MEXICO Law and Practice Contributed by: Bernardo Cortés and Fernando Quesada, Cortés Quesada Abogados, S.C.
on securing the relevant social impact authorisa- tion. Certain isolated self-consumption projects may be exempt from this requirement under cur- rent regulations. • Change of forestry land use: if the project affects protected flora, an authorisation must be obtained from SEMARNAT for the relocation of such spe- cies. • Archaeological clearance: in specific regions, developers must secure archaeological clearance before commencing construction. • Water concession: the use of national waters may require permits or concessions from the National Waters Commission (however, hydroelectric plants of 30 MW capacity may be exempted from water permitting requirements). • Local authorisations: construction permits, land use approvals and civil protection authorisa- tions, governed by local regulations, must also be secured prior to construction and operation. In addition, if the project site is located on lands inhab- ited or claimed by indigenous communities, SENER is obliged to conduct a prior consultation process to ensure the protection of indigenous rights. Projects designated as “Strategic Projects” under PLADESE may also benefit from administrative streamlining mechanisms intended to accelerate permitting and execution, particularly where they involve transmis- sion infrastructure, reliability support or mixed partici- pation schemes with CFE. 3.3 Approvals to Construct and Operate Generation Facilities Government-issued authorisations for the construc- tion and operation of generation facilities typically include strict deadlines for meeting key project mile- stones, such as the start of construction, provisional acceptance (ready for testing) and the commence- ment of commercial operations. Failure to meet these milestones may trigger administrative procedures to amend relevant permits; otherwise, the effectiveness of the permit may be at risk. Material changes to projects (such as changes to nameplate capacity, generation technology or site conditions) generally require a formal amendment to the main permits in order to properly reflect the pro-
ject scope. The amendment process often mirrors the original permitting procedure in both substance and timing, although for minor changes the administrative process only requires an “update” rather than a full permit amendment. Under the new CNE permit regu- lations, certain amendments are expressly restricted or prohibited, particularly where they involve relo- cation of the power plant by municipality or node, changes of technology, capacity increases for legacy permits, or changes of modality affecting legacy gen- eration projects. Legacy permits granted under the former Electricity Industry Law or the Public Power Utility Electricity Law are also subject to specific migration procedures if the permit holder intends to move into the new modalities created under the LSE, including self-consumption, cogeneration or generation for the WEM. These migra- tion procedures require separate regulatory review and may have effects regarding prior interconnection rights, operational obligations and permit validity. Interconnection agreements also impose firm dead- lines for the works covered thereunder, coupled with the posting of financial guarantees to ensure their timely completion. They are also subject to hard dead- lines and the posting of collateral to guarantee their completion in time. In contrast, environmental and social authorisations focus on terms and conditions to monitor the com- mitments assumed by the generation company. These include environmental mitigation measures, commu- nity engagement obligations, biodiversity protection requirements and compliance with social impact com- mitments throughout the operational life of the project. Note that the Mexican President recently released a draft of a new LGEEPA which – if approved – may affect the environmental aspects of power generation projects. 3.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Generation Facilities The LSE recognises the power sector as a matter of public interest and national policy. However, emi- nent domain for land use and occupation is limited to hydroelectric and geothermal power plants only.
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