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LATIN AMERICA ADVISOR

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

March 1, 2024

What Will a Major Ruling Mean for Power in Mexico?

Mexico’s Supreme Court recently struck down key parts of President Andrés Manuel Lopez Obrador’s power sector reforms. // File Photo: Mexican Government.

Q

  • Mexico’s Supreme Court on Jan. 31 struck down provisions of President Andrés Manuel López Obrador’s landmark 2021 power sector reform. The high court sided with companies that had sought an injunction against the law, arguing that its favoring of state-owned power company, Comisión Federal de Electricidad, or CFE, over private power companies violated constitutionally protected principles of free competition. What are the implications of the ruling for the CFE and for private power providers, including ones that generate renewable energy? What does the high court’s action mean for the trade dispute that the United States launched against Mexico in 2022 over the reforms? How will the ruling affect Mexico’s electricity consumers?  

A

Duncan Wood, vice president for strategy and new initiatives at the Wilson Center: “The decision by Mexico’s Supreme Court to declare AMLO’s electricity sector reform unconstitutional gives new hope that a more reasonable approach to power generation and distribution will emerge in Mexico after the end of his presidency. For the past six years, the power sector has languished as investor confidence has been trampled by the López Obrador administration’s efforts to create a truly dominant market position for the CFE. Power outages are becoming more and more common across the country and there are substantive concerns that Mexico will not be able to reach the full potential of the nearshoring phenomenon due to the lack of access to clean, affordable and reliable energy sources for manufacturing. The next president, who will take office in October, will…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.
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Diego Arria
Director,
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Merike Blofield
Professor of Political Science,
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Devry Boughner Vorwerk
CEO,
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Joyce Chang
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J.P. Morgan

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Barbara Kotschwar
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Nicolas Mariscal
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Thomas F. McLarty III
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Beatrice Rangel
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Ernesto Revilla
Head of Latin American Economics, Citi

Gustavo Roosen
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Andrés Rozental
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Shelly Shetty
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