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CFE rolling out new tariffs for Mexico in November

Mexico City, Mexico — The Federal Electricity Commission (CFE) is set to release new tariffs for the country by November.

Diego Villarreal, deputy director general of coordination of the electricity industry of the Secretariat of Energy (Sener) reports that by November, the new CFE tariff that will apply to all houses in the country will be ready for publication by the Energy Regulatory Commission.

This new tariff will be transparent because, unlike the current one, it will be composed of how much it costs to generate, transmit, distribute and deliver electricity in the country’s homes, explained Diego Villarreal.

“This is a fundamental paradigm shift because the price we pay today for the basic supply is indexed by a number of fuels, but in reality it is completely out of phase with generation costs and is not transparent to the end user,” he said.

This tariff is stopping private generators looking to sign contracts in the qualified market (industries and shops), as this basic tariff for houses will serve as the basis for the qualified market.

“With this new scheme, the Energy Regulatory Commission will publish the final rate of basic supply, and then we can see exactly how much it costs CFE to generate to those who are buying,” he said.

During the Specialized Workshop of the Electricity Sector in Mexico, which was organized by the state productive company, it was noted that a subsidy could be possible in the new tariff, but for now it will be based on the new costs.

Villarreal added that “On top of that, the State via the Ministry of Finance can decide I do not want to raise the rate but instead, I will contribute capital, creating a subsidy so that what the end user sees on bill is lower.”

However the fate of this subsidy is not known and is not very clear, he added.

“This is a key paradigm shift because in the past that subsidy went into the CFE bag and CFE was distributing it and we did not know where that subsidy was going. With this new rate, it will be very clear how much the basic supply costs, how much it charges and how much it lacks,” he said.

By law, CFE can no longer charge “what you want” to the houses of the country since the tariff is regulated by the Energy Regulatory Commission.

“The basic supplier can not charge what he wants because the CRE tells him you can only charge this‘. So that is how the rate is made. It’s determined by the costs of generation, transmission, distribution, related services and any other costs associated with the sale of that,” he said.