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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 a public utility company in New Mexico?

Area of Law: Environmental Law
Keywords: Public utility operators; Abandonment of a long-lived asset; Legal obligations
Jurisdiction: New Mexico
Cited Cases: None
Cited Statutes: N.M. Stat. § 62-9-5 (2008); N.M. Stat. § 62-14-1 to -10 (2008); N.M. Code R. § 18.60.2.8(A) (2008); § 17.4.2.14(G)(7); §§ 19.14.73.8, .9; Alamogordo, N.M., Code § 20-02-030 (2008); Bernalillo County, N.M., Code § 66-123 (2008); Farmington, N.M., Code § 24-5-14 (2008); Los Alamos County, N.M., Code § 34-43 (2008); Espanola, N.M., Code § 78-39 (2008); Rio Rancho, N.M., Code § 96.20 (2008), § 96.23
Date: 12/01/2008

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 (2008).  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.

Article 14 of the New Mexico statutes provides for the marking of underground utility lines and pipelines in advance of excavations.  N.M. Stat. § 62-14-1 to -10 (2008).  The laws require that the owner or operator of an underground facility must mark the location of the same upon request prior to excavation in the area.  The Article does not define facilities or pipelines based on whether or not they are in use or have been abandoned.

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) (2008).  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 […]

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