Mexico’s president seeks to undo market reforms with electricity bill

October 1, 2021

MEXICO CITY (Reuters) -Mexico has sent a proposed electricity reform to Congress seeking to boost the role of the state power utility, marking another effort by President Andres Manuel Lopez Obrador to roll back the last government’s liberalization of the energy market.

The bill, which also calls for the government to be the only extractor of lithium and was sent to the lower house on Thursday, would have the Comision Federal de Electricidad (CFE) supply 54% of the market, with its preferential treatment over private firms geared at keeping prices low for Mexican users, Lopez Obrador said.

“We are trying to compensate for the damage caused by the so-called energy reform,” he told a news conference on Friday, referring to the previous administration’s 2013-14 opening of the energy market to private capital.

The law currently gives preference to dispatching the lowest-cost power onto the grid, which is often produced by private companies.

The proposed reform also aims to establish the government as the only extractor of lithium, Lopez Obrador said.

Interior Minister Adan Lopez, speaking alongside the president, said eight existing concessions for lithium will remain in private hands as long as companies develop them, and that the government will not grant private concessions.

“It will be the state that intervenes in the exploration and production of these strategic minerals,” he said.

Lopez Obrador added that certain electricity regulators under the reform will be absorbed by the CFE.

(Reporting by Raul Cortes, Ana Isabel Martinez and Daina Beth Solomon, Editing by Timothy Heritage, Giles Elgood and Steve Orlofsky)

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