Mexico: SCJN could determine which AMLO's energy policy hinders Cofece and benefits CFE

During the administration of President Andrés Manuel López Obrador, one of the issues that has generated the most controversy is his energy policy and it is expected that the position of the Supreme Court of Justice of the Nation ( SCJN ) in this regard is that it hinders the functions of the Federal Commission of Economic Competition ( Cofece ) and unduly benefits the Federal Electricity Commission ( CFE ).

This decision could take place next Wednesday , when the members of the Second Chamber of the Court review Minister Luis María Aguilar's project regarding the resolution of the constitutional controversy presented by Cofece against the Policy of Reliability, Security, Continuity and Quality in the System Eléctrico Nacional (SEN) that Rocío Nahle , head of the Ministry of Energy, published in May 2020 .

According to information obtained by the newspaper El Universal , the proposal indicates that the policy hinders economic competition and gives an exclusive and undue advantage in favor of the CFE to propose strategic projects in highly relevant programs.

This is due to the fact that the projects proposed by the CFE would affect the entire development of the production chain of the electricity industry, so this commission, in its capacity as generator, transporter, distributor and marketer would have a participation of sum relevance in the planning of the National Energy System.

However, this would represent an obstacle for the electricity generation and commercialization market to operate under competitive conditions, the main argument on which the Court's decision in favor of Cofece would be based on the document that It will be presented on January 27.

The proposal could also invalidate 22 provisions of the Reliability Policy, which are contrary to what was established in the 2014 energy reform regarding the functions of Cofece to prevent monopolistic acts under the principles of impartiality and independence.

Another argument to go against the Policy is that it would allow the National Center for Energy Control (Cenace) to order the assignment and dispatch of Power Plant Units out of merit , which would represent a barrier to competition and free competition.

The main reason for this statement is that allowing these conditions would displace power plants from the market that can be more efficient and, therefore, deprive consumers of more accessible electricity rates.

Regarding the generation and importance of clean energies , Minister Aguilar's project establishes that the State must guarantee a sustainable national development , in addition to the fact that Sener's policy cannot avoid the responsibility that the advance in the electricity industry be of this way.

After the arrival of Joe Biden to the presidency of the United States, Andrés Manuel López Obrador said he agreed with his colleague's plans on handling the pandemic, economic stimuli and migration, but ruled out changing his energy policy, questioned in the neighboring country .

Faced with questions about a possible relaxation of some actions taken by his government in the energy sector and its effects on investment , the president said that he will not make changes in his policy before the arrival of a new administration in the United States.

And it is that throughout his government, López Obrador has sought to strengthen the presence of the State in the sector and Mexico has increasingly collided with foreign investors for measures such as restricting permits to private renewable energy firms or threats to eliminate autonomous regulatory bodies , such as the Energy Regulatory Commission.