N.M. Admin. Code § 17.6.450.14 - RATE TREATMENT

A. Allocations: There is no presumption that a utility's allocation method is reasonable. The burden of proof shall be on the utility in a rate case or other proceeding to justify its method of allocation of expenses, any factors used, and amounts allocated.

B. Class I Transactions: There is no presumption that a Class I transaction is reasonable. The utility has the burden of proof to show that all Class I transaction costs and contract conditions are reasonable.

C. Class II Transactions: The utility shall bear the burden of proof to show that its rates, costs including cost of capital, and service have not been materially and adversely affected by any Class II transaction or its resulting effect and that the utility has not subsidized its affiliates.

D. Confidentiality: Any person who so qualifies may petition the Commission for a protective order for confidential or proprietary information, as provided by NMSA 1978, Section 62-6-17(D).

E. Sanctions for Failure to Provide or Permit Discovery: If any person fails to obey an order to provide or permit discovery with regard to any matter related to Class I transactions or Class II transactions and their resulting effect, the Commission may impose sanctions pursuant to Rule 37 of the New Mexico Rules of Civil Procedure for the District Courts and/or penalties pursuant to NMSA 1978, Article 12, Chapter 62, and/or if the person is a utility the Commission may disapprove the utility's general diversification plan.

F. Remedies:

(1) Upon a finding that a utility has failed to carry its burden of proof regarding Class I and Class II transactions, or upon a finding that a Class II transaction or its resulting effect is adversely and materially affecting the utility's ability to provide reasonable and proper service at just and reasonable rates, or a finding that a cross-subsidization or improper allocation has occurred, the Commission may take such steps as it deems necessary to correct such situations and to compensate ratepayers for any resulting risks, costs, service reductions, or other adverse and material effects including, but not limited to, adjustments to the utility's cost of capital, capital structure, expenses, or revenues.

(2) Upon a Commission finding that a Class II transaction or the resulting effect thereof has materially and adversely affected the utility's ability to provide reasonable and proper utility service at fair, just, and reasonable rates and/or imposed other costs or risks on the ratepayer, the Commission may order the utility to develop and file a proposed plan of action which will eliminate the cause of, and compensate ratepayers for, such effect, costs, or risks and will provide appropriate monitoring procedures.

Notes

N.M. Admin. Code § 17.6.450.14

Recompiled 12/30/01