MEXICO Trends and Developments Contributed by: Bernardo Cortés and Fernando Quesada, Cortés Quesada Abogados, S.C.
equity interests or shares, to ensure compliance with sectoral regulation. Land use and occupation, promotion of the national industry, and social impact The execution of instruments related to the use and occupation of land for the performance of activities of the power industry is subject to the completion of specific administrative and judicial procedures, particularly those involving transmission, distribution and generation activi- ties using geothermal deposits and hydraulic resources. As a general rule, activities of the electricity industry are deemed to be of public utility, which enables the government to exercise expropria- tion and eminent domain in some instances. In addition, requirements and methodologies are introduced on national content obligations. The new legal framework also incorporates the con- cept of “Energy Justice” and “Sustainability”, aimed to foster access to energy infrastructure across the entire population, with responsible resource management. Energy planning and transition The new legal framework introduces certain command economy principles through the con- cept of “mandatory planning” for the WEM. This planning mechanism is intended to aim invest- ment decisions in the sector across different regions of the country, while ensuring the State’s predominant role in the injection of energy into the national grid. Under the LPTE, several key planning instru- ments are established with medium (15 years) and long-term (at least 30 years) horizons: • the National Strategy of Energy Transition;
• the Power Sector Development Plan; • the Hydrocarbons Sector Development Plan; and • the Plan for the Energy Transition and Energy Sustainable Use. The National Strategy must be issued at the beginning of each new Presidential Administra- tion and will set forth clean and renewable ener- gy targets, based on minimum percentages with respect to the total power generation in Mexico. In addition, the LPTE provides for the manage- ment of the Energy Information System, and contemplates the issuance of acknowledge- ments and agreements related to energy effi- ciency. Grandfathered projects and migration Permits and agreements issued under the former legal framework (the Law of the Public Service of Electric Energy, repealed in 2014, and the Elec- tricity Industry Law, repealed in 2025) will remain in force under their current terms. However, the new legal regime under the LESE provides the option for relevant participants to migrate to the new modalities under the LESE. All agreements entered into by CFE’s subsidiary productive companies will be transferred to the restructured CFE entity. While CFE is now inte- grated as a single company, the framework pre- serves conditions of the separation of activities in terms of nominations and offers for the WEM. The 2024 energy reforms and the laws stem- ming therefrom are still being implemented at an administrative level, with the creation of the CNE and the drafting of new regulations; the issuance of regulations and amendments to existing pro- visions are yet to fully implement the constitu-
203 CHAMBERS.COM
Powered by FlippingBook