Image credits: Daniel Bone
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News Article

Judges Grant General Suspension Against Electricity Industry Law

By Anamary Olivas | Wed, 07/27/2022 - 13:19

Judges Rodrigo de la Peza and Juan Pablo Gómez Fierro extended a general suspension against the Electricity Industry Law (LIE). The judges argued that because a previous decision by the Supreme Court did not reach the majority to either strike down or legitimize the reform, they can now suspend several sections of the LIE. The amparos enter in general effect, so it will be valid to all market participants. The government still has the option to appeal against these decisions.

 

Juan Pablo Gómez Fierro, Head of the Second District Court for Administrative Matters and specializing in economic competition was the judge who granted the first injunction against the LIE. The appeal was granted to the Mexican Center for Environmental Law (CEMDA) and it forces the government to apply the rules of the 2014 Energy Reform once again.

 

Gómez’s resolution only includes the effects on the environment and it cites the points of view expressed by some ministers of the Supreme Court of Justice of the Nation (SCJN) in their recent debate regarding the LIE. However, the eight votes needed to declare the law unconstitutional were not reached and criteria on the validity of the law were not established either.

 

“The generation of electricity from renewable sources in the fight against climate change must be a priority for the state, which, in the opinion of this legal body, does not comply with the reformed provisions of the LIE,” ruled Gómez.

 

He also mentioned that the LIE displaces the operation of clean energy power plants and that the restrictions it imposes on private market participation also has effects on the right to a healthy environment, in addition to adverse effects on free economic competition, which are issues Mexico’s key trading partners in the US and Canada have raised recently, too.

 

Judge Gómez cited a study by the National Renewable Energy Laboratory (NREL), which indicates that prioritizing the dispatch of energy from the CFE in the energy dispatch will translate to an increase of between 28 and 153 percent in polluting emissions. In addition to that, the change would increase costs, making it unviable both environmentally and economically. Gómez added that the Mexican state, having signed the Paris Agreements, has to confront climate change and exhaust every effort in favor of a clean environment.

 

De la Peza’s ruling followed a similar line of thinking. His amparo blocked alterations to the legacy self-supply scheme, changes in how clean energy certificates (CELs) are granted and provisions that would force companies to sign supply contracts with either PEMEX or CFE. Like Gómez, his amparo prevents the government from establishing its desired dispatch priority.

 

The Supreme Court cleared various parts of the LIE, meaning that the amparos leave this part of the reform untouched, including a stronger mandate for CRE to review or revoke permits.

Photo by:   Daniel Bone
Anamary Olivas Anamary Olivas Journalist & Industry Analyst