Energy Articles

August 28, 2020

Mexico’s Electricity Policy on Hold

By José María Lujambio and Antonio Riojas

The Mexican energy sector has undergone a major restructuring over the past several years as a result of the 2013-2014 reforms. Nevertheless, Mexico’s current federal government has sought to implement a nationalistic energy policy, which has resulted in the undoing of some aspects of such reforms. Indeed, the government has taken several actions for the benefit of the two large State-owned energy companies: CFE and Pemex. To date, such actions have not involved amending the Mexican Constitution, laws, or presidential regulations. As relates to electricity matters, the most significant action taken by the current administration has been the Resolution issuing the Policy on Reliability, Security, Continuity, and Quality in the National Electric System (the “Policy”), published by the Department of … read more

March 27, 2020

Requests by Pemex and CFE to the Energy Regulatory Commission

By José María Lujambio and Antonio Riojas

Economic regulators exist to correct the failures of certain markets, and thus promote their efficient development. These regulatory agencies have multiplied in recent decades throughout the world in order to protect consumers and users of certain products and services against, for example, conditions involving natural or legal monopolies. The goal has been to create a level playing field for regulated companies to compete in a fair environment and to guarantee open access to network infrastructure. In Mexico, the purpose of the Mexican Energy Regulatory Commission (“CRE” by its acronym in Spanish) is to promote the efficient development of midstream and downstream activities in the hydrocarbons and petroleum sector, as well as in the value chain of the electricity industry. Despite … read more

November 7, 2019

Update on Regulatory Aspects of Clean Energy in Mexico

By Antonio Riojas

Good news regarding Mexico’s electricity sector has been in short supply since late last year. Instead, the electricity industry has witnessed a series of controversial governmental decisions, which in certain cases clearly contradict the principles of Mexico’s 2013-2014 electricity reform. Such decisions included: exertion of unjustified political pressure against the former President of the Energy Regulatory Commission (“CRE” by its acronym in Spanish); the appointment of five new CRE Commissioners whose profiles and Senate confirmation hearings were criticized by both the general public and industry specialists; modifications to the strict legal unbundling of the Federal Electricity Commission (“CFE” by its acronym in Spanish); the cancellation of two proceedings to build transmission lines in Oaxaca and Baja California; and the suspension … read more

October 8, 2019

There Is, In Fact, Life After Mexico’s Electricity Auctions

By José María Lujambio

At the end of January of this year, Mexico’s National Energy Control Center (“CENACE” for its acronym in Spanish) decided to cancel the fourth long-term auction that would have allowed CFE Basic Services Suppliers and other interested suppliers to acquire electricity, capacity and clean energy certificates (“CEL,” for its acronym in Spanish) at the wholesale level. This decision hit the national energy sector, particularly those companies that develop power plants, like a bucket of cold water.   The decision was directed by the Secretary of Energy and motivated by the current prevailing ideological rejection by the new Mexican federal administration of the generation of electricity by private companies, particularly foreign companies. It did not matter that the Electric Industry Law … read more

June 26, 2019

Draft Regulations Governing Collective Distributed Generation of Electricity

By Antonio Riojas

On May 27, 2019, the preliminary draft of the Resolution through which the Energy Regulatory Commission issues the contract model for suppliers of basic services and the methodology for compensation applicable to collective distributed generation (“Draft Regulations”) was submitted to the National Regulatory Improvement Commission for public comment. The Draft Regulations expand the possibilities for small electric power generators to supply multiple load centers, whose demand is met by a supplier of basic services. Consequently, it allows the option for load centers to benefit from distributed generation even though they may not have the physical space to install systems of this kind, such as solar panels. This modality is known as collective distributed generation. The Draft Regulations are based on … read more

April 18, 2019

The Legal Separation of Mexico’s Federal Electricity Commission

By Jose María Lujambio

The constitutional energy reforms enacted in Mexico in late 2013, mandated Congress to grant the Department of Energy (known by its Spanish acronym as “SENER”) the authority to establish rules strictly separating certain activities of the electricity sector in order to promote open access and efficient operation, and to monitor its compliance. Since then, the bases for the disaggregation of the sector’s value chain activities have been established, aimed to serve as a fundamental component of ensuring effective competition.   The Electric Industry Law (known by its Spanish acronym as “LIE”) of 2014 provided that the activities of generation, transmission, distribution, commercialization and supply of primary products should be performed independently, under a strict regime of legal separation. Further, when … read more

February 22, 2019

Electricity Reform and Political Shift in Mexico

By José María Lujambio

Despite the recent political storm in the Mexican electricity sector, it appears that the electricity reform of 2013 and 2014 is protected in various ways from political and ideological shifts in the federal administration. The strongest evidence of such protection lies in the fact that the main contents of the reform were established at a constitutional level, specifically in both the substantive and the transitory articles of the decree of constitutional reforms published in the Official Journal of the Federation on December of 2013. A constitutional amendment requires the vote of a two-thirds majority in both chambers of Federal Congress, a majority of state legislatures, and the Mexico City legislature. No political party or coalition has, on its own, gained … read more

May 2, 2018

Electric Supply Alternatives for Large Consumers

By Jose Maria Lujambio

Based on the Electricity Industry Law (“LIE” for its acronym in Spanish) of 2014, many companies that currently consume large quantities of electricity can access the benefits of receiving their electricity supply from a company other than Mexico’s Federal Electricity Commission (CFE) as a Supplier of Basic Services, if they register as qualified end users with the Energy Regulatory Commission (“CRE” for its acronym in Spanish). In order to register with the CRE, the contracted load must be one (1) megawatt (MW) or more. This is not the actual volume of electricity consumption, measured in MWh, but instead a maximum consumption capacity. End users belonging to the same economic interest group may aggregate their loads to reach the minimum of … read more

January 12, 2018
“Electricity Reform in Mexico” Third Annual Conference Highlights

“Electricity Reform in Mexico” Third Annual Conference Highlights

By José Maria Lujambio

The third annual conference entitled “Electricity Reform in Mexico” was held in San Antonio, Texas on September 28-29, 2017. This recurring event was again organized by Kinetic ( It is worth noting the generous participation of many keynote speakers, such as: Commissioner Marcelino Madrigal of the Energy Regulatory Commission (“CRE”); Mauricio Herrera, General Director of Electrical Market Surveillance for the CRE; Efraín Téllez, founding partner of the Enix consultancy; Alejandro Ibarra, research professor of the EGADE of Tecnológico de Monterrey; as well as the illuminating contributions in discussion panels by Rebecca Bollenbach (Essentia Advisors); Cristian de Cosío (Cemex Energía); Alberto Ríos (Acclaim Energy); Austin Collins (Energy Network); Al García (Association of Energy Marketers); Tom Ottem (Yes Energy); Geoff Street (Tenaska); … read more

September 15, 2017

The United States’ Energy Objectives in the NAFTA Renegotiation

By José María Lujambio

In mid-July, the United States government issued a 17 page document summarizing the country’s goals for the renegotiation of the North American Free Trade Agreement (NAFTA). It is noteworthy that the section on energy contains only three lines, but with huge substance and meaning: Preserve and strengthen investment, market access, and state-owned enterprise disciplines, benefiting energy production and transmission and support North American energy security and independence, while promoting continuing energy market-opening reforms. The Mexican reforms of 2013 and 2014 ended the state’s monopoly on the energy sector and welcomed competition. As a result, great opportunities for private investment in the Mexican energy sector, both domestic and foreign, arose. It was obvious that this opening would awaken the appetite of … read more