The Energy Reform Is Defeated in CongressBy María José Goytia | Wed, 04/20/2022 - 17:30
Mexico’s Congress finally voted on the energy reform. The opposition’s votes against the initiative prevented the reform from achieving the qualified majority required for approval. Meanwhile, the Supreme Court ended discussions regarding the Electricity Industry Law (LIE), dismissing the three unconstitutionality actions against LIE. Furthermore, YKK started construction of its solar plant in Guanajuato. In other news, the federal government announced a contract revision for private power generators in the legacy market.
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After months of political discussion and delays regarding its vote, President López Obrador's energy reform was rejected in Congress this Sunday. Bolstered by the political polarization that surrounded the initiative, the opposition achieved its mission to protect the legal status quo by avoiding the qualified majority needed to approve the constitutional reform. The vote’s result was 275 votes in favor of the reform and 223 against, remaining far from the qualified majority of 334 votes necessary for the approval of the constitutional reform.
The Mexican Supreme Court dismissed the unconstitutionality actions brought on by COFECE and Colima’s local government against the Electricity Industry Law (LIE). With this, the three unconstitutionality actions against LIE have been judged, leaving the law active but with enabling the possibility for new amparos, to be resolved case by case. Due to criticism and doubts about the Supreme Court's vote, the court also clarified the result of the April 7 vote, which failed to declare the LIE unconstitutional.
The construction of YKK’s solar and water treatment plants in Guanajuato is part of the company’s sustainability strategy.
Moody's forecasted benefits for private power generators in Mexico after the energy reform, promoted by the Government to strengthen CFE to the detriment of private companies, failed to pass Congress.
Mexico’s federal government is making a move against private power production contracts. Following the ruling of the Supreme Court of Justice (SCJN) that reactivated the Electric Industry Law (LIE) of 2021, the president’s office announced that it will review electricity self-supply contracts and permits that do not comply with the reformed legal framework. If necessary, it will proceed to revoke them. Among the companies under review are Iberdrola, Naturgy, Mitsui, Saavi and Enel. These companies developed 34 power plants with an installed capacity of 16,51MW, 28 of which are combined cycles and six are wind power plants, which have been selling part of the electricity to CFE since 1992.