The Federal Commission on Economic Competition (Cofece) brought a constitutional dispute before the Supreme Court of Justice of the Nation (SCJN) against the decree reforming the Law on the Electricity Industry, considering that it affects competition in the markets.
For the Cofece, some of its content is contrary to constitutional Articles 25, 27 and 28, which order a competition regime in the electricity generation and supply markets.
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“In the view of this authority, the measures contained in the decree are contrary to the Constitution and eliminate the conditions necessary for a dynamic of competition in the electricity market, which would result in a disturbance in the conditions of supply of electricity, as well as damage to the consumer and the economy in general,” he said.
In a statement, it detailed that the contested decree broke the open and non-discriminatory access rule to distribution and transfer networks, reducing the ability to compete for certain generators and marketers.
It also eliminates the economic clearance criterion of power plants, giving undue advantages in favour of the Federal Electricity Commission (CFE) and nullifies the ability of other actors to compete in the generation link.
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At the same time, it “dilutes the rule of open access to networks, enabling refusals of access to this indispensable input where there are no legitimate impediments or justifications for doing so”.
It also adds that this decree allows suppliers of the basic service, specifically to the CFE, to acquire energy through non-competitive methods, indefinitely extending the legacy regime, which was originally transient.
#ComunicadoCOFECE ?#COFECE constitutional dispute is brought against the Decree reforming various provisions of the Law on the Electrical Industry #LIE. The information ➡️https://t.co/DoyMU2Wmgx pic.twitter.com/V65XYrps4y
— COFECE (@cofecemx) April 22, 2021
According to the Cofece, under the current constitutional scheme it is essential that there are certain requirements for generation and supply markets to operate under competitive conditions.
These are:
-The possibility of open and unduly discriminatory access of any generator to distribution and electrical transmission networks.
-That the energy dispatch is governed by objective and efficiency criteria.
-That the operator – National Energy Control Centre – and the regulator – Energy Regulatory Commission – operate independently and impartially, without favouring or granting undue advantages to any participant.
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