will provide due observance of the law
at the administrative level. Next, general
administrative provisions will be issued
by the regulatory agency. Lastly, we will
see the specific permits and contracts.
The path will consist of pursuing
effective competitive conditions and
promoting strong regulations as needed in
accordance with the model conceived by
the substantive and transitory articles of
the constitutional reform.
Meanwhile, those working on the
energy reform's regulations should
consider the following:
reforms grants the CRE the power to
regulate the generation of electricity
and wheeling fees for the transmission
and distribution of electricity. There is
no room for confusion: the Department
of Finance and Public Credit should
no longer determine the fees that the
CFE charges for its network services
or for electricity as a product. Finally,
a technical specialized regulatory
agency will be in charge of such work
based on a meticulous cost analysis.
Nevertheless, the CFE will continue to
be a dominant player in the generation
and marketing of electricity, and the
regulations should treat it as such if
we desire a strong market to flourish in
the mid-term. Furthermore, consumer
subsidies should be granted to those
who truly need them in accordance
with energy and social policy, and not
as a result of regulatory considerations.
Energy (Secretaría de Energía,
SENER) as coordinator of the sector
and grants it the power to establish
the terms of the strict legal separation
that will be required to promote open
access and efficient operation of the
electricity sector, and to oversee
compliance. The intent was for
SENER to construct the so-called
"Chinese walls." Nevertheless, such
a mandate will be exhausted when
the rules for the operation of at least
established: the first one in charge
of the generation and marketing of
electricity, and the second in charge
of transmission and distribution. As a
result, responsibility for the true and
effective regulation of open access to
the network should belong to the CRE
through the issuance of terms and
conditions and economic regulation
of electricity transmission and
distribution services, and the approval
of the rules for dispatch and other
instruments to be applied by the new
system's independent operator.
Energía, CENACE) will play a key role
in the new model. As an independent
operator, it will ensure that the CFE
does not unduly discriminate in
providing access to the electricity grid
for its own generation purposes. The
basis for this is found in transitory
article sixteen, subsection (b) of the
reform decree. In any case, since
the CENACE is being created as a
decentralized organism, as part of
the Federal Public Administration,
it must be ensured that the various
interested parties participating in the
industry have a voice according to the
international best practices.
individuals may participate in the
financing, installation, maintenance,
management, operation and expansion
of transmission and distribution
infrastructure. Perhaps a permits
system would have been more
appropriate to encourage private
participation in these activities, as
had been proposed by the PAN. Given
that there was not much success in
the drafting of the eleventh transitory
article of the decree for constitutional
reform, the law must be very clear
on the scope of the exclusivity of the
State in transmission and distribution,
and what activities will be done "on
behalf of the nation," in addition
to what should be understood by
operation and management for hiring
the appropriate incentives to grow
the infrastructure of the national
electricity system, particularly to
develop the enormous potential for
renewable energy.
energy and reduction of pollutants
will be established under the law
for participants in the electricity
industry, as ordered by the seventeenth
transitory of the reform decree.
Hopefully, the drafters are thinking
of what has been called in the
United States "renewable portfolio
standards," by means of which
various states force suppliers to
provide a certain percentage of their
electricity from renewable sources.
In a best case scenario, this could be
accompanied by strict federal controls
on emissions of greenhouse gases and
the corresponding emissions rights
markets which help to optimize the
energy mix as a whole. The mature
technology of some renewable energy,
such as wind and, more recently, solar
photovoltaic, suggests that subsidies
may not be required in Mexico (on the
contrary, the new framework seems
to encourage abandoning prevalent
general subsidies on gasoline, diesel
and propane).
Mexico is at least 20 years behind
most countries in the Organization for
Economic Cooperation and Development
(OECD). Mexico should use this lag in
implementation to its advantage and
learn lessons from the international
experience of other countries that have
already reformed their electricity sectors.
For now, Congress will be in charge of
building a good electricity market with
strong regulations aimed at benefiting
the end consumer and regulations which
presuppose that the electric industry
is the industry that most contributes to
climate change.