MEXICO Trends and Developments Contributed by: Marco Tulio Venegas, LITREDI, S.C.
State Planning, Mixed Investment and Arbitration in Mexico’s Electricity Sector After the 2024–2025 Reforms Mexico’s constitutional reforms of 2024 and second - ary legislation of 2025 established a state-directed mixed electricity model rather than a restored monop - oly. This article makes three claims about the reform. • First, what defines the model is not the announced division of capacity between the Federal Electricity Commission and private participants, but the shift in what co-ordinates investment: a binding state plan has taken the place of price signals. • Second, arbitration therefore plays a defined but modest role, reaching commercial disputes between the parties without extending to acts of public authority. • Third, assessments that ask only whether the framework favours investment misidentify what is at stake, because the model will be tested where planning, contract and public authority meet. Introduction Mexico has rewritten the constitutional foundations of its electricity sector twice in 12 years, and in oppo - site directions. The reform of 2013 organised the sys - tem around competition and opened generation to private participants, while the reforms of 2024 and 2025 restored the primacy of the State and the Fed - eral Electricity Commission (CFE). The temptation is to read the second movement as the undoing of the first. It is not. The State now plans, yet it also invites capi - tal; it claims exclusive control of the system, yet con - templates projects built jointly with private investors; and it sends the disputes those projects generate, in defined circumstances, to arbitration. Public direction, private participation, and consensual adjudication sit together in a single design that the familiar opposition between monopoly and market cannot describe. What has changed is not who invests, but what tells them to invest: where price signals once guided capital, a binding plan now does – and the contract, not the market, has become the place where public purpose and private money must be reconciled. Those foundations were laid in quick succession. Con - stitutional reforms were published on 31 October and 20 December 2024, followed by a package of second -
ary legislation on 18 March 2025; the administration had signalled its intentions earlier still, in the National Electricity Sector Strategy presented in November 2024. The framework now in force comprises the Electricity Sector Law, the Law of the State Public Enterprise Federal Electricity Commission, the Law on Energy Planning and Transition, their implementing regulations, and the Electricity Sector Development Plan 2025–2039. Together, these instruments displace competition as the system’s organising principle and put binding public planning in its place – without clos - ing the several routes through which private capital may still participate. Which routes remain open, and on what terms, is the question this article pursues. The administration has described an indicative balance in which CFE accounts for at least 54% of the electricity injected into the national grid, with private participants supply - ing the remainder. Official project information identi - fies three principal modalities: • private generation for the wholesale market; • long-term production arrangements involving deliv - ery to CFE; and • mixed-development structures in which CFE holds a majority position while public and private parties share risks and benefits. Each modality rests on a contract, and every con - tract must anticipate disagreement. Dispute resolution therefore belongs at the centre of the analysis. Three claims organise what follows. • The first concerns displacement, which, rather than the announced division of capacity, is what makes the framework a state-directed mixed model rather than a restored monopoly. • The second concerns its consequences for dispute resolution: arbitration acquires a defined and com - paratively modest role, reaching the commercial dimension of public-private co-operation but not the exercise of public authority. • The third is methodological: an assessment that asks only whether the framework favours invest- ment will miss what is at stake in it, because the
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