Mexico Halts Power Zone Split to Protect Grid Stability

Mexico’s power grid operator has rolled back a major structural reform aimed at dividing the country’s main electricity system into two regional zones, citing critical risks to grid stability and market efficiency. In a resolution dated July 16, 2025, the National Center for Energy Control (CENACE) formally requested the cancellation of the planned split of the National Interconnected System (SIN) into SIN-North and SIN-South. The National Energy Commission (CNE) approved the request the same day.

The decision reverses a previous reform greenlit by the Energy Regulatory Commission (CRE) in 2023 and reaffirmed in March 2025, which aimed to create two separate capacity zones under the Power Balance Market Manual. At the time, the move was intended to reflect operational realities and transmission constraints within the grid. However, CENACE now argues the division would introduce more problems than it solves. In its latest filing, the operator warned of significant operational and financial consequences, including potential imbalances, regulatory uncertainty, and widespread non-compliance by obligated market participants.

CENACE will maintain a unified power zone across the SIN for the time being, citing this as a “necessary and indispensable” measure to safeguard the reliability and continuity of grid operations. A new evaluation of zonification needs will be carried out once Mexico finalizes its updated Power Sector Development Plan and the secondary regulations governing capacity trading are in place.

CENACE emphasized that the recently enacted Energy Transition Planning Law and Electricity Sector Law have reshaped how the national grid is planned and regulated. Under the new framework, planning is binding and now falls under the purview of the Energy Ministry, shifting away from the more flexible approach of the now-repealed Electricity Industry Law.

Given these changes, and in light of risks to dispatch security and grid balance, the agency says it is legally obligated to act. According to Art. 123 and 124 of the new law, CENACE must preserve the safety, reliability, quality, and continuity of the power system, including through the operation of the Wholesale Electricity Market (MEM).

The CNE concluded that the cancellation is justified and in the public interest. It urged immediate communication of the decision to all market participants via the public area of the Market Information System, to provide legal clarity and avoid further market distortions.