The reform to give more market power to the CFE seemed to be paralyzed in the Chamber of Deputies, the body that received the initiative. But the rush to resume the discussion has appeared among the legislators of Morena and the times seem to be already agreed for the bill to reach the Senate before the end of this legislative period, on April 30.
This Monday, according to the latest information released in the parliamentary gazette, the permanent session between the members of the Energy Commission and Constitutional Points would be established for the ruling of the document, the process in which the legislators would make some changes -if they decide so – and they would approve the final text that would go up to vote in plenary. This would mark the formal start of the discussion between legislators so that the reform is voted on in a couple of weeks, although the deadline is still unknown with certainty.
The signs indicate that the initiative will undergo some modifications, but none that will change the structure or the ultimate goal of the reform: cut private participation and leave responsibility for electricity generation in the hands of the state-owned CFE. “There are several proposals on the table, which pose without modifying the spirit of the original reform. Some improvements, some strengthening to provide certainty to those who participate in the electricity industry”, explained Manuel Rodríguez, the president of the Energy Commission, a few days in an interview.
Among the modifications, it would be established that the energy transition will be in charge of the Mexican State and not centered on the CFE, as established in the original document. The wording of the initiative would also be modified so that it is clear that the distributed generation model will be able to continue, the right of communities and civil society to participate in the energy model is guaranteed, and access to electricity is guaranteed more clearly. electricity as a human right, officials from the Energy Secretariat and legislators have said.
Another series of principles would also be added. The reform document could also include a paragraph on the revision of electricity rates and would open the door to the adhesion of fiscal stimuli to encourage the purchase of electric vehicles and the development of related technology.
Rodríguez, one of the key players in President López Obrador’s energy policy and one of the main promoters of the reform, says that the changes would be made to “achieve the necessary consensus” in the legislature. Some of the modifications were proposed by members of the National Confederation of Governors. and the Institutional Revolutionary Party (PRI). The National Action Party has maintained a tougher stance regarding the reform and has shown no room for negotiation.
But perhaps the changes are not enough to calm the spirits of private initiative. None of the hot spots would be removed or at least there are no signs to indicate so.
The points of the reform that concern the private sector
The items that most concern the private sector are those referring to the immediate cancellation of private contracts, a change in the order in which the energy that is dispatched in the system is taken to put the CFE plants at the beginning of the queue and the disappearance of autonomous bodies.
But despite the concerns, there is no clear sign indicating an exchange or conversation between the companies and the federal government or legislators. The exercise of open parliament, which lasted a month and a half, had as great absentees the private companies, who left the defense of their activities and the investments they have made in the last 30 years to the associations of the sector.
Since his path as a candidate, President López Obrador has declared himself an opponent of the 2013 reform, which opened the market to private investment. The energy discourse in favor of state companies has remained a core part of the presidential messages, perhaps only overshadowed by the constant allusion to the fight against corruption. With a favorable vote in Deputies, the executive would tie the beginning of the end of the constitutional change of his predecessor. But the path for Morena will not be easy, unless she achieves a successful negotiation.
To approve the reform, Morena needs two thirds of the lower house to be in favor of the document. The president’s party needs 57 votes from members who are not from his caucus or his allies. Analysts agree that the most viable possibility is that these votes come from the PRI or a slightly more remote option, from Movimiento Ciudadano.
The challenges for its approval
The president’s party is facing a more complicated scenario than the last legislative period when, with an indisputable majority in both chambers and without such a heated discussion, it managed, for example, to pass the reform for the creation of the National Guard and approve the Secondary reform to the Law of the Electricity Industry, which contained the core points of the document that proposes a constitutional reform, but which was stopped in court.
The PRI had requested that the vote on the reform take place after the state elections next June, in which the new governors of Aguascalientes, Durango, Hidalgo, Oaxaca, Quintana Roo and Tamaulipas will be voted on.
The vote would take place at an important moment for Morena: the party and the president have just scored a point in favor with the inauguration without major setbacks of the Felipe Ángeles International Airport and the discussion in the form of the reform will take place in the middle of the next consultation of revocation of mandate, of April 10.
Disseminated surveys indicate that the approval of the reform would give one more point to the president’s popularity. In October, an exercise released by the Strategic Communications Office indicated that 63.8% of Mexicans are in favor of the reform promoted by the presidency. Another survey from last November in the newspaper El Financiero says something similar, that 51% of the population is in favor of the proposal, but 57% say they know little or nothing about the document. The numbers show that the reform enjoys great support, but little of it is reported.
Also, the discussion will take place at a decisive moment for electricity policy. The Supreme Court is set to discuss and probably approve a project by Minister Loreta Ortiz that declares as constitutional the reform to the Law of the Electricity Industry promoted in March of last year by the Morena caucus. The victory of the project would give the federal administration the opportunity to implement all the changes proposed in the secondary legislation, all of them included in the constitutional reform.
Meanwhile, it is not clear what will happen if the reform to the constitution is approved. The text says that after being enacted, private contracts will be canceled and the CFE will be the only company in charge of electricity generation.
Morena’s deputies are rushing for the reform to reach the Senate before April 30. The members of the Upper House have opened the possibility of changes to the document. A few days ago, Ricardo Monreal, Morena’s parliamentary coordinator, said that his bench was open to making changes to the document related to demands from the private sector and specialists.
In an analysis published a few weeks ago by REDD Intelligence, it is noted that the Senate would already be working on modifying some parts of the document to avoid international arbitrations or violations of the Treaty between Mexico, the United States and Canada. The firm says that one of the main changes would be aimed at phasing out legacy contracts.
If the reform is approved, the fine points of agreement would be agreed in the secondary legislation, although the alerts between private companies and the governments of the United States and the European Union have already been lit since before the reform was presented.
