Mexico would lose independent energy regulators under AMLO plan
By Amy Stillman / Bloomberg
Petroleumworld 10 04 2021
Comision Federal de Electricidad (CFE) Thermoelectric Power Plant in Villa de Reyes, San Luis Potosi state, Mexico, on Tuesday, Jan. 19, 2021. Mexican President Andres Manuel Lopez Obrador has sought to clamp down on private competition to state-owned companies, saying in October he intends to protect the interests of state oil producer Petroleos Mexicanos and electricity firm Comision Federal de Electricidad. At the time, he accused foreign companies of ransacking the country. Photographer: Mauricio Palos/Bloomberg , Bloomberg
A controversial electricity bill President Andres Manuel Lopez Obrador sent to Mexico’s congress on Friday would abolish the country’s independent energy regulators.
The legislation is primarily aimed at supporting state power utility Comision Federal de Electricidad. But it also proposes the National Hydrocarbons Commission and the Energy Regulatory Commission are incorporated into the Energy Ministry, and that National grid operator Cenace be absorbed by CFE.
It’s uncertain whether the bill will succeed, since AMLO’s Morena party will need support from outside the ruling coalition to amend the constitution. But if it does pass, it could be the final nail in the coffin for the country’s landmark energy reforms. The regulators were founded as part of the reforms of 2013-2014 that opened up Mexico’s oil sector to private investment after more than three-quarters of a century in which CFE and state-owned oil producer Petroleos Mexicanos had a monopoly.
“Without a doubt this initiative could disrupt the market,” said Rodolfo Rueda, lead partner of the regulatory and government relations practice at law firm Holland & Knight LLP in Mexico City. “It could have an impact on competition.”