CFE Director General Presents Analysis; IMCO Reports CFE Finances

Manuel Bartlett, Director General, CFE, presented the state utility’s financial results to the Chamber of Deputies. He said that the company’s increase in debt was due to necessary investments carried out through financing schemes.

Bartlett underlined President López Obrador's mission to save the company and its importance in defending energy sovereignty and expanding telecommunications. The director commented that CFE’s losses were caused by a rise in fuel prices, and he held that the impact of this inflation was limited thanks to the financial measures the company took. Bartlett also reported that other measures were taken simultaneously to protect its customers from the rising costs: "While inflation reaches [above] 8 percent, low-consumption domestic electricity rates have increased only 5.9 percent, industrial rates 6.3 percent and commercial rates 5.9 percent," he said.

The Mexican Institute for Competitiveness (IMCO) published a report on CFE’s 3Q22 financial results. IMCO found that CFE registered a net loss for the third consecutive year; between January and September 2022, the state company had a net loss of MX$50.7 billion (US$2.614 billion), greater than the losses observed in the same period of 2021. According to Bartlett, the debt it acquired was focused on the investment of different projects. “CFE is a growing company that, in order to continue its operation, requires investments that come from financing. This, in the short term, will result in plenty of profitability for the Mexican state,” he said.

PRI Deputy Sue Ellen Bernal questioned CFE’s profitability and ability to operate since it receives public resources for subsidies on electricity tariffs. Bartlett replied that CFE operates with its resources and that these subsidies were granted to the benefit of its clients. According to IMCO, the transfers received by the CFE from the federal government for the subsidy for electricity rates grew for the fourth consecutive year. From January to September, CFE received MX$68.8 billion (US$35.47 billion), while in 2020 it received MX$63.0 billion (US$32.48 billion), and in 2021 MX$63.3 billion (US$32.63 billion).

CFE reached its highest level of losses for the first three quarters of any year in the past five years, which IMCO attributed to the 11.5 percent increase in its sales costs, going from MX$408.1 billion (US$21.0416 billion) in 2021 to $454.9 billion (US$23.4545 billion) in 2022. Higher natural gas prices are largely to blame.

Bartlett furthermore touched upon CFE’s renewable energy projects, which included the modernization of 13 hydroelectric power plants and the adaptation of a further three. He also mentioned the photovoltaic solar plant in Puerto Peñasco, Sonora and the alliance with TC energy and New Fortress for other projects. Recently, the Regulatory Energy Commission (CRE) presented a proposal to the National Commission for Regulatory Improvement (CONAMER) to modify regulations for solar panel users with systems above 25KW. CRE proposed that solar system owners must liquidate their energy surplus every month and CFE will pay the users for their surplus energy, but the tariffs for these payments will change, diminishing the economic viability of photovoltaic solar systems.