The possibility of having a new reform in the electricity sector has been put back on the table. This Tuesday, President Andrés Manuel López Obrador assured that he has three proposals for constitutional reforms, one of them aimed at strengthening the Federal Electricity Commission (CFE), which has become one of the presidential priorities, along with Pemex.
The electricity market, in which the national company lost exclusivity in generation in 2013, with the energy reform, has been the protagonist of consistent changes from the executive branch, but which until now have not been able to start due to a series of injunctions filed by environmental and civil organizations and private initiative, and the support of specialized competition judges and the Supreme Court of Justice.
At least five attempts, including reforms to secondary laws, agreements and policies, have been arrested and with little chance of leaving the courts with a verdict in favor of the federal government.
Dispatch criteria
In the latest reform to the Electricity Industry Law, the executive included a change in the way electricity produced in the power plants of the state-owned CFE and private companies is taken. Until now, the economic criterion is used, which implies that the plants with a lower generation cost will be used first.
Thus, priority is given to wind and solar plants and those that produce with coal, fuel oil or diesel, which represent higher costs, are left at the end of the line.
But the executive has proposed a new order, in which hydroelectric plants will come first, followed by all plants owned by the CFE, wind and solar plants, and gas plants owned by private parties.
This change, the one that has worried the industry the most, would give priority to fossil fuels, since most of the plants owned by CFE run on these fuels.
Fewer private permits and contracts under review
The latest reform, so far stopped, also includes the review of the contracts granted during the last administrations to independent producers and the self-supply permits, a figure that is mainly used by large industrial consumers, whom the president has accused of generate losses to the state company.
This point would allow the federal administration to cancel those permits and contracts that it considers do not represent benefits for the State.
The national electricity system reliability policy, published by the Ministry of Energy in May last year, gave the National Energy Control Center (Cenace) the possibility of canceling new interconnection permits, if the agency led by RocÃo Nahle considers that the area is saturated.
Align the regulators
The executive has made various attempts to return the electricity market regulators to the rectory of the State, mainly the Energy Regulatory Commission (CRE), which has a greater impact on electricity generation activities. And now, the new reform could include a change to the regulator.
In the Sener 2020-2024 sectoral program, which was contested by the Greenpeace organization – as it contained a series of measures against renewables – the federal administration rightly mentions that it is necessary for coordinated regulatory bodies in energy matters to align with the State to recover the guide on the electricity market.
And at a meeting in the National Palace last September, the president asked regulators, who are theoretically autonomous, to join his energy project. But so far the laws don’t allow the president to make big changes to regulators.
CELs for the CFE
The first change made by the federal administration to the electricity market consisted of a change to the Clean Energy Certificates (CEL), an instrument designed in the past government to encourage the construction of new power plants and that could only be delivered to new works renewable generation.
But the federal administration proposed last October that the old plants owned by the CFE, which operate with some renewable method, can receive these certificates.
Until now, this change has been suspended by the judges in competition, pending a final resolution.
The CFE, the rector of national policy
The policy of Reliability, Safety, Continuity and Quality in the National Electric System, published in May last year and detained in court, had put on the table a guiding role of the CFE on electricity policy, a role that after the reform was blurred , as the company became one more player in the market, open to private parties.
The policy,, gave the Commission the power to decide which are the projects that could or could not be developed by private companies and which are those that the state could develop exclusively.
