Electric utility case could change following municipal election

Farmington official says city would welcome end to litigation

Hannah Grover
Farmington Daily Times
  • Bloomfield voters elected a new mayor and two new City Council members during Tuesday's municipal elections.
  • Bloomfield and Farmington are locked in a legal dispute over which electric utility assets Bloomfield has the right to acquire.
  • The Farmington Electric Utility System currently serves all of San Juan County except for the city of Aztec.
The fate of lawsuit between Bloomfield and Farmington over which electric utility infrastructure Bloomfield has the right to acquire within its borders is in question after the recent municipal elections.

FARMINGTON — The results of Tuesday’s election could change the course of Bloomfield’s electric utility lawsuit against the city of Farmington.

“The electrical acquisition power issue was, I feel, the major issue of the election,” Councilor-elect Kenneth Hare stated in an email to The Daily Times.

Hare and two other newly elected Bloomfield officials defeated three incumbent candidates who supported the lawsuit against Farmington in Tuesday's municipal elections. All three newcomers received more than 50 percent of the votes cast. Hare received 61 percent, and Councilor-elect Sue Ann Finch received 60 percent, while Mayor-elect Cynthia Atencio received 55 percent of the votes.

More:Bloomfield candidates weigh in on electric utility lawsuit

Farmington and Bloomfield have been locked in a court battle over which electric utility assets a 1960s court case gave Bloomfield the right to acquire. A district court judge ruled in favor of Bloomfield last year, but Farmington has since appealed the case.

Farmington says the 1960s case gave Bloomfield the right to acquire the assets that were in place when Farmington acquired the electric utility from Basin Light & Power Co. in 1959. Bloomfield argues that the case gave the city the right to acquire all the assets that are currently within Bloomfield’s city limits.

During a candidate forum leading up to the election, the three eventual winners criticized the city's spending on lawsuits while Bloomfield has been struggling to provide basic services with the economic downturn. The lawsuit has cost Bloomfield $300,000 in legal fees since 2011, according to Mayor Scott Eckstein. Eckstein provided the number during the candidate forum when Atencio asked him about the legal fees.

More:Farmington prepares to appeal electric utility case

Sue Ann Finch

The Farmington Electric Utility System currently serves all of San Juan County except for the city of Aztec. It also serves a portion of Rio Arriba County. Farmington officials say the size of the electric utility system helps keep rates lower. Farmington currently has the lowest rates in the region.

When reached by phone, City Councilor-elect Sue Ann Finch said she will need to discuss the case with the other city councilors and Mayor-elect Cynthia Atencio before she can make a final decision about pursuing the electric utility case.

“My feelings are that we should just drop it,” she said.

She said she would like to renegotiate the franchise agreement with Farmington. The franchise agreement is essentially rent that Farmington pays Bloomfield for use of easements and rights of way located within its borders. Bloomfield’s franchise agreement with Farmington expired several years ago, but Farmington has continued to operate under the terms of the previous agreement.

Farmington City Attorney Jennifer Breakell said Bloomfield could end the litigation at any time, but Farmington officials have not had a discussion with Bloomfield regarding the possible termination of the lawsuit. She said Farmington would welcome any conversation regarding an end to the litigation.

More:Farmington, Bloomfield continue electric utility debate

Kenneth Hare

Breakell said if Bloomfield drops the lawsuit, it will retain the right to have an electric utility at some point. She said the only dispute was which assets Bloomfield is legally entitled to obtain.

Breakell said Farmington is willing to sit down with Bloomfield to renegotiate the franchise agreement.

“The prudent path is to proceed in a very timely manner to assess our options and situations to avoid a 'rash decision,'” Hare said. “Where are we in this process? Most of us don’t know.”

He said he will need to talk to the city’s legal team, as well as other city councilors and the city management. Hare said there should also be a quick, cost-efficient assessment and review of a feasibility study that the city of Bloomfield has completed to determine whether the city could run a successful electric utility. The city completed its first feasibility study in 2012 and then had a second study done in 2014.

More:Judge: Bloomfield has right to buy electric system

Hare said the council also will have to assess other options, including opening a dialog with Farmington and the possibility of starting a public-private partnership for creating and operating an electric utility.

“The key question is: Is it feasible to move forward?” Hare said.

Hare said Bloomfield must define the worst-case scenario and “move up the scale of opportunity to a point we are comfortable with risk analysis and opportunity.”

He said the City Council needs to be transparent and provide residents with relevant data so they can make a strong, evidence-based decision.

“This decision is too big to be made by five people,” Hare said. “This will require some type of town hall format. We have to listen to the people for mission critical decision making, but we have to provide them with solid, transparent data on which to base their decisions.”

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