constitutional reform on energy in Mexico
in several decades was published in the
Official Journal of the Federation. This
reform intends to implement radical
changes by promoting competition
in a sector that has been historically
characterized by the concentration of
productive activities in the hands of the
Mexican government since the 1930s.
This sector began to open up to private
investment just two decades ago.
This holds true for the hydrocarbon
industry, given that oil production has
always dominated public debate in
Mexico. Nevertheless, it is also the case
that the electricity sector is quietly
undergoing its greatest transformation
since its nationalization in 1960. Since
then, and until the 2013 reform, the
generation, transformation, transmission,
distribution and sale of electrical
energy for public consumption has been
the exclusive province of the federal
government. By means of a creative
constitutional interpretation, the reforms
Energy Act broadened the opportunities
for self-supply and gave way to a vigorous
framework for the independent production
of electricity, among other achievements.
However, such reforms did not allow the
generation of electrical energy for sale
between private parties.
As a result of the alarming financial
situation faced by the public utility
Federal Electricity Commission
(Comisión Federal de Electricidad, CFE),
the opacity, politicization and cross-
subsidization in determining electricity
fees, the lack of investment in networks
and the urgency to meet ambitious goals
in the reduction of greenhouse gases, the
need for a far reaching reform became
indispensable. In their respective
initiatives, Mexico's President and the
senators of the National Action Party
(Partido Acción Nacional, PAN) proposed
to move toward an institutional framework
that would allow for the creation of a true
electricity market.
The result is a model in which plan-
ning and control of the national electricity
of the federal government by means of
an operator that is independent of other
parties in the industry, specifically, the
CFE. Electricity transmission and distri-
bution will be considered public utility
services, which will also be entrusted to
the State, and the remaining activities in
the electricity industry will be opened
to participation from private industry, in
accordance with the terms established
by the new laws. Nevertheless, all of the
above activities will continue to be subject
to oversight by the Energy Regulatory
Commission (Comisión Reguladora de
Energía, CRE) with renewed autonomy
for such an agency.
Thus, although much work remains
in order to bring about a duly integrated
legal framework, we now have a solid
constitutional basis from which to
work. To begin with, on April 30, the
President submitted to Congress the
bills of the regulatory statutes which
will contain the detailed rules of the
new model. Subsequently, presidential
José María Lujambio served as General Counsel of the Mexican
Federal Energy Regulatory Commission from 2009 through 2012.
He previously worked in the office of the Legal Advisor to the
President of the Republic of Mexico.
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