AMLO sends Congress a preferential initiative to reform the Electricity Industry Law

The president of Mexico, Andrés Manuel López Obrador, on Monday sent a preferential initiative to Congress proposing modifications to the electrical industry law, in which you are looking give preference to the state company CFE in the electrical dispatch.


© Photo: Galo Cañas / Cuartoscuro

In a remote session of the General Congress, the president of the Board of Directors, Deputy Dulce María Sauri Riancho, reported that the head of the Federal Executive sent said initiative with a draft decree that reforms and adds various provisions of the Electricity Industry Law for preferential processing.

The initiative, turned over to the Chamber of Deputies, highlights that it is It is urgent to deepen the changes already started in this matter, in order to strengthen the productive company of the State, CFE, for the benefit of the national interest, whose strategic nature in the reliability of the electrical system is essential to sustain the long-term commitment with the people of Mexico, consisting of not increasing rates of electricity, as well as guaranteeing energy security as a strategic piece of the superior concept of national security.

It proposes to modify the mechanism of the dispatch of the power plants, to be in priority: Energy Produced by Hydroelectric Plants, Energy Generated in other CFE Plants, Wind or solar energy from individuals and Combined Cycles from private companies.

Also, look for guarantee reliability and a price tariff system, which will only be updated due to inflation. This, by proposing to modify the order of priority of the dispatch, through the operation of the power plants in the current CFE Legacy Contract and with the design of a new Contract for the Physical Delivery of Energy and Capacity to the Grid.

It points out that with the simultaneous operation of both financial and physical delivery contracts, budgetary expenditures with a negative impact on taxpayers and the nation’s economic resources are eliminated and, with this, stability in the electricity rate is guaranteed.

It also stresses that with the initiative it will be possible to end the simulation of prices in a market that favors speculation, dumping and subsidies granted to private participants by the CFE, as well as with years of looting and with the recognition of the total generation costs, which will allow a competition in conditions of equality between the market participants.

The modification of the current Economic Dispatch to Dispatch for Physical Delivery of Power Plants in the CFE Legacy Contract, will allow overcome the intentional relegation of the CFE plants, ensuring its priority dispatch before other participants in the electricity industry and thus achieving the profitability required by current legislation for projects of the CFE and the nation, prevented by the Meritorious Office of the Wholesale Electricity Market with variable costs that favors speculation of the private producers, he says.

He adds that the new CFE generation projects will be added to the Legacy Contract and the Contract for Physical Delivery of Energy and Capacity for the benefit of the Basic Service Provider and, particularly, the end users. The greater participation of CFE’s power plants will ensure the reliability of the Electric System and national energy security, by increasing the rolling reserve capacity.

It provides for the obligation that the permits referred to in the Electricity Industry Law are subject to the planning criteria of the National Electric System issued by the Ministry of Energy; establish that the granting of Clean Energy Certificates will not depend on the ownership or the date of commencement of commercial operations in the power plants.

Too proposes to eliminate the obligation to buy by auctions for the Basic Service Provider; oblige the Energy Regulatory Commission to revoke the self-supply permits, as well as their modifications, in cases where they have been obtained by carrying out acts constituting fraud to the law.

In addition, review the legality and profitability for the Federal Government of the Electric Power Generation Capacity Commitment Contracts and Electric Power Purchase and Sale signed with independent power producers under the Electric Power Public Service Law.

The transitory states indicate that the Energy Secretariat, the Energy Regulatory Commission (CRE) and the National Energy Control Center will have a maximum period of six months, counted from the entry into force of the decree, to carry out the modifications that are necessary to all agreements, resolutions, guidelines, policies, criteria, manuals and other regulatory instruments issued in the field of electrical energy.

It is indicated that self-supply permits, with their respective modifications, granted or processed under the Electric Power Public Service Law, which continue to have their legal effects, may be revoked by the CRE through the corresponding administrative procedure established in the Law of the Electrical Industry. Where appropriate, the permit holders may process a generation permit, in accordance with the law.

It mentions that the Electric Power Generation Capacity Commitment and Electric Power Purchase and Sale contracts signed with independent power producers under the Electric Power Public Service Law must be reviewed, in order to ensure compliance with the profitability requirement for the Federal Government.

The office of the Ministry of the Interior states that: “By instructions of the President of the Republic, Andrés Manuel López Obrador and in exercise of the power conferred by the third paragraph of article 71 of the Political Constitution, based on the provisions of the Article 27, section XV of the Organic Law of the Federal Public Administration, I allow myself to submit the initiative with a draft decree by which various provisions of the Electricity Industry Law are amended and added. The foregoing, in order for it to be considered as an initiative with a preferential procedure character, for which I request through your kind conduit it be forwarded to the Chamber of Deputies of the H. Congress of the Union, for its constitutional effects ”.

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