FARMINGTON — Natural gas that 63 land and business owners have been receiving for decades from distribution lines in San Juan County will be cut off by the end of the summer, and those people say that violates their right-of-way agreements.

"We just want them to honor their agreement," said Rich Anderson, a property owner who uses the natural gas to power pumps that irrigate his land in La Plata. "Now, if they can't honor their agreement, come get your pipelines."

The New Mexico Public Regulation Commission in 1995 approved a transfer of ownership of the lines from PNM to Williams Four Corners LLC and Enterprise Products.

Kim Alsup points in the direction where an oil and gas line runs under her property on May 29 at her home in Bloomfield.
Kim Alsup points in the direction where an oil and gas line runs under her property on May 29 at her home in Bloomfield. (Jon Austria — The Daily Times)

But those companies are not utility providers, the land and business owners say, and, in 2009, the companies told the New Mexico Gas Company they plan to stop providing gas to 474 customers hooked into the lines. Historically, the gas company bought the gas in the lines and sold it to metered customers.

On March 5, in an agreement with all involved parties, the PRC ruled the New Mexico Gas Company will extend its main gas lines to 411 of the customers.

But that leaves the 63 people detached.

"They're too far away, and it's too expensive to extend our system to them," said Tom Domme, New Mexico Gas Company regulatory affairs vice president.

Instead, he said, his company will pay each user $5,000 to switch from the natural gas to either propane or electricity. But property owners say they received notice last week that a 28 percent tax on those payments will leave them only $3,600.

"We have to comply with federal tax code," Domme said, "and that $5,000 is considered by the federal tax code as a payment of income to these people."

Many questions remain, the land and business owners say.

Kim Alsup looks through a maze of gas lines on May 29 at her home in Bloomfield.
Kim Alsup looks through a maze of gas lines on May 29 at her home in Bloomfield. (Jon Austria — The Daily Times)

The agreement many entered with the company to receive gas from the lines prohibited them from building on the lines' rights of way.

Paula and Robert Alley, owners of property in Aztec, said the right of way on their land is 1,400 feet by 50 feet long.

"That's a lot of land," Paula Alley said.

If the land and business owners don't get the gas anymore, Anderson wants to know how Williams Four Corners LLC and Enterprise Products can, under its contract with them, prohibit construction on the rights of way.

Dwight Lamberson, PRC Utility Division director, said the right-of-way agreements between the land and business owners and the lines' owners is historic and nuanced. Some date to the 1950s, he said, and gas rights aren't promised in every agreement.

He and his associates were unable to provide more information about the agreements.

"It's something that the commission has no jurisdiction over," said Tim Martinez, an engineer with the PRC's Gas, Water and Wastewater Engineering Bureau.

For 18 years, Anderson said he's built up his land to pass to family, but, he said, "in a year or so we're going to be forced out of business."

"How can the commission — who are publicly elected officials — allow this?" he asked.

Theresa Becenti-Aguilar, PRC chairwoman and District 4 commissioner, which includes that area, said all stakeholders — including those 63 who are constituents — were involved in the March compromise.

"I think every angle was measured," she said, "and this was the best possible path that we can all agree on."

Lynda Lovejoy — who beat Becenti-Aguilar in the three-way Democratic primary for the District 4 PRC seat nomination and currently faces no opposition in the November general election — said she would have handled the issue differently. When Williams Four Corners LLC and Enterprise Products officials initially asked the PRC to buy the gas lines, she said she would have asked they continue service to existing customers. She would have also asked if they planned to add more customers, she said.

"It sounds like somebody dropped the ball," Lovejoy said.

She added the New Mexico Gas Company should extend its lines to the 63 customers. Saying it is too expensive, she said, is an often-used excuse.

Kim Alsup, an affected property owner, said she expects the issue to be challenged in court.

First, most of the 63 people affected must pool their money to collectively hire a lawyer, Anderson said.

But when they asked the PRC for the names of the 63 people who will be affected, Anderson said they were denied. He said the commission is trying to prevent them from organizing.

PRC representatives said that is not the case.

Martinez said their identities are protected by statute. "It has absolutely nothing to do with preventing people from organizing," Lamberson said.

Dan Schwartz covers government for The Daily Times. He can be reached at 505-564-4606 and dschwartz@daily-times.com. Follow him @dtdschwartz on Twitter.