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Legal Memorandum: Retirement of Long-lived Assets in NM

Issue: What are the legal obligations for the retirement of long-lived assets for public utilities?

Area of Law: Environmental Law
Keywords: Retirement of long-lived assets; Public utilities; Legal obligations
Jurisdiction: New Mexico
Cited Cases: None
Cited Statutes: N.M. Stat. § 62-9-5 (2007); N.M. Code R. § 18.60.2.8(A) (2007), 17.4.2.14(G)(7), §§ 19.14.73.8, .9; 49 C.F.R. Part 192; Alamogordo, N.M., Code § 20-02-030 (2007); Bernalillo County, N.M., Code § 66-123 (2007); Farmington, N.M., Code § 24-5-14 (2007); Los Alamos County, N.M., Code § 34-43 (2007); Espanola, N.M., Code § 78-39 (1998); Rio Rancho, N.M., Code § 96.20 (2007), § 96.23
Date: 11/01/2007

No utility may abandon all or any part of its facilities without first obtaining Public Regulation Commission’s permission and approval.  N.M. Stat. § 62-9-5 (2007).  The Commission must grant approval after notice and hearing, if it finds that the present and future public convenience and necessity do not require continued use of the facility.  Id. Note, however, that ordinary discontinuance of the use of a facility for “reasons in the usual course of business” is not considered abandonment for purposes of this pre-approval requirement.  Id.

With respect to gas pipelines, the Commission has generally adopted the federal pipeline safety standards set forth in 49 C.F.R. Part 192.  See N.M. Code R. § 18.60.2.8(A) (2007).  Regulations of the State Highway and Transportation Department governing the occupancy of state highway rights-of-way by utility facilities provide that all larger diameter abandoned casings and pipes in a highway right-of-way must be backfilled with grout of a type approved by the Department.  Id. § 17.4.2.14(G)(7).

Administrative regulations also detail the steps that must be taken when a geothermal well is abandoned, either temporarily or permanently.  See id. §§ 19.14.73.8, .9.

Municipal codes for ten New Mexico cities were reviewed, and several address the abandonment of equipment and facilities.  Within a master plan area in Alamogordo, the planning and zoning commission must recommend to the city commission the approval or denial of any proposal to abandon a utility, whether publicly or privately owned. Alamogordo, N.M., Code § 20-02-030 (2007).  The Bernalillo code provides that if a substructure […]

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