NM Supreme Court rejects El Paso Electric’s request to recover rate losses

SANTA FE (KVIA) -- The New Mexico Supreme Court unanimously ruled Friday the El Paso Electric Company cannot recover losses from rates that were later invalidated on appeal.

EPE serves southern New Mexico customers, including those in Las Cruces.

The Court affirmed the state's Public Regulation Commission's denial of EPE's proposal to recoup losses from two years before a Supreme Court decision invalidated rates in 2023, officials said.

The Court said EPE should have requested a stay of the Commission's ratemaking order, or ask the regulatory agency to establish interim rates subject to a refund or surcharge pending the appeal outcome, according to a news release.

EPE didn't do either when it appealed the PRC's order setting the utility's rates in 2021, the Court said.

The Court reversed the 2021 order in 2023, arguing the PRC violated EPE's due process rights by "excluding certain costs and assets from the utility's rate base."

EPE proposed to recover losses from the rates in effect during its initial appeal. It filed a second appeal when the PRC established new rates, which didn't allow for recovery of the losses between the time the rates were initially ordered in 2021 and when the rates were vacated by the Court in 2023.

Friday, the Court said if state regulators “were to allow EPE to recover these amounts in rates with a January 2024 effective date, then the Commission would retroactively change the price of transactions occurring between June 2021 and June 2023."

The Court said the prohibition on retroactive ratemaking protects due process rights by ensuring rates paid for past transactions can't change without prior notice.