Mexican govt hints at reviving rejected constitutional energy reform

A new political deal between Mexico's ruling Morena party and the opposition PRI has sparked talk of possible revival of the constitutional reform of the electric power sector that was rejected by the lower house of congress earlier this year.

Several PRI representatives supported Morena on Wednesday to push a constitutional reform through congress that extends the deployment of army personnel in security duties until 2028.

According to interior minister Adán Augusto López, who was in charge of the government's congressional negotiations, the deal is a milestone that could chart a path forward for other constitutional reforms, including in energy and electoral policy. The energy reform could therefore return in a new version.

"As a government, we're looking to build consensus. I believe the current circumstances could lead us in that direction in issues like electrical reform and electoral reform," López told local press.

However, PRI lower house whip Rubén Moreira said there was currently no concrete plan or agreement on the cards to push through a new electric power reform proposal.

One of President Andrés Manuel López Obrador's key initiatives, the electric power constitutional reform project was rejected by the lower house of congress in April, with the ruling coalition falling short of the required supermajority by 59 votes.

The reform failed to pass because its sweeping scope was considered too radical by sufficient opposition lawmakers. It sought to make public utility CFE the only power purchaser in the Mexican electricity sector, give it control over dispatch priority rules and would have capped private sector participation to 46% of total national generation.

It also eliminated independent energy sector regulators CRE and CNH, although this was removed in last-minute negotiations to try to flip undecided voters.

In early 2021, the lower house and the senate passed a controversial legislative reform of the electric power sector, but its implementation has largely been blocked by courts arguing that it breaches constitutional principles.