Mexican Congress passes electrical energy reform

The Mexican Congress adopted the invoice to reform and amend the regulation on the electrical energy business (Ley de la Industria Eléctrica or LIE) which was submitted by the Workplace of the President on February 1, 2021. Congress didn’t make any related modifications to the federal authorities’s proposed invoice, apart from a provision that now requires (as an alternative merely authorize) the Regulatory Vitality Fee (Comisión Reguladora de Energía or CRE) to revoke current self-supply permits beneath the acquired rights regime (legados).

See our earlier alert, “Mexican Congress to Vote on Electrical energy Reform Invoice, “which analyzes the primary features of the reform and its penalties. The highlights of the accepted invoice are as follows:

  • The invoice modifications the principles for the distribution and operation of the nationwide community within the federal authorities New vitality insurance policies1 overtly for the advantage of the ability crops of the Federal Electrical energy Fee (Comisión Federal de Electricidad or CFE) and relocate non-public factories. The brand new order of precedence for transport will probably be: 1) hydroelectric producing stations; 2) energy crops belonging to CFE or its subsidiaries; 3) photo voltaic and wind energy crops and 4) non-public mixed cycle energy crops.
  • It qualifies and limits the ideas of free competitors and open entry (presently envisaged inside the framework of the LIE) beneath the requirements of “safety” and “feasibility”.
  • The invoice removes the duty of CFE and the Nationwide Heart for Vitality Administration (Centro Nacional de Management de Energía or CENACE), the community operator, to prepare long-term electrical energy auctions (subastas de largo plazo) for fundamental electrical energy provide, a coverage which has been de facto applied by the regulatory authorities because the begin of this administration.
  • It additionally orders CRE to evaluate and revoke the present self-consumption manufacturing permits (autoabastecimiento permits) beneath the acquired rights regime (legados), if they’re deemed “fraudulent”.2
  • The invoice orders that the ability buy and capability agreements signed between CFE and impartial energy producers be reviewed in accordance with the amended regulation.
  • Clear vitality certificates will probably be awarded to energy crops no matter their possession and date of business operation, for the advantage of former CFE crops.
  • The invoice offers regulators and sectoral authorities six months to amend, reformulate or publish all current guidelines, rules and administrative orders in accordance with the reformed LIE.

Given the ultimate vote (68 for; 58 in opposition to), a minority group (representing over 33%) within the Senate is predicted to deliver up a constitutional problem (acción de inconsitucionalidad) in opposition to the brand new regulation earlier than the Mexican Supreme Court docket of Justice (Suprema Corte de Justicia de la Nación).

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