Mexico’s Supreme Court of Justice (SCJN) has overturned the 2021 electricity market reform seeking to strengthen the role of the state-owned power utility Comision Federal de Electricidad (CFE) within the electricity sector. Considering the reform as a violation to the principles of freedom of free competition and sustainable development, the Supreme Court ruled out the reform approved by the Mexican Congress in March 2021 that aimed to increase the CFE’s market share to 54% and to provide preferential treatment to the company by excluding private investors in the sector. A new constitution-compliant initiative to reform the electricity sector will soon be presented.
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. The approval of the reform in 2021 triggered proceedings against Mexico within the framework of the free trade agreement (USMCA) by the US and Canada, while affected companies filed various amparos to temporarily suspend the effects of the law until it was definitively ruled. Although the reform was never enforced, it did had an impact on generation permits given to private power plants since the reform was approved by the Mexican Congress.
Interested in Global Energy Research?
Enerdata's premium online information service provides up-to-date market reports on 110+ countries. The reports include valuable market data and analysis as well as a daily newsfeed, curated by our energy analysts, on the oil, gas, coal and power markets.
This user-friendly tool gives you the essentials about the domestic markets of your concern, including market structure, organisation, actors, projects and business perspectives.