A next move by the Court could change the course of energy policy. The Supreme Court is set to vote next week on a project by Minister Loretta Ortiz that proposes declaring as valid the reform of the Electricity Industry Law, a change that precedes the constitutional reform sent by the president and whose course for its Voting has already begun in Congress.
Ortiz Ahlf’s project, one of the founders of the president’s party and the fourth magistrate appointed during the six-year term, proposes reviving the changes promoted by the presidency to favor the state-owned CFE before betting on the constitutional initiative, but which were stopped by judges specialized in competition after private companies and civil organizations filed injunctions.
The project would reverse three appeals filed before the Court: an action of unconstitutionality filed by opposition legislators and two constitutional controversies promoted by the Federal Competition Commission and the state of Colima. The approval of this would give the federal government free rein to implement some changes, such as prioritizing the CFE plants in the order of dispatch of electrical energy and reviewing the contracts of private companies to guarantee that these are of benefit to the State. .
Both premises are part of the most critical and key points of the constitutional reform. The approval of the project, say the analysts, would be a determining factor in the next steps to take towards the vote on the Constitutional initiative in Congress, planned for the second week of April, just a few days after the mandate revocation consultation. . “Right now the big risk is what the Court says, because through the Court the government will be able to continue its policy of strangling the energy sector,” says Luis Carlos Ugalde, the director of Integralia Consultores.
President López Obrador has some close collaborators in the Court, such as Yasmín Esquivel and Margarita Ríos Farjat, but the path for the approval of the project requires that eight of the 11 magistrates be in favor of the document and analysts do not dare to give a voting prospects.
The day on which it will be voted on is not yet clear. The document was listed since mid-March to be discussed, but the Court has prioritized other debates such as the case related to the brother of the prosecutor Alejandro Gertz Manero. But everything indicates that the future of the project to declare the reform of the LIE as valid will be defined the following week, in the same days in which the draft opinion of the constitutional reform in electrical matters will be disseminated.
The future of the Loretta Ortiz project could define the next steps of the constitutional reform in the sector. The reason: a resolution in favor of the document would imply a first legal victory for the federal government within the electricity market and would give the Secretary of Energy the first firm impulse to deploy its new rules that until now had been stopped.
“There would be nothing to do, the amparos would basically be resolved in the same sense and the reform (to the LIE) would come into force,” says Bernardo Cortés, a lawyer in the sector.
What are the differences between the electricity reform and the LIE reform?
The constitutional initiative sent from the presidency is more ambitious than the reform of the LIE: it cancels the contracts with the private initiative, leaves the state-owned CFE the main role in the electricity market and the two autonomous entities of the sector disappear. But apart from that, it marks the principles of the dynamics promoted by the federal government, which is basically based on limiting private participation and imposing a new order on the market, in which the Federal Electricity Commission resumes the leading role.
And a victory for the federal government in court could lead to two scenarios: a brief break in the promotion of the energy reform – whose approval has accelerated in recent days – or a source of pressure for legislators, who may be give the argument that there are no violations of the Constitution that support a vote against. The turn in the speech will be decided by the president.
Analysts predict the first as the most likely. Morena’s time is already short compared to the end of this legislature, which ends on April 30. In less than a month, the bench wants the document to be approved in both Houses. But the negotiation work has been short and there are not many signs of consensus between the parties.
The Morenista caucus has accelerated the discussion of the reform in the Chamber of Deputies, but the changes proposed to the document may not be enough for it to achieve a qualified majority. Morena needs 57 votes in the lower house to send the document to the Senate.
A few days ago, the president asked Congress to approve the reform without modifications. This could further limit the chances that the document will continue its passage to the Upper House without setbacks. Analysts are already predicting a defeat for the reform in Congress. “Right now (opposition parties) would gain nothing by approving the reform,” says Ugalde. The opposition fractions need to maintain the counterweight discourse towards the elections next June, unless a negotiation between Morena and the PRI marks the agenda.
Morena also needs to convince opponents in the Senate. If for the ruling party, the Chamber of Deputies could represent an important job of convincing and agreements, the Senate is drawn as a more complicated step. “These accounts are already clear to the executive and that is why he calls for the reform to be approved immediately, knowing that he does not have the votes to gather the qualified majority,” explains Said Hernández, a political scientist specializing in elections and Congress. “In practical terms, the constitutional reform would lose some sense because the Supreme Court will have already endorsed the same thing that the initiative presented by the executive sought.”
If the scenario is fulfilled, the constitutional reform could pass – at least for some time – into the background. “We are between a bad scenario and a very bad scenario,” says Ugalde.
