Resolute Wind 1 LLC v. N.M. Pub. Regul. Comm'n ( 2022 )


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    IN THE SUPREME COURT OF THE STATE OF NEW MEXICO
    Opinion Number: __________________
    Filing Date: February 9, 2022
    NO. S-1-SC-37320
    RESOLUTE WIND 1 LLC,
    Appellant,
    v.
    NEW MEXICO PUBLIC
    REGULATION COMMISSION,
    Appellee,
    and
    LEA COUNTY ELECTRIC COOPERATIVE, INC., and
    WESTERN FARMERS ELECTRIC COOPERATIVE, INC.,
    Intervenors-Appellees.
    In the Matter of the Formal
    Complaint of Resolute Wind 1
    Against Lea County Electric
    Cooperative, Inc. Case No. 18-00211-UT
    APPEAL FROM             THE     NEW      MEXICO        PUBLIC       REGULATION
    COMMISSION
    Jason Marks Law, LLC
    Jason A. Marks
    Albuquerque, NM
    for Appellant
    Judith Ellen Amer
    Associate General Counsel
    Santa Fe, NM
    for Appellee
    Newell Law Firm, LLC
    Michael T. Newell
    Lovington, NM
    for Intervenor-Appellee Lea County Electric Cooperative, Inc.
    The Law Office of Jamison Barkley, LLC
    Jamison Barkley
    Santa Fe, NM
    for Intervenor-Appellee Western Farmers Electric Cooperative, Inc.
    Charles F. Noble
    Santa Fe, NM
    for Amicus Curiae Coalition for Clean Affordable Energy
    Earthjustice
    Sara Gersen
    Los Angeles, CA
    Robin L. Cooley
    Denver, CO
    David C. Bender
    Madison, WI
    for Amici Curiae Vote Solar, Sierra Club, Coalition for Clean Affordable Energy
    Virtue & Najjar, PC
    Daniel A. Najjar
    Carla Rossana Najjar
    Santa Fe, NM
    for Amicus Curiae New Mexico Rural Electric Cooperative Association
    OPINION
    VIGIL, Chief Justice.
    {1}   This appeal turns on a familiar and straightforward legal principle: contested
    proceedings—whether judicial or, as in this case, administrative—are not
    susceptible to summary disposition in the face of disputed issues of material fact.
    The New Mexico Public Regulation Commission (the Commission) ignored this
    blackletter principle when it summarily dismissed the complaint brought by Resolute
    Wind 1 LLC (Resolute Wind). The Commission’s summary dismissal violated the
    procedural due process rights of Resolute Wind and was at a minimum arbitrary,
    capricious, or an abuse of discretion.
    {2}   The Commission also erred in relying on a federal agency’s determination in
    an earlier, unrelated matter to dismiss the complaint.
    {3}   The Commission’s procedural and substantive missteps, whether considered
    separately or together, require us to annul and vacate the final order appealed from
    and remand the matter to the Commission for further proceedings so as to afford all
    parties an opportunity to present evidence in support of their respective positions. In
    view of this result, and as Resolute Wind readily acknowledges, it is not necessary
    to address the merits of the federal compliance issue Resolute Wind also raises on
    appeal. Nor, by extension, is it necessary to consider any jurisdictional implications
    that the compliance issue might create.
    I.    BACKGROUND
    {4}   The outcome of the underlying administrative proceeding ultimately may turn
    on the proper interpretation and application of various federal and New Mexico
    statutes and regulations, all highly technical in nature. Because our determination of
    the distinct and narrow issues outlined above is sufficient to dispose of the present
    appeal, a full description of the statutory and regulatory frameworks is unnecessary.
    Instead, we offer a glimpse of the basic aspects of those provisions that govern the
    dispositive issues and briefly summarize the factual and procedural backdrop of the
    case to give context to the Commission’s rulings.
    A.    Relevant Statutory and Regulatory Frameworks
    {5}   This case arises under the Public Utility Regulatory Policies Act of 1978
    (PURPA), Pub. L. No. 95-617, 
    92 Stat. 3117
     (codified as amended at 
    16 U.S.C. §§ 2601-2645
    ). PURPA was designed “to encourage the development of cogeneration
    and small power production facilities” in order to diversify the nation’s energy
    sources and thereby “reduce the demand for traditional fossil fuels.” Fed. Energy
    Regul. Comm’n v. Mississippi, 
    456 U.S. 742
    , 750-51 (1982). “Cogeneration facilities
    capture otherwise-wasted heat and turn it into thermal energy; small power-
    2
    production facilities produce energy (fewer than 80 megawatts) primarily by using
    ‘biomass, waste, renewable resources, geothermal resources, or any combination
    thereof.’” Portland Gen. Elec. Co. v. Fed. Energy Regul. Comm’n, 
    854 F.3d 692
    ,
    695 (D.C. Cir. 2017) (quoting 
    16 U.S.C. § 796
    (17)). PURPA designates both
    cogeneration and small power facilities as “‘qualifying facilities,’” and “[S]ection
    210(a) of PURPA direct[s] the Federal Energy Regulatory Commission (‘FERC’) to
    promulgate rules mandating that electric utilities purchase energy from [qualifying
    facilities].” Allco Renewable Energy, Ltd. v. Mass. Elec. Co., 
    875 F.3d 64
    , 67 (1st
    Cir. 2017). Those FERC regulations are codified at 
    18 C.F.R. §§ 292.101-292.602
    (2018)1. Under 
    18 C.F.R. § 292.303
    (a), an electric utility is required to purchase
    “any energy and capacity which is made available from a qualifying facility.” We
    refer to this as the mandatory purchase obligation.
    {6}   The mandatory purchase obligation is not absolute. Two exceptions are
    applicable in this case. First, an electric utility may transfer its mandatory purchase
    obligation to another electric utility which serves as the transferring utility’s full- or
    all-requirements supplier. See 
    18 C.F.R. § 292.303
    (d). However, for such a transfer
    to be effective, the qualifying facility must consent. See 
    id.
     (requiring that the
    1
    Although the Code of Federal Regulations is updated annually, this opinion
    cites the version of the regulations in effect at the time of the order at issue.
    3
    “qualifying facility agrees”); Small Power Production and Cogeneration Facilities;
    Regulations Implementing Section 210 of [PURPA], 
    45 Fed. Reg. 12,214
    , 12,235
    (Feb. 25, 1980) (stating that such “an all-requirements” transfer is permissible “if
    the qualifying facility consents”). Second, an electric utility may apply to FERC for
    a waiver of the mandatory purchase requirement. See 
    18 C.F.R. § 292.402
    (a).
    However, the utility must provide public notice that it is seeking the waiver. 
    Id.
    {7}   On the state level, the Commission has promulgated and adopted a counterpart
    transfer regulation giving a “distribution cooperative having a full power
    requirements contract with its supplier . . . the option of transferring the purchase
    obligation . . . to its power supplier.” 17.9.570.13(F)(1) NMAC (Rule 570). Unlike
    the FERC transfer provision set out in 
    18 C.F.R. § 292.303
    (d), the Commission’s
    rule does not by its terms require a qualifying facility’s consent to transfer the
    purchase obligation. See Rule 570.
    {8}   PURPA requires the rate at which the utility purchases a qualifying facility’s
    power to “be just and reasonable to the [customers] of the electric utility” and bars
    FERC from prescribing a rate that “exceeds the incremental cost to the electric utility
    of alternative electric energy.” 16 U.S.C. § 824a-3(b). PURPA defines the term
    incremental cost of alternative electric energy as “the cost to the electric utility of
    the electric energy which, but for the purchase from [the] small power producer,
    4
    such utility would generate or purchase from another source.” Section 824a-3(d). In
    adopting its rules to implement PURPA, FERC substituted the term “avoided costs”
    for the term “incremental cost” that Congress chose. See Sierra Club v. Pub. Serv.
    Comm’n of W. Va., 
    827 S.E.2d 224
    , 228 (W. Va. 2019) (internal quotation marks
    omitted) (recognizing that costs “incremental” and “avoided” are synonymous
    (internal quotation marks omitted)). Stated simply, a utility’s avoided cost “is the
    cost [the] utility would otherwise incur in obtaining the same quantity of electricity
    from a different source.” In re Investigation to Review the Avoided Costs That Serve
    as Prices for the Standard-Offer Program in 2020, 
    2021 VT 28
    , ¶ 5, 
    254 A.3d 178
    .
    B.    Factual Background and Commission Proceedings
    {9}   Intervenor-Appellee Western Farmers Electric Cooperative, Inc. (Western
    Farmers Electric) “is a cooperative association engaged in the wholesale
    generation[,] . . . transmission[,] and distribution of electric power to its member
    rural electric cooperatives[,] which then provide retail electric service to the public.”
    Intervenor-Appellee Lea County Electric Cooperative, Inc. (Lea County Electric) “is
    a rural electric cooperative organized pursuant to the New Mexico Rural Electric
    Cooperative Act,” NMSA 1978, §§ 62-15-1 to -37 (1939, as amended through 2021),
    which provides energy to retail customers in Southeastern New Mexico and West
    Texas. Lea County Electric does not have electrical generation sources of its own
    5
    and must obtain its electrical power and energy from another source, such as Western
    Farmers Electric.
    {10}   The case commenced with Resolute Wind filing a petition for declaratory
    order and a supporting brief with the Commission. The petition was supported by an
    affidavit attesting to the facts alleged. Resolute Wind contended it is a “qualifying
    facility” under PURPA and asked the Commission to enter its order, “after notice
    and hearing,” (1) declaring that Lea County Electric is obligated under PURPA to
    purchase the energy and capacity that Resolute Wind produces and (2) determining
    the proper avoided costs Lea County Electric is required to pay Resolute Wind for
    its energy and capacity.
    {11}   Resolute Wind alleged that it purchased “a two megawatt (2MW) wind
    turbine located in Gaines County, Texas, within 400 feet of the border with Lea
    County,” New Mexico, which has been certified as a “qualifying facility” by FERC.
    Resolute Wind contended that Lea County Electric is obligated under PURPA to
    purchase the energy and capacity that Resolute Wind produces, asserting that the
    wind turbine is within Lea County Electric’s service territory and is interconnected
    to Lea County Electric’s service system.
    {12}   The dispute arose, according to the petition, when Resolute Wind asked Lea
    County Electric to fulfill the mandatory PURPA purchase obligation and Lea County
    6
    Electric asserted it had transferred its mandatory PURPA purchase obligation to
    Western Farmers Electric, one of Lea County Electric’s wholesale suppliers.
    Resolute Wind contended as follows: (1) Federal regulations allowed Lea County
    Electric to transfer its purchase obligation, but only with Resolute Wind’s consent,
    and Resolute Wind had not consented to any transfer. (2) FERC had not granted Lea
    County Electric a waiver of its purchase obligation. (3) While Rule 570 purports to
    allow a transfer of Lea County Electric’s purchase obligation if Lea County Electric
    had a “full-requirements contract” with a supplier, Lea County Electric did not have
    a “full-requirements contract” with Western Farmers Electric or any other supplier.
    (4) Even if Lea County Electric had a “‘full power requirements contract’” with a
    supplier, it could not transfer the purchase obligation pursuant to Rule 570 because
    Rule 570 conflicts with the federal requirements of 
    18 C.F.R. § 292.303
    , which gives
    the qualifying facility (Resolute Wind) the right to approve a transfer, while Rule
    570 gives the option to the utility (Lea County Electric), and because federal law
    preempts Rule 570. (5) The parties disputed whether the avoided cost of either Lea
    County Electric or Western Farmers Electric applied and the method for calculating
    the avoided cost.
    {13}   The Commission determined that it would process the Resolute Wind filing
    “as a complaint, subject to the formal complaint process set forth in [its] Rules of
    7
    Procedure 1.2.2.13 and 1.2.2.15 [NMAC]” and not as a petition for a declaratory
    order.
    {14}     Lea County Electric and Western Farmers Electric (collectively, the Utilities)
    filed a joint answer. They contended the Commission should dismiss the complaint
    because “the [c]omplaint failed to provide probable cause for the Commission to
    pursue the [c]omplaint.” In support of this contention, the Utilities denied that Lea
    County Electric is obligated by PURPA to purchase the energy and capacity that
    Resolute Wind produces because, they asserted, the obligation was transferred to
    Lea County Electric’s “all-requirements provider” Western Farmers Electric. In
    response to Resolute Wind’s specific contentions, the Utilities (1) denied that Lea
    County Electric could not transfer its PURPA obligation without Resolute Wind’s
    consent, (2) agreed that FERC had not granted Lea County Electric a waiver of the
    purchase obligation, (3) affirmatively alleged that Lea County Electric has a full-
    requirements contract with Western Farmers Electric, (4) denied that PURPA
    preempts Rule 570, and (5) agreed that the parties dispute whether the avoided cost
    8
    of either Lea County Electric or Western Farmers Electric applies and the method
    for calculating the avoided cost.2
    {15}   On its own initiative and without any input from the parties, the Commission
    ordered the Utilities to file “a sworn affidavit with supporting documents that testify
    to and prove” the answer’s assertions that Lea County Electric “has a ‘full
    requirements’ contract with Western Farmers Electric” and that “Resolute [Wind] is
    required to negotiate a [purchase power agreement] with [Western Farmers
    Electric].” Resolute Wind moved for rehearing, strongly objecting to the agency’s
    adoption of a procedure that allowed its opposing parties the opportunity, in effect,
    to augment their answer by submitting additional or stronger factual support “as
    dispositive” of the proceeding and asserting that “under the circumstances” and “at
    2
    As stated at the outset of this opinion, and as Resolute Wind candidly
    concedes, the federal compliance issue created by the absence of an express consent
    requirement from Rule 570 need not be resolved in this appeal. The issue takes on
    relevance if, and only if, it is ultimately determined on remand that a full-
    requirements contractual supply relationship exists between the Utilities. It
    necessarily follows that the nuanced question as to whether this Court has
    jurisdiction to decide the federal compliance issue need not now be addressed either.
    Cf. In re Investigation to Review the Avoided Costs That Serve as Prices for the
    Standard-Offer Program in 2020, 
    2021 VT 28
    , ¶¶ 25-30, 
    254 A.3d 178
     (discussing
    the distinct jurisdictional paths pertinent to “‘as-applied’ challenges to a state
    regulatory agency’s application of PURPA-compliant regulations to an individual
    petitioner”—a state court path—and pertinent to “a broad facial challenge to [state]
    regulations themselves” as PURPA noncompliant—a federal court path.
    9
    a minimum” it was “entitled to pursue discovery” on any new facts presented by the
    Utilities so as to avoid “hav[ing] the matter prejudged by the Commission.”
    {16}   Consistent with the Commission’s order inviting the Utilities to “testify to and
    prove” their defense of the case on paper, the Utilities filed two affidavits—one
    submitted by an officer of Lea County Electric and the other submitted by an officer
    of Western Farmers Electric. The affidavits, each confined to two pages and in
    virtually identical form, attested to the status of Lea County Electric as a full-
    requirements member of Western Farmers Electric. To support that contention, the
    affidavits relied heavily on various contractual agreements entered into by the
    Utilities—among the earliest documents being a Transition Agreement dated March
    24, 2010 that called for the phased transition of Lea County Electric to full-
    requirements status by May 31, 2026. With little elaboration, the affiants averred in
    lockstep that the Utilities by their actions accelerated the transition period well ahead
    of the stated May 2026 contractual deadline and that the status of Lea County
    Electric as a full-requirements member of Western Farmers Electric actually came
    to fruition no later than May 2014.
    {17}   Following receipt of the affidavits of the Utilities and without soliciting a
    response from Resolute Wind, the Commission issued its final order, which
    dismissed the complaint with prejudice. The Commission’s summary disposition
    10
    was based on a finding that the affidavits and supporting documentation submitted
    at the Commission’s own request constituted substantial evidence that Lea County
    Electric is a full-requirements member of Western Farmers Electric and that the
    power purchase contract entered into by the Utilities on March 24, 2010, carried with
    it an existing and enforceable full-requirements obligation on the part of Lea County
    Electric to purchase all of its electric power from Western Farmers Electric.
    {18}   In addition, in its final order, the Commission relied on a FERC ruling dating
    back to June 2006 that granted Western Farmers Electric and its then eighteen-
    member full-requirements electric distribution cooperatives a waiver of their
    respective obligations to sell electric power to and purchase electric power from
    qualifying facilities. Lea County Electric was, conspicuously, not included in this
    group of cooperatives. See Western Farmers Elec. Coop., 
    115 FERC ¶ 61,323
    , at
    62,149 & n.1, 62,150 (2006) (order).
    {19}   Thus, and despite the undeveloped nature of the factual record, the
    Commission determined that Western Farmers Electric owes the mandatory PURPA
    purchase obligation to Resolute Wind at the avoided cost of Western Farmers
    Electric and not at the avoided cost of Lea County Electric. The Commission
    concluded that the Resolute Wind complaint “lacks probable cause” and dismissed
    the complaint with prejudice. Resolute Wind appeals, and as explained next, we
    11
    annul and vacate the Commission’s final order and remand the case to the
    Commission for further proceedings.
    II.    DISCUSSION
    A.     Standard of Review
    {20}   Resolute Wind, as the party appealing from the Commission’s final order, has
    the burden “to show that the order appealed from is unreasonable, or unlawful.”
    NMSA 1978, § 62-11-4 (1965). “[T]he appropriate inquiry in determining whether
    an order of the [C]ommission is unreasonable or unlawful is whether the
    [C]ommission’s decision was arbitrary and capricious, unsupported by substantial
    evidence, or an abuse of the agency’s discretion.” Att’y Gen. of N.M. v. N.M. Pub.
    Util. Comm’n, 
    2000-NMSC-008
    , ¶ 3, 
    128 N.M. 747
    , 
    998 P.2d 1198
    . As to questions
    of fact, “we view the evidence in the light most favorable to the [Commission’s]
    decision, [but] we will uphold the decision only if it is supported by substantial
    evidence.” Albuquerque Bernalillo Cnty. Water Util. Auth. v. N.M. Pub. Regul.
    Comm’n (ABCWUA), 
    2010-NMSC-013
    , ¶ 18, 
    148 N.M. 21
    , 
    229 P.3d 494
    .
    B.     The Erroneous Procedure Followed by the Commission in Summarily
    Resolving the Disputed Full-Requirements Issue
    {21}   As outlined above, the Commission improperly adopted its own methodology
    for summarily resolving a hotly contested factual issue: whether Western Farmers
    12
    Electric is a full-requirements provider of all the power needs of Lea County
    Electric. The summary fact-finding approach fashioned by the Commission—giving
    controlling weight to the follow-up affidavits submitted by the Utilities at the
    Commission’s own directive, while implicitly rejecting the competing allegations
    set out in the verified complaint—represents a clear departure from evidence-
    weighing principles traditionally applied in contested administrative proceedings.
    See 1 Kristin E. Hickman & Richard J. Pierce, Jr., Administrative Law Treatise, §
    6.2.3, at 693 (6th ed. 2019) (recognizing that an administrative hearing is required
    “to resolve a contested issue of adjudicative fact—as opposed to an issue of policy
    or of legislative fact—[at least] when credibility is an issue”); Ernest Gellhorn &
    William F. Robinson, Jr., Summary Judgment in Administrative Adjudication, 
    84 Harv. L. Rev. 612
    , 630-31 (1971) (endorsing the use of summary judgment in
    administrative proceedings, at least when “evidentiary facts are undisputed [and] a
    hearing serves no purpose”). And, more specifically, the Commission’s summary
    resolution of the full-requirements issue appears out of step with FERC rulings that
    signal the need for a hearing when disputed issues arise in the context of this type of
    inquiry. See, e.g., W. Tex. Utils. Co., 
    25 FERC ¶ 61,114
    , at 61,345-46, 61,348 (1983)
    (ordering a public hearing on the “justness and reasonableness” of a utility’s rates
    and proposed definitional changes that raised “significant issues” relating to “full
    13
    requirements customers whose loads are partially supplied by cogenerators or small
    power producers”); Wis. Pub. Serv. Corp., 
    24 FERC ¶ 61,304
    , at 61,656 (1983)
    (ordering a public hearing on, among other issues, “the rates, terms, and conditions
    of [a utility’s] full requirements service”).
    {22}   In practical terms, the procedure followed by the Commission gave the
    Utilities the last and decisive word on the all-important factual issue concerning the
    full-requirements relationship—or lack thereof—between the Utilities.
    {23}   In evaluating the Commission’s action, we are mindful of the deference
    generally accorded both a public utility agency’s management of its own
    proceedings, see Tri-State Generation & Transmission Ass’n v. N.M. Pub. Regul.
    Comm’n, 
    2015-NMSC-013
    , ¶ 24, 
    347 P.3d 274
    , and the agency’s treatment of
    procedural matters, see City of Gillette v. FERC, 
    737 F.2d 883
    , 884-85 (10th Cir.
    1984). However, we also subscribe to the view that “when [procedural] matters fall
    outside the norm, experience teaches us to exercise a healthy dose of caution and
    circumspection.” ABCWUA, 
    2010-NMSC-013
    , ¶ 99 (Bosson, J., dissenting).
    Considering the unconventional fact-finding course followed by the Commission in
    this case, the need for judicial “caution and circumspection” on appeal is imperative.
    See 
    id.
    14
    {24}   With appropriate caution in mind, we cannot say that the problems created by
    the summary fact-finding procedure employed by the Commission—allowing no
    means for Resolute Wind to counter the follow-up affidavits from the Utilities—are
    trifling matters; to the contrary, the problems reach constitutional proportions. The
    procedural path taken by the Commission plainly violated an essential element of
    the procedural due process rights of Resolute Wind: the opportunity to be heard. See
    TW Telecom of N.M., L.L.C. v. N.M. Pub. Regul. Comm’n, 
    2011-NMSC-029
    , ¶ 17,
    
    150 N.M. 12
    , 
    256 P.3d 24
     (recognizing that “the fundamental requirements of due
    process in an administrative context are reasonable notice and opportunity to be
    heard and present any claim or defense” (internal quotation marks and citation
    omitted)). Despite the law’s command that an opportunity to be heard in an
    administrative matter be granted “at a meaningful time and in a meaningful manner,”
    
    id.
     (internal quotation marks and citation omitted), the due process rights of Resolute
    Wind were violated when it was precluded altogether from presenting evidence and
    developing a record on the disputed full-requirements issue. See id. ¶¶ 1, 20-21
    (concluding that the Commission’s denial of “the opportunity to present evidence
    and to examine and cross-examine witnesses” or to otherwise “ma[ke] a record”
    constituted a violation of the appellant’s due process rights).
    {25}   This is not a situation where an administrative agency sets an expedited, but
    15
    ultimately manageable, procedural schedule limiting discovery. See ABCWUA,
    
    2010-NMSC-013
    , ¶¶ 27, 31 (rejecting a procedural due process challenge to an
    expedited procedural schedule imposed by the Commission, where the agency twice
    “extend[ed] the time period in which [appellants] were required to file their
    responsive testimony”). Instead, it is a situation where a party is denied outright any
    and all opportunities to conduct discovery or otherwise develop the record on a
    disputed factual issue. And because the procedural prohibitions imposed by the
    Commission against Resolute Wind were absolute, not relative, the inherently
    flexible nature of due process does not assist the Commission here. Cf. ABCWUA,
    
    2010-NMSC-013
    , ¶ 28 (noting as a general proposition that “due process is flexible
    in nature and may adhere to such requisite procedural protections as the particular
    situation demands” (internal quotation marks and citation omitted)).
    {26}   Analyzed from a different perspective, the peremptory fact-finding process
    imposed by the Commission was—at a minimum—arbitrary, capricious, or an abuse
    of discretion. The Commission’s action constituted an abuse of discretion because,
    among other infirmities, it was “not in accord with legal procedure,” see Bernalillo
    Cnty. Health Care Corp. v. N.M. Pub. Regul. Comm’n, 
    2014-NMSC-008
    , ¶ 9, 
    319 P.3d 1284
     (internal quotation marks and citation omitted), and it was arbitrary and
    capricious because it lacked a rational basis and was not the product of reasoned
    16
    decision-making. See N.M. Att’y Gen. v. N.M. Pub. Regul. Comm’n, 2013-NMSC-
    042, ¶ 10, 
    309 P.3d 89
     (stating that an agency decision “is arbitrary and capricious
    if it is unreasonable or without a rational basis, when viewed in light of the whole
    record”); see also Pub. Serv. Comm’n of N.Y. v. FERC, 
    813 F.2d 448
    , 451 (D.C. Cir.
    1987) (defining reasoned decision-making in the utility ratemaking context as “a
    process demonstrating the connection between the facts found and the choice
    made”). Nor can it be said that the Commission’s decision was supported by
    substantial evidence, which, in the context of this appeal, “is evidence that a
    reasonable mind would regard as adequate to support a conclusion.” Doña Ana Mut.
    Domestic Water Consumers Ass’n v. N.M. Pub. Regul. Comm’n, 
    2006-NMSC-032
    ,
    ¶ 11, 
    140 N.M. 6
    , 
    139 P.3d 166
     (internal quotation marks and citation omitted).
    {27}   In the final analysis, the Commission’s one-sided procedural approach failed
    to comport with traditional notions of fairness, mandating that we vacate and annul
    the final order under review here. See NMSA 1978, § 62-11-5 (1982) (authorizing
    this Court to “either affirm or annul and vacate” a Commission order but not to
    modify it).
    {28}   Having concluded that the Commission’s adjudication of the full-
    requirements issue was fundamentally flawed from a procedural perspective, we
    need not and do not address the substantive aspects of the Commission’s full-
    17
    requirements ruling. To be clear, in remanding the matter for further proceedings,
    we express no view on the merits of the full-requirements arguments of Resolute
    Wind or responses to them from the Utilities.
    C.     The Commission’s Invocation of FERC Waiver Principles
    {29}   In dismissing the complaint, the Commission’s apparent reliance on waiver
    principles was also arbitrary, capricious, or an abuse of discretion, thus providing an
    independent basis on which to annul and vacate the agency’s final order.
    {30}   The Utilities readily acknowledged in their joint answer to the complaint of
    Resolute Wind that neither has availed itself of the opportunity to apply for a FERC
    waiver of any qualifying facility purchase or sale obligation in connection with the
    energy produced by the Resolute Wind turbine facility. Because FERC has not yet
    passed judgment on the waiver issue, the Utilities may not assert any entitlement to
    the benefits of a formal, favorable FERC waiver determination. See Indep. Energy
    Producers Ass’n, Inc. v. Cal. Pub. Utils. Comm’n, 
    36 F.3d 848
    , 853-54 (9th Cir.
    1994) (recognizing that FERC regulations under PURPA carry out congressional
    intent that FERC “exercise exclusive authority over [qualifying facility] status
    determinations,” including determinations involving the waiver of compliance with
    qualifying facility standards, and the regulations nowhere “contemplate a role for
    the state in setting [qualifying facility] standards or determining [qualifying facility]
    18
    status”).
    {31}   But even if the Commission had a role to play in this arena, nothing in its
    analysis supports, much less compels, a dismissal of the complaint. This conclusion
    certainly applies to the Commission’s heavy but seemingly misplaced reliance on
    the previously mentioned 2006 FERC order granting Western Farmers Electric and
    some of its then member cooperatives a waiver of their respective sales and purchase
    obligations under PURPA. See Western Farmers Elec. Coop., 
    115 FERC ¶ 61,323
    .
    The dismissal can be taken⸻as counsel for Resolute Wind puts it⸻as the “conjuring
    of a FERC waiver order from thin air.” Granted, the decision issued in the cited case
    appears to reflect the willingness of FERC, in appropriate circumstances, to view
    favorably the “requests for waiver submitted by generation and transmission
    cooperatives (G&Ts) seeking waiver of the G&T’s sale obligations and waiver of
    the member distribution cooperatives’ purchase obligations.” Id. at 62,152. But the
    FERC decision also made clear that the grant of a G&T waiver request is not
    available just for the asking and instead hinges on a particularized showing that
    adherence to the mandatory PURPA purchase and sales obligations is “not necessary
    to encourage cogeneration and small power production” in a particular situation or
    service area. Id. at 62,150, 62,152; see 
    18 C.F.R. § 292.402
    (b). Indeed, the FERC
    decision in that case was quick to point out that it had denied, within the preceding
    19
    three-year period, a waiver request from another G&T located in a different service
    area when presented with different circumstances. Western Farmers Elec. Coop.,
    
    115 FERC ¶ 61,323
    , at 62,152 & n.9. Thus, the FERC approach therein seems
    consistent with the type of individualized, case-specific treatment of qualifying
    facility waiver requests that forms a common thread throughout the relevant case
    law. See, e.g., City of Fremont v. FERC, 
    336 F.3d 910
    , 918 (9th Cir. 2003)
    (recognizing that FERC waiver decisions are “necessarily exercises of discretion in
    light of the facts and equities in the particular cases”); Greensboro Lumber Co. v.
    FERC, 
    825 F.2d 518
    , 523 (D.C. Cir. 1987) (noting that FERC waiver analyses
    require “case-by-case determinations” that are “carefully crafted to fit particular
    circumstances”).
    {32}   For the reasons set forth herein, the Commission acted unreasonably or
    unlawfully to the extent that it relied on favorable treatment by FERC of the 2006
    waiver application of Western Farmers Electric as a basis on which to dismiss the
    complaint.
    III.   CONCLUSION
    {33}   Based on the foregoing, we annul and vacate the final order appealed from
    and remand this case to the Commission for further proceedings in accordance with
    this opinion.
    20
    IT IS SO ORDERED.
    MICHAEL E. VIGIL, Chief Justice
    WE CONCUR:
    C. SHANNON BACON, Justice
    DAVID K. THOMSON, Justice
    21