The Energy Regulation and Markets Review - Stikeman Elliott

Mexico
Environmental licences are needed in order to install facilities for the production
of electricity and bioenergetics, as well as for the transportation and storage of natural
gas, LP gas and bioenergetics, since environmental risks can arise from such activities.
Environmental licences are commonly granted by local and federal authorities, depending
on the activity to be carried out (construction or operation), and they are typically
regarded as sensitive items to consider and deal with. As part of a legal due diligence, an
environmental expert may have to address social issues with adjacent communities.
At a federal level, such environmental licences may be environmental impact
authorisations (whose application process lasts about 60 business days), risk authorisations
(whose application process lasts about 45 business days), and air emissions permits,
known in Mexico as ‘Comprehensive Environmental Licences’ (whose application
process lasts about 30 business days). These licences are requested from the Ministry of
Environmental and Natural Resources. At the state or municipal levels of government,
common approvals include land use licences (or in the case of transmission lines or
pipelines a route-tracing approval) and construction licence whose issuance time frames
vary depending on the state or municipality, but are usually granted within one month
of the application date.
Finally, authorisations from the applicable governmental agency (municipal, state
or federal) must be obtained if facilities for electricity production and the installation
of trunk lines to transmit the electricity produced to the National Electric System (‘the
SEN’), or the transportation of gas through pipelines is done via rivers, lakes, crossing
land or any land of governmental ownership.
iv Transfer of control and assignments
To convey assets or for the assignment of permits for the production of electricity,
transportation or distribution of natural gas, as well as for the merger and acquisition of
companies developing such activities, the relevant authorities reviewing such transactions
and authorising or rejecting the same, are the CRE and, if applicable, the COFECO.
The Electric Energy Law states that when the ownership of private production
energy facilities is sold, the permit for the production of energy can only be assigned to
the new owner of the facilities, therefore the assignment of the facilities is always linked
to the assignment of the production permit.
For the assignment of the aforementioned permits and production facilities, an
assignment application to the CRE is required. In the same way, legal, technical and
financial information of the assignee must be submitted. If the CRE considers that the
information demonstrates the economic and technical capability of the assignee to carry
out the production of energy, it will authorise the assignment within a month of the
filing being made.
In the case of assignment of the transportation, storage or distribution of natural
gas permits, the procedure and period of analysis by the CRE of the assignment request is
similar to the aforementioned, but there is no need to ask for a permit to assign facilities.
Concerning the procedure for the assignment of the permit related to the
transportation, storage or distribution of LP gas, the time frames and relevant authorities
are different from the foregoing cases. If the permit is for the transportation of LP gas on
tankers (ships or trucks), the permit assignment must be requested from the Ministry of
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