MEXICO Trends and Developments Contributed by: Bernardo Cortés and Fernando Quesada, Cortés Quesada Abogados, S.C.
Implementation of 2024 Constitutional Reforms In 2024, the Mexican Congress approved a consti- tutional reform on strategic areas and public compa- nies, which materially changed the legal framework applicable to the electricity industry. The reform trans- formed former State-productive companies into State public companies, including Petróleos Mexicanos and the Federal Electricity Commission (CFE), and recog- nised certain activities performed by those companies as being exclusive strategic areas. For the electricity sector, the reform expanded CFE’s statutory purpose to include social responsibility, continuity and access to electricity services, while prioritising the participation of the State, particu- larly through CFE, over private participants. It also re-established national planning objectives and con- trol over the National Electric System (NES), with an emphasis on energy security, self-sufficiency and the provision of electricity services at the lowest possible cost, rather than under purely profit-driven criteria. In practical terms, the reform re-established a verti- cally integrated model for CFE, reinforced the State’s constitutional predominance in generation and supply activities, and introduced the principle that at least 54% of the electricity delivered to the grid must origi- nate from State-controlled generation assets, limiting private participation to a maximum of 46%. Separately, in December 2024, Congress approved another constitutional reform on organisational simpli- fication, which dissolved the National Hydrocarbons Commission and the Energy Regulatory Commission (CRE). This institutional restructuring resulted in the creation of the National Energy Commission (CNE), a new regulator integrated within the Ministry of Energy (SENER), marking a departure from the previous inde- pendent technical regulator model and consolidat- ing regulatory authority within the federal executive branch. Implementing Legislation On 18 March 2025, the implementing legislation for both constitutional reforms came into effect. This package reshaped the electricity legal framework through new statutes and reforms to existing laws, including:
• the Electricity Sector Law (LSE), which repealed the Electricity Industry Law enacted under the 2013–2014 energy reform; • the Law of CFE, which repealed the prior law gov- erning CFE; • the Planning and Energy Transition Law (LPTE), which superseded the 2015 Energy Transition Law; • the Law of the CNE, creating the CNE as regulator of the power sector; • the Geothermal Law; and • reforms to the Organisational Law of the Federal Public Administration. Subsequent administrative instruments published during 2025 and 2026 – including the Regulations to the LSE (RLSE), the Regulations to the LPTE, new permit rules issued by the CNE, storage regulations, cogeneration rules, mixed development guidelines and migration rules for legacy projects – have begun to operationalise the new legal model. Collectively, the new regime establishes a centralised model marked by State planning through SENER, con- stitutional preference and strategic control in certain segments, and the continued operation of a Whole- sale Electricity Market (WEM) for the purchase and sale of electricity and ancillary products. The model is designed to ensure the predominance of the State in the market, particularly through a vertically and hori- zontally reintegrated CFE and the annual requirement that at least 54% of electricity delivered to the grid originates from State-controlled generation assets. Key Elements of the 2024–2026 Electricity Reform Implementation Generation activities The LSE establishes a minimum 54% share of State- controlled generation in the electricity injected into the NES, while limiting private participation to a maximum of 46%. The LSE recognises three main forms of gen- eration:
• distributed generation; • self-consumption; and • generation for the WEM.
The threshold for permit-exempt generation rose to 0.7 MW. For self-consumption, the LSE provides a
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