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Mexico’s new electricity decree officially comes into force

Mexico City, Mexico — The new decree that modified several articles of the Industry Electricity Law, came into effect March 10. The modifications arose from the preferential initiative sent to the Chamber of Deputies on February 1.

The document indicates that it is intended to guarantee a price tariff system that will be updated due to inflation, through the operation of power plants regulated by the Legacy Contract of the Federal Electricity Commission (CFE) and the Contract for Physical Delivery of Energy and Capacity.

The bill, which will give priority to the Comision Federal de Electricidad (CFE), will also eliminate Mexico’s obligation to buy power through auctions. While Mexico’s Business Coordinating Council has called it an “indirect expropriation”, the U.S. Chamber of Commerce said it violated the United States-Mexico-Canada Agreement (USMCA) trade deal.

Placing the CFE ahead of private wind and solar plants has also generated concern among advocates of renewable energy.

Manuel Rodriguez, a member of Lopez Obrador’s National Regeneration Movement who heads the lower house of energy committee said “investments already made in accordance with the rules of the energy reform are guaranteed, and will continue, there won’t be a change of rules for those investments.”

He says that going forward however, amended rules would apply to new investors.

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