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Mexico's Congress rejects constitutional reform to strengthen power utility CFE

The Mexican Congress has failed to pass a constitutional reform seeking to strengthen the role of the state-owned power utility Comision Federal de Electricidad (CFE) within the electricity sector. The reform would have given a preferential treatment to the CFE over private firms (hydropower plants operated by CFE would have had priority, followed by other CFE-operated power plants, and private solar and wind power plants), whereas the law currently assigns priority to dispatching the lowest-cost power onto the grid, which is often produced by private companies. In addition, the proposed reform would have remove nominally independent energy regulators - such as the National Hydrocarbon Commission (CNH) and the Energy Regulatory Commission (CRE) - and group their functions under the Ministry of Energy and the CFE.

Mexico opened its energy sector to private and foreign investors in 2013, ending CFE’s monopoly. In March 2021, the Congress passed a bill that required power grid operators to take power generated by CFE in priority over private generators. Earlier in April 2022, the Supreme Court of Mexico upheld the constitutionality of the electricity industry law.

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