Energy Articles

August 20, 2021

Mexico’s CFE Requests Regulator to Suspend Generation Permits

By Antonio Riojas and Elena Hernández

Toward the end of last month, Mexico’s Federal Electricity Commission (“CFE”) stated in a press conference that a December 28, 2020, interruption in electricity supply was mainly due to a failure of the San Carlos wind power plant in Tamaulipas, which is owned by the Spanish company Acciona. Such conclusion was based on an expert report ordered by CFE itself, which has not been made public. This statement is consistent with the declarations made by CFE in January, in which it blamed the variability of some renewable energy power plants as the cause of the failure, and it is consistent as well with numerous affronts by the government against foreign companies over the last few months, including Iberdrola and Enel. … read more

June 10, 2021

Mexico’s Deregulation of PEMEX as a Seller

By José María Lujambio and Iván Castañeda

A Decree was published in the Official Journal of the Federation (“DOF” for its acronym in Spanish) on May 19, 2021, amending the thirteenth transitory article of Mexico’s 2014 Hydrocarbons Law (the “Decree”) and granting the Energy Regulatory Commission (“CRE” for its acronym in Spanish) 30 days to abolish all general administrative regulations that had been issued to implement the “asymmetric” regulation of Petróleos Mexicanos and its subsidiaries and affiliates (“PEMEX” for its acronym in Spanish). CRE complied almost immediately on May 21, publishing Resolution A/015/2021in the DOF, which cancelled a total of 49 prior resolutions issued for such purpose. The asymmetric regulation was based on the abovementioned transitory article, which granted authority to the CRE to establish general contractual … read more

February 12, 2021

Looking Forward Toward a New Bilateral Relationship on Energy Matters

By José María Lujambio

On January 18, 2021, a letter sent by the United States Secretaries of State, Energy, and Commerce to their counterparts in the Mexican government was made public. The letter, dated January 11, contains the clearest and most direct official message in defense of U.S. interests in the Mexican energy sector since President López Obrador ordered a freeze on the implementation of the country’s constitutional and legal energy framework and dictated a series of regulatory and administrative measures tending to inhibit competition from private, foreign and national investment with Mexican state companies, Petróleos Mexicanos (“Pemex”) and the Federal Electricity Commission (“CFE”). The main concerns expressed in the letter are the improper regulatory treatment in favor of Pemex and CFE, as well … read more

November 20, 2020

Mexico’s Solar Industry Outlook: Notes Regarding the “Solar Asset Management Mexico” Conference

By Antonio Riojas y Elena Hernández

The third edition of “Solar Asset Management Mexico”, one of Mexico’s most important conferences on solar energy, was held during the month of October 2020. Due to the current pandemic, the conference was held virtually via a high-quality digital platform that brought together representatives from the entire Mexican electricity sector. Over the course of four days, more than 200 participants attended the presentations of more than 30 panelists, they had the opportunity to interact with each other, and they received a complete picture of Mexico’s current solar industry. The energy sector has not been impervious to the challenges posed by the pandemic.  A number of actions taken by Mexico’s current federal administration have also created an environment that has slowed … 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

March 15, 2020

Mexico’s Electricity Policy on Hold

By José María Lujambio y 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 … 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