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News Article

Inquiry Against Judge Following Electricity Law Suspension

By Cas Biekmann | Wed, 03/17/2021 - 13:14

Just two days after President López Obrador managed to pass his electricity law initiative, which altered the 2014 Energy Reform to support state-owned CFE, a judge froze it temporarily. López Obrador pointed out the judge by name in his morning press conference, after having sent a request for an inquiry to the Supreme Court.

The president launched his initiative in February 2020. When enacted, the bill would favor CFE’s power plants over private players in the energy dispatch and allow the state utility’s clean power plants to receive CELs, certificates meant to boost new clean energy projects following the 2014 Energy Reform. López Obrador turned to Mexico’s Congress to approve the initiative in the form of a bill, after facing strong opposition in the private sector and an eventual deactivation by the Supreme Court against measures in the same vein. But not long after the Senate ratified the new electricity law, judge Juan Pablo Gomez Fierro had already suspended it in response to a lawsuit coming from Electricite de France and Mitsui Power & Co. Americas, among other companies, Bloomberg News reported. Even though the swift suspension is a blow to López Obrador’s plans to pull CFE back to the energy sector’s forefront, both experts and MORENA politicians expected these types of lawsuits to occur. In this regard, López Obrador anticipates the Supreme Court will rule that the bill was constitutional.

In response to the judge’s decision to halt the bill, López Obrador sent a letter to the Supreme Court asking it to investigate if the judge acted responsibly. Supreme Court Chief Judge Arturo Zaldivar responded on Monday March 16 that investigation will be taken into consideration by a dedicated judiciary council. Further investigation will only be held if this judiciary council deems it necessary, reported Reuters. “There are people, organizations and companies related to the old regime who act based on their well-known economic and political interests, who use corruption and influence peddling as their modus operandi,” said López Obrador about the judge and private companies he claims are working against his vision for the energy sector. Nevertheless, López Obrador and other ministers continue to declare their respect for the Judicial power in Mexico and their goal to foster transparent decision-making within the government. As such, López Obrador will likely respect the final decision of the Supreme Court. Industry analysts quoted by Bloomberg News believe that if this bill is to be rejected by the Supreme Court for being unconstitutional, the government will try to change the constitution next. July’s mid-term elections will therefore prove to be crucial for the energy sector, as a swing in the balance of Congress can either help support a constitutional change or make it a virtual impossibility.

The current dispute in the energy sector is often framed as an issue of private versus public. Fernando Tovar, CEO and Country Manager of Engie México, disagrees: “The environment seems to be us or them; CFE against the private sector. I do not subscribe to this way of thinking because there is space for both. There is no conflict between strengthening CFE and having private participation in the market, after all,” he outlined at last week’s Mexico Energy Forum.

The data used in this article was sourced from:  
Bloomberg News, Reuters
Cas Biekmann Cas Biekmann Journalist and Industry Analyst