Supreme Court’s Vote Will Decide Future of Energy Reform
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Supreme Court’s Vote Will Decide Future of Energy Reform

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María José Goytia By María José Goytia | Journalist and Industry Analyst - Wed, 04/06/2022 - 17:48

The Supreme Court will decide on the constitutionality of the Electric Industry Law (LIE), a decision that will shape the future of Mexico’s energy industry. Meanwhile, US Climate Envoy John Kerry visited Mexico again to voice concerns regarding US investment in Mexico’s energy sector and how the country will reach its climate goals. Furthermore, the opposition rejected the energy reform, confirming it will not pass the Congressional vote, as it presented its own initiative for the energy sector. In other news, Canada underlines the US’ concerns under USMCA regarding Mexico’s energy reform.

Ready for more? Here is the Week in Energy!


Supreme Court Will Decide on Electric Industry Law’s Constitutionality

Amid a rushed vote on the new energy reform in Congress, Ministers of the Supreme Court of Justice (SCJN) prepare to vote on the possible unconstitutionality of the Electric Industry Law (LIE) from 2021. If declared constitutional, CFE will become the preponderant power generator even without seeing the reform proposal approved. Minister Arturo Zaldivar, President, Supreme Court, announced that the SCJN will vote on three constitutional challenges against the bill on April 5.


US Climate Envoy Visits Mexico Once Again 

In an effort to negotiate better terms for Mexico’s new energy reform, US Special Climate Envoy John Kerry met with President López Obrador on March 31. This is the second time Kerry visits Mexico in 2022 over concerns surrounding the Mexican energy market and US investment. The meeting took place on Thursday, March 31, and was also attended by US Ambassador to Mexico Ken Salazar and a group of 20 US company executives with an interest in investing in the Mexican energy sector.


Opposition Rejects Energy Reform and Pursues Own Bill

The opposition, consisting of PAN, PRI and PRD, announced they will pursue a counterproposal to the energy reform, which will be formally presented once the initiative promoted by President López Obrador and his party, MORENA, is rejected in Congress. The announcement was preceded by a joint statement regarding the opposition’s rejection of the energy reform, which confirmed the president’s bill will not be approved by Congress. The new proposal composes twelve points, including the creation of a free electricity tariff for vulnerable, low-income and rural populations, public hospitals and daycare centers.


Iberdrola Wins Amparo to Resume Operations in Nuevo Leon

Iberdrola was granted a definitive amparo, meaning its paralyzed plant in Nuevo Leon can resume operations while the lawsuit is developed further and resolved. The two units of the Dulces Nombres combined cycle plant were disconnected in February after their interconnection contract expired. The amparo demands that while the trial is resolved, the interconnection contract is not be terminated and continues to be in effect without needing an extension.


Energy Reform Hinders North American Partnership, Says Canadian Ambassador

During his participation at the Mexican Private Equity Association summit, Canada’s Ambassador to Mexico, Graeme C. Clark, stated that President López Obrador's energy reform represents an "irritant" to the relationship that Mexico has with its North American partners. Canada has US$4 billion in investments in the Mexican renewable energy sector. Clark also pointed out the advantages of how non-conformities can be solved within USMCA.


PEMEX Has Multimillion Dollar Debt With CFE

PEMEX owes more than MX$2.96 billion (US$147 million) in electricity bills to CFE. PEMEX's non-payment represents 83 percent of the electricity bills from federal agencies and entities that have not been collected by the state utility. As of Feb. 28, 2022, some 27 federal government agencies and entities have not paid a total of MX$3.56 billion (US$177 million) in electricity bills.


Sempra, TotalEnergies Expand Energy Ventures in Mexico

Sempra Infrastructure and TotalEnergies are expanding their strategic alliance in North American energy with two memoranda of understanding (MOU), one involving liquefied natural gas (LNG) exports and the other offshore wind.


Mitsui Launches MITinfra in Mexico

Mitsui & Co. has launched Mitsui & Co. Infrastructure Solutions (MITinfra) to deliver water, power and energy solutions in Mexico. MITinfra will provide companies with infrastructure services offered by Mitsui's two subsidiaries, Atlatec, a water-related business, and Mitsui & Co. Power Development and Management Americas (MPA), focused on power generation.

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