Mexico: court suspends new electricity law

A Mexican court issued a definitive suspension March 19 against the new Electricity Law that aims to strengthen the state-run company, Comisión Federal de Electricidad (CFE). The law is supported by President Andrés Manuel López Obrador, who wants to increase state control of the energy market. López Obrador claimed that under the previous administration, the electricity market was skewed in favor of private operators. Grupo BimboWalmart Inc and two unnamed companies filed challenges against the law. The US Chamber of Commerce expressed concern that the new law violates the US-Mexico-Canada Agreement (USMCA) and may create a monopoly in the electricity sector.

The injunction will be in place until the case is decided on its merits. The judge asserted that the injunction was necessary "to prevent economic damage to the electricity sector, to ensure competition, and to protect the environment."

López Obrador called for the Supreme Court to resolve the issue. He stated, "If it's declared unconstitutional then the interest of private businesses win out. If the judges don't act with justice, they must be denied the right to speak."

From Jurist, March 20. Usd with permission.

Note: An "energy reform" that called for further opening the CFE to private investors and generators was first unveiled in 2013—sparking massive protests. The 2009 privatization of a secondary state eletric company, Central Light & Power (LFC), resulted in mass layoffs of workers, which was challenged in the courts and in the streets. After a public hunger strike and repression by federal police, a deal was worked out in 2011 that allowed many laid-off workers to keep their jobs. Both the CFE and LFC began purchasing power from private generators after NAFTA took effect. The CFE has also met with protests by consumers over high rates, and campesinos impacted by its hydro-power projects.