Legal Memorandum: Retirement of Long-Lived Assets in NM

Issue: Legal Obligations for the Retirement of Long-Lived Assets for Public Utility Operators in New Mexico.

Area of Law: Administrative Law, Administrative Law & Regulation (Federal and State), Environmental Law
Keywords: Retirement or abandonment of long-lived assets; Public utility operators; Legal obligations
Jurisdiction: New Mexico
Cited Cases: None
Cited Statutes: N.M. Stat. § 62-9-5; 49 C.F.R. Part 192. N.M. Admin. Code tit. 18, § 60.2.8(A), tit.17, § 4.2.14(G)(7), Code tit. 19, § 14.73
Date: 11/01/2004

No utility may abandon all or any part of its facilities without first obtaining the permission and approval of the Public Regulation Commission.  N.M. Stat. § 62-9-5 (2004).  Approval must be granted, after notice and hearing, if the Commission finds that the present and future public convenience and necessity do not require continuation of the 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 purposed of this pre-approval requirement.  Id.

With respect to gas pipelines the Commission has adopted the federal pipeline safety standards set forth in 49 C.F.R. Part 192.  N.M. Admin. Code tit. 18, § 60.2.8(A) (2004).  And, 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 Secretary of the Department.  Id. tit.17, § 4.2.14(G)(7).

There is also an administrative regulation that details the steps that must be taken when a geothermal well is abandoned, either temporarily or permanently.  See id. Code tit. 19, § 14.73 (2004).


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