Mexican electricity reforms – off to court

Mexican electricity reforms – off to court

March 11, 2021 | By Raquel Bierzwinsky in New York|Mexico City, Hernán González Estrada and Carlos Campuzano in Mexico City

Sweeping changes in how private electricity generators operate in Mexico took effect on March 10.

The changes are amendments to the Mexican Electric Industry Law (Ley de la Industria Eléctrica or LIE).  They passed Congress under a fast-track procedure barely one month after being proposed by President Andrés Manuel López Obrador.

They will strengthen the position of the state-owned electric utility, Comisión Federal de Electricidad or CFE, as the dominant player in the Mexican electricity market at the expense of private generators. (For more information, see “New obstacles to private power projects in Mexico”.) Details appeared on March 9 in the Mexican Federal Register.

Now that the changes have taken effect, the clock has started to run for interested parties to file legal challenges, both in the federal courts or through dispute proceedings under international trade and investment treaties.

Private generators will be seeking amparos—a form of injunction—to block application of the new law to their projects.

The reforms passed Congress with the support of the President's party, MORENA, which controls both houses, without consideration of any expert testimony or comments from industry participants and NGOs, who objected to the amendments on technical, antitrust, economic and environmental grounds.