Modifications to the Organic Statutes of CFE Generación

July 4, 2023 /

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Executive Summary:

On June 19, 2023, the Federal Electricity Commission (“CFE”) published, in the Official Gazette of the Federation (“DOF”), the Modifications to the Organic Statutes of CFE Generation I, II, IV and VI (the “Statutes”).
These modifications aim to add the figure of the Department of Intelligence and Market Analysis to the Operational Areas, establishing its functions in said Statutes.
On the other hand, on June 21, 2023, CFE published in the DOF the Modification to the Organic Statute of CFE Generación V, in which the functions are grouped according to the structure and organization that makes up CFE Generación V, within which is the addition to issue certified copies of documents and regulate the delegation or substitution of functions.

Background

On December 12, 2017, the Organic Statute of CFE Generation I was published and at the 14th ordinary session, on May 3, 2022, the Board of Directors-G1 approved the modifications to the Organic Statute of CFE Generation I. For its part, on December 22, 2017, the Organic Statute of CFE Generation II was published in the DOF.

On December 15, 2017, the Organic Statute of CFE Generation IV was published in the DOF.

On December 22, 2017, the Organic Statute of CFE Generation VI was published in the Official Gazette of the Federation. As well as the Organic Statute of CFE Generation V that was published on that same date, which was added on November 5, 2018 and subsequently modified on June 12, 2020 and January 16, 2023.

CFE Generation Purpose

The purpose of CFE Generación is to generate electric energy using any technology found within the national territory, as well as to carry out the marketing activities referred to in article 45 of the Electricity Industry Law (“LIE”), except for the provision of the Electricity Supply.

To this end, Article 45 of the LIE establishes that marketing includes one or more of the following activities: providing the Electric Supply to End Users, representing Exempt Generators in the Wholesale Electricity Market, entering into contracts with Generators, Marketers and Qualified Users Participating in the Market and others determined by the CRE.

CFE Generation Structure

The structure of CFE Generación has Higher Bodies and Operational and Administrative Areas, this for the attention of the matters that are within its competence, which is composed as follows:

Director General of the Commission.
A director appointed by the Board of Directors.
A counselor appointed by the head of SENER.
A counselor appointed by the head of the Ministry of Finance and Public Credit, subject to approval by the Board of Directors.
An independent director appointed by the Board of Directors.

Relevant Aspects

The purpose of the Statutes is to establish the structure and organization, as well as the powers of the different areas that comprise the CFE's Subsidiary Productive Company, as well as each of its directors or staff.

To this end, the Department of Market Intelligence and Analysis, in addition to its generic functions, is given the following:

Preparation of needs studies related to non-consolidated goods and services, required for registration in the Annual Contracting Program for acquisitions, leases and services of CFE Generación.
Review of the information recorded by the requesting areas of CFE Generación in the electronic system prior to reporting to the Commission's Market Intelligence and Analysis Management.
Monitoring the implementation of the Annual Procurement Program in matters of acquisitions, leases and services.
Review and preparation of market conditions research corresponding to the needs for non-consolidated goods and services required by CFE Generación.
Review of market conditions updates related to the procurement of goods and services that CFE Generación must carry out, in order to obtain information on market behavior.
Analysis of the convenience of modifying contracts derived from CFE Generación contracting procedures when it involves the replacement of goods, in order to obtain better conditions.
Identification of the risks associated with the contracting procedures to be developed by the contracting area and subareas of CFE Generación.
Design of contracting strategies based on market conditions and possible risks detected to obtain the best conditions in contracting procedures.
Inform the authorities about the general results of the market intelligence processes carried out within the scope of CFE Generación.
Select and propose to the CFE Intelligence and Market Analysis Management the public servants assigned to the Department of Intelligence and Market Analysis and to the requesting areas of CFE Generación.
Collaborate with the CFE's Market Intelligence and Analysis Department in the verifications it carries out on compliance with applicable regulations.

It is important to mention that this Department is responsible for supporting the requesting areas of the CFE and the Subsidiary Productive Companies, as well as the contracting area of the Corporation, providing strategic information on market studies, technical and economic conditions of the contracting procedures; as well as the costs of goods, leases and services required for a productive, efficient and competitive operation, in order to ensure the best available conditions in terms of price, quality, financing and opportunity for contracts.

For its part, in the modification of the Statutes of CFE Generación V, various sections are added to article 12, which establishes the functions of the General Director, within which the following are added:

Delegate powers to the heads of Administrative and Operational Units.
Establish control systems and adopt the necessary preventive and corrective measures.
Appoint trusted personnel, so that this will not be reserved solely for the Council.
Issue certified copies of files and documents that are in the care of the Administrative and Operational Units.
Provide the information and documentation requested by the competent authorities to the Units, in accordance with the Federal Law on Transparency and Access to Public Government Information.
Designate the temporary or permanent representatives of CFE Generación V who will participate in the Coordination Committees with External Energy Producers.

On the other hand, the Technical Supervision Sub-directorate will be in charge of coordinating the preparation and execution of the Committee meeting program related to the operation of the Legacy External Power Plants, as well as the supervision and execution of audits of said programs.

These modifications will enter into force on the next business day following their publication in the DOF.

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