• REFORM: After a series of setbacks in courts, president Andrés Manuel López Obrador has presented Congress a bill to reform Mexico’s electric sector law that would favor state-owned utility (CFE), raising concerns about competition and compliance with international trade agreements.
• TERMS: Despite questions about its constitutionality, López Obrador’s bill to reform Mexico’s Electric Industry Law attempts to codify into law several directives that give preference to electricity produced by CFE over private renewables companies that have being halted by Mexican courts.
•REASONS: Presented to the Mexican Congress last week but only made public today, López Obrador argues in the bill’s preamble that Mexico’s landmark 2013 reform of its electricity sector gave undue advantage to private companies leaving CFE “almost in ruins”. If approved, the bill would affect billions of dollars in foreign investment.
• USMCA: While the new Biden administration has take a position on the subject, the US government warned Mexico in January that its actions in the energy sector to favor state-owned companies (including CFE) raised concerns about its compliance with the new USMCA trade agreement.
