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They yield in electrical reform: CRE and CNH will remain autonomous

Deputies of the United Commissions of Constitutional and Energy Points, with the endorsement of the Environment and Natural Resources Commission, agreed to maintain the autonomy of the regulatory bodies of the energy sector, within the Electricity Reform initiative that will be voted on in plenary this Sunday.

The draft opinion included 10 of the 12 points proposed by the opposition group ‘Va por México’, however, experts consider that it is necessary to eliminate the points of the electricity reform that threaten competitiveness and intend to give more participation to the Federal Commission of Electricity (CFE).

The Political Coordination Board (Jucopo) rescheduled the vote on the electricity reform for next Sunday, April 17, this with the ‘hope’ that the opposition reviews the new initiative in detail and it can be approved.

However, the changes made in the new text are few, although it highlights that the regulatory bodies of the energy sector would retain their autonomy.

In accordance with a draft of the initiativeone of the most important changes was the elimination of the transitory article that established that the coordinated regulatory bodies in energy matters, the Energy Regulatory Commission (CRE) and the National Hydrocarbons Commission (CNH), were abolished, and that their structure and powers would be incorporated into the Secretary of Energy.

The draft also included a tenth transitory article that establishes that when the decree enters into force, the Federal Electricity Commission (CFE) will proceed to establish a fee schedule of the public service that allows to reduce the rates of public lighting, drinking water pumping, sanitation and domestic.

“Likewise, it will review those that correspond to public health and education institutions, so that their supply is provided in affordable conditions,” the text can read.

Marcial Díaz, president of the Association of Regulated Entities of the Energy Sector, pointed out that although preserving the autonomous bodies was a critical issue, it is not one of the most relevant of the entire reform, in addition to the fact that its elimination has a greater benefit in the oil sector than in the electric.

“Of the universe of CRE permit holders, which are around 26,000, the majority are related to oil products, and there are much fewer who participate in the electricity sector,” he said.

On the other hand, the decree project not only seeks to reform articles 25, 27 and 28 of the Mexican Constitution, but will also make modifications in article 4.

Therefore, a seventh paragraph would be included in this article, in which it would be established that every person may access the use and supply of sufficient and affordable electrical energy as a prior condition for the enjoyment of the human rights established by the Constitution.

“The State will guarantee the conditions and the law will define the bases and modalities for access to electricity,” the draft underlined.

Although maintaining the autonomy of the regulatory bodies was one of the three proposals of the ‘Va por México’ parliamentary group that did not fit in with the presidential initiative, still two pending proposals so that the PRI-PAN-PRD alliance can say that its 12 points were included in López Obrador’s reform: these are proposal number 7, which establishes that the State maintains, reaffirms and strengthens its stewardship in the electricity sector via the creation of the National Commission of Electric Networks and an Autonomous State Organism, and proposal number 10, in which the granting of permits is perfected to give legal certainty to projects.

In this way, 10 of the 12 proposals of ‘Va por México’ have already found a place in the president’s electrical reform. For it to be approved in the Chamber of Deputies, a qualified majority is needed, that is, 334 votes.

Morena and her allies (PT and PVEM) would contribute 277 votes, but they would lack 57 to achieve “the feat” of approving the initiative. Therefore, they would have to convince deputies from other parties. Those with the most votes to distribute are the PAN (113 votes), PRI (71 votes), Movimiento Ciudadano (24) and, finally, the PRD (15).

insufficient changes

Oscar Ocampo, energy coordinator of the Mexican Institute for Competitiveness (IMCO), He considered that this type of additions are not enough for the visions of the opposition and the Government to meet, since they are issues that do not have a profound impact on the energy market.

“There are still two points missing from Va por México that should be included to try to reach an agreement, which is the autonomy of the National Center for Energy Control and legal certainty for the permits of private companies, but it is a completely different vision than the one proposed by President López Obrador,” he said.

He summarized that while the presidential initiative seeks to increase CFE’s share of electricity generation and minimize private participation, the vision of ‘Va por México’ seeks to promote an electricity market with the public and private sectors.

Forward, Bernardo Cortés, partner of the firm Cortés Quesada Abogados, He indicated that it will be necessary to be attentive to the vote on Sunday, although it is extremely rare that the initiative reaches the plenary without having signs of being approved.

“Normally, the initiatives go up to the plenary session when they know that they are likely to be approved, I think it could be the case that it is withdrawn and avoid the political wear and tear that a vote and rejection would imply,” he said.

He added that the changes made so far do not guarantee his approval. When asked if he considers that the President has a ‘plan B’, he pointed out that the Government already has control of the industry, and that at most, it could send an initiative to protect lithium.

“We already have an immobile electricity sector, without the need for reform or declaring the Electricity Industry Law unconstitutional,” he stressed.

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