El Paso Electric Company v. New Mexico Public Regulation Commission

Summary

The New Mexico Supreme Court held that the rule against retroactive ratemaking barred El Paso Electric Company from recovering losses incurred under rates that were later vacated on appeal. The Court declined to overrule its precedent establishing that rule and affirmed the New Mexico Public Regulation Commission’s denial of recovery for the period before the Court’s mandate. The Court emphasized that utilities seeking to avoid potentially unrecoverable losses during an appeal should request a stay or interim rates.

Holdings

1. The rule against retroactive ratemaking prohibits El Paso Electric from including in its January 2024 rates a regulatory asset for losses incurred between June 2021 and June 2023 under the vacated June 2021 rate order.
2. The Court declined to recognize an independent equitable remedy allowing El Paso Electric to recover the losses.
3. The Court declined to overrule Mountain States and U.S. West and retained the rule against retroactive ratemaking.

Questions Presented

1. Whether the rule against retroactive ratemaking prohibits a utility from recovering losses incurred under rates that were later vacated on appeal.
2. Whether the Supreme Court may provide independent equitable relief to compensate the utility for those losses.
3. Whether the Court should abandon the rule against retroactive ratemaking and overrule Mountain States Telephone & Telegraph Co. v. New Mexico State Corp. Commission and U.S. West Communications, Inc. v. New Mexico State Corp. Commission.

Disposition

affirmed