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Electricity reform: Opposition proposals that ‘click’ (and those that don’t) with AMLO

next april 11 The discussion of the electrical reform initiative proposed by President Andrés Manuel López Obrador will begin, for which the opposition group ‘Va por México’ proposed 12 points to be included in the draft opinion. Ignacio Mier, coordinator of the Morenista deputies, announced that for now 9 of the 12 proposals will be incorporated.

Therefore, we show you point by point which are the proposals of the opposition that do not have major inconvenience in being part of AMLO’s reform and which are “under review”since its addition would go against the main objectives of the presidential initiative, this in the face of the ‘battle’ that will take place in the Chamber of Deputies.

Those that do not fit with AMLO

Proposal 6. Market regulation is strengthened

‘Va por México’ intends at this point to give constitutional autonomy to the Energy Regulatory Commission (CRE), while the presidential initiative seeks to integrate the functions of the regulatory bodies (CRE and the National Hydrocarbons Commission) to the Secretary of Energyso that the State is in charge of its responsibilities.

Proposal 7. The State maintains, reaffirms and strengthens its stewardship in the electricity sector through the creation of the National Commission of Electric Networks and an Autonomous State Organization

The opposition’s proposal proposes that the National Center for Energy Control (Cenace) absorb the planning of the Electrical System by integrating CFE Transmission and CFE Distribution into a new organization called National Commission of Electric Networks.

It is also established that this new commission prepare regionalized programs for the growth of transmission and distribution lines and that the investments made as a result of these be recovered by charging the generators/consumers the proportional amount of the investment at the time the which are interconnected or connected.

However, President López Obrador’s proposal is that the functions of the Cenace are integrated into the structure of the Federal Electricity Commission (CFE)which would give the company led by Manuel Bartlett control of the electricity market.

Proposal 10. The granting of permits is perfected to give legal certainty to projects

‘Va por México’ seeks to modify the installation procedure to build new power generation plants. To give legal certainty to the interested parties, the procedure must include interconnection with the National Electricity Networks Commission (formerly Cenace), report its environmental, social and anthropological impact and have a generation permit from the CRE.

Meanwhile, the presidential initiative seeks cancel permits granted to the private sector and limit competition, by granting a stake of at least 54 percent to CFE and up to 46 percent to private parties.

And which ones did ‘click’ with AMLO’s proposal?

Proposal 1. Access to electricity is established as a human right

The opposition’s proposal consists of modifying article 4 of the Mexican Constitution to establish access to electricity as a human right, stating that it must be sufficient, continuous, clean, safe, sustainable and accessible.

“Highlighting that the State must establish the necessary mechanisms so that access is at the lowest and most stable costs possible,” the proposal reads.

On February 24 of this year, the head of the CFE Legal Office, Nancy Joselyn Jiménez, suggested during her participation in the 25th forum of the open parliament that electricity should be established as a legal asset protected as a human right.

Proposal 2. To guarantee access to electricity at the lowest possible cost, mechanisms are established that allow citizens to generate their own energy or buy it at the lowest and most stable prices possible.

The content of this proposal is based on guaranteeing low rates to heads of families and vulnerable groups, by applying targeted subsidies and with the help of solar panels. It is also proposed to transform CFE Distribución Básico into an Independent State company, called Citizen Basic Supply.

Lowering electricity costs is one of the objectives of the electricity reform, according to the president, which is why they agreed to include these proposals in their initiative.

Proposal 5. Open the opportunity for businesses and SMEs to access the electricity market and its benefits, such as lower energy costs or clean energy.

Va por México’ proposed to reduce the qualified supply from 1 mega to half a mega upon the approval of this reform and a period of 4 years is established so that, each year, the threshold is reduced from 100 KW until it is left at 100 KW.

Companies that meet the consumption limit may choose to remain in the Basic Supply or migrate to the wholesale electricity market.

Morena’s bench saw this proposal with good eyes, so they decided to accept it.

Proposal 9. The penetration of the use of renewable energies is encouraged

This point indicates that distributed generation should be promoted (solar energy) through financing models for different types of users and raising the limit of distributed generation to one megawatt, double what is currently allowed. Responsibility for this issue would fall on the National Electricity Networks Commission.

One of the priorities of the Morena bench is to make it clear that President Obrador’s reform yes it will allow that distributed generation continue to be promoted in the country, so they had no problem with the reform opinion clarifying the doubts that arose when the initiative was presented (in which the fate of the permits for this industry was not defined ), so they ‘palomearon’ the proposal of ‘Va por México’.

Proposal 11. Reformulation of the CEL’s model to align it with the IREC (International Renewable Energy Certificates).

The opposition group proposes that the Clean Energy Certificates (CEL’s) go from be national to internationalaligning the issuance criteria with the IREC, which would allow Mexican companies to prove their compliance with environmental matters internationally.

They also point out that the character of the CEL’s of financial certificate would be eliminated, but the commitments and contracts already established before the decree would be fulfilled.

In this way, a ‘balance’ would be achieved with respect to AMLO’s initiative, who wants to eliminate the CEL’s due to the financial burden that their payment implies and to which CFE does not have access.

Points that only ‘slightly’ modify AMLO’s proposal

Proposal 3. Energy transition

‘It’s going for Mexico’ I almost ‘copied’ his proposal to President López Obrador, since they also want the energy transition to be a state obligation, although with the participation of the public, private and social sectors. Both political forces agreed on this point.

Proposal 4. Errors and excesses of the past are corrected and the simulation is finished

The PRI-PAN-PRD deputies proposed creating a model to encourage the migration of legacy contracts, forcing power plants that have been in operation for 10 years to migrate their permit to the model established in the Electricity Industry Law within a period not exceeding To one year.

One of the main objectives of the CFE is to put an end to the simulation and excesses of the past, so this proposal fits the wishes of President López Obrador and the general director of the CFE, Manuel Bartlett.

Proposal 8. The Federal Electricity Commission (CFE) is strengthened

Opposition and Government fully agree on this point. ‘Va por México’ considers that, in addition, the CFE should be granted budgetary and management autonomy, operating outside the budget, with corporate, independent and professional governing bodies, but maintaining accountability as a public body. Likewise, he would be in charge of the capital, fuel marketing, generation and qualified supply companies.

Proposal 12. Lithium will be owned by the State, but its use will follow the rules of oil

At this point it is established that, as in oil, there is rounds for exploration and extraction of minerals to guarantee ownership to the State at all times, as well as profits from this activity.

Both the opposition and the government agree on this issue, and it is even one of President López Obrador’s priorities, since in the event that the electricity reform is not approved, he intends to propose an initiative to protect lithium.

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