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News Article

Senate Approves López Obrador’s Energy Bill

By Lorenzo Núñez | Thu, 03/04/2021 - 09:13

With 68 votes in favor and 58 votes against, the Senate approved Lopez Obrador’s energy bill. The counter-reform proposed by the president modifies the dispatch priority of power plants, benefiting CFE’s plants over private power producers. This initiative will also allow CFE to deny self-supply permits, especially if they are considered to be fraudulent. The end goal of the reform is to grant CFE sovereignty, reported MBN.

The opposition, made up of senators from PAN, PRI, PRD and Movimiento Ciudadano, said this reform is unconstitutional. PRI Senator Claudia Ruiz Massieu, stated that the project is not logical and its instrumentation will not prevail. She also explained that the reform violates the Constitution and a number of laws, such as the transition of energy and climate change. It also breaks international commitments, including the Paris Agreement, TIPAT, USMCA and TLCUEM, reported El Economista. Ricardo Monreal, Senator for MORENA, counter argued by stating that the reform is constitutional and consistent with Art. 25, 27 and 28 as it prioritizes the national interest of providing a public service and electric energy distribution.

Alejandra Reynoso, Senator for PAN, stated that MORENA was unwilling to listen to experts, because the most important thing for the party was to listen to whatever the ‘boss’ says. Other senators such as Miguel Ángel Mancera, who voted against the energy bill, requested that the majority of the Senate be willing to listen to experts. Verónica Delgadillo, Senator of MC, also stated that the president needs to stop thinking about railroads and refineries and start thinking about the future of the country, reported Milenio.

The Federal Economic Competition Commission (COFECE) had previously recommended Congress not to approve the president’s energy bill, since, according to experts, it could seriously end up harming competition in the country, increasing electricity rates and damaging CFE’s transparency. Despite expert criticisms and opinions, the Chamber of Deputies approved the counter reform, reported MBN.

In a heated argument, MORENA Senator Martí Batres said the party could be accused of complying with the president’s agenda, but they will never comply with the agenda of Odebrecht, Iberdrola or Repsol. In addition, senators said they will never accept any form of bribery, unlike the legislators and government officials from the previous administration who approved former President Peña Nieto’s Energy Reform, which opened the doors to private and international electricity and oil companies.

MORENA Senator Ana Lilia Rivera, who was in favor of the bill, stated that this reform was essential for the future. Rocío Abreu, from the same party, also added that the majority decided to move forward with the transformation of the energy sector and to maintain the industry strong, healthy and self-sufficient.

Despite the final outcome of the debate, Senators from PAN, PRI, MC and PRD anticipated that their respective parliament groups would appeal to the Supreme Court of Justice (SCJN), arguing the unconstitutional nature of the energy bill.

The president expressed his gratitude to the legislators. He also mentioned he will announce a modernization plan for the country’s hydroelectric plants. His next step will be to renegotiate with Iberdrola and about 10 other companies that are participating in the electricity market, reported MBN.

Lorenzo Núñez Lorenzo Núñez Junior Journalist & Industry Analyst