Moongate Water Co., Inc. v. City of Las Cruces

The Public Regulation Commission (PRC) issued Moongate Water Company (Moongate) a certificate of public convenience and necessity (CCN) authorizing Moongate, as a public utility, to provide water to an area located outside the city limits of Las Cruces (the “certificated area.”) Las Cruces later annexed three undeveloped tracts of land within Moongate’s certificated area, and Las Cruces committed itself to provide water to this area despite Moongate’s CCN. The Supreme Court addressed two questions in this appeal: (1) did Moongate have a right to provide water within the certificated area to the exclusion of Las Cruces?; and (2) did Las Cruces engage in an unlawful taking of Moongate’s property entitling Moongate to just compensation when Las Cruces chose to provide water within the certificated area? The Court answered both questions in the negative: (1) because Las Cruces was not subject to the Public Utilities Act (the PUA); and (2) because on the record before the Court, Moongate did not prove that it had established infrastructure and was already serving customers in the annexed area. “Absent such proof of a tangible loss, a public utility is not entitled to just compensation when a municipality lawfully exercises its right to serve in the public utility’s certificated area.” The Court therefore affirmed the Court of Appeals and reversed the district court.

Moongate Water Co., Inc. v. City of Las Cruces