Insights

Share

New Electricity Legal Framework in Mexico

New Electricity Legal Framework in Mexico

August 22, 2014 Alert

Further to the Mexican Energy Constitutional Amendments approved on December 12, 2013, President Enrique Peña Nieto signed decrees enacting Secondary Laws for Mexico's Energy Reform. Published in the Federal Official Gazette on August 11, 2014, this new legislation consists of nine new laws and 12 amendments to existing laws.

Highlights of the secondary laws focusing on the electric power sector include:

  • Newly independent production, transmission, distribution, purchase, sale and supply activities in the electricity industry ensure open access and efficient operation in the electric sector.

  • Generation, purchase and sale of electricity are now open to free competition, and private investment is now allowed.

  • The Comisión Federal de Electricidad ("CFE") was transformed into a State Productive Entity, responsible for public electric power transmission and distribution services. The proposed legal scheme contemplates contracts between CFE and private parties, in which the private parties contribute technology and experience to expand and improve Mexico's transmission and distribution networks.

  • The Electric Industry Law distinguishes between a "Producer" and an "Exempt Producer" on the basis of installed capacity. Additionally, based on their electricity consumption, users are classified as "Basic Users" and "Qualified Users."

  • Suppliers are required to obtain a permit from the Comision Reguladora de Energia ("CRE") to provide services and must execute supply agreements with final users using forms approved by CRE.

  • The Centro Nacional de Control de Energía ("CENACE") will become a decentralized federal government entity in charge of programming for the Mexico's national electricity system, including planning and control. CENACE will guarantee to all the participants free access to Mexico's transmission and distribution networks on nondiscriminatory terms.

  • A wholesale electricity market was created and will be operated by CENACE under conditions that promote competition, efficiency and no undue discrimination, in accordance with market rules. Participants in the wholesale electricity market may enter into transactions for the purchase of: (a) electricity, (b) related services, (c) potency or any other product that guarantees the sufficiency of resources to satisfy demand for electricity, (d) the import or export of the above mentioned products, (e) financial rights regarding transmission, (f) clean energy certificates, and (g) any other products required for the operation of the national electric system.

  • Planned legal mechanisms will ensure that real property may be obtained for land that must be occupied or will otherwise be affected by electric industry activities.

  • Obligations to acquire Clean Energy Certificates will be established.

  • CRE will be in charge of, among other things (a) granting permits, (b) establishing accounting guidelines applicable to transmission, distribution and basic supply activities, as well as CENACE's operations, and (c) issuing the method for calculating and adjusting tariffs for transmission and distribution services, the supply of basic services, CENACE's operations, and the related services that are not part of the wholesale electricity market.

  • The Geothermic Energy Law will regulate the exploration and development of geothermal resources in Mexico, both for the electricity sector and otherwise. Private parties may obtain the exclusive right to develop a geothermal field for a period of up to 30 years, through a concession granted by the Secretaría de Energía. 

CONTACTS

José Estandía
Mexico City
+52.55.3000.4081
jestandia@jonesday.com

Alberto de la Parra
Mexico City
+52.55.3000.4087
adelaparra@jonesday.com

Mariana González
Mexico City
+52.55.6283.5050
mgonzalez@jonesday.com

Alejandro Creel
Mexico City
+52.55.3000.4070
acreel@jonesday.com

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. The electronic mailing/distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the author and do not necessarily reflect those of the Firm.

You May Also Be Interested In

December 03, 2024 Alert

Final Regulations Expand Access to "Direct Pay" Elections for Energy Credits

November 26, 2024 Alert

EPA Releases National Strategy to Prevent Plastic Pollution

November 19, 2024 Handout

Energy Transition in the Cement and Concrete Industry

November 15, 2024 Alert

D.C. Circuit Finds Council on Environmental Quality's NEPA Regulations Are Unenforceable

Before sending, please note:

Information on www.jonesday.com is for general use and is not legal advice. The mailing of this email is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Anything that you send to anyone at our Firm will not be confidential or privileged unless we have agreed to represent you. If you send this email, you confirm that you have read and understand this notice.