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CFE implements 300 percent price hike in Baja California, threatening companies, jobs

Tijuana, Baja California — Closure of companies, loss of jobs and increase in prices are expected with the new CFE rate hike of 200 to 300 percent for the industrial sector of Baja California.

The National Chamber of the Industrial Transformation (Canacintra), the Industrial Association of Mesa de la Otay (AIMO) and the Association of the Maquiladora and Export Industry (Index), voiced this concern at a recent press conference.

One company hit was Jacuzzi de México who in December 2017 paid 668,949 peso for electricity. In January, their electric use was billed at nearly 1.3 million peso even though its light consumption was lower, said the president of Canacintra Tijuana, Marcello Hinojosa Jiménez.

“This issue is not exclusive to the industrial sector because in the end the increases in electricity rates are going to affect the goods and services that you consume every day,” he said.

“In addition to causing business closures, paralyzing new investments, mass layoffs, unemployment and insecurity, these are increases that only the inhabitants of Baja California suffer,” he added.

He said the hikes are because the state’s electricity grid is not connected to the rest of the country, and since December 2017, the Energy Regulatory Commission (CRE) has defined a new model for electricity tariffs.

“Arguing that the new scheme takes into account the cost of each segment of the value chain of the electricity industry, so that the industrial sector and in general all CFE users have to suffer from the fact that the national electricity sector does not reduce your production costs by implementing new technologies,” he said.

The president of AIMO, Salvador Díaz González, says he could resort to filing injunctions, although the process is complicated.

“Increases in gasoline, increases in electricity and what we are experiencing right now with negotiations with our neighbor from the North? Obviously that puts us in a more worrisome scheme to make our state look like a competitive state for foreign investment,” he explained.

Luis Hernández González, head of Index,  said more than 600 companies and 300,000 jobs were at risk by the rate hike and urged those responsible to reconsider.

“CFE has to see the consequences of that decision and the CRE also needs to talk otherwise there will be an escalation of consumer prices,” he reiterated.

The industrialists commented that although CFE is not the only electricity supplier, the new competitors offer savings of 10 percent and the investment to make the switch is not profitable.

Company Aluminum of Baja California was also hit with a substantial increase from December to January when their electric bill rose from 2,410,193 pesos to 4.3 million peso. As with Jacuzzi de México, the company showed their electric usage was less with the increased bill.

State business leaders are seeking a meeting with CRE director Guillermo García Alcocer to better understand how the new rates were established. They are also considering legal action.