The current government launched an attack against the electricity legal framework established by its predecessor. The new framework reflects a major change in policy concerning the participation of the private sector in Mexico’s electricity industry, which could endanger billions of dollars in investments, the creation of thousands of jobs and could result in the emission
A Mexican Court issued a provisional suspension in an amparo proceeding of the new hydrocarbons and fuels import and export rules enacted by the Ministry of Energy on December 26, 2020. As a result, the permitting regulation for the import and export of hydrocarbons and petroleum products originally published by the Ministry of Energy on
The electricity industry in Mexico is under stress. The President of Mexico has proposed amendments to the Electricity Industry Law that could result in the undoing of the energy reform that permitted private investment in the power market. In parallel, the Mexican Supreme Court issued a decision rejecting a number of provisions of the Ministry
According with the current oil & gas regulatory framework, the Mexican Government must have a marketer that carries out the commercialization of hydrocarbons that correspond to it under the contracts for the exploration and extraction of hydrocarbons executed through the National Hydrocarbons Commission (CNH). For this purpose, CNH, at the request of the Mexican Petroleum
The Policy of Reliability, Safety, Continuity, and Quality in the National Electricity System (the “Policy”) published on May 15, 2020 in the Federal Official Gazette (Diario Oficial de la Federación) was subject to several judicial proceedings due to its controversial content.
The Policy, based on the current health emergency, slowed the dispatch of renewable electric energy to the National Electricity System indefinitely due to its supposed lack of reliability, granting priority to CFE’s electricity generation despite the fact that it implies greater pollution and a higher cost to the end user.
The Federal Commission of Economic Competition (Comisión Federal de Competencia Económica) filed constitutional controversy docket 89/2020, which resulted in the Court’s decision to suspend, with general effects, the application of the Policy since June 2020.
The President –through the Executive Power Legal Counsel- filed an appeal against such decision.
Notwithstanding the foregoing, the Court determined unanimously that the complaint filed by the Executive Power was unfounded and on October 21, 2020, the Supreme Court of Justice confirmed the decision to suspend the Policy. We estimate that the definitive resolution of this procedure could take up to one year.
On the other hand, in November 2020 the final judgement of the amparo trial filed by EGP Magdalena Solar –one of several renewable energy companies that challenged the Policy-was published and it was the first judgment that analyzed the merits of the case. The judge considered that the Policy affects free competition and violates regulatory requirements; therefore, the Policy was suspended with general effects.
As a consequence of the foregoing, the Policy will not be part of the legal framework of the power industry and the relevant players of the sector may continue operations as if the Policy had never been issued. This may be further altered if SENER appeals such decision.
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