AMLO gets his way: Thanks to new law, the CFE to remain a virtual monopoly

Critics of the new reform argue that it will disincentivize the production of renewable energy. Photo: File
Critics of a new electricity generation reform in Mexico argue that it will disincentivize the production of renewable energy. Photo: File

Mexico’s senate has approved a new reform to the law governing the production and distribution of electricity.

The reforms are described by President Andrés Manuel López Obrador as strengthening the state-owned CFE.

Critics of the move argue that the new rules give the CFE unfair market advantages when competing with the private sector, especially foreign-owned companies. 

The president’s party, Morena, ensured the passage of the bill with the votes of 68 senators, while 58 opposition members voted against it.

Earlier: CFE’s ‘scheduled’ power cuts hit Yucatán without warning

Senator Claudia Ruíz Massiue (PRI), described the vote as a “dark day for Mexico” and said that allowing the CFE to remain a monopoly was a historic blunder.

Analysts claim that this change in policy is likely to have profound implications on the way the Mexican energy industry evolves over the next several decades.

Environmental groups have expressed concern because most companies producing renewable energy in Mexico are private. For its part, the CFE has done little to signal that it will be transitioning to more environmentally friendly energy production methods on a significant scale. 

Several governments, including those of Germany, Canada and the United States have expressed concern over the new energy law.

The administration of US President Joe Biden has said that it respects Mexico’s sovereignty but hopes that it will reconsider its dependence on fossil fuels.

Carlos Rosado van der Gracht

Born in Mérida, Carlos Rosado van der Gracht is a Mexican/Canadian blogger, photographer and adventure expedition leader. He holds degrees in multimedia, philosophy and translation from universities in Mexico, Canada and Norway.