The Energy Regulation and Markets Review - Stikeman Elliott

Chapter 15
Mexico
Gonzalo A Vargas 1
I
OVERVIEW
Through a Constitutional directive set out in Article 27, in Mexico the generation,
distribution and transportation of energy is reserved to the Mexican state, which
created the Federal Electricity Commission (‘the CFE’). For 75 years, this agency was
responsible for designing and developing the required infrastructure for the generation
and distribution of energy. Since the 1982 amendment to the Law of the Public Service
of Electric Energy (‘the Electric Energy Law’), which allowed, under limited schemes,
the participation of the private sector in the generation of energy, private companies
slowly started to participate under the available schemes, but the CFE has remained as
the cornerstone of the sector, given that not only did it retain ownership of producing
plants, but also the distribution network and the exclusive rights to transfer energy. The
applicable regulatory legal framework has been further enhanced with a view to creating
more equitable grounds for different participants in the field, and diminishing the
discretionary powers of the CFE, thus allowing it to maintain its plants and transmission
network, but at the same time incentivising further private-sector participation.
II
REGULATION
i The regulators
The main authority in charge of regulating all matters related to the energy sector is
the Ministry of Energy, with the active participation of two entities with administrative
independence from the Ministry of Energy, the Regulatory Energy Commission (‘the
CRE’) and the National Hydrocarbons Commission (‘the CNH’).
1 Gonzalo A Vargas is a partner at González Calvillo, SC.
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