Electric utility debate hinges on 1960 document

Cities disagree over what electric utility infrastructure Bloomfield has a right to acquire

Hannah Grover
District Judge Bradford Dalley presides over a hearing between Farmington and Bloomfield officials Wednesday in Aztec District Court.
  • Judge Bradford Dalley will determine what electric utility properties Bloomfield has the right to acquire.
  • Bloomfield sued Farmington in 2015 in an attempt to purchase the infrastructure within its city limits
  • A 1960 court decision is being used as the basis of arguments for both cities.

AZTEC — District Judge Bradford Dalley said he feels like he needs to go back in time to interpret the meaning of a 1960 document that is the basis of a legal debate between Farmington and Bloomfield over electric utility infrastructure.

Bloomfield sued Farmington in 2015 as part of an attempt to acquire the electric utility system infrastructure within its city limits as part of an effort to create its own electric utility. The cities differ over how much infrastructure Bloomfield is entitled to. Bloomfield wants to acquire all the infrastructure currently existing within its city limits, but Farmington claims Bloomfield has no right to acquire the infrastructure it has added over the last half century since it assumed ownership of the system.

After hearing arguments in the case on Wednesday, Dalley said he will not have hearings on the other motions until he makes a decision on what property Bloomfield has the right to acquire. A timeline has not yet been set for when the two cities may hear a final decision.

When Basin Light and Power Co. gave its assets to Farmington more than 50 years ago, some Basin board members filed suit to determine what legal authority Farmington had to the assets. That move resulted in the 1960 Culpepper Judgment and Decree, which also gave Aztec and Bloomfield a right to acquire the utility assets within their city limits. Sunny Nixon, who is representing Farmington in the current lawsuit, argues that the document should be the only one used in determining how much infrastructure Bloomfield has a right to acquire. Nixon said the words "electric utility system" are never mentioned in the judgment and decree. Instead, the document refers only to properties that formerly belonged to Basin.

Bloomfield's attorney, Nann Winter, argued that because the Culpepper decree references other documents, Dalley should examine those materials to provide interpretation about what Culpepper means. Winter also argued that if Dalley feels that the 1960 document is not clear, he should look at other documents, as well as how Farmington has managed the transfer of assets to Aztec in the past.

Sunny Nixon, an attorney representing Farmington, provides documents to Judge Bradford Dalley during a hearing Wednesday in Aztec District Court.

Winter said that while Farmington and Bloomfield both maintain that the judgment and decree is clear and unambiguous, the cities interpret it to mean something different. She described that difference as two theories — the Basin limitation theory or the system acquisition theory.

"(Bloomfield) is coming 55 years later and asking for the entire system without a basis in the clear and unambiguous 1960 judgment," Nixon said during Wednesday's hearing.

Winter said both cities agree that Bloomfield has the right to buy utility infrastructure.

"The real issue is what do we get to buy," she said.

After Culpepper was handed down, Aztec sued to acquire its portion of the electric utility. Winters points to the Aztec judgment as evidence that Bloomfield is entitled to all the electric utility system infrastructure within its city limits. That judgment gave Aztec the right to purchase the system for $790,000. The judgment states the price can be changed based on additions to or retirements of system property. Nixon said Aztec knew in 1960 that it had the right only to the Basin properties, rather than any new infrastructure Farmington had added, and that was what it asked for in 1960.

Bloomfield City Attorney Ryan Lane, center, and Bloomfield City Manager Eric Strahl, right, listen to arguments during a hearing Wednesday in Aztec District Court.

Bloomfield argues that as Aztec has annexed land and expanded its boundaries over time, it has purchased additional assets that were not Basin property. Nixon countered by saying those transactions were not based on Culpepper.

Winter said the utility infrastructure belonged to Farmington even while Basin existed because Basin was organized to hold the infrastructure in trust until Farmington was legally able to own it. When Farmington received the legal authority to take ownership of the system, including infrastructure outside of its city limits, it was given to the city.

"Basin was almost a fiction," Winter said. "Basin was Farmington's alter ego."

Nixon countered that Basin was a real, legal entity, and if it were fictional, Farmington would have been breaking the law. She said Farmington and Bloomield received the same thing — rights to Basin's assets.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.