The Federal Economic Competition Commission (Cofece) sent Congress an opinion in which it recommends rejecting the electricity reform promoted by President Andrés Manuel López Obrador, on the grounds that it would be harmful to consumers and the country as a whole.
López Obrador’s project proposes to reform the Constitution to give priority to the Federal Electricity Commission (CFE) in the country’s electricity system. Since it was announced, this initiative generates controversy, because while the government defends it, businessmen and some analysts say that it would scare away investments and would be negative for Mexico.
Read: Electricity reform: What AMLO wants and what alerts there are
Cofece said Monday that the president’s electricity reform “would suppress competition in the sector and eliminate the regulatory mechanisms that allow its efficient development.”
“Cofece recommends not approving the initiative and consolidating a competitive electricity model that is capable of supplying electricity in the best conditions and supports the development of the country,” the autonomous body said in a statement.
“The proposal does not provide mechanisms to ensure that the electricity generated (both by the CFE and, where appropriate, by private companies) and dispatched in the system is the least expensive. On the contrary, a change such as the one proposed would delay the exit from the market of older, polluting and inefficient generation plants; it would also discourage the installation of new projects,” he added.
📰 #ComunicadoCofece Due to the risks of affecting consumers and companies, the #Cofece recommends not approving the initiative for constitutional reform in electricity 💡 matters.
The https://t.co/UnLcoxV2Iw pic.twitter.com/piXtoRu8uX information ➡️
— COFECE (@cofecemx) March 7, 2022
Where is the reform?
The electricity reform initiative is under analysis in the Chamber of Deputies. It is expected to begin its ruling soon.
For López Obrador, approving it is necessary because it is necessary to reverse the energy reform approved in the six-year term of Enrique Peña Nieto (2012-2018). According to López Obrador, this modification only favored private companies and relegated the generation of electricity by the State.
By implying changes to the Constitution, López Obrador’s electricity reform requires a qualified majority — two-thirds of the Chamber of Deputies and the Senate — as well as the approval of more than half of the local congresses.
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