A. Any municipality owning or operating a municipal water utility may furnish or sell, and may contract to furnish or sell, water to any person, association or legal entity, including governmental agencies and political subdivisions, situate without the corporate limits of the municipality.

B. Contracts for the sale of municipal water may be for a term, and upon conditions, acceptable to the municipality, but the contracts shall be entered in the name of the municipality following approval of its governing body.

History: 1953 Comp., § 14-26-8, enacted by Laws 1965, ch. 38, § 1.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Right of municipality to provide service in the certified area of a public utility. — Where the public regulation commission issued the public utility a certificate of public convenience and necessity authorizing the public utility to provide water in an area outside the limits of the municipality; the municipality subsequently annexed three undeveloped tracts of land within the public utility's certified area, subdivided the land and committed itself to provide water to the subdivision; and the municipality had not elected to become subject to the Public Utilities Act, 62-1-1 NMSA 1978 et seq., and did not have a population of more than 200,000, the public utility's certificate of public convenience and necessity did not prevent the municipality from competing with the public utility in the certified area, because the municipality was not subject to the Public Utilities Act. Moongate Water Co., Inc. v. City of Las Cruces, 2013-NMSC-018, 302 P.3d 405, aff'g 2012-NMCA-003, 269 P.3d 1.

A taking may occur by a municipality providing service in the certified area of a public utility. — A taking may occur, even if a public utility does not have the exclusive right to furnish utilities in a certified area under a certificate of public convenience and necessity, if the public utility proves that it had established infrastructure and was already serving customers in the certified area that is interfered with by a municipality. In the absence of any proof of tangible loss, that is, physical taking or stranded costs, a public utility is not entitled to just compensation when a municipality lawfully exercises its right to provide utilities in the in the public utility's certified area. Moongate Water Co., Inc. v. City of Las Cruces, 2013-NMSC-018, 302 P.3d 405.

Municipality providing service in the certified area of a public utility was not a taking. — Where the public regulation commission issued the public utility a certificate of public convenience and necessity authorizing the public utility to provide water in an area outside the limits of the municipality; the municipality later annexed three undeveloped tracts of land within the public utility's certified area, subdivided the land and committed itself to provide water to the subdivision; because the municipality had not elected to become subject to the Public Utilities Act, 62-1-1 NMSA 1978 et seq., and did not have a population of more than 200,000, the municipality was not subject to the act and the public utility's certificate of public convenience and necessity did not prevent the municipality from competing with the public utility in the certified area; the public utility did not have any infrastructure, customers or physical assets in the subdivision, had not incurred any costs to serve the subdivision, and could not serve the subdivision without making significant infrastructure improvements; and the municipality did not take any of the public utility's physical assets, the municipality did not engage in an unlawful taking of the public utility's property. Moongate Water Co., Inc. v. City of Las Cruces, 2013-NMSC-018, 302 P.3d 405.