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FARMINGTON — Farmington and Bloomfield are working to resolve a lawsuit that Bloomfield filed in 2015 in attempt to clarify Bloomfield's right to purchase an electric utility from Farmington.

A district court judge ruled in 2017 that the city of Bloomfield has the right through a 1960s court decision to acquire the electric utility assets within its city limits from Farmington Electric Utility System.

Farmington had appealed to the New Mexico Supreme Court asking the supreme court to review District Court Judge Bradford Dalley’s ruling that Bloomfield has a right to all electric assets within its current city limits. The state Supreme Court denied Farmington’s petition in late July, according to Bloomfield City Attorney Ryan Lane.

Farmington had argued that the 1960s decision only gave Bloomfield the right to the assets that were in place when Farmington Electric Utility System acquired the utility from Basin Light & Power Co. in 1959.

Basin Light & Power Co. was essentially a branch of the city that owned electric assets outside of a five-mile radius surrounding Farmington. The company owned the assets because state law prevented cities from owning electric assets outside of the five-mile radius. That law changed and Basin Light & Power dissolved, giving Farmington all the utility assets in San Juan County.

Shortly after the 1960s court decision, Aztec acquired the utility within its boundaries through a lawsuit.

Bloomfield had hoped to do the same thing.

Lane said the case will now be remanded to district court. The next phase would be determining the value of the electric assets.

The city of Bloomfield has not yet committed to purchasing the utility assets. The elected officials have said the city would not purchase the electric utility without the residents voting on the purchase.

Farmington City Manager Rob Mayes said in a text message to The Daily Times that Bloomfield has reached out to Farmington Electric Utility System about a new franchise agreement that could increase the payment that Farmington gives Bloomfield for use of Bloomfield’s rights of ways and easements.

Lane confirmed that Bloomfield is in discussion with Farmington about that agreement.

“The two cities are hoping to sit down and see if we can reach a resolution,” he said.

Mayes said the increased payments to Bloomfield would help Bloomfield’s general fund.

“This is the outcome city of Farmington has preferred all along as an alternative to costly litigation,” he said. “In addition to the cost of litigation and consultants that Bloomfield has paid from their general fund, Bloomfield has lost over $500,000 in additional payments from FEUS as a direct result of filing this lawsuit and delaying a new franchise. I commend Mayor (Cynthia) Atencio and their elected officials for seeking a financially prudent resolution to this matter.”

In April, city councilors told residents that Bloomfield had spent $849,000 on the electric utility lawsuit.

The money spent on the lawsuit during an economic downturn was a driving factor in the March elections. The incumbent mayor and councilors lost to Atencio and Councilors Ken Hare and Sue Finch. The three newcomers criticized the lawsuit during their campaigns.

"The city of Farmington looks forward to resolving this matter as quickly as possible and continuing our positive relationship with our Bloomfield customers in the FEUS electric system," Mayes said.

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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