CFE Profits to Subsidize Energy

CFE’s profits this year will be allocated to subsidize energy consumption in areas forced to use more energy due to climatic conditions, such as Baja California, Baja California Sur, Sonora, Sinaloa, and Nayarit, announced President Andrés Manuel López Obrador. During a tour on July 5 in Baja California, the president assured that despite CFE not having increased electricity rates in real terms and maintaining subsidies for domestic consumption, the state company has managed to achieve significant profits.

"I did the calculations with CFE’s Director, Manuel Bartlett and, even though the price of electricity has not increased, and we have maintained subsidies, CFE has made significant profits this year, generating electricity at a lower cost with reasonable profitability. I have reached an agreement with Bartlett through which profits from CFE will be used to finance the subsidy for electricity consumers," he announced in Mexicali.

In 2023, CFE’s net profits amounted to MX$96.192 billion (US$5.63 billion), according to its financial statements released in April. In terms of subsidies, additional subsidies to these entities alone, excluding Baja California Sur, amounted to MX$2.691 billion that same year. With these figures, subsidies for the year would represent 2.8% of the utility’s profits, Energía a Debate mentions. 

Bartlett, and president-elect Claudia Sheinbaum,  accompanied López Obrador during his tour. López Obrador reaffirmed that CFE generates around 54% of the country's total electricity, adding that, with the recent purchase of plants from Iberdrola, this percentage would increase to 61%.

Iberdrola finalized the sale of its electricity generation assets in Mexico to the Mexican government for US$6.2 billion in February of the present year. The transaction involved 13 power generation plants with a combined installed capacity of 8,539MW, as reported by MBN. These assets represent approximately 55% of Iberdrola Mexico's gross operating profit (EBITDA) for 2023. The deal was closed after receiving approval from the Federal Economic Competition Commission (COFECE) and meeting other agreed-upon conditions.

Juan Antonio Fernández Correa, Corporate Director of Strategic Planning, CFE, reported that the company developed a strategic plan to ensure sufficient electricity supply, which involves constructing six generation plants with an investment of US$3.77 billion to add a capacity of 2,893MW. 

During the tour Claudia Sheinbaum reiterated her commitment to maintaining and strengthening state companies PEMEX and CFE over the next six years. "If there is one thing we agree on with President López Obrador and CFE’s Director, Bartlett, it is the importance of strengthening the state's energy companies, CFE and PEMEX," she said.