RESOLUTIONS FROM THE ENERGY REGULATORY COMMISSION. FEES FOR ELECTRIC ENERGY TRANSMISSION FROM RENEWABLE AND CONVENTIONAL POWER PLANTS

Mexico City, June 1st, 2020.

 

On May 28th, 2020 the government body of the Energy Regulatory Commission (“CRE”) solved in its extraordinary session the approval of two resolutions by mean of which:

 

I. Fees related to the electric energy transmission at prices of 2018 were issued, which will be applied by the company known as CFE Intermediación de Contratos Legados, S.A. de C.V. (“CFE”) to holders having a legacy interconnection agreement for power plants from renewable energy sources or efficient cogeneration as per resolutions RES/066/2010 and RES/194/2010; and

II.Procedures to determine the economic variables required to calculate fees for transmission services for voltages equal or greater to 69 Kv applied by CFE to holders of legacy interconnection agreements of power plants from conventional energies as per resolutions RES/083/98, RES/254/99 and RES//146/2001 were approved.

 

Although as per public information the content of the referred resolutions has not been released by CRE and, for the moment, same is not available in the official webpage of such coordinated regulatory body in energy matters, it is expected that with the approval of these resolutions an increase in the electric energy fees will take place since these transmission costs will have to be paid by private companies for the use of CFE transmission lines (also known as “cargo por porteo” for its name in Spanish) which in turn could affect the sale costs of the energy produced by private companies which is sold to certain industries or make unfeasible some projects already under operation.

 

Resolution mentioned in point (i) above and its effects will apply to holders of legacy interconnection agreements from renewable sources, meaning, power plants developed and interconnected prior the 2013 energy reform.

 

As referred in CRE resolution, for those power plants mentioned in the immediate above paragraph, transmission fees will apply as per the voltage levels included in CRE resolutions identified as RES/066/2010 and RES/194/2010 published in the Federal Official Gazette on April 16, 2010 and August 13, 2010 respectively.

 

Additionally, as per public information from CRE, increase in the transmission fees was the result of a petition made by the Federal Electric Commission on March of this year, from which it was concluded that: (i) transmission fees do not reflect the real and proportional costs for such service; (ii) there are unfair competitiveness conditions in the electric market; and (iii) final users of basic supply pay the shortfall generated due to the difference between the costs of the transmission fees defined in the legacy interconnection agreements and the ones established in the wholesale electric market.

 

Since as of this date details regarding the resolutions referred herein are unknown, it will be important to verify the increase percentage that will apply to the transmission services referred above, as well as the methodology that will be implemented for such purposes as to determine the impacts that these resolutions will have in possible costs increases for electricity produced by private companies with legacy interconnection agreements.

 

The lawyers of the energy and infrastructure area at firm are available for any questions or comments on the above.

 

SINCERELY,

 

Juan Carlos Serra

serra@basham.com.mx

 

Jorge Eduardo Escobedo

jescobedo@basham.com.mx

 

Miguel Figueroa

mfigueroa@basham.com.mx

 

Pedro Reynoso

preynoso@basham.com.mx