Open Parliament on Energy Reform Extended

The Political Coordination Board (JUCOPO) confirmed its extension on the Open Parliament regarding the government’s energy bill, which will now run until Feb. 28. President López Obrador’s constitutional energy reform proposal would drastically reshape the energy sector, so JUCOPO issued extra time to analyze its extensive impact.

The Open Parliament forums were scheduled to end on Feb. 15. However, to go deeper into specific topics, JUCOPO approved a two-weeks extension with seven more forums included. This came after the visit of US Climate Envoy John Kerry, who approached the Mexican government to promote action against climate change and the development of renewable energy ventures. New themes include discussions regarding clean and renewable energy based on the country’s energy transition, the impact of the reform on public finance, electricity as a constitutional human right, the position of large power producers and offtakers, judicial decisions in energy matters and a dialogue with state governors.

Industry experts, scholars and private sector participants have voiced their concern regarding the president’s proposal to transform the energy sector’s legal framework. Some argue that such a far-reaching reform is not required: José Medina, President of the Mexican Employers' Confederation (COPARMEX) considered it necessary to adjust contracts signed under the 2013 Energy Reform, review their conditions and ensure that CFE is paid fairly for its transmission, distribution and backup operations.

The Mexican Institute for Competitiveness (IMCO) has also participated in the forums. In its most recent study, IMCO outlined some of the negative impacts the electric bill could generate if approved unchanged. In that were to happen, Mexico’s privileged market position as a manufacturer compared to China would be compromised. The new regulation would also be seen as a potential violation of USMCA, reducing the level of competitiveness for all of North America, as well as worsening performance levels for several important industries such as automotive, cement, steel and chemicals.

From the beginning of these discussions, the government has expressed its intention to strengthen CFE over privates as a matter of national sovereignty. Mexico City Mayor Claudia Sheinbaum and CFE Director Manuel Bartlett have strongly supported the energy bill and the vote is now scheduled in April 2022.