MEXICO Trends and Developments Contributed by: Bernardo Cortés and Fernando Quesada, Cortés Quesada Abogados, S.C.
energy sector by dissolving the co-ordinated regulators on energy matters: the National Hydrocarbons Commission (regulator of oil and gas upstream activities) and the Energy Regula- tory Commission (CRE), regulator of all power activities, as well as oil and gas midstream and downstream activities. Implementing legislation The implementing legislation for both consti- tutional reforms came into effect on 18 March 2025, commemorating the anniversary of the 1938 oil expropriation. This legislation reshaped the electricity legal framework through the fol- lowing new statutes and reforms to existing laws, to adapt its provisions to the new constitutional framework of the Mexican electricity sector: • the Electricity Sector Law (LESE), which repealed the Electricity Industry Law from the 2013–2014 energy reform; • the Law of the State-Owned Company, Comisión Federal de Electricidad (the “New Law of CFE”), which repealed the prior law governing CFE; • the Planning and Energy Transition Law (LPTE), which superseded the 2015 Energy Transition Law; • the Law of the National Energy Commission (LCNE), creating the National Energy Com- mission (CNE) as regulator of the power sector, and repealing the 2014 Law of the Co-ordinated Regulatory Agencies on Energy Matters; • the Geothermal Law, which repealed the 2014 Geothermal Energy Law; and • reforms to the Organisational Law of the Fed- eral Public Administration. Collectively, the new legal regime institutes a centralised model marked by State planning through the Ministry of Energy (SENER – the
constitutional monopoly in certain segments) and the continued operation of a Wholesale Electricity Market (WEM) for the performance of purchase and sale transactions of energy and ancillary products. All of the above occurs under mechanisms that ensure the predominance of the State in the market, particularly through a vertically and horizontally reintegrated CFE. Key elements of the 2024 energy reform Generation activities The LESE establishes a minimum 54% share of State-controlled generation assets (including those of CFE) in total energy injected into the grid, andin the marketing of electricity. The LESE implements three main forms of generation (with different modalities):
• distributed generation; • self-consumption; and • generation for the WEM.
The threshold for permit-exempt generation rose to 0.7 MW, which also applies for distributed generation purposes. For the self-consumption modality, the LESE provides a streamlined permitting process for power plants with a capacity of up to 20 MW. This scheme includes both isolated and inter- connected modalities, with the latter requiring back-up conditions for grid reliability purposes. The WEM allows for participation by both pub- lic and private entities for generation purposes, either individually or through public-private (mixed) structures. In the latter case, two types of public-private participation modalities are rec- ognised: • long-term production structures involving exclusive sales to CFE; and
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