City of Las Cruces v. N.M. Pub. Regul. Comm'n

── City of Las Cruces v. N.M. Pub. Regul. Comm'n ── Court: New Mexico Supreme Court Date: May 11, 2026 Category: General 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. 1 IN THE SUPREME COURT OF THE STATE OF NEW MEXICO 2 Opinion Number: 3 Filing Date: May 11, 2026 4 NO. S-1-SC-40636 5 CITY OF LAS CRUCES, 6 Appellant, 7 v. 8 NEW MEXICO PUBLIC 9 REGULATION COMMISSION, 10 Appellee, 11 and 12 EL PASO ELECTRIC COMPANY, 13 Intervenor-Appellee. 14 In the Matter of the Application 15 of El Paso Electric Company for 16 a Variance from the Fuel and 17 Purchased Power Cost Adjustment 18 Clause Methodology, New Mexico 19 Public Regulation Commission 20 Case No. 21-00064-UT 21 APPEAL FROM THE NEW MEXICO PUBLIC REGULATION 22 COMMISSION  1 City of Las Cruces 2 Bradley Douglas, City Attorney 3 Las Cruces, NM 4 Stevens Law, LLC 5 Anastasia S. Stevens 6 Santa Fe, NM 7 for Appellant 8 Erin E. Lecocq, Appellate Specialist 9 Santa Fe, NM 10 for Appellee 11 El Paso Electric Co. 12 Nancy B. Burns 13 Santa Fe, NM 14 Spencer Fane, LLP 15 Jeffrey J. Wechsler 16 Kari E. Olson 17 Joseph M. Dworak 18 Santa Fe, NM 19 for Intervenor-Appellee El Paso Electric Co.  1 OPINION 2 THOMSON, Justice. 3 {1} The public utility rate dispute at issue stems from the snow, ice, and severely 4 cold temperatures brought by Winter Storm Uri, whose Arctic air gripped New 5 Mexico for seven consecutive days in February 2021. Intervenor-Appellee El Paso 6 Electric Company (EPE) relied, in in part, upon Palo Verde Nuclear Generating 7 Station Unit 3 (PV3, PVGS Unit 3, or PVNGS Unit 3) to successfully provide 8 electric energy and capacity to its New Mexico customers without interruption 9 throughout the storm period. The rate dispute in this case centers on the propriety of 10 EPE’s use of a so-called proxy price formula to calculate the increase in consumer 11 energy costs attributable to EPE’s use of PV3. As a result of the storm, “natural gas 12 prices skyrocket[ed] due to supply constraints” in New Mexico and other states 13 impacted by the storm. See, e.g., Holcim U.S. Inc. v. Colo. Pub. Utils. Comm’n, 2025 14 CO 1, ¶ 6, 562 P.3d 55 (“The interplay of the extreme cold, freeze-offs of natural 15 gas production, and high customer demand for natural gas greatly impacted natural 16 gas prices during th[e reign of Winter Storm Uri],” causing gas prices to “spik[e].”); 17 Evergy Mo. W. Inc. v. Off. of Pub. Couns., 676 S.W.3d 438, 442 (Mo. Ct. App. 2023) 18 (“The spike in natural gas prices [caused by Winter Storm Uri] resulted in record 19 high real-time electricity prices [in Missouri].”).  1 {2} The outcome of this appeal hinges on the proper interpretation and application 2 of a number of prior rate-related orders issued by the New Mexico Public Regulation 3 Commission (the Commission or NMPRC) in separate administrative proceedings 4 involving EPE and addressing similar PV3 proxy price issues. As a threshold matter, 5 however, this Court has not previously established the level of deference, if any, we 6 extend to the Commission’s interpretation of its own prior orders. This opinion 7 resolves this issue of first impression in favor of the Commission by adopting the 8 “high level of deference” generally accorded an “agency’s interpretation of its own 9 orders.” 73A C.J.S. Public Administrative Law & Procedure § 343 (2014). Applying 10 the standard, we uphold the results of the full and fair administrative proceedings 11 held by the Commission and affirm the Commiss