Mexico energy bill to open power generation, sales to privates

Mexico's senate unveiled an energy bill Saturday (Dec 7) that would end the state monopoly over the power sector and open generation and sale of power to privates.

The bill, currently being discussed by senate committees, confirms the proposed power sector as laid out by energy ministry Sener's head of electricity, Lourdes Melgar, in an August interview with BNamericas.

GENERATION

The bill lays out plans for the relocating of the national energy control center (Cenace), currently a department in state-owned utility CFE.

Cenace would become an independent state-owned body tasked with administering an open generation market, functioning like most independent system operators (ISOs) around the world.

Mexico's transmission network would remain under the ownership of CFE, but interconnection and planning expansion of the network would be a responsibility of Cenace.

POWER SALES

"In a few years, one will be able to select the company that provides [electricity] service based on the best price, supply and customer service for each family or industry," the bill's substantiation reads.

However, distribution infrastructure would also remain property of the state under the legislation.

A NEW CFE

The bill stresses the transformation of CFE into a "productive public company" whose primary goal will be creation of economic value.

Restructuring of the firm will be based on aligning with international industry standards and ensuring autonomy from the state.

The only legal changes in the bill are those pertaining to the constitution: elimination of state monopoly over electric power and prohibition of contracting to privates.

Although a guideline for subsequent legislation to these constitutional changes was provided in the bill, the details of the new power sector will come to light next year during secondary legislation.

Mexico's senate was discussing the bill in committees Monday. It is expected to be brought to the senate floor Tuesday, possibly with minor committee changes.

The left-wing PRD, vehemently opposed to the legislation, motioned for suspension of discussion in the senate but the motion was denied.