Mexico lawmakers throw out constitutional energy reform

Parliament rejects President's Andres Lopez Obrador latest attempt to increase state control over the energy industry

The president's proposed energy reform failed to secure the required majority in the Chamber of Deputies
The president's proposed energy reform failed to secure the required majority in the Chamber of Deputies

The Chamber of Deputies, the lower house of Mexico’s parliament, voted by 275 to 223 on Easter Sunday (17 April) in favour of the bill, but the vote fell short of the two-third majority required to approve the constitutional reform.

Designed to shield state power utility CFE from privately backed wind and solar energy, the reform would have limited the participation of private companies in Mexico’s power supplies to around 46% and annulled some power purchase agreements.

The country’s president, Andres Lopez Obrador viciously criticised opposition lawmakers for failing to support the move.

“An act of treachery was committed against Mexico by a group of lawmakers who instead of defending the interests of the people became open advocates of foreign companies dedicated to taking and stealing,” the president said in his morning press conference on 18 April.

However, the rejection of the constitutional reform does little to reduce uncertainty for private investors in Mexico’s power industry.

Following the validation of the government’s 2021 Electrical Industry Law by the Supreme Court earlier this month, which grants CFE power to dispatch its own plants ahead of cheaper rivals, Lopez Obrador promised to continue with efforts to increase control over the power sector.

“So, we have already protected ourselves there, we can now guarantee that we will not lack electricity and that we will continue to hold down the price of electricity,” the president said.

Mexico’s wind energy association, Amdee, has warned that around 7GW of wind energy projects have been left in limbo since the government began to intervene in the sector, halting new tenders for renewable energy and refusing to grant permits for new wind farms.

Welcoming the deputies’ rejection of the reform, business leaders called for the rational application of technical criteria in the operation of the power sector.

“An open and modern country like ours requires a clear, transport and reliable legal framework,” said CCE, Mexico’s top business organisation, in a statement on 18 April.

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