The Mexican government will appeal the temporary suspension of its electricity reform this week, President Andres Manuel Lopez Obrador said, called into question the action of the judges.
“The reform had only just been published and the first injunction was approved,” Lopez Obrador said today. “We are going to appeal to the supreme court and we want the judicial system to review the conduct of these judges.”
A court temporarily suspended Mexico’s new electricity law on 10 March, a day after it took effect, signaling the start of a wave of litigation against the controversial reform.
Renewable developers Zuma Energia, EDF and Naturgy secured injunctions against the law for three separate wind and solar projects and more are expected in the coming days.
“It would be the last straw if the legal system turns out to be at the service of private companies,” said Lopez Obrador, known as AMLO.
The law prioritizes dispatching CFE-generated power regardless of cost or environmental impact, revokes self-supply permits and begins a review process of all long-term power purchase agreements (PPAs) between CFE and independent power producers (IPPs).
Some 40,924 MW, or 48pc, of Mexico’s installed capacity is operated under private-sector generation permits that will all be affected by the reform, lawyers have said, suggesting that many companies will prefer to renegotiate terms than pursue legal action.
“We are open to a negotiation, we have to review these excessive contracts,” Lopez Obrador said today.
Lopez Obrador’s administration has been chipping away at the 2014 energy reform that opened the door to more private investment since he took office in December 2018, a situation that has already sent private investment tumbling across Mexico’s energy sector.
Foreign direct investment fell by 62pc to $506mn last year compared with 2019, according to information from the economy ministry. Electricity sector investment peaked at $4.99bn in 2018 following long-term power auctions held by the previous administration but Lopez Obrador shut down all fresh avenues for private sector investment. A series of regulatory changes enacted over the past two years have dramatically slowed project permitting.
Rebecca Conan. (2021). Mexico to defend electricity reform: AMLO. USA. ARGUS. Recuperado de
