Image credits: Thomas Kelley
News Article

OXXO, Bimbo, Walmart Accused of Paying Less for Electricity

By Sofía Hanna | Mon, 03/22/2021 - 17:53

During today’s morning press conference, López Obrador said he would be asking CFE to clarify energy payments and subsidies granted to large companies like OXXO, Bimbo and Walmart. He asked CFE to make the payments these companies make transparent. The president has accused companies of paying less for electricity on several occasions, stating that subsidies allow them to pay up to four times less than citizens for the energy they use.

According to Animal Politico, López Obrador said unsubsidized household pays MX$5.2/kWh (US$0.25/kWh), while an OXXO branch pays MX$1.8/kWh (US$0.087/kWh). Meanwhile, Bimbo and Walmart pay MX$1.7/kWh (US$0.083/kWh). The President complained that state utility CFE, the sole responsible party for the transmission and distribution network by law, had to pay more than MX$26,000 (US$1,255) per month in subsidies in the case of OXXO, Forbes reported, while many households go unsubsidized. “How is it possible that a middle-to-low class family or a grocery store owner pay up to four times more than what an OXXO pays? How did they do it? They obtained special contracts because the laws were reformed or because they are supposedly generators of clean energy. The result, in the end, is that they have a subsidy and those who pay the subsidy are the people,” said López Obrador.

The president made it clear that he has no personal issue with private companies and that he is proposing to form a commission and establish an open dialog with the media to explain why companies pay less for the electricity they consume. “We cannot be giving subsidies to large corporations, because it does not seem fair to us. And for a long time, companies pretended that the subsidy was handed to the consumer. Most of the subsidy goes to large corporations,” he said. After said comments, both OXXO and Bimbo released statements highlighting what they actually pay for electricity according to the law. 

The FEMSA group, owner of OXXO, said that 70.1 percent of its stores are connected to a wind farm and that each of these stores pays MX$14,052 (US$682.39) per month in average for electricity. “This cost includes a series of payments to CFE for transport, use of transmission lines and a fixed charge for being part of the national electricity grid,” said the company, according to Forbes. The remaining 30 percent of OXXO stores rely completely on CFE, so their energy payments go directly to CFE. FEMSA also said it has an Energy Efficiency Program that has managed to reduce energy consumption at stores by 35 percent, compared to 2009.

Bimbo also released a statement mentioning that “by the end of 2020, 80 percent of the electricity consumed by the company came from clean sources, contributing decisively to caring for the environment and cutting nearly 400,000 tons of CO2 emissions,” according to Forbes. The company detailed its process and goals to increase the use of renewable electricity, going from 49 percent to 80 percent to meet its 2020 target and advancing its commitment to reaching 95 percent of clean energy use by 2023. 

Walmart did not release a statement but, according to its website, it already sources 63 percent of its energy from renewables. With this, the company has reduced its greenhouse gas emissions by 2.8 percent against 2019. The company receives renewable energy from six wind farms and two hydroelectric plants.

López Obrador had denounced self-supply contracts before, saying the practice is responsible for destabilizing CFE. The president says the company has to pay subsidies and is not compensated adequately through transmission and distribution costs. To remedy the issue, the government proposed a hike in the wheeling rates to be charged in June 2020. The initiative was soon halted by amparos, just like the resolution adopted by CRE in May 2020. Through a new electricity law initiative in 2021, López Obrador hopes to be able to recall what he calls fraudulent self-supply contracts. If the new initiative is blocked by the Supreme Court, López Obrador already announced he would attempt to alter the Constitution to make this a possibility, reported MBN. The results of the upcoming mid-term elections will likely play an important role in his plans.

The data used in this article was sourced from:  
Forbes, Animal Politico, Walmart
Photo by:   Thomas Kelley, Unsplash
Sofía Hanna Sofía Hanna Junior Journalist and Industry Analyst