SCJN will resume its jurisdiction in the appeals against the reforms to the LIE.

By Santamarina Steta

Executive Summary:

The Second Chamber of the Supreme Court of Justice of Mexico ("SCJN") decided to exercise its power to reassume jurisdiction to review certain amparos filed against the amendments to the Electricity Industry Law ("Ley de la Industria Eléctrica" or "LIE").
The resumption requests were filed before the SCJN by 18 companies.
The SCJN will have in its hands the possibility of declaring certain elements of the amendments to the LIE invalid.

Context and background

In March 2021, the Legislative Power approved the amendments to the LIE sent by the Federal Executive in order to favor the Federal Electricity Commission over the participation of the private sector in the electricity sector.

En abril de 2022, el Pleno de la SCJN resolvió la acción de inconstitucionalidad 64/2021 y las controversias constitucionales 44/2021 y 45/2021, promovidas por 48 integrantes del Senado de la República, la Comisión Federal de Competencia Económica y el gobierno del estado de Colima, respectivamente. En los tres asuntos, las actoras demandaron que se declararan inconstitucionales las reformas a la LIE.

In these proceedings, the SCJN analyzed, among other things, the imbalance that the reforms to the LIE generate in the electricity sector to the detriment of private companies and end users, the violation of the right to the environment and international treaties. However, the SCJN did not gather the qualified majority votes necessary to invalidate a single article of the reforms to the LIE and expel such norms from the national legal order.

Therefore, the analysis of the constitutionality of certain articles of the amendments to the LIE was left open through the numerous amparo lawsuits against the amendments pending resolution and the new amparo lawsuits that may arise against the application of the LIE. In this regard, it is worth noting that several federal courts have ruled in favor of several companies against certain articles of the amendments to the LIE.

Key Aspects

Thus, on January 25, 2023, the Second Chamber of the SCJN discussed and decided to exercise its power to reassume jurisdiction to review two amparo lawsuits filed against the amendments to the LIE in which federal judges declared the amendments to the LIE unconstitutional in order to definitively resolve the merits of the cases. The requests for reassumption of jurisdiction were filed before the SCJN by two groups of 18 companies, most of them private solar and wind energy producers.

Thus, the SCJN will have in its hands the possibility of declaring invalid the following elements of the amendments to the LIE:

Article 3:
- Section V, referring to legacy power plants;
- Section XII, referring to electricity hedging contracts;
- Section XII bis, referring to electricity coverage contracts with physical delivery commitment;
- Section XIV, regarding legacy contracts for basic supply.
Article 53, relating to electricity hedging contracts by auctions.
Article 108, Section VI regarding the powers of the National Energy Control Center.

In principle, the Second Chamber of the SCJN would be in charge of reviewing the amparos, but given the relevance of the issue, the amparos could be discussed in the Plenary of the SCJN.

There are no definite deadlines for the SCJN to definitively resolve these matters and no minister has yet been assigned to prepare the draft resolutions.

Authors