Mexico City, March 10th, 2021.
On March 9th, 2021, the Energy Ministry published in the Federal Official Gazette a Decree by means of which the Electricity Industry Law was amended (the “Decree").
The Decree follows the bill of amendments submitted by the Mexican President to the Federal Congress on February 01st, 2021 under the preferential scheme provided by the Federal Constitution and the subsequent approval of such bill by the Mexican Chamber of Deputies and the Senate.
The amendments included in the Decree have as main purpose to strengthen the State-Owned Productive Company known as Federal Electric Commission (“CFE” for its acronym in Spanish) which has been one of the main targets of the current Federal Government.
The amendments that became effective as of March 10th, 2021, include, among others:
- A new priority order for the dispatch of electric energy, which although is not expressly incorporated throughout the amendments, it was included in the explanatory statements of the Presidential bill of amendments.
- Granting of those permits referred in the Electricity Industry Law will be subject to the criteria issued by the Energy Ministry regarding the National Electric System planification.
- The fact that the Energy Regulatory Commission (“CRE” for its acronym in Spanish) must revoke the self-supply permits, including their amendments, whenever same had been obtained by means of fraudulent acts.
- Obligation for CFE Basic Supplier (CFE Suministrador de Servicios Básicos) to purchase electric energy through the electric auctions previously called by the National Centre of Energy Control (“CENACE” for its acronym in Spanish) is deleted.
The Energy Ministry (“SENER”), CRE, and CENACE will have a time frame of 180 natural days to amend the corresponding and existing administrative provisions in connection with electric energy matters as to align them to the terms included in the Decree.
The Decree opens the possibility to: (i) file an action of unconstitutionality (accion de inconstitucionalidad) which could be filed either by 33% of the Senators or Deputies or by those individuals / entities allowed as per article 105 of the Federal Constitution, or (ii) amparo appeals (juicios de amparo) by any individual / company suffering any negative or adverse effects from the new legal provisions included in the Electricity Industry Law or the amendments expected to be made to the existing administrative provisions which regulate the electric market and industry.
The lawyers of the energy, infrastructure and administrative area at firm are available for any questions or comments on the above.
S I N C E R E L Y,
Juan Carlos Serra
Jorge Eduardo Escobedo