Discussions in open parliament on the electricity reform are about to begin. The following week, the talks between the legislature and the members of the energy market will begin formally. But the approval of the main reform of President Andrés Manuel López Obrador could take the rest of the year.
“It can be as slow or as fast as Congress decides, but since it is a constitutional reform there are several internal processes that have to be carried out by force,” explains Bernardo Cortés, a lawyer in the sector. In this process, the Chamber of Deputies, where the initiative arrived on September 30, serves as the chamber of origin and the Senate as the reviewing body. The reform initiative is already in the Commissions of Constitutional Points and Energy of the lower house, where it must be discussed before going up to the plenary session.
The open parliament process, which will begin next day 17 and will take four weeks between January and February, is one of the last steps for the committees to release the opinion of the project, which will then be raised to the plenary session to be voted on. This discussion exercise between analysts, academics and businessmen could be considered as the only public opportunity that members of the market have to achieve some modification within the document, the rest is carried out privately, behind the scenes.
Negotiations inside have already started. For a few months, López Obrador has met with the main business representatives. In December he did it with Antonio Del Valle, the president of the Mexican Business Council, and a week ago with Carlos Salazar, of the Business Coordinating Council, although the content of the conversations has not been made public.
But the interests between the government and businessmen will never coincide, and self-supply contracts – through which large industrial customers source energy -, say the market participants interviewed, aim to become the lever of the negotiations.
The federal government proposes in the reform initiative the extinction of this model, considering that it provides energy to large companies at prices below the market, with which the state CFE does not benefit. Some businessmen in the sector with contracts of this type have assured that they could migrate their plants to a scheme within the wholesale electricity market.
The sources interviewed say that the business sector would be willing to accept the elimination or restriction of the figure of self-sufficiency, in exchange for keeping in force some of the market rules that were created after the 2013 energy reform and not touching the independence of the regulatory bodies.
The sector already assumes that the reform will not be voted on as ordered by the president, but the modifications that will be made to the document are not yet known.
At the start of the open parliament, another conversation will take place between representatives of the National Action Party – the opposition party with the most seats in the legislative chambers – and the main representatives of economic strategy, the secretaries of the Treasury, Economy and Energy.
The times are not yet defined. While the president’s party already prepares the stage for a vote, those of the opposition want this part of the process to take place after September, in the second term of the legislature, after the gubernatorial elections in the middle of this year. And after the mandate revocation process, he has been on a tightrope in recent weeks.
The legislators of the PRI, the main party promoting the opening of the sector, will be the key player in the voting. Morena needs the favorable votes of two-thirds of the legislators present for the document to advance. In Deputies he needs 57 extra votes and in the Senate only eight more.
Local congresses, in which the initiative must also be approved, will not be a major problem for the president. The document must be approved in 17 of these, Morena and his allies have a majority in 20 of the local congresses.
And if they went through this last point and only returned to the executive for enactment, market participants would be left with virtually no options to slow the changes. Mexican legislation only allows, in this case, to initiate actions of unconstitutionality due to failures or omissions in the approval process. And an international arbitration, which is already being analyzed within the private sector, could only ensure that some companies receive compensation from the State.
