Farmington reviews legal options in wake of decision

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FARMINGTON — The New Mexico Court of Appeals has denied Farmington’s request for the court to review a district judge’s ruling that Bloomfield has the right to acquire all electric utility assets within its city boundaries from the city of Farmington.

The Court of Appeals announced its decision earlier this month.

The district court judge had ruled that a 1960 court judgment and decree gave Bloomfield the legal right to all the utility assets.

Bloomfield filed a lawsuit in 2015 due to a difference in opinion between the two cities about what infrastructure the city was allowed to acquire from Farmington.

Farmington maintains Bloomfield is only legally entitled to the assets within its city limits that were in place when it acquired the system from Basin Light & Power Co. in 1959. But District court Judge Bradford Dalley ruled in August that Bloomfield had the right to purchase all the assets currently in place within its city limits.

The electric utility lawsuit, which has cost the city of Bloomfield about $850,000, became one of the key issues in the recent municipal elections. The two newly elected Bloomfield city councilors, as well as the newly elected mayor, stated during campaigns that they would end the electric utility lawsuit. Their incumbent opponents all favored continuing the litigation to establish the city's right to acquire the infrastructure.

“We will be meeting with our team in the near future to discuss legal options going forward,” Farmington City Manager Rob Mayes said in a text message statement regarding the status of the litigation. “Regardless of our legal response, we continue to extend the offer to the City of Bloomfield to negotiate a financially beneficial franchise agreement.”

The franchise agreement is essentially rent that Farmington pays to use Bloomfield’s rights of way.

The franchise agreement between the two cities has expired, although Farmington continues to operate under the terms of the expired agreement.

Farmington maintains that if Bloomfield acquires the electric utility assets it wants, the move would raise the electric rates for people both within Bloomfield city limits and within the rest of the system.

The city has said the large number of customers served by the Farmington Electric Utility System allows it to spread costs out over more customers and keep rates lower than anywhere else in the region.

In a statement emailed to The Daily Times by the city attorney, Bloomfield officials state the city believes Farmington will ask the New Mexico Supreme Court to review the district judge’s decision.

“However, Bloomfield is confident that, like the Court of Appeals, the Supreme Court will decline such a review,” the statement reads.

Bloomfield officials acknowledged that Farmington has made significant investments in the electric system within the Bloomfield city limits since Farmington acquired the infrastructure from Basin Light & Power Co. in 1959.

The 1960s judgment and decree, known as the Culpepper Decree, came after former members of the Basin Light & Power Co. board sued the city of Farmington to determine the legal rights of Aztec and Bloomfield to the utility assets within their boundaries. The decree gets its name from one of the board trustees, C.C. Culpepper.

Aztec acquired its electric utility system shortly after the Culpepper Decree was issued.

In the city's statement sent to The Daily Times, Bloomfield officials offered to negotiate with Farmington to resolve the litigation without spending “time, energy, and resources litigating a matter that, in all due regards, is now settled.”

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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