MEXICO Law and Practice Contributed by: Bernardo Cortés and Fernando Quesada, Cortés Quesada Abogados, S.C.
using methodologies that ensure a reasonable return of investment and cost recovery on the operation, maintenance, financing, investment, improvement, expansion and depreciation of the NTG, as well as accounting for both technical and non-technical losses. Market participants pay for transmission servic- es through CENACE, which incorporates these rates into the settlement processes of the WEM. Basic supply rates also consider specific trans- mission costs reflected as part of the variable energy charges. The CNE is also empowered to issue general terms of service for transmission services, out- lining the scope and types of service offered, credit terms, conditions for service suspension, penalties and compensation mechanisms, and procedures for addressing complaints from users. Open access to the NES is recognised as uni- versal and a public utility service obligation, pro- vided that it is technically feasible and does not compromise the reliability of the system. CENACE is mandated to ensure that open access obligations are met while safeguarding the operational reliability of the NES. The legal, financial and technical requirements to allow the interconnection of generation facilities and the connection of load points are established in the Market Rules, which include a dedicated Manual detailing the procedures. The interconnection and connection processes involve several technical studies to identify rein- forcement works (which are incorporated in the relevant interconnection or connection agree- 4.7 Open-Access and Non- Discriminatory Transmission
ments), including indicative, system impact and facility studies. Subject to completion of the relevant studies, CFE is obliged to allow the interconnection and connection of power stations and loads on a non-discriminatory basis. In this regard, CEN- ACE instructs CFE to enter into the agreement with the interested party. Upon completion of the required infrastructure, verification units certify that the interconnection facilities comply with the technical specifications established in the agreements. Interconnection or connection works may be executed directly and financed by the interested party or integrat- ed into the expansion and improvement works outlined in the PLADESEN. Distribution services are exclusively reserved to CFE, pursuant to the Mexican Constitution and the LESE. The operation of General Distribution Grids (GDGs) are governed by the LESE and the Gen- eral Administrative Provisions on open access and terms of service for distribution services, as approved by the CNE. 5.2 Regulatory Process for Obtaining Approvals to Construct and Operate Electricity Distribution Facilities As with transmission services, CFE is not required to obtain a specific permit to provide distribution services. 5. Distribution 5.1 Constructing and Operating Electricity Distribution Facilities
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