Mexico regulatory watch

Leopoldo Melchi has been reelected to lead energy regulator CRE, suggesting the agency will continue with its current policies for the foreseeable future.

Melchi, who was the agency's head commissioner between 2019 and 2022 after previously worked as an auditor at state-run oil and gas giant Pemex, was selected from a shortlist put together by Mexico's presidency to lead the CRE until the end of 2029.

He is expected to continue current policy at the regulator, which since 2019 has seen it prioritize permits for public companies, while building a significant backlog of private sector requests, especially in power generation.

While gas station and natural gas permits also suffered initially, more recently the regulator has sped up decisions in this area. In renewables, however, many projects remain unable to progress due to various hurdles in the permitting process, where issues and delays with generation licenses overseen by CRE are one of the most common roadblocks.

Speaking to a senate committee last week, Melchi said his tenure had been characterized by positive changes, and he would continue to lead the CRE in the same direction.

He focused in particular on the 2021 LPG price cap enacted by the regulator and on its decision to make assessment of generation permits conditional on grid safety and stability considerations, a decision that led to a drastic slowdown in permit approvals and mirrored a similar call by grid control center Cenace.

In a release, the CRE said the key points during Melchi's new tenure would include issuing "focalized regulation" that "aligned with [national] energy policy" and took account of social issues, increasing the agency's revenues and overhauling its internal information system.

Melchi reached the end of his first term at CRE at the end of 2022 together with Guillermo Pineda Bernal, who was considered the last remaining commissioner friendly to the 2013-14 reforms that broadened private sector participation in the Mexican energy sector. 

All the remaining commissioners have been appointed by the current government of president Andrés Manuel López Obrador. CRE is yet to hold a session so far this year.

***

The recently appointed head of hydrocarbons regulator CNH will make it his top priority to overhaul the agency's procedures to make its regulatory duties more efficient.

Agustín Díaz Lastra told upstream trade group Amexhi that his tenure would focus on making processes faster while "strictly following the current rules and regulations," local press reported.

Díaz Lastra began his term in late October after the resignation of former head Rogelio Hernández Cázares left CNH unable to hold a session for over a month. The agency is now in the same situation after commissioner Alma América Porres Luna ended her tenure late in 2022.