In a groundbreaking move, Mexico’s Senate has voted to amend the country’s constitution to give priority dispatch to state electricity company CFE, solidifying its position above foreign or private competitors.
The amendment passed with an overwhelming majority of 86 votes to 39, surpassing the required two-thirds support for constitutional changes.
Under the new reform, national grid operator Cenace will be mandated to prioritize power generated from CFE’s plants, even if it comes at a higher cost than electricity from private producers.
This initiative, supported by President Claudia Sheinbaum’s Morena party, has already been approved by the lower house of Congress.
Once the constitutional reform is ratified by a majority of state legislatures and published in the official gazette, it will come into effect.
Following in the footsteps of her predecessor, President Sheinbaum aims to strengthen CFE’s role in Mexico’s energy market, echoing former President Lopez Obrador’s efforts during his term.
Lopez Obrador’s similar attempt was previously impeded by legal challenges.
Analysis:
The recent constitutional amendment in Mexico prioritizing state electricity company CFE is a significant development in the country’s energy sector. By giving CFE preferential treatment over private competitors, the government aims to bolster the role of the state-owned power generator. This move could have far-reaching implications for energy prices, market dynamics, and investment opportunities in Mexico. Investors and consumers alike should closely monitor how this reform unfolds and consider its potential impact on their finances and daily lives.