MEXICO Law and Practice Contributed by: Bernardo Cortés and Fernando Quesada, Cortés Quesada Abogados, S.C.
cess from an economic agent with substantial market power engaging in exclusionary conduct. As outlined in 1.4 Sale of Power Industry Assets , the Mexican antitrust framework is undergoing significant structural changes due to the removal of COFECE and the creation of a new public entity under the Ministry of Econ- omy, called the National Antitrust Commission (CNA), which will have authority on economic competition matters. While COFECE continues to exercise transitional powers, the CNA will eventually assume full jurisdiction and authority over all economic competition procedures and investigations (overseeing all markets, including the electricity sector) which, jointly with the new legal framework, will result in changes to: • investigations into monopolistic practices; • market dominance assessments; • pre-merger control thresholds and proce- dures; and • the imposition of sanctions. 2.5 Surveillance to Detect Anti- Competitive Behaviour Once COFECE is replaced, the CNA will be the federal agency tasked with monitoring the Mexi- can power market on antitrust matters, particu- larly with respect to private economic agents. The LFCE classifies punishable exclusionary conducts in two categories: • absolute monopolistic practices, (includ- ing price fixing, bid rigging and unlawful exchanges of information); and • relative monopolistic practices, which are performed by economic agents with substan- tial market power, aiming to affect the com- petitive process.
The enforcement of anti-competitive rules usu- ally involves formal investigations, an adminis- trative adverse procedure (in the form of a trial), and the imposition of substantial economic fines, potentially amounting to as much as 10% of the annual revenue of the economic agent.
3. Generation Facilities 3.1 Constructing and Operating Generation Facilities
The construction and operation of generation facilities are mainly governed by the LESE and the General Law of Environmental Protection and Ecological Equilibrium (LGEEPA). The LESE and regulations stemming therefrom, such as the WEM Rules, operating provisions and CNE-issued regulations on generation per- mits, specifically regulate the development and operation of generation facilities, and address their social impacts (whether for small, medium or large-scale operations). The LESE currently provides three distinct regulatory types for pow- er generation, as follows. • Distributed generation: projects with a capac- ity of up to 0.7 MW, which do not require a generation permit from the CNE (irrespective of other interconnection agreements with CFE). • Self-consumption: generation for the “self needs” of users belonging to the same cor- porate group, whether connected (or not) to the NES (for back-up purposes). The LESE contemplates a fast-track permitting proce- dure for self-consumption generation facilities for up to 20 MW. • Generation for the WEM: this includes par- ticipation of the State and private parties, either individually or through public-private
189 CHAMBERS.COM
Powered by FlippingBook