13 finding that SPS had subtracted transmission costs in “flagrant disregard” of the Rule

14 and ordering SPS to file a compliant rate within two business days. SPS filed a

15 second advice notice under protest, with a bill-credit rate that did not subtract

16 transmission costs, and demanded a hearing on its original proposed bill-credit rate.

17 The Commission again concluded that no hearing was necessary and allowed SPS’s

18 revised bill-credit rate to take effect. SPS appealed from both orders, arguing that

19 the denial of its original proposed bill-credit rate violated SPS’s statutory and due

6 1 process rights.

2 {11} We consolidated these various appeals, ordered briefing, and heard oral

3 argument. Shortly after the argument, we filed an order upholding the Rule and

4 affirming the Commission’s orders challenged in this appeal. See Order, S-1-SC-

5 39432 (Mar. 11, 2024). We now issue this opinion to explain our reasoning.

7 {12} We consider this appeal in three sections. In Section II.A, we consider the

8 Utilities’ various challenges to the Rule itself, beginning with their challenge to the

9 prohibition against subtracting transmission costs from the bill-credit rate. In Section

10 II.B, we consider whether the Commission engaged in prohibited ex parte

11 communications with the Team after the close of the record in violation of statute

12 and due process. In Section II.C, we address the Commission’s refusal to hold a

13 hearing before rejecting SPS’s original bill-credit rate or allowing SPS’s revised bill-

14 credit rate to take effect. We provide additional background as necessary throughout

15 our analysis.

16 A. The Utilities Have Not Met Their Burden to Show the Rule Is 17 Unreasonable or Unlawful

18 {13} The Utilities challenge the Rule on seven grounds, arguing that it violates

19 various provisions of the Act, is vague and unenforceable, or is arbitrary and

20 capricious. Specifically, the Utilities argue that the Rule (1) creates an unlawful

7 1 subsidy by prohibiting the subtraction of transmission costs from the bill-credit rate,

2 (2) creates an unlawful subsidy by allowing interconnection costs to be shared with

3 non-subscribers on a case-by-case basis, (3) violates the prohibition against co-

4 location by allowing co-location of community solar facilities on a case-by-case

5 basis, (4) ignores the Commission’s duty to oversee the selection of community solar

6 projects by delegating responsibility to a third-party administrator, (5) ignores the

7 requirement to promulgate interconnection rules specifically for community solar

8 facilities, (6) ignores the requirement to promulgate guidelines for low-income

9 customers, and (7) fails to implement adequate consumer protection standards and

10 enforcement procedures. These are legal questions that we review de novo and that

11 we address in turn. N.M. Atty. Gen. v. N.M. Pub. Regul. Comm’n, 2015-NMSC-032,

12 ¶ 24, 359 P.3d 133. As the parties challenging the Rule, the Utilities bear the burden

13 of demonstrating the Rule is unreasonable or unlawful. See NMSA 1978, § 62-11-4

14 (1965).

15 1. The Commission’s interpretation of Section 62-16B-7(B)(8) to prohibit 16 subtracting transmission costs from the bill-credit rate is reasonable and 17 within the Commission’s policy-making authority

18 {14} The Utilities first challenge the Rule’s prohibition against subtracting

19 transmission costs from the bill-credit rate. The Rule provides that “[t]he utility shall

20 not subtract any costs of transmission from the solar bill credit rate calculation.”

8 1 17.9.573.20(D) NMAC. The Utilities argue the prohibition will result in non-

2 subscribers subsidizing transmission “costs attributable to subscribers,” in violation

3 of Section 62-16B-7(B)(8), and will exceed the scope of the Act’s definition of

4 community solar bill credit, which is limited to “the credit value of electricity

5 generated by a community solar facility.” Section 62-16B-2(B) (emphasis added).

6 The Utilities contend that the Rule’s mandate against subtracting transmission costs

7 from the bill-credit rate “is directly contrary to the Act” and amounts to an abuse of

8 discretion.

9 a. Additional background

10 {15} We provide three points of additional background before proceeding with our

11 analysis. First, we take note of the terms generation (production), transmission, and

12 distribution in this context and how they apply to community solar facilities. In

13 general, electricity is generated at the production location, transmitted over long

14 distances at high voltage, and stepped down to a lower voltage so it can be

15 distributed to customers at a local level. See 17.9.531.7(F) NMAC (“Generation

16 means the production or acquisition of energy supply.”); 17.9.531.7(G) NMAC

17 (“Transmission means the activities involved in the transmission of electric power

18 from the source or producer of power to the distribution system.”); 17.9.531.7(D)

19 NMAC (“Distribution means the delivery of electric power from the transmission

9 1 system through distribution lines to the meter of the retail customer.”). By definition,

2 a community solar facility is a generation source within a utility’s distribution system

3 that produces additional electricity for the utility and its customers, including both

4 subscribers and non-subscribers. See § 62-16B-3(A)(2) (requiring a community

5 solar facility to be interconnected to a utility’s distribution system); see also § 62-

6 16B-6(A)(1) (“A qualifying utility shall . . . acquire the entire output of a community

7 solar facility connected to its distribution system.”). Accordingly, electricity

8 generated by a community solar facility is distributed and consumed locally, without

9 requiring use of a utility’s transmission system.

10 {16} Second, we note the significance of the bill-credit rate itself, which the

11 Commission’s rulemaking consultant described as “a central feature of any

12 community solar program and . . . critical to its success.” As the consultant

13 explained,

14 A bill credit rate set too low will erode developer interest in pursuing 15 community solar projects and undermine the value proposition for 16 prospective customer-subscribers. The net effect is likely a community 17 solar program in name only; with few, if any, community solar projects 18 developed and customers enjoying little by way of bill savings. 19 Conversely, a bill credit rate set too high can catalyze an “overheated” 20 community solar market, driving difficult interconnection queue issues, 21 consumer protection concerns, and potentially impacting utility 22 revenue collection from the application of credits on Subscribers[’] 23 bills.

10 1 In practical terms, the bill-credit rate determines the credit that a community solar

2 subscriber will receive from a utility for each kilowatt-hour of electricity consumed,

3 for up to one hundred percent of the subscriber’s average annual consumption. See

4 § 62-16B-2(C); § 62-16B-5(A)(1). By definition, the bill-credit rate is less than the

5 approved rate charged by a utility for each kilowatt-hour of electricity consumed.

6 See § 62-16B-7(B)(8) (prescribing the bill-credit rate as the “total aggregate retail

7 rate [(TARR)] . . . , less the [C]ommission-approved distribution cost components”).

8 For example, the approved bill-credit rate challenged by SPS in this appeal will

9 reduce a residential-service subscriber’s monthly electricity rate by approximately

10 seventy percent for each kilowatt-hour of electricity eligible for the credit. 2

11 {17} Third, the Act requires the Commission to establish a “mechanism” by rule

12 for calculating the bill-credit rate on a per-customer-class basis. Section 62-16B-

13 7(B)(8). The relevant provision, quoted here in full, mandates the creation of rules

14 that

15 provide a community solar bill credit rate mechanism for subscribers 16 derived from the qualifying utility’s [TARR] on a per-customer-class 17 basis, less the [C]ommission-approved distribution cost components,

The community solar bill credit is distinct from the cost of a community solar 2

subscription, which is paid directly to a community solar subscriber organization. See § 62-16B-2(M) (defining subscriber organization); § 62-16B-2(N) (defining subscription); § 62-16B-6 (setting forth duties of utilities and subscriber organizations in administering a community solar program).

11 1 and identify all proposed rules, fees and charges; provided that non- 2 subscribers shall not subsidize costs attributable to subscribers; and 3 provided further that if the [C]ommission determines that it is in the 4 public interest for non-subscribers to subsidize subscribers, non- 5 subscribers shall not be charged more than three percent of the non- 6 subscribers’ aggregate retail rate on an annual basis to subsidize 7 subscribers.

8 Id. For purposes of our discussion, this provision has two main components. First, it

9 sets forth a basic formula: the bill-credit rate is “derived from the qualifying utility’s

10 [TARR] . . . , less the [C]ommission-approved distribution cost[s].”3 Id. Second, the

11 statute sets forth a proviso to the basic formula: “non-subscribers shall not subsidize

12 costs attributable to subscribers.” Id.

13 {18} How to calculate the bill-credit rate under Section 62-16B-7(B)(8)—and

The Act separately defines the TARR, which provides the starting point for 3

calculating the bill-credit rate as the total amount of a qualifying utility’s demand, energy and other charges converted to a kilowatt-hour rate, including fuel and power cost adjustments, the value of renewable energy attributes and other charges of a qualifying utility’s effective rate schedule applicable to a given customer rate class, but does not include charges described on a qualifying utility’s rate schedule as minimum monthly charges, including customer or service availability charges, energy efficiency program riders or other charges not related to a qualifying utility’s power production, transmission or distribution functions, as approved by the [C]ommission, franchise fees and tax charges on utility bills.

Section 62-16B-2(O).

12 1 specifically whether transmission costs should be subtracted from the TARR—was,

2 according to the Team, “perhaps the point of greatest contention between utilities,

3 on the one hand, and subscriber organizations and other commenters, on the other

4 hand.” For its part, SPS insisted that including transmission costs in the bill-credit

5 rate would “result in an unrecognized subsidy of community solar by non-

6 subscribers,” in violation of the statute’s proviso. Id. However, both the Team and

7 the Commission were persuaded that “the express exclusion of distribution costs

8 from the credit [in the basic formula] renders the Legislature’s silence on

9 transmission costs a clearly intentional omission, and thus, indicates an intent not to

10 exclude transmission costs.” The final version of the Rule therefore prohibits

11 subtracting (excluding) transmission costs from the bill-credit rate. See

12 17.9.573.20(D) NMAC. Later in the proceedings, the Commission elaborated on its

13 reasons for the prohibition, explaining that its view of legislative intent is “consistent

14 with the Commission’s understanding of community solar projects.” In the

15 Commission’s view, “It is difficult . . . to conceive of any situation in which

16 transmission costs might reasonably be considered to have been caused by a

17 community solar project. On the contrary, community solar projects bring generation

18 within the distribution level of the grid.”

13 1 b. Discussion

2 {19} We must decide whether the Commission’s interpretation of Section 62-16B-

3 7(B)(8) as prohibiting subtracting transmission costs from the bill-credit rate is

4 contrary to the Act. We are not bound by the Commission’s interpretation of a statute

5 and “may substitute (our) own judgment for that of the agency” because “[i]t is the

6 function of the courts to interpret the law.” Doña Ana Mut. Domestic Water

7 Consumers Ass’n v. N.M. Pub. Regul. Comm’n, 2006-NMSC-032, ¶ 10, 140 N.M.

8 6, 139 P.3d 166 (internal quotation marks and citation omitted). In certain

9 circumstances, however,

10 [w]e are . . . more likely to defer to an agency interpretation if the 11 relevant statute is unclear or ambiguous, the legal questions presented 12 implicate special agency expertise or the determination of fundamental 13 policies within the scope of the agency’s statutory function, and it 14 appears that the agency has been delegated policy-making authority in 15 the area.

16 Id. (internal quotation marks and citations omitted). When these circumstances are

17 present, we will defer to “the agency’s interpretation of a law [unless it] is

18 unreasonable or unlawful.” Morningstar Water Users Ass’n v. N.M. Pub. Util.

19 Comm’n, 1995-NMSC-062, ¶ 11, 120 N.M. 579, 904 P.2d 28; see also Gila Res.

20 Info. Project v. N.M. Water Quality Control Comm’n, 2018-NMSC-025, ¶ 35, 417

21 P.3d 369 (“We will overturn the administrative construction of statutes by

22 appropriate agencies only if they are clearly incorrect.” (internal quotation marks

14 1 and citation omitted)). For the reasons that follow, we defer to the Commission’s

2 interpretation of Section 62-16B-7(B)(8).

3 {20} To start, the statute’s meaning is ambiguous and “reasonably subject to

4 multiple interpretations.” See State v. Almanzar, 2014-NMSC-001, ¶ 15, 316 P.3d

5 183. While the basic formula for calculating the bill-credit rate is clear and

6 undisputed, the proviso’s language—“provided that non-subscribers shall not

7 subsidize costs attributable to subscribers,” § 62-16B-7(B)(8)—“does not lend itself

8 well to judicial construction” when several of its key terms are undefined and

9 “general enough . . . to have a variety of meanings.” Doña Ana, 2006-NMSC-032, ¶

10 15 (holding that the phrase “‘unreasonably interfere with the service or system’ of a

11 utility” was ambiguous when interfere and service or system were undefined).

12 {21} For instance, the Act does not define subsidize or prescribe how to determine

13 whether the bill-credit rate could result in a subsidy by non-subscribers, whose

14 electricity bills are not directly affected by the bill-credit rate. Cf. § 62-16B-6(A)(2)

15 (“A qualifying utility shall . . . apply community solar bill credits to subscriber

16 bills . . . .” (emphasis added)). Similarly, the Act does not define costs or identify the

17 types of costs that may be subject to the proviso prohibiting subsidization. Notably,

18 the only costs identified in Section 62-16B-7(B)(8) are the “distribution cost

19 components” that must be subtracted from the TARR, see id., and the “fuel and

15 1 power cost adjustments” incorporated by reference from the definition of the TARR

2 itself, § 62-16B-2(O). Whether the proviso applies to these identified costs or only

3 to these costs or to other, unnamed costs is unclear. Nor does the Act define the

4 phrase attributable to subscribers, including whether it refers to subscribers as

5 generic ratepayers or specifically as a result of their subscription. When the

6 Legislature has left such questions open to reasonable interpretation, the statute is

7 ambiguous. See Doña Ana, 2006-NMSC-032, ¶ 15.

8 {22} In addition, Section 62-16B-7(B)(8) addresses the Commission’s regulatory

9 authority, justifying our deference to the Commission’s interpretation. The statute

10 implicates the Commission’s specialized expertise, namely regulating public utilities

11 and setting “fair, just, and reasonable rates.” NMSA 1978, § 62-3-1(B) (2008); see

12 also, e.g., Doña Ana, 2006-NMSC-032, ¶ 16 (describing “a comprehensive

13 regulatory scheme granting the [Commission] the policy-making authority to plan

14 and coordinate the activities of New Mexico public utilities, in a manner consistent

15 with the Legislature’s stated goals”). The statute also delegates responsibility to the

16 Commission for adopting a rule to “provide a community solar bill credit rate

17 mechanism for subscribers.” Section 62-16B-7(B)(8). This delegation necessarily

18 includes the policy-making authority to promulgate a rule consistent with the

19 purposes of the Act and the Commission’s expertise. See NMSA 1978, § 62-19-9(A)

16 1 (2020) (“The [C]ommission shall administer and enforce the laws with which it is

2 charged and has every power conferred by law.”). Given the Legislature’s express

3 delegation of authority to effectuate the ambiguous requirements of Section 62-16B-

4 7(B)(8), “[t]he Commission is the appropriate policy-making entity in this context.”

5 Gila Res. Info. Project, 2018-NMSC-025, ¶ 36.

6 {23} We therefore defer to the Commission’s interpretation of Section 62-16B-

7 7(B)(8) unless it is unreasonable or unlawful. Morningstar Water Users Ass’n, 1995-

8 NMSC-062, ¶ 11. It is neither. The Commission concluded that the Legislature

9 intended transmission costs not to be subtracted from the TARR when determining

10 the bill-credit rate given (1) the statute’s clear, exclusive mandate to subtract

11 distribution costs from the TARR and (2) the absence of any reference to

12 transmission costs in the statute. We have applied this reasoning before, albeit in

13 different contexts. See State v. Nick R., 2009-NMSC-050, ¶¶ 16, 23, 147 N.M. 182,

14 218 P.3d 868 (holding that the Legislature’s inclusion of the specific term

15 “switchblade” in the definition of “deadly weapon” showed an intent not to include

16 “all pocketknives” in the definition); see also City of Santa Rosa v. Jaramillo, 1973-

17 NMSC-119, ¶¶ 9-11, 85 N.M. 747, 517 P.2d 69 (holding that the Legislature’s

18 inclusion of two exceptions to the prohibition against transferring liquor licenses

19 signaled an intent not to permit other exceptions). Consistent with our reasoning in

17 1 those cases, the explicit mandate to subtract distribution costs from the TARR—with

2 no mention of transmission costs—is highly persuasive of the Legislature’s intent

3 not to subtract transmission costs from the TARR.

4 {24} This reading of the statute is also supported by the Commission’s explanation

5 that community solar projects “bring generation within the distribution level of the

6 grid” and therefore do not result in transmission costs. See § 62-16B-3(A)(2)

7 (providing that a community solar facility must be interconnected to a utility’s

8 distribution system). The Commission could reasonably conclude that if a

9 community solar project does not result in transmission costs, then such a project

10 does not introduce transmission costs that are attributable to subscribers and subject

11 to the prohibition against subsidization. See § 62-16B-7(B)(8). The Utilities advance

12 a different reading of the statute under which transmission costs are shared among

13 all ratepayers, such that crediting subscribers for their transmission costs will

14 necessarily result in a subsidy by non-subscribers. While that may be a plausible

15 interpretation of the statute, we defer to the Commission’s reasonable interpretation

16 as the entity delegated policy-making authority under the Act.

17 {25} As a final matter, we are not persuaded by the Utilities’ argument that the

18 Act’s definition of community solar bill credit requires a different result. See § 62-

19 16B-2(B). The Utilities argue that because the Act defines the bill credit as “the

18 1 credit value of electricity generated by a community solar facility,” the bill-credit

2 rate must not include any costs unassociated with the costs of generation. Id.

3 (emphasis added). Again, the Utilities’ preferred reading of Section 62-16B-2(B) is

4 not the only permissible reading of that provision.4 And importantly, the Utilities’

5 interpretation would render other provisions of the Act surplusage. If the bill credit

6 were limited to the cost of generation, it would be unnecessary to prescribe in detail

7 how to calculate the TARR and then to mandate the subtraction of distribution costs.

8 See § 62-16B-2(O) (defining the TARR); § 62-16B-7(B)(8). We decline to read

9 Section 62-16B-2(B) in a manner that would impermissibly render these other

10 provisions unnecessary. See, e.g., State v. Hobbs, 2022-NMSC-018, ¶ 23, 518 P.3d

11 489 The Commission’s interpretation of Section 62-16B-7(B)(8) is reasonable,

12 lawful, and within the scope of the policy-making authority delegated by the

13 Legislature under the Act.

4 For instance, one could reasonably emphasize “the credit value of electricity generated by a community solar facility,” § 62-16B-2(B), an interpretation that would consider all of the costs and benefits that result from electricity generated by a community solar facility, not merely the cost of generation. This reading of the statute would readily support the Commission’s interpretation of Section 62-16B- 7(B)(8).

19 1 2. The Commission’s interpretation of Section 62-16B-7(B)(6) to allow the 2 sharing of interconnection costs on a case-by-case basis is reasonable and 3 within the Commission’s policy-making authority

4 {26} The Utilities next challenge Rule 573.13(A), which provides that “[t]he

5 [C]ommission may determine on a case-by-case basis whether the cost of

6 distribution system upgrades necessary to interconnect one or more community solar

7 facilities may be eligible for some form of cost-sharing” among ratepayers, including

8 both subscribers and non-subscribers. 17.9.573.13(A)(2) NMAC. The Utilities argue

9 that any sharing of interconnection costs with non-subscribers necessarily results in

10 subsidization, in violation of Section 62-16B-7(B)(6). That provision requires the

11 Commission, in relevant part, to adopt rules that “establish . . . standards, fees, and

12 processes for the interconnection of community solar facilities . . . , such that a

13 qualifying utility and its non-subscrib[ers] do not subsidize the costs attributable to

14 the subscriber organization under this paragraph.” Id. In the Utilities’ view,

15 subsidization and cost sharing are synonymous, so the Commission erred by

16 allowing the potential for any interconnection costs to be shared with non-

17 subscribers.

18 {27} In response, the Commission argues that the Rule does not violate Section 62-

19 16B-7(B)(6) because cost sharing with non-subscribers may be permitted only when

20 subsidization would not occur. According to the Commission, a subscriber

20 1 organization requesting cost sharing must demonstrate under Rule 573.13(C) that

2 “the costs borne by [non-subscribing] ratepayers are matched or exceeded by

3 demonstrable benefits to such ratepayers, so that there will be no subsidization of

4 interconnection costs by nonsubscribing ratepayers in appropriate cases.”

5 17.9.573.13(C) NMAC (emphasis added). The Commission also points to the Rule’s

6 standards for evaluating the public benefit of a “cost-sharing mechanism,” which are

7 derived from the existing statutory standards for “considering cost sharing or rate

8 basing grid modernization projects.” 17.9.573.13(B) NMAC; see NMSA 1978, § 62-

9 8-13 (2021) (setting forth requirements for a public utility to apply for “grid

10 modernization projects”). The Commission argues that allowing cost sharing in

11 these limited circumstances may be necessary when, for example, interconnection

12 costs would otherwise be prohibitive to a subscriber organization. 5 The Commission

13 states that this flexible approach balances its duty to adopt rules that satisfy Section

14 62-16B-(7)(B)(6) and that “reasonably allow for the creation, financing and

15 accessibility of community solar facilities.” Section 62-16B-7(B)(9).

5 This argument is consistent with the Team’s recommendation about sharing interconnection costs, in which it warned that “some, perhaps many, [community solar] projects will be met with prohibitive interconnection costs involving upgrades to the system that would benefit other projects and non-subscribing ratepayers. Cost sharing could well be the critical factor determining the feasibility of many projects.”

21 1 {28} The Utilities’ argument again requires us to consider whether the

2 Commission’s interpretation of a statute—this time, the prohibition against

3 subsidization set forth in Section 62-16B-7(B)(6)—is worthy of deference. As a

4 threshold matter, we hold that Section 62-16B-7(B)(6) is ambiguous and concerns

5 substantive issues within the Commission’s policy-making authority and expertise.

6 See Doña Ana, 2006-NMSC-032, ¶ 10 (describing circumstances when the Court is

7 likely to defer to the Commission’s interpretation of a statute). The statute’s meaning

8 is ambiguous when the Act neither defines the term subsidize nor prescribes how to

9 ensure that “a qualifying utility and its non-subscrib[ers] do not subsidize the costs

10 attributable to the subscriber organization.” Section 62-16B-7(B)(6). And by

11 requiring rules that establish “standards, fees, and processes for the interconnection

12 of community solar facilities,” the Legislature has tasked the Commission with

13 interpreting Section 62-16B-7(B)(6) in a manner that balances the various interests

14 at stake. See Gila Res. Info. Project, 2018-NMSC-025, ¶ 34. This task falls squarely

15 within the Commission’s expertise. See, e.g., S.W. Pub. Serv. Co. v. N.M. Pub.

16 Regul. Comm’n, 2024-NMSC-012, ¶ 40, 548 P.3d 97 (describing the Commission’s

17 “overarching duty to regulate public utilities in a manner that balances the interests

18 of the public, consumers, and investors to ensure that reasonable and proper services

19 shall be available at fair, just and reasonable rates” (internal quotation marks and

22 1 citation omitted)).

2 {29} We therefore will defer to the Commission unless we agree with the Utilities

3 that the Commission’s interpretation of Section 62-16B-7(B)(6) “is unreasonable or

4 unlawful.” See Morningstar Water Users Ass’n, 1995-NMSC-062, ¶ 11. As

5 previously noted, the Utilities argue that the Act’s prohibition of subsidization

6 applies to cost sharing with equal force. We disagree that the statute’s meaning is so

7 clear when the Act provides no guidance about the form or substance that a

8 prohibited subsidy may—or must—take. The term subsidize certainly does not

9 forbid consideration of both the costs and benefits of interconnection upgrades when

10 evaluating whether “some form of cost-sharing . . . among all rate payers” may be

11 permitted without violating the prohibition against subsidization. 17.9.573.13(A)(2)

13 {30} Moreover, the Utilities cite no authority that would require their preferred

14 reading of the statute, particularly when the Rule limits cost sharing to circumstances

15 when there will be no subsidization because of the off-setting benefit to all ratepayers

16 of the resulting system upgrades. We defer to the Commission’s interpretation of

17 Section 62-16B-7(B)(6) to allow cost sharing in appropriate circumstances as a

18 reasonable balancing of the interests of community solar facilities, subscribers, non-

19 subscribers, and utilities, in accordance with the authority delegated under the Act.

23 1 See New Energy Econ., Inc. v. N.M. Pub. Regul. Comm’n, 2018-NMSC-024, ¶ 25,

2 416 P.3d 277 (“[I]f it is clear that our Legislature delegated to the [Commission]

3 (either explicitly or implicitly) the task of giving meaning to interpretive gaps in a

4 statute, we will defer to the [Commission]’s construction of the statute as the

5 [Commission] has been delegated policy-making authority and possesses the

6 expertise necessary to make sound policy.”).

7 3. The Commission’s interpretation of the Act’s prohibition against the co- 8 location of community solar facilities is reasonable and within the 9 Commission’s policy-making authority

10 {31} The Utilities next argue the Rule unlawfully allows co-location of community

11 solar facilities, in violation of two provisions of the Act that expressly prohibit co-

12 location. See § 62-16B-3(A)(4) (“A community solar facility shall . . . have the

13 option to be co-located with other energy resources, but shall not be co-located with

14 other community solar facilities.” (emphasis added)); § 62-16B-7(B)(10) (“The rules

15 shall . . . provide requirements for the siting and co-location of community solar

16 facilities with other energy resources; provided that community solar facilities shall

17 not be co-located with other community solar facilities.” (emphasis added)). The

18 Utilities challenge Rule 573.18, which provides as follows:

19 As long as a community solar facility is not located on the same parcel 20 as another community solar facility, it shall not be considered co- 21 located with another community solar facility. For any parcel that has 22 been subdivided in the two years prior to a community solar project bid,

24 1 all subdivided parcels shall be considered a single parcel for the 2 purposes of this rule. The [C]ommission will consider, on a case-by- 3 case basis, allowing more than one community solar facility to be 4 located on the same parcel.

5 17.9.573.18 NMAC. According to the Utilities, this provision defines co-location as

6 being located on the same parcel of land and then violates the Act by permitting the

7 Commission to “consider, on a case-by-case basis, allowing more than one

8 community solar facility to be located on the same parcel.” 17.9.573.18 NMAC. The

9 Utilities argue the Commission lacks “authority to create this type of ad hoc

10 exception” to the prohibition against the co-location of community solar facilities.

11 {32} We agree with the Commission that the prohibition against co-location is

12 ambiguous because the Act neither defines co-locate nor provides a reason for the

13 prohibition. See §§ 62-16B-3(A)(4), -7(B)(10). The Utilities contend, however, that

14 the term co-locate is not ambiguous and that its plain meaning dictates a one-facility-

15 per-parcel definition. That assertion certainly does not follow from the Utilities’ only

16 cited authority: a common dictionary that defines the term colocate to mean, “to

17 locate (two or more things) together or be located together.” See colocate, Merriam-

18 Webster Dictionary, https://www.merriam-webster.com/dictionary/colocate (last

19 visited Jan. 6, 2025). The Utilities make no attempt to explain how being “located

20 together” necessarily means being “located together [on the same parcel].” Id. Nor

21 does any provision of the Act or the Rule require the prohibition against co-location

25 1 to be enforced on a per-parcel basis. Thus, we are faced again with an ambiguous

2 statutory term that requires the Commission to exercise its policy-making authority

3 and apply its specialized expertise to carry out its statutory duties. See § 62-16B-

4 7(B)(10) (requiring the Commission to adopt rules that “provide requirements for

5 the siting and co-location of community solar facilities with other energy resources;

6 provided that community solar facilities shall not be co-located with other

7 community solar facilities”).

8 {33} The Commission’s exercise of that authority was reasonable. Rather than

9 adopting a rigid definition of co-locate, the Commission opted for a flexible

10 approach to determining whether community solar facilities are co-located. First, the

11 Commission established a categorical rule that facilities that are not on the same

12 parcel are not co-located. See 17.9.573.18 NMAC. This categorical rule, which we

13 presume is lawful, has not been challenged on appeal.6 See, e.g., Tenneco Oil Co. v.

14 N.M. Water Quality Control Comm’n, 1987-NMCA-153, ¶ 14, 107 N.M. 469, 760

15 P.2d 161 (“Rules and regulations enacted by an agency are presumed valid and will

6 Although we defer to the Commission’s interpretation of the Act on this issue, we also note that the failure to challenge the location of community solar facilities consistent with this presumption is fatal to the Utilities’ pre-enforcement challenge. See, e.g., Gila Res. Info. Project, 2018-NMSC-025, ¶ 6 (“Petitioners must establish that no set of circumstances exist where the . . . [r]ule could be valid.”).

26 1 be upheld if reasonably consistent with the statutes that they implement.”),

2 superseded by statute on other grounds as stated in N.M. Mining Ass’n v. N.M. Water

3 Quality Control Comm’n, 2007-NMCA-010, ¶ 19, 141 N.M. 41, 150 P.3d 991.

4 {34} Second, the Commission opted to consider on a case-by-case basis whether

5 two or more facilities may be located on the same parcel without violating the

6 prohibition against co-location. See 17.9.573.18 NMAC. Relevant to this inquiry,

7 the Commission found during the rulemaking that the reason for the prohibition is

8 to avoid gaming by developers who would evade the Act’s five-megawatt limit for

9 a single community solar facility by subdividing a parcel to locate multiple facilities

10 in close proximity. See § 62-16B-3(A)(1) (providing that a community solar facility

11 shall “have a nameplate capacity rating of five megawatts alternating current or

12 less”). This finding is similarly unchallenged on appeal and will guide the

13 Commission in deciding whether more than one community solar facility may be

14 located on the same parcel without violating the prohibition against co-location. Cf.

15 17.9.573.18 NMAC (“For any parcel that has been subdivided in the two years prior

16 to a community solar project bid, all subdivided parcels shall be considered a single

17 parcel for the purposes of this rule.”). We defer to the Commission’s reasonable

18 interpretation of the Act based on its specialized expertise. See, e.g., New Energy

19 Econ., 2018-NMSC-024, ¶ 25.

27 1 4. The Commission’s delegation of responsibility to a third-party 2 administrator to oversee the selection process for community solar 3 projects is not unreasonable or unlawful

4 {35} SPS challenges the Rule’s delegation of responsibility to a third-party

5 administrator “for selection of proposed projects for building and operating

6 community solar facilities” and the Rule’s detailed rubric for the administrator to

7 follow when scoring and selecting bids. 7 See 17.9.573.12 NMAC. SPS takes issue

8 mainly with the Rule’s disclaimer that “[t]he [C]ommission will have no

9 involvement in the process except to the extent that the administrator or any

10 participant in the process may raise before the [C]ommission an issue that is not fully

11 addressed in this rule and that the [C]ommission finds, in its discretion, that it should

12 address.” 17.9.573.12(A) NMAC. SPS argues that the “wholesale delegation of all

13 aspects of the selection of projects” violates the Act’s mandate, which requires the

14 Commission to “establish a process for the selection of community solar facility

15 projects,” § 62-16B-7(B)(4). In SPS’s view, this language does not allow the

16 Commission to delegate the administration of the selection process to a third party.

17 {36} We disagree. Although the Act itself does not authorize the Commission to

18 delegate the administration of the selection process, the Commission has broad

7 PNM and EPE do not join SPS on this issue.

28 1 authority to “enter into contracts to carry out its powers and duties.” Section 62-19-

2 9(B)(9); see also § 62-19-19(A) (authorizing the Commission’s Chief of Staff to

3 “hire on a temporary, term or contract basis such other experts or staff as the

4 [C]ommission requires for a particular case” (NMSA 1978, § 62-19-11(A) (2020)

5 (establishing the Commission’s Chief of Staff)); Qwest Corp. v. N.M. Pub. Regul.

6 Comm’n, 2006-NMSC-042, ¶ 58, 140 N.M. 440, 143 P.3d 478 (discussing

7 responsibilities that may be delegated to advisory staff hired on “temporary, term,

8 or contract employment relationships with the [Commission]”). Here, the

9 Commission’s relevant duties are to “administer and enforce the rules and provisions

10 of the . . . Act” and to promulgate rules that “establish a process for the selection of

11 community solar facility projects.” Section 62-16B-7(A), (B)(4). The Commission

12 carried out these duties by first prescribing a detailed selection process by rule and

13 then “engag[ing] a third-party administrator to manage” that process,

14 17.9.573.12(A) NMAC, in accordance with the Commission’s authority under

15 Section 62-19-9(B)(9).

16 {37} SPS’s arguments to the contrary are overstated and unavailing. First, SPS

17 argues that the Act does not authorize the Commission to “abdicate its duties to a

18 third party.” This assertion does not withstand scrutiny. The Commission has

19 prescribed a detailed, transparent process for the selection of community solar

29 1 facility projects and hired a third-party administrator to manage that process. To

2 guide the administrator, the Rule includes detailed minimum eligibility requirements

3 for bids that will be considered, see 17.9.573.12(B)(1)-(5) NMAC, criteria for

4 scoring and awarding points to eligible bids, 17.9.573.12(E)(1)-(9) NMAC, and

5 instructions for establishing wait lists of eligible projects in each utility’s territory,

6 17.9.573.12(H) NMAC. SPS cites no legal authority to support its argument that the

7 Rule’s guidance is insufficient or that the Commission may not contract with a third-

8 party administrator to implement this detailed, transparent selection process. We

9 therefore assume no such authority exists. 8 See, e.g., State v. Veleta, 2023-NMSC-

10 024, ¶ 39, 538 P.3d 51 (“[W]here [the party] has not provided authority to support

11 his position, we may assume no such authority exists.”).

12 {38} Second, SPS argues that the Commission exceeded its delegation authority by

13 authorizing the “third-party administrator to make important policy decisions

14 regarding the selection of community solar facility projects.” But SPS cites no

We also agree with the Commission and Intervenors-Appellees that this 8

argument contradicts SPS’s position during the rulemaking. The Commission requested input during the rulemaking about whether the selection process should be overseen by the Commission’s internal staff, a third party, or the Utilities themselves. SPS favored delegation, “strongly preferr[ing] that the utilities manage the process of solicitation of projects.” SPS’s argument on appeal that the Act does not permit delegation of the selection process therefore rings hollow.

30 1 authority that (1) proscribes the Commission from delegating “important” policy

2 decisions, or more importantly (2) distinguishes “important” decisions, which

3 assertedly may not be delegated, from “[un]important” decisions, which implicitly

4 may be delegated. Nor does SPS explain how its lone example of an important

5 decision—the administrator’s discretion to award up to five points for an innovative

6 proposal—amounts to a policy decision at all. See 17.9.523.12(E)(9) NMAC. We

7 decline to reach these unsupported arguments. See Veleta, 2023-NMSC-024, ¶ 39.

8 {39} Third, SPS challenges the provision that allows the administrator to award up

9 to five points for an innovative proposal as void for vagueness. See

10 17.9.523.12(E)(9) NMAC. This argument may be readily answered in the context of

11 a pre-enforcement challenge to a regulation that does not implicate constitutionally

12 protected conduct: “A court . . . may sustain a vagueness challenge only if the law

13 ‘is impermissibly vague in all of its applications.’” N.M. Petroleum Marketers Ass’n

14 v. N.M. Env’t. Improvement Bd., 2007-NMCA-060, ¶ 16, 141 N.M. 678, 160 P.3d

15 587 (quoting Vill. of Hoffman Ests. v. The Flipside, Hoffman Ests., Inc., 455 U.S.

16 489, 495 (1982)). That standard is not met here. The Rule allows the administrator

17 to award up to five points for a proposal that “includes an innovative commitment

18 or provision beneficial to the local community, to potential subscribers, or to the

19 program overall.” 17.9.573.12(E)(9) NMAC. While the words “innovative” and

31 1 “beneficial” carry a certain amount of subjectivity, they do not “confer whimsical

2 discretion” upon the third-party administrator or otherwise require “persons of

3 common intelligence [to] guess at [their] meaning[s].” Old Abe Co. v. N.M. Mining

4 Comm’n, 1995-NMCA-134, ¶¶ 25, 32, 121 N.M. 83, 908 P.2d 776 (internal

5 quotation marks and citation omitted) (upholding a regulation against a void-for-

6 vagueness facial challenge when it did not “confer whimsical discretion” on the

7 director or impose a “criminal or civil penalty for guessing incorrectly” about the

8 regulation’s meaning).

9 {40} Fourth, SPS argues, quoting 17.9.573.12(F) NMAC, that the Rule provides

10 too much discretion to the administrator by allowing bids to be scored by

11 unidentified “‘selection criteria within each qualifying utility’s territory.’” This

12 argument relies on a misreading of the Rule. Taken in context, the language

13 challenged by SPS refers not to unidentified selection criteria but to the detailed

14 criteria set forth in the Rule itself. Id. (“The program administrator shall select

15 projects based upon these qualifications and selection criteria within each

16 qualifying utility’s territory until the allocated capacity cap for each utility has been

17 reached.” (emphasis added)). The Rule’s meaning about the qualifications and

18 criteria that will be used to select projects is sufficiently clear to provide notice to

19 “a hypothetical recipient desirous of actually being informed,” which is sufficient to

32 1 satisfy due process. See S.W. Pub. Serv. Co., 2024-NMSC-012, ¶ 48 (internal

2 quotation marks and citation omitted).

3 {41} Finally, SPS argues that the Rule is void for vagueness because it fails to

4 provide a right to seek review of the third-party administrator’s actions. This

5 argument lacks merit. The right to seek review has no particular significance to

6 whether a provision is void for vagueness; rather, it provides an important check on

7 whether a delegation of authority is permissible at all. “An important aspect of

8 gauging the delegation of discretion is whether the discretion is reviewable.” See,

9 e.g., Old Abe Co., 1995-NMCA-134, ¶ 34. Moreover, the Rule expressly allows “the

10 administrator or any participant in the process [to] raise before the [C]ommission an

11 issue that is not fully addressed in this rule.” 17.9.573.12(A) NMAC. Given this

12 explicit right of review, SPS’s pre-enforcement challenge must fail. See Gila Res.

13 Info. Project, 2018-NMSC-025, ¶ 6 (explaining that a challenge to the validity of a

14 rule not yet applied must establish that no set of circumstances exist where the [rule]

15 could be valid”).

16 5. The Utilities’ remaining challenges to the Rule lack merit

17 {42} The Utilities’ remaining challenges to the Rule lack merit, and we therefore

18 treat them summarily.

19 a. The Commission’s reliance on its existing interconnection rules does not 20 violate Section 62-16B-7(B)(6)

33 1 {43} The Utilities argue that the Rule is unlawful because it omits standards for the

2 recovery of a utility’s costs resulting from the interconnection of community solar

3 facilities, purportedly in violation of Section 62-16B-7(B)(6). We disagree. The Rule

4 requires the Commission to adopt rules that establish “standards, fees and processes

5 for the interconnection of community solar facilities that are consistent with the

6 [C]ommission’s existing interconnection rules and interconnection manual that

7 allows a qualifying utility to recover . . . interconnection costs for each community

8 solar facility.” Section 62-16B-7(B)(6) (emphasis added). While the Utilities are

9 correct that the Rule does not establish new interconnection rules specific to

10 community solar facilities, they ignore that the Commission clarified in its Order on

11 Rehearing that the recovery of interconnection costs would be governed by its

12 existing interconnection rules. See 17.9.568 NMAC (10/15/2008, repealed and

13 replaced effective 2/14/2023) (interconnection rules for facilities producing up to ten

14 megawatts of electricity). The Utilities neither argue nor explain why the

15 Commission’s existing interconnection rules are inadequate for community solar

16 facilities. Nor do the Utilities cite authority requiring the Commission to promulgate

17 duplicative interconnection rules for community solar facilities after a determination

18 that its existing interconnection rules are sufficient. We therefore assume no such

19 authority exists and decline to consider this argument any further. See Veleta, 2023-

34 1 NMSC-024, ¶ 39.

2 b. The Rule does not violate the requirement to promulgate guidelines for 3 serving low-income customers

4 {44} The Utilities next argue the Rule unlawfully ignores the statutory requirement

5 to issue guidelines to achieve an annual thirty-percent “carve-out” of available

6 capacity from community solar facilities for serving low-income customers. See §

7 62-16B-7(B)(3). Rather than including guidelines, the Utilities argue that the Rule

8 “merely parrots the Act by stating that the Commission ‘will issue guidelines’ at

9 some unknown time in the future.” According to the Utilities, the omission of

10 guidelines from the Rule itself “renders the Rule defective.”

11 {45} We are unpersuaded. The requirement to issue guidelines arises under Section

12 62-16B-7(B)(3), which mandates the adoption of rules that require a thirty-percent

13 carve-out for low-income customers. The Rule meets this requirement explicitly. See

14 17.9.573.10(B) NMAC (“At least thirty percent of electricity produced from each

15 community solar facility shall be reserved for low-income subscribers and low-

16 income service organizations.”). Section 62-16B-7(B)(3) also provides as follows:

17 “The Commission shall issue guidelines to ensure the carve-out is achieved each

18 year and develop a list of low-income service organizations and programs that may

19 pre-qualify low-income customers.” The Commission opted to include the required

20 list of service organizations and programs in the Rule itself. See 17.9.573.15(A)

35 1 NMAC (listing low-income service organizations and programs that may pre-qualify

2 low-income customers to be eligible for the carve-out); see also 17.9.573.15(B), (C)

3 NMAC (providing “other ways for households and low-income service

4 organizations to qualify” for eligibility as low-income subscribers). The

5 Commission also chose to issue the guidelines separately, at an unidentified time in

6 the future. See 17.9.573.10(B) NMAC (“The [C]ommission will issue guidelines to

7 ensure the carve-out is achieved each year.”). The Utilities do not argue or explain

8 why the guidelines must be included in the Rule itself or cite authority to support

9 their argument that “sever[ing]” guidelines from the Rule renders it unlawful. In the

10 absence of such argument or authority, we reject this argument without further

11 discussion. See Veleta, 2023-NMSC-024, ¶ 39.

12 c. The Rule’s consumer protections are not inadequate under Section 62- 13 16B-7(B)(7)

14 {46} For their final challenge to the Rule, the Utilities argue that the Rule is

15 unlawful because it lacks “specific consumer protection standards and establishes

16 no consumer protection enforcement procedures,” as required by Section 62-16B-

17 7(B)(7) (“The rules shall . . . provide consumer protections for subscribers, including

18 a uniform disclosure form that identifies the information that shall be provided by a

19 subscriber organization to a potential subscriber . . . as well as grievance and

20 enforcement procedures.”). This argument is meritless. The Act requires the

36 1 Commission to provide only two specific subscriber-protection measures: (1) a

2 uniform disclosure form and (2) grievance and enforcement procedures. See id. The

3 Commission has fulfilled both requirements. See Subscriber Information Disclosure

4 Form (attached as Exhibit B to order adopting rule); 17.9.573.17(C) NMAC

5 (providing that complaints may be filed with the Commission’s consumer relations

6 division and referred to the Attorney General as appropriate). Further, the Utilities

7 ignore that the Rule includes other consumer protection measures, including

8 requirements for subscriber organizations to maintain minimum levels of general

9 liability insurance, see 17.9.573.16(B) NMAC, and to develop and implement

10 written subscriber agreements that comply with a detailed list of minimum terms and

11 conditions for subscribing to a community solar project, 17.9.573.17(A) NMAC.

12 The latter measures exceed the minimum requirements set forth in Section 62-16B-

13 7(B)(7). The Utilities have not identified any specific protections that are missing

14 from the Rule and have not explained the inadequacy of an informal process of

15 referral to consumer relations for most subscriber complaints when serious matters

16 may be referred to the Attorney General. See 17.9.573.17(C) NMAC. The Utilities

17 thus fail to meet their burden to demonstrate that the Rule is unreasonable or

18 unlawful.

37 1 B. The Utilities Have Not Demonstrated That the Commission’s Reliance on 2 Recommendations from the Team Was Unreasonable, Unlawful, or a 3 Violation of Due Process

4 {47} In addition to their substantive challenges to the Rule, the Utilities argue that

5 the Order Adopting the Rule must be vacated and annulled because of the

6 Commission’s reliance on the Team’s purportedly “nonpublic, non-record

7 recommendations” throughout the rulemaking, including after the close of the

8 record. The Utilities argue that the Team’s participation requires vacating and

9 annulling the Rule as a violation of their right to due process and of the statutory

10 prohibition against ex parte communications. We address these arguments in turn.

11 1. The Commission’s reliance on the Team’s recommendations does not 12 implicate due process

13 {48} First, the Utilities argue “reliance on the Team’s undisclosed

14 recommendations” violated due process by depriving the Utilities of notice and “any

15 opportunity to respond on the record to the Team’s recommendations before the

16 record closed.” This argument is misplaced. Any right in a rulemaking to notice and

17 an opportunity to be heard is statutory and does not result from the constitutional

18 guarantee of due process. See Livingston v. Ewing, 1982-NMSC-110, ¶ 14, 98 N.M.

19 685, 652 P.2d 235 (“There is no fundamental right to notice and hearing before the

20 adoption of a rule; such a right is statutory only.” (citing, among others, Bi-Metallic

21 Co. v. Colorado, 239 U.S. 441, 445 (1915)) (“The [answer to the] question, . . .

38 1 whether all individuals have a constitutional right to be heard, before a matter can

2 be decided in which all are equally concerned, . . , was that it was hard to believe

3 that the proposition was seriously made.”).

4 {49} The two cases cited by the Utilities do not hold to the contrary. The first case

5 arose in the context of an adjudication and is therefore inapposite. See TW Telecom

6 of N.M., LLC v. N.M. Pub. Regul. Comm’n, 2011-NMSC-029, ¶ 7, 150 N.M. 12, 256

7 P.3d 24 (“The [Commission] determined that the . . . case would be conducted as an

8 adjudicated case and all interested parties would be given an opportunity to

9 participate . . . .”). Unlike a rulemaking, an adjudicatory proceeding may deprive an

10 individual of a protected liberty or property interest and therefore must satisfy

11 constitutional due process. See, e.g., Mills v. N.M. State Bd. of Psych. Exam’rs, 1997-

12 NMSC-028, ¶ 14, 123 N.M. 421, 941 P.2d 502 (“The Fourteenth Amendment

13 protects citizens from deprivations of liberty and property without due process of

14 law.”); see also Miles v. Bd. of Cnty. Comm’rs of Cnty. of Sandoval, 1998-NMCA-

15 118, ¶ 8, 125 N.M. 608, 964 P.2d 169 (discussing the difference between

16 “individualized [fact-based] deprivations, that are protected by procedural due

17 process, and policy-based deprivations of the interests of a class, that are not

18 protected by procedural due process” (alteration in original) (internal quotation

19 marks and citation omitted)).

39 1 {50} While the second case cited by the Utilities arose in the relevant context of a

2 rulemaking, the discussion of due process was unnecessary to our holding. See Rivas

3 v. Bd. of Cosmetologists, 1984-NMSC-076, ¶ 13, 101 N.M. 592, 686 P.2d 934

4 (holding that the repeal of a regulation was invalid when the board “failed to . . .

5 comply with the repeal procedure of the statute in failing to give notice to interested

6 parties and to hold a hearing prior to taking action” (emphasis added)). Moreover,

7 the suggestion in Rivas that due process may apply in a rulemaking relied on

8 persuasive authority construing the right to notice and comment under statute,

9 NMSA 1978, § 12-8-4 (1969), not due process. See Rivas, 1984-NMSC-076, ¶¶ 8,

10 9 (“Case law suggests . . . ‘the minimum protections upon which administrative

11 action may be based.’” (quoting Mobil Oil Corp. v. Fed. Power Comm’n, 483 F.2d

12 1238, 1253 (D.C. Cir. 1973) (discussing the “minimum protections” in informal

13 rulemaking proceedings under the Administrative Procedure Act, 5 U.S.C. § 553

14 (1970))). Neither TW Telecom nor Rivas supports the Utilities’ argument that due

15 process was violated—much less implicated—in the rulemaking in this case.

16 {51} The Utilities cite a final case, Santa Fe Exploration Co. v. Oil Conservation

17 Comm’n, 1992-NMSC-044, 114 N.M. 103, 835 P.2d 819, in support of a second

18 claimed due-process violation. They argue that the Commission violated due process

19 “[b]y failing to clarify the identity of all Team members, . . . [thereby] depriv[ing]

40 1 the Utilities of their right to raise possible defenses arising from [ex parte]

2 communications.” By doing so, the Commission purportedly ran afoul of the general

3 proposition that “procedural due process requires that before being deprived of life,

4 liberty, or property, a person or entity be given notice of the possible deprivation and

5 an opportunity to defend.” Id. ¶ 14. This argument is similarly unavailing. “[T]o

6 claim the protections of the due process clause, an opponent must possess a

7 cognizable property or liberty interest.” Citizens for Fair Rates & the Env’t v. N.M.

8 Pub. Regul. Comm’n, 2022-NMSC-010, ¶ 34, 503 P.3d 1138. The Utilities make no

9 attempt to identify such an interest, in the rulemaking or otherwise, that could trigger

10 the due-process protections they claim. We therefore decline to consider this

11 argument any further. See, e.g., Elane Photography v. Willock, 2013-NMSC-040, ¶

12 70, 309 P.3d 53 (“We will not review unclear arguments, or guess at what [a party’s]

13 arguments might be.” (alteration in original) (internal quotation marks and citation

14 omitted)).

15 2. The Commission’s reliance on the Team’s recommendations did not 16 violate the statutory prohibition against ex parte communications

17 {52} Turning to the Utilities’ statutory argument, they rely on NMSA 1978, Section

18 62-19-23 (2004), which prohibits ex parte communications and, should such a

19 communication occur, requires the Commission to “disclose it to all parties and give

20 other parties an opportunity to respond.” Section 62-19-23 (D). The Utilities assert

41 1 that the Commission refused to identify all members of the Team during the

2 rulemaking and made it impossible to determine whether communications with the

3 Team after the close of the record violated the prohibition. See § 62-19-23(A)

4 (prohibiting ex parte communications “concerning a pending rulemaking after the

5 record has been closed”); see also 1.2.3.7(B) NMAC (9/1/2008) (defining an ex

6 parte communication in a Commission proceeding, in part, as a communication

7 “concerning a pending rulemaking after the record has been closed”). In particular,

8 the Utilities object to the Team’s inclusion of “representatives of Staff of the

9 Commission’s Utilities Division,” who, unlike advisory staff, are expressly

10 prohibited from engaging in ex parte communications with the Commission.

11 Compare NMSA 1978, § 62-19-17(E) (2003) (“Utility division staff shall not have

12 ex parte communications with commissioners or a hearing examiner assigned to a

13 utility case.”) with § 62-19-23(C)(2) (“[A] commissioner may consult with another

14 commissioner or with advisory staff whose function is to advise the [C]ommission

15 in carrying out the commissioner’s rulemaking or adjudicative responsibilities.”). In

16 considering the Utilities’ argument, we note a considerable amount of uncertainty in

17 the record about the Team’s composition. We therefore provide additional

18 background before we address the Utilities’ argument in detail.

42 1 a. Additional background

2 {53} SPS and EPE first raised concerns about the Team after the Commission filed

3 its Order Adopting the Rule. 9 In a request for procedural clarifications, SPS and EPE

4 argued that the Team’s “composition and role are unclear[, which] creates ambiguity

5 as to the record in this matter[ and] ambiguity as to the rationale underlying the Order

6 Adopting Rule.” The utilities asserted that they had “been unable to locate any

7 complete listing of the membership of the ‘Team’ in the record” and that the

8 Commission’s “partial descriptions” differed. The Initial Order described the Team

9 as including two commissioners, plus “representatives of Staff of the Commission’s

10 Utilities Division, the Office of General Counsel, and the Chief of Staff, among

11 others.” The Notice of Proposed Rulemaking later described the Team as including

12 two commissioners, “several employees of the Commission, and a Commission

13 contractor.” SPS and EPE also observed that, in the Commission’s public

14 deliberations during the rulemaking, “Mr. Arthur O’Donnell appeared to have the

15 role of speaking for the ‘Team’ and providing its recommendations.”

16 {54} SPS and EPE urged that the Team’s recommendations should be disclosed

17 “for the benefit of participating stakeholders and the general public, regardless of

9 PNM later raised substantially identical concerns in its motion for rehearing.

43 1 formal applicability of the Commission’s ex parte rules.” They also observed that,

2 depending on the Team’s composition, its substantive recommendations after the

3 close of the record—its recommendations about the final rule in particular—may

4 have amounted to undisclosed ex parte communications under the Commission’s

5 rules. See 1.2.3.1 to .11 NMAC (7/15/2004 as amended 9/1/2008) (regulating ex

6 parte communications in Commission proceedings); see also § 62-19-23. SPS and

7 EPE asked the Commission to clarify the Team’s role and the scope of its authority

8 in any remaining proceedings related to the Community Solar Rule, which were

9 ongoing. SPS later moved for rehearing and requested reopening the record to

10 supplement it with all of the Team’s recommendations relied on by the Commission

11 “in crafting the final rule” and providing an opportunity for public comment.

12 {55} The Commission rejected these concerns and denied SPS’s request to reopen

13 the record. The Commission characterized the Utilities’ “suddenly urgent concerns

14 [about] the Team” as “disingenuous if not frivolous” and “baseless and untimely”

15 given the Commission’s transparency about the Team’s participation and

16 recommendations throughout the rulemaking. The Commission also clarified that

17 Utility Division Staff “did not participate in Team discussions after the closing of

18 the record” and that all Staff recommendations had been “entirely contained within

19 Staff’s filed comments.” Notably however, the Commission did not identify

44 1 individual members of the Team and again described the Team as “Commissioners,

2 expert consultants, and others.” In a subsequent order, the Commission repeated its

3 description of the Team as “Commissioners, expert consultants, and others” and

4 specifically identified Arthur O’Donnell as a member. According to the

5 Commission, Mr. O’Donnell’s role was “that of advisory staff to the Commission,

6 initially pursuant to a consulting contract and subsequently pursuant to an

7 appointment in the U.S. Department of Energy’s Office of Energy Efficiency &

8 Renewable Energy (EERE) Research Participation Program.”

9 b. Discussion

10 {56} Before we address the merits of the Utilities’ argument, we make three

11 preliminary points. First, other than questioning the nature of Mr. O’Donnell’s role

12 during the rulemaking, the Utilities have not argued to the Commission or on appeal

13 that his participation was actually improper or that his advice after the close of the

14 record required disclosure under Section 62-19-23(E) or the Commission’s rules

15 governing ex parte communications. See 1.2.3.10 NMAC (requiring disclosure of ex

16 parte communications and an opportunity for all parties to respond). We therefore

17 assume without deciding that the Commission’s description of Mr. O’Donnell’s role

18 sufficiently identified him as “advisory staff whose function is to advise the

19 [C]ommission in carrying out the commissioner’s rulemaking . . . responsibilities.”

45 1 Section 62-19-23(C)(2); see also § 62-19-19(A), (B)(4) (authorizing the Chief of

2 Staff to hire advisory staff on a “temporary, term or contract basis” to inter alia

3 “assist the [C]ommission in the development of rules”). As such, Mr. O’Donnell’s

4 communications with the Commission are exempt from the prohibition against ex

5 parte communications and need not be disclosed. See also Qwest Corp., 2006-

6 NMSC-042, ¶ 60 (holding that the Commission “need not provide [the] parties with

7 the substance of [the] advice” of an expert hired by the Commission as advisory

8 staff); 1.2.3.9(C) NMAC (“Commissioners, hearing examiners and advisory staff

9 may consult with each other.”).

10 {57} Second, in the course of our whole-record review, we have discovered an

11 apparently full disclosure of the Team’s membership that has not been cited on

12 appeal or in any of the pleadings or Commission orders relevant to this issue. Shortly

13 after the Team’s creation, the Commission filed its first Order Scheduling Workshop

14 and explicitly stated that “all members of the Team will participate.” (Emphasis

15 added.) In a footnote, the order identified “the members of the Team” by name and

46 1 job title.10 Of note, the list of nine individual Team members is consistent with the

2 Commission’s repeated, varying descriptions of the Team, including Mr. O’Donnell

3 as an “advisor to the Commission.” Assuming the list is accurate, the Utilities’

4 arguments on this issue are essentially moot when the only member of the Team

5 subject to the prohibition against ex parte communications was the director of the

6 Commission’s Utility Division Staff, who according to the Commission, did not

7 participate in Team discussions after the close of the record.

8 {58} Accordingly, we hold that the Utilities have failed to meet their burden to

9 show that the Order Adopting the Rule must be vacated and annulled. The Utilities

10 rely on speculation and innuendo to argue that we should vacate and annul the order

11 because, in essence, ex parte communications may have occurred. Focusing on the

12 Team’s inclusion of Utility Division Staff, the Utilities argue that “the Commission’s

13 after-the-fact representation regarding Utility Division Staff should not be deemed

14 to cure the infirmity evident in the original order adopting the Rule.” They

The order identified the following members of the Team: Commissioners 10

Joseph Maestas and Cynthia Hall, “Wayne Probst (the Commission’s Chief of Staff), John Reynolds (Director of the Commission’s Utility Division Staff), Arthur O’Donnell (advisor to the Commission), Jonas Armstrong (assistant to Comm. Maestas), Collin Gillespie (assistant to Comm. Hall), Russell Fisk (of the Commission’s Office of General Counsel), Sarah Valencia (the Commission’s Public Information Officer), and representatives of Strategen.”

47 1 effectively invite us to disregard or disbelieve the Commission’s on-record

2 assurances that all input from Utility Division Staff was contained in their publicly

3 filed comments and that no Utility Division Staff participated in Team discussions

4 after the close of the record.

5 {59} The Utilities misunderstand their burden on appeal. “The burden shall be on

6 the party appealing to show that the order appealed from is unreasonable, or

7 unlawful.” Section 62-11-4. We presume that “administrative action is correct and

8 that the orders and decisions of the administrative body are valid and reasonable;

9 presumptions will not be indulged against the regularity of the administrative

10 agency’s action.” State ex rel. Reynolds v. Aamodt, 1990-NMSC-099, ¶ 9, 111 N.M.

11 4, 800 P.2d 1061 (internal quotation marks and citation omitted). The Utilities seek

12 to flip the presumption of regularity on this issue without evidence or legal authority.

13 We will not grant relief under these circumstances, when the Utilities have made no

14 attempt to substantiate their accusations after the Commission addressed the

15 Utilities’ questions about the participation of Utility Division Staff after the close of

48 1 the record.11 To hold otherwise would set too low a bar for undoing a Commission

2 order under the ex parte statute.

3 {60} We also agree with the Commission that its reliance on the Team was “more

4 transparent than applicable law requires.” Even assuming the Team included

5 members subject to the prohibition against ex parte communications, the

6 Commission routinely disclosed the Team’s recommendations throughout the

7 rulemaking, including before the prohibition applied. See § 62-19-23(A) (prohibiting

8 ex parte communications “concerning a pending rulemaking after the record has

9 been closed” (emphasis added)); 1.2.3.7(B) NMAC (defining ex parte

10 communication). And assuming the Team consisted entirely of advisory staff after

11 the close of the record, the Commission was under no duty to disclose its

12 recommendations at all. See § 62-19-23(C)(2); Qwest Corp., 2006-NMSC-042, ¶ 60;

13 see also 1.2.3.9(C) NMAC (“Commissioners, hearing examiners and advisory staff

14 may consult with each other.”). The Commission’s detailed disclosure of the Team’s

15 recommendations throughout the rulemaking process, including in the Order

As noted by the Commission, “The Utilities did not seek from the 11

Commission and do not include in the record before the Court any public records of the Commission to support their baseless claims.” We agree that the Utilities’ failure to undertake basic measures to investigate or substantiate their accusations undermines any argument for appellate relief. See, e.g., NMSA 1978, § 14-2-8(A) (2009) (providing a right to inspect public records on request).

49 1 Adopting the Rule, provided ample explanation of the Commission’s reasons for

2 adopting the Rule, which we hold was sufficient under law. See NMSA 1978, § 62-

3 19-21(E) (2001) (providing that all Commission rules “shall be filed in accordance

4 with the State Rules Act [Chapter 14, Article 4 NMSA 1978]” (bracketed text in

5 original)); see also NMSA 1978, § 14-4-5.5 (2017) (requiring “a concise explanatory

6 statement” when an agency adopts a rule).

7 {61} We are not persuaded that the Commission’s reliance on the Team’s

8 recommendations after the close of the record deprived the Utilities of their statutory

9 right to notice and an opportunity to respond to ex parte communications. The

10 Utilities’ claims that ex parte communications may have occurred are speculative,

11 unsupported by evidence, and inconsistent with the record. We therefore affirm on

12 this issue.

13 C. The Commission Did Not Violate the Public Utility Act or Due Process 14 by Summarily Rejecting SPS’s Proposed Bill-Credit Rate Without a 15 Hearing

16 {62} For the final issue on appeal, SPS challenges the Commission’s refusal to hold

17 a hearing when it rejected SPS’s initial proposed bill-credit rate, ordered SPS to file

18 a rate that complied with Rule 573.20(D), and allowed SPS’s revised bill-credit rate

19 to take effect. SPS argues that the Commission’s failure to hold a hearing violates

20 the Public Utility Act and due process. We first provide additional background and

50 1 then address these arguments on their merits.

2 1. Background

3 {63} After the Rule was adopted, SPS filed Advice Notice 309, which included the

4 bill-credit rate that SPS initially proposed for community solar subscribers. The

5 advice notice openly revealed that SPS had subtracted transmission costs from the

6 bill-credit rate, and it included written testimony that explained, among other things,

7 why SPS had subtracted transmission costs notwithstanding the Rule’s prohibition.

8 According to SPS’s two experts, transmission costs were subtracted “based on a

9 concern that crediting the entirety of the transmission cost rate to [s]ubscribers would

10 result in subsidization of such costs by nonsubscribers, in light of the fact that

11 [s]ubscribers will necessarily continue to use SPS’s transmission system for the

12 delivery of their energy.” The experts explained that during periods when solar

13 energy is not being generated, including at night, subscribers will use electricity

14 delivered through the transmission system, which serves a similar function as the

15 distribution system.

16 {64} Four advocacy groups filed written protests, urging the Commission to

17 summarily reject SPS’s proposed bill-credit rate as “unlawful on its face” and “in

18 complete disregard for the Commission’s orders and the [Act].” Commission Staff

19 similarly recommended suspending the advice notice because SPS had subtracted

51 1 transmission costs from the proposed bill-credit rate in violation of Rule 573.20(D).

2 {65} SPS argued in response that it had a right to continue to raise the issue of

3 transmission costs until it was resolved in this appeal. SPS also argued that it was

4 making a good-faith effort to resolve the Rule with the Commission’s order

5 clarifying implementation of the Rule. The Commission rejected SPS’s proposed

6 bill-credit rate, finding that it was submitted “in flagrant disregard” of Rule

7 573.20(D). The Commission also ordered SPS to file a compliant bill-credit rate and

8 specifically held that no hearing was necessary.

9 {66} SPS then filed a motion to vacate or stay the order, as well as a conditionally

10 filed advice notice under protest (Advice Notice 311). SPS argued that the previous

11 order should be vacated because it compelled SPS to file a different bill-credit rate

12 without first conducting a hearing. SPS further explained that it was “vigorously

13 contesting inclusion of transmission costs in the bill credit—an as-applied challenge

14 to the Commission’s implementation of 17.9.573.20.D NMAC—on the basis that it

15 is an improper subsidy in violation of the CSA.” SPS further argued that rejecting

16 the first advice notice without a hearing and ordering resubmission of a compliant

17 advice notice violated due process.

18 {67} The Commission denied SPS’s motion to vacate or stay the order and allowed

19 the bill-credit rate proposed in the Advice Notice 311 to take effect, again without a

52 1 hearing. The Commission reiterated that the first advice notice was submitted in

2 “flagrant violation” of the Rule, which the Commission could determine without a

3 hearing because “SPS expressly disputed the rule itself, and there was no dispute

4 about application of the rule to SPS’s specific facts and circumstances.”

5 2. Discussion

6 {68} SPS argues that the Commission’s failure to hold a hearing on either advice

7 notice renders the ensuing orders void. SPS first argues that under the Public Utility

8 Act, the Commission must hold a hearing before it can order “a rate different than

9 [the rate] proposed by the utility itself.” SPS relies on NMSA 1978, Section 62-8-

10 7(D) (2011), which provides as follows:

11 If after a hearing the [C]ommission finds the proposed rates to be 12 unjust, unreasonable or in any way in violation of law, the 13 [C]ommission shall determine the just and reasonable rates to be 14 charged or applied by the utility for the service in question and shall fix 15 the rates by order to be served upon the utility[,] or the [C]ommission 16 by its order shall direct the utility to file new rates respecting such 17 service that are designed to produce annual revenues no greater than 18 those determined by the [C]ommission in its order to be just and 19 reasonable.

20 (Emphasis added.) SPS argues that, without a hearing on either advice notice, the

21 Commission lacked authority under Section 62-8-7(D) to reject the original

22 proposed bill-credit rate, order the filing of a revised rate, and approve the revised

23 rate that was filed under protest. Relatedly, SPS argues that the failure to hold a

53 1 hearing violated due process by preventing SPS from “develop[ing] a record on

2 contested issues” concerning its proposed bill-credit rate. See Resolute Wind 1 LLC

3 v. N.M. Pub. Regul. Comm’n, 2022-NMSC-011, ¶ 24, 506 P.3d 346 (holding that

4 the Commission violated due process by using a “summary [disposition] procedure”

5 that “precluded [the appellant] from presenting evidence and developing a record on

6 the disputed . . . issue”).

7 {69} Under the specific circumstances of this case, we disagree that a hearing was

8 required under Section 62-8-7(D) or as a matter of due process. See, e.g., TW

9 Telecom, 2011-NMSC-029, ¶ 17 (“Due process is not a concrete concept, but rather

10 is flexible in nature and may adhere to such requisite procedural protections as the

11 particular situation demands.”) (internal quotation marks and citation omitted)).

12 Neither the statute nor due process requires a hearing when, as here, the proposed

13 bill-credit rate was submitted in open defiance of prescribed requirements. See, e.g.,

14 1 Kristin E. Hickman & Richard J. Pierce, Jr., Administrative Law Treatise, § 6.3, at

15 847 (7th ed. 2024) (“An oral evidentiary hearing is never required if the only disputes

16 involve issues of law or policy.”).

17 {70} Moreover, the Commission was well-positioned to determine whether SPS

18 was merely attempting to relitigate arguments of law or policy previously raised and

19 considered during the rulemaking or genuinely attempting to develop a record on

54 1 disputed issues of fact. By the time the Commission considered Advice Notice 309,

2 SPS’s position on the issue of transmission costs was well known. The Commission

3 had repeatedly considered and addressed SPS’s arguments throughout the

4 rulemaking, including in (1) the Notice of Proposed Rulemaking, which called out

5 the Utilities’ arguments during the informal proceedings and specifically solicited

6 comment on whether transmission costs should be included or excluded from the

7 bill-credit rate, (2) the Order Adopting the Rule, which summarized and addressed

8 SPS’s initial, response, and reply comments on the proposed rule, (3) the Order on

9 Rehearing which denied SPS’s arguments in its motion for rehearing, and (4) the

10 order denying SPS’s Motion to Stay Implementation of the Rule pending appeal.

11 The Commission had also responded to the same arguments in this Court after SPS

12 filed its Motion to Stay Implementation of [the Commission’s] Orders Pending

13 Appeal.

14 {71} Suffice it to say, SPS’s position on the issue of transmission costs was well-

15 understood by the Commission when it rejected the proposed bill-credit rate in

16 Advice Notice 309 without a hearing. The same is true of SPS’s arguments when it

17 filed Advice Notice 311 under protest. Indeed, SPS candidly admitted in support of

18 Advice Notice 309 that it was making the very same arguments it had been making

19 throughout the rulemaking: “As SPS has repeatedly noted in its filings in the

55 1 Community Solar rulemaking and in its pending appeal of the Commission’s

2 rulemaking order, [Rule 573.20(D)] must be interpreted and applied as SPS has

3 proposed in its Advice Notice in order to comply with the plain language of the

4 Community Solar Act.” This admission made clear that SPS was merely attempting

5 to accomplish through expert testimony what it had failed to achieve during the

6 rulemaking: to persuade the Commission to adopt SPS’s preferred reading of the

7 statute. “When the regulated party’s own admissions make clear that no material

8 facts are in dispute, it is unnecessary to require a judge to recite these facts as

9 ‘findings’ after a hearing.” See Kourouma v. Fed. Energy Regul. Comm’n, 723 F.3d

10 274, 278 (D.C. Cir. 2013). Under these circumstances, lacking any dispute of

11 material facts, when the proposed bill-credit rate was openly submitted “in violation

12 of law,” § 62-8-7(D), the Commission was free to reject Advice Notice 309 without

13 a hearing.

14 {72} We are unpersuaded by the authorities cited by SPS in favor of reversal. None

15 involves a circumstance in which the Commission or its predecessor concluded that

16 a hearing was unnecessary based on a rate submitted by a public utility in open

17 defiance of prescribed requirements. See Tri-State Generation & Transmission

18 Ass’n, Inc. v. N.M. Pub. Regul. Comm’n, 2015-NMSC-013, ¶¶ 2, 34-35, 347 P.3d

19 274; see also TW Telecom, 2011-NMSC-029, ¶ 1; see also State v. Mountain States

56 1 Tel. & Tel. Co., 1950-NMSC-055, ¶¶ 5, 26-27, 54 N.M. 315, 224 P.2d 155. We have

2 already held that the Commission reasonably interpreted the Act to prohibit

3 subtracting transmission costs from the bill-credit rate. While SPS was free to

4 preserve this issue in its advice notices pending the outcome of this appeal, the

5 Commission was under no obligation to hold a hearing on a question of policy that

6 was fully debated and considered during the rulemaking and clearly answered by the

7 Rule.

9 {73} We hold the Utilities, in their various challenges, failed to meet their burden

10 in demonstrating that the Rule is unreasonable or unlawful in light of the Act.

11 Accordingly, we affirm the Commission’s adoption of the Rule. The Utilities also

12 failed to substantiate their claim that the Rule must be vacated and annulled because

13 of possible ex parte communications after the close of the rulemaking record.

14 Finally, we hold that the Commission did not violate statute or due process when it

15 rejected SPS’s proposed bill-credit rate without a hearing.

16 {74} IT IS SO ORDERED.

17 18 BRIANA H. ZAMORA, Justice

57 1 WE CONCUR:

2 3 DAVID K. THOMSON, Chief Justice

4 5 MICHAEL E. VIGIL, Justice

6 7 C. SHANNON BACON, Justice

8 9 JULIE J. VARGAS, Justice