The CFE, with sound finances, safeguards Mexico’s energy sovereignty and strengthens its green generation park

As of December 31, 2021, the CFE’s total revenues amounted to 566.6 billion pesos, 12.7% more than in 2020.

The CFE has 48,997 MW of installed capacity for clean energy generation, compared to only 39,959 MW in the private sector.

In 2022, strategic alliances with foreign companies have been established, progress is being made in connecting Baja California to the National Electric System and low rates continue to be guaranteed.

In an appearance before the United Energy and Infrastructure Commissions of the LXV legislature of the Chamber of Deputies, the general director of the Federal Electricity Commission, Manuel Bartlett Díaz, emphasized that the rescue of the CFE is already a reality, listing the results obtained during the present administration.

The CFE is consolidated as an electricity and energy company

With an investment of around 9,000 million dollars, the CFE adds 9,000 MW of capacity.

Modernizes 13 hydroelectric plants, while equipping three agricultural dams to generate energy. It has already installed 16,000 solar panels at the Puerto Peñasco Photovoltaic Power Plant. It also develops the Humeros III Geothermal Power Plant, to add 25 MW of clean and firm energy. Build 15 hubs
which will add 7,400 MW of capacity thanks to the use of natural gas, a transition fuel with high thermal efficiencies and low emission production.

At the beginning of this administration, a network of gas pipelines was found with serious delays and leonine contracts. When they were renegotiated, a saving of 6,725 million dollars was reported in nominal value and 789 million dollars in present value: where the CFE was intended to be a passive consumer, it was able to be an active player in the international market.

The CFE signed strategic alliances with transnational companies, which have made it a partner in the transportation and export of natural gas at a time when there are opportunities in the international market. The two coasts of the country will be used to export it, via the Pacific or the Atlantic, to Asia and Europe.

An alliance with TC Energy was concluded to extend the gas pipeline that goes from Texas to Tuxpan to Paraíso, Tabasco, and from there to the Yucatan Peninsula; as well as to complete the Tuxpan – Tula and Tula – Villa de Reyes gas pipelines – whose route was redesigned to safeguard community rights. 4,500 million dollars will be invested, which will generate 900 direct and 450 indirect jobs. CFE will have a 15 percent shareholding in the company, which will increase to 49% in the long term.

Progress is also being made in an alliance with Sempra, to develop a natural gas liquefaction plant that will allow it to be exported from Topolobampo, Sinaloa. The approximate investment will be 5,200 million dollars and the agreement considered the Yaqui community, to safeguard their rights. While supplying the gas molecule, Sempra will give a percentage of the participation to the CFE.

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financial overview

As of December 31, 2021, the CFE’s total revenues amounted to 566.6 billion pesos, 12.7% more than in 2020.

The war in Ukraine has generated a notable increase in fuel prices, which unfortunately has created a scenario of global energy crisis, especially in Europe.

Mexico, thanks to the CFE, has remained stable. Although the CFE’s debt, as of September 2022, amounted to 433.3 billion pesos – an increase of 13.5% compared to the end of December 2021 – the financing is for investment in productive projects, such as generation plants or new transmission networks. , which will bring high rates of return in the short term. While the world is in crisis, with the CFE Mexico will increase its installed capacity by 9,000 MW, which will bring about a 40% increase in sales.

electricity rates

Fuels have increased throughout the year –only in September they rose 90%–, but low consumption domestic rates have increased 5.9%, industrial rates 6.3% and commercial rates 5.9%, while inflation reaches 8%.

Bartlett Díaz denied that rates have risen above inflation: in fact, Mexico is the country with the lowest electricity rates in the G20 group.

Support in strategic projects

The CFE also participates in several strategic projects of President López Obrador. Develops 678 works to electrify workshops, stations and whereabouts of the Mayan Train. In 2022, it has connected 400 Banco del Bienestar branches and by 2023 it will add another 600. It develops works and infrastructure for the interoceanic train. Participate in the rescue of victims in the Pasta de Conchos and Pinabete mines. It attended the fire emergency at the Mexico City Metro facilities and is developing, with the capital’s government, a photovoltaic plant in the Central de Abasto.

To advance in the implementation of Internet for All, the CFE has installed 68 telecommunications towers, with 4G equipment, in places that did not have coverage. It has benefited 315 localities and 62,500 inhabitants. An additional 2,800 towers are under construction, to be operational by 2024.

Questions and answers: financial situation of the CFE

When asked by deputies about the financial situation of the CFE, the general director explained that it is not true that it is subsidized by the government: it finances itself with its own income, which represents more than half a billion pesos a year.

He reminded the deputies that the CFE does not receive subsidies or transfers: resources are given to offset discounts to Mexican households and agricultural producers, not to finance its own operation. To those who criticize said transfer, he asked them to be clear in their opposition to the subsidy given to the countryside and households.

In this context, and taking into account that there have been such high increases in the price of natural gas that Germany itself is facing a crisis, the additional 50 billion pesos that, due to the war in Ukraine, the CFE allocated to buy fuel.

None of these costs has been caused by the operation of the CFE – whose technical and personnel capacity is more than proven – but by geopolitical factors that harm the entire world and were mitigated by an adequate financial operation.

The economic situation of the CFE is very strong. It is financing itself to strengthen itself and increase its income: this year alone, it will allocate 78 billion pesos to promote new generation plants.

It generates an operating profit flow of 53 billion pesos. It has a flow before taxes of 20 billion pesos.

Among the projects undertaken by the CFE, the general director highlighted the solar plant in Puerto Peñasco, in Sonora: built on land of little value, in the desert, it will connect Baja California with the National Electric System through new transmission lines – resolving for the first time a lag that has lasted decades.

He announced that, before the end of this six-year term, the CFE will present additional solar and wind generation efforts.

Questions and answers: clean generation

When questioned about the green generation of the CFE, the general director, Manuel Bartlett, pointed out that the CFE has strengthened its clean energy generation capacity: it has 48,997 MW, against only 39,959 MW of the private sector.

The CFE has a permanent research program to take advantage of green hydrogen and another to develop batteries that solve the intermittency of wind and solar generation. Nor has it stopped studying the possibilities to expand its nuclear generation.

It has not stopped analyzing how to move beyond conventional generation, but the world has not yet reached the technological capacity to achieve it in the short term – to assert otherwise is demagogic.

Questions and answers: energy sovereignty

Before the deputies and deputies who continue to defend the 2013 electricity reform, Bartlett recapitulated its damages: separate the CFE into different companies to weaken it, allocate it to disappear in 2024, and above all unfairly favor the private sector: they do not pay for the support to the intermittency of its generation, nor by the use of transmission networks. The obligation to electrify all Mexicans was even eliminated – something that the CFE has ignored, as it continues with that mission. He considered that the 2013 reform was not foreign investment, but foreign invasion.

Bartlett regretted that some congressmen and deputies want the United States to sanction the CFE for correcting the abuses of the energy reform and that foreigners come to impose their rules. In addition, he reiterated, the legal changes promoted by the current government do not go against the guidelines of the TMEC. What irritates, she pointed out, is that the CFE is a living company that refuses to disappear.

He disagreed with the National Electric System being handed over to foreign companies. He recalled that Mexico is a nation that, from the Constitution, has the vocation to be sovereign and make its own decisions: those who do not agree simply have a conception contrary to those principles. He urged that we Mexicans have control over our essential resources and
foreigners participate, but do not control.

To finish, the general director of the CFE, Manuel Bartlett Díaz, celebrated the participation of the deputies of all the parliamentary groups. He invited those who disagree with his appearance to review the data presented. “The debate, in the end, opts for truth and reason” – he concluded.