Federal judge blocks AMLO’s reform to the Electric Industry Law

Federal judge Juan Pablo Gómez, presiding judge of the second district court, has issued a definite ruling against President López Obrador’s reform to the Electric Industry Law (EIL), following four companies contesting the decree.

“Energía y Proyectos Eólicos,” “Fuerza y Energía de Naco Nogales,” “Fuerza y Energía BII Hioxo,” and “Fuerza Eólica San Matías,” were granted their respective amparos, shielding them against the reform. It is important to highlight that the ruling is not an industry-wide suspension, like previous attempts, but specific to the companies that complained.

The reform, initially promoted by the president in hopes of favoring the Federal Electricity Commission (CFE) over private companies, was considered by the judge to be a detriment to the accessibility of energy and a way to deprive consumers of a competitive market. The ruling cancels out changes made to the EIL, considered a way to overrule Peña Nieto’s Energy Reform.  

Judge Gómez´ criteria, stated in the ruling, is based on prioritizing a more competitive, amicable, and healthier electric market. The current 38 million Mexican households served by CFE were considered in the ruling, in order to avoid reducing their options in accessing the electric network. In addition, the ruling deemed, the now abrogated legislation, to unjustly broaden CFE’s access to the national transmission network through CENACE (the grid operator), a dangerous advantage that might have effectively displaced or barred other competitors from accessing it, and, in the long term, affected the final price paid for in the bills by households and other users.

In regards to climate change, the judge said that the economic reasoning to boost the sector nation-wide should not mean opposing efforts to diminish climate change and adverse effects on the environment, emphasizing that power generation through renewable sources should be an absolute priority of the State.

Judge Gómez said that in order to avoid a regulatory vacuum, contested authorities must abide by the Electric Industry Law  before the entry into force of the contested decree.

Judge Gómez has also notified Arturo Zaldívar, presiding minister of the Supreme Court of Justice of the Nation (SCJN), so as to have the highest court of justice ultimately decide whether the reform is unconstitutional or not.