02/ 23 Closing Prices / revised 02/23/2024 21:59  GMT 02/22   OPEC Basket  82.90 + 0.91  | 02/23    Mexico Basket (MME)   $72. 22 -2.05 | 01/13    Venezuela Basket (Merey)  $66.50  +1.30   | 02/23     NYMEX WTI Texas Intermediate April  CLJ24   $76.49 -2.12 | 02/23    ICE Brent April BRNJ24     $81.62 -2.05 | 02/23     NYMEX Gasoline March  RBH24   $2.28  -2.5% |  02/23    NYMEX  Heating Oil March  HOH24   $2.69   -2.3%   | 02/23    Natural Gas March NGH24    $1.60  -7.5% | 02/23    Active U.S. Rig Count (Oil & Gas)    626   +5  | 02/23    USD/MXN Mexican Peso  17.1166  (data live  | 02/23     EUR/USD    1.0821  (data live)  | 02/23    US/Bs. (Bolivar)   $36.06980000  ( data BCV)  

Mexico’s Top Court Voids Government’s Statist Power Reform – Bloomberg

The Comision Federal de Electricidad (CFE) Angostura hydroelectric dam, officially known as the Belisario Dominguez Dam, on the Grijalva River near Venustiano Carranza, Chiapas state, Mexico, on Monday, July 18, 2022. , Photographer: Jeoffrey Guillemard/Bloomberg
Supreme court rules against the government’s electricity law. Companies argued the legislation hurt renewable energy supply. The Comision Federal de Electricidad (CFE) Angostura hydroelectric dam, officially known as the Belisario Dominguez Dam, on the Grijalva River near Venustiano Carranza, Chiapas state, Mexico, on Monday, July 18, 2022. (Jeoffrey Guillemard/Bloomberg)

Maya Averbuch, Bloomberg News

MEXICO CITY
EnergiesNet.com 02 01 2024

Mexico’s Supreme Court decided against the government’s nationalistic electricity legislation in a case brought by private energy companies, a major blow to President Andres Manuel Lopez Obrador’s statist agenda as he nears the end of his term. 

The ruling prevents the controversial law, which gave Mexico’s state-owned utility CFE priority over private ones in dispatching electricity, from being applied to companies. Even though the case brought by a group of renewable energy firms who argued that they were directly affected by the 2021 law, the justices’ decision applies broadly to firms operating in Mexico’s energy sector.

“This is an enormous victory not only for Mexico’s energy sector, but also for the future,” said Viviana Patiño Alcala, a competition researcher at Mexico Evalua, a think tank in Mexico City. “We can return to the pace we had before in our energy transition.”

The court said in a statement published Wednesday that the law “violates the principles of competition.” It also said the change in the system of issuing clean energy certificates disincentivized new projects that supported the country’s sustainable development goals. The reform had not been implemented while the cases brought by businesses, who had argued they were not allowed to compete, were pending in courts.

Lopez Obrador, who is starting his final year in power, has sought to strengthen Mexico’s state energy producers and revert probusiness legislation passed by the prior administration, arguing his predecessors had signed off on unfair deals. The legislation his party passed in congress also included an end to the state’s obligation to hold public electricity auctions.

The Mexican government’s nationalistic energy policy, including giving large rescue packages for state oil producer Pemex, has turned into a trade dispute with the US and Canada, as companies in those countries sought the help of their officials to negotiate with the Lopez Obrador administration over the terms of their contracts. 

Analysts say the court’s decision reduces the chance that parties could soon ask for an arbitration panel to intervene if they do not reach an agreement, a potential boon for the Lopez Obrador administration despite the blow to the president’s agenda.

“It’s important for the relationship with the United States, which is always key in an election year,” said Jesus Carrillo, a researcher at the Mexican Institute for Competitiveness, known as IMCO. “It will help reduce the pressure from those who are on the side of the US and Canadian companies.”

Lopez Obrador has found other ways to achieve his vision, including purchasing $6 billion worth of national gas plants and a wind farm from Spanish firm Iberdrola SA and enforcing the cancellation of self-supply contracts the government said companies had misused to sell power. The energy regulator has also delayed issuing permits for companies to operate, leading to a volley of complaints.

The result is that the state utility — the Comision Federal de Electricidad, as CFE is formally known — saw its market share rise to around 40%, and if you count its private partners as well, to an estimated 69%, with a combination of hydroelectric, nuclear and natural-gas power plants, plus solar projects in the works.

Lower tribunals in Mexico are now expected to apply the Supreme Court’s decision for the many other companies that have brought individual injunctions. The court had ruled in 2022 that parts of the electricity reform were unconstitutional, but did not have the votes needed to entirely invalidate the legislation. 

bloomberg.com 01 31 2024

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com


CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved
 

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

 
 
Scroll to Top