Santamarina Steta

Challenges of the Electricity Market in Mexico

The electricity sector transition started rapidly, cornering all the companies with self-supply permits in the country.

Although the figure of electric self-supply is expected to disappear gradually, following current legislation and with the last contract granted until May 2039, the federal government seeks to cancel 110 permits with more than 77,000 customers for the purchase and sale of energy, giving rise to legal uncertainty that augurs hundreds of lawsuits in the second half of 2022.

And it is that the controversial model of electricity generation ensured that a total of 468 private and public companies operated their power plants in Mexico and thus did not depend on the supply of the Federal Electricity Commission (CFE) but on the parastatal network. However, with the entry into force of the Electricity Industry Law (LIE) and the creation of the Wholesale Electricity Market, the self-supply modality was abandoned and today, 347 permits are waiting for their Legacy Interconnection Contracts to expire.

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Roberto Fernández del Valle

Partner

rfernandez@s-s.mx

Mariano Calderón

Partner

mcalderon@s-s.mx

Juan Carlos Machorro

Partner

jmachorro@s-s.mx