Iberdrola Loses Amparo Case Against CRE

Iberdrola suffered a new setback in a Mexican court. The Spanish company was denied an injunction to maintain the generation permit for its power plant in Nuevo Leon, losing the battle against the energy regulator, CRE.

On Monday, May 23, the Second District Judge in Administrative Matters, Specializing in Economic Competition, Broadcasting and Telecommunications, dismissed Iberdrola's request for an amparo filed on May 18 against the federal government's provisions for granting electricity generation permits.

The injunction was filed against agreement A/006/2022 of the regulatory commission, in which the general administrative provisions establish the terms for submitting information regarding the corporate purpose for permits, as well as various legal, technical and financial capacity-related issues to obtain electric power generation permits.

Iberdrola considered that the agreement violates articles 1, 5, 14, 16, 17, 25, 26, 27 and 28 of the Mexican Constitution. However, the judge determined that Iberdrola's request is inadmissible due to the considerations outlined in the request, which were not presented with evidence.

CRE has rejected the Spanish company's requests to modify at least four permits. The case of the Dulces Nombres plant stands out for now, but other power plans would run out of their contracts soon, too.  

Iberdrola requested to migrate its interconnection contract at Dulces Nombres and three other plants from the legacy market to the wholesale electricity market. There are no legal arguments for the CRE to deny the modification of the permit as such, but the regulator's actions are in line with the federal government's discourse against self-supply contracts and private power generation.

Iberdrola has arguably been the company that was hit the hardest with the federal government’s discourse and policy direction, as a result of which it has had to undertake constant legal battles in Mexican courts to maintain the operation of its assets.

Litigation through amparos has become a constant in the Mexican electricity sector. Private companies see themselves forced to resort to these injunctions because of ongoing governmental actions that seek to strengthen CFE at the expense of the private sector.