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FOR IMMEDIATE RELEASE Contact:
July 22, 2024, Jerrid Williams,
Director of Communications and Public Affairs
Socorro Electric Cooperative Files Legal Notice of Violation to City of Socorro
Socorro, NM – In response to ongoing attempts by the City of Socorro to form its own electric utility, the Socorro Electric Cooperative (SEC) has issued a legal notice of claim to the City of Socorro today because of a resolution adopted by the City of Socorro this past May.
The resolution, approved by Socorro City Council, stated that when the City energizes its own electric utility, SEC must remove its infrastructure (power poles, transformers, lines, and other physical assets) within the city limits. The resolution also provided a month-to-month franchise agreement to SEC until the City plans to serve city residents with electricity without any proposed compensation to SEC for termination of the franchise. If the City followed through on its plan, SEC would be unable to fulfill its legal obligation to serve its members within the City of Socorro.
The legal notice filed today states that the resolution violates the Bill of Rights of the New Mexico Constitution, which prohibits the City from taking or damaging private property without just compensation. SEC has calculated the fair market value of those assets within the city, using one common method for valuing them, to be $54.7 million. The estimated amount does not include substantial cost that would also be incurred to remove the assets and other legal, administrative, and transaction costs.
“It is unfortunate that we are at the point that we had to file this notice, but the City has given us no other alternative. We have an obligation to protect our members’ assets and to continue to provide them with reliable electric service,” said Leroy Anaya, SEC Board President. “Our hope is that the city councilors will start asking the tough questions about the Mayor’s costly proposal to create its own electric utility. SEC wants to work with the City to understand and help meet its needs, which we believe can be met through our not-for-profit, cooperative business model.”
“SEC members in the City of Socorro face the ridiculous position of paying twice for the electric system they enjoy today,” Anaya said. “SEC members in the city already have an electric system in place, which the City and all its citizens must pay us for if they create their own utility and force us to leave, and then the City and its citizens will have to pay again to build a new system. That makes no sense.”
Starting last year, SEC initiated discussions with the City on a new franchise agreement, as the current agreement between the cooperative and the City expired in May 2024. A franchise agreement establishes a franchise fee, which is essentially rent being paid by a utility to a city or county for the use of that local government’s rights-of-way. Most franchise agreements between cities and utilities range from 5 to 20 years.
Per New Mexico law, electric cooperatives including SEC are directed with an obligation to serve their members. The New Mexico Public Regulation Commission would be required to consider any withdraw of service to cooperative members.
In a recent survey, about 80% of SEC members agreed that the Mayor’s proposal to take over electric service is unnecessary and could harm members’ interests. Approximately 86% of members surveyed are concerned that changes to SEC’s operations might increase costs and make service less reliable, and withdrawing electric service from its members would require approval from the New Mexico Public Regulation Commission.
As an owner and member of not-for-profit wholesale power supply cooperative Tri-State Generation and Transmission Association, SEC receives a reliable, affordable, and responsible power supply to deliver to its members. In 2025, Tri-State’s members will reach a significant milestone when 50% of the power they use will come from renewable resources, including from solar facilities in New Mexico, and rising to 70% clean energy use in 2030. Tri-State also supports SEC with staff, equipment and materials to help ensure a reliable distribution system.
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