Mexico’s Constitutional Electricity Reform Delayed

Mexico’s ruling coalition has postponed the debates regarding a constitutional electricity reform proposal until after a recall vote for President López Obrador’s political mandate. Because the administration needs a supermajority it does not have within its coalition, a boost to the president’s mandate could help its efforts to reform the constitution.

MORENA and its allies decided to no longer push for the debates to occur before Congress concludes its regular sessions on Dec. 15. “We proposed concluding the reform process, which includes approval in the Chamber of Deputies, the Chamber of Senators and at least 17 local Congresses, no later than April 15. We urge the owners and executives of power producers to participate in the debate,” said MORENA's Ignacio Mier on Twitter, emphasizing the added benefit that those affected by the reform would have more time to enter the debate.

The controversial reform would give CFE a 56 percent majority in the energy sector and aims to put a variety of competences steadfastly in the government’s hands, including the energy dispatch of CENACE and the right to mine lithium. The reform furthermore aimed to cancel all offtake contracts in the Wholesale and Legacy markets. However, the Energy Commission in the Chamber of Deputies had already looked into removing this proposition from the bill.

Foreign officials, climate watchdogs and private business representatives expressed strong concerns over the proposal. Nevertheless, López Obrador has stated he is open for changes as long as the main point of his reform goes through: “Yes, I would accept changes to the reform as long as the essence of the initiative is maintained. The essence is that the electricity industry is a strategic industry that must be owned by the nation and by all Mexicans. If they respect that, I am open to changes,” he said in his morning press conference.

President López Obrador plans to hold a public vote that could recall the second part of his sex-year presidential term. Opinion polls suggest that López Obrador could comfortably win such a referendum, so a MORENA official told Reuters that the president hopes that a successful vote could help gather momentum. Looking at the seats in the Chamber of Deputies, 500 seats are divided between 7 political parties. Following June’s mid-term elections, the ruling coalition consists of López Obrador’s MORENA party, with 201 seats, PVEM with 43 seats and the Labor Party (PT) with 33 seats. In total, they have 277 seats. Since the ruling coalition needs a two-thirds majority to pass the electric reform proposal, it requires a total of 334 seats assuming that the entire governing coalition is on board with the reform.