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AMLO Compromises on Energy Bill

By Cinthya Alaniz Salazar | Mon, 07/26/2021 - 11:59

President Andrés Manuel López Obrador (AMLO) affirmed that his latest constitutional reform, which will be sent to congress promptly for approval, will grant the Federal Electricity Commission (CFE) the capacity to produce and distribute 54 percent of the nation´s energy demand, while leaving the remaining 46 percent to the private sector. This indicator comes after months of uncertain energy sector policies and an attempt to amend the Constitution in favor of state-owned enterprises CFE and PEMEX. However, this is the first sign of compromise and readiness to work with private energy providers.

At the moment CFE can only contribute 35 percent, though it has capacity to produce 54 percent; however, generating plants are underutilized due to measures adopted during the PRI and PAN administrations, said the president.  The president went on to say that the majority of his time in office has been spent “correcting mistakes” left behind by these previous administrations, which allowed the looting of public funds, and litigating contracts where companies have raked in funds at the expense of Mexico.

The president explained that the proposal was not to give CFE special treatment nor monopoly power, but rather to simply provide order in the sector and maintain the national network.

“It is not displacing the private sector, it is putting order because Repsol or Odebrecht cannot be treated the same way as the Federal Electricity Commission. The CFE is a non-profit public company, it is a public company so that the price of electricity does not increase for the benefit of domestic consumers and for the benefit of companies, it is to promote the development of Mexico” explained the president.

As assurance, he said that the Federal Commission of Economic Competition (COFECE) would present at all moments to review CFE’s actions as oversight and deter a storm of litigations after the proposal reaches congress.

Aside from development, the president also avowed his energy reform is tied to national security and civil protection, referring indirectly to the energy blackout that left millions without energy last December when Texas’ energy sector went down. Ultimately, since losing congressional majority in June, it seems as through AMLO has recognized that compromise is the only way he will now be able to enact a meaningful energy reform during his term. If successful this may bring about a new era of cooperation between the state and private energy investors.

The data used in this article was sourced from:  
Mexican Government
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Cinthya Alaniz Salazar Cinthya Alaniz Salazar Journalist & Industry Analyst