The Federal electricity commission (CFE) can be a competitive organization in renewable generation with the current legal framework, without a constitutional change such as the one proposed by the president’s reform initiative Andres Manuel Lopez Obrador, but adjustments to the laws designed in 2013 will be necessary, agreed experts in electricity markets in the sixth forum of the Open Parliament of the electrical reform in the Chamber of Deputies.
This Tuesday, in the discussion about the State as guarantor of sovereignty and National Electric System, academics in favor of electrical reform assured that the current energy policy has stripped the State of leadership, while the opponents argued that there is energy sovereignty and that cases such as Spain or Texas, with open markets and tariff increases, in addition to power cuts if it is not affordable for generators, would not occur in Mexico since the CFE has the basic supply with a regulated rate and the legal supply of last resort financed with national funds.
Paolo Salerno, a doctor in the electricity market, pointed out that the Mexican State does have the country’s energy stewardship, since it is reflected in the Constitution, which is why those who maintain that private initiative has taken it away from them are lying.
He recalled that article 39 of the Constitution maintains that “sovereignty resides in the people,” while article 25 states that “planning, control, as well as the public service of the transmission and distribution of the public energy.
Furthermore, Article 18 of the Electricity Industry Law (LIE), states that “the State will exercise control of the energy system through the National Energy Control Center, and the same law gives three exclusive powers to the CFE, which are to provide the public energy transmission service, to provide the public energy distribution service, and to guarantee the provision of the public service to end users.
“Then In Mexico no one is going to be left without electricity because it is a constitutional guarantee brought to the people through the productive company of the State”, he said, “the LIE is perfectible, in fact, all the electrical laws of the advanced countries are modified approximately every eight years, there is much to correct but Constitutional change is not necessary.
However, Héctor Alonso Romero Gutiérrez, an engineer in sustainable development from Tec de Monterrey and head of the office of the commissioner of the Energy regulatory commission (CRE), Luis Linares Zapa, denounced that the current energy strategy is a dispossession of energy control that must be recovered through the reform that is under debate.
“They say that with this reform, the CFC will have too much power to set rates, but why should we give power to private initiative? We must regain leadership, the State must be the one that guarantees energy distribution and not the private sector, This will allow progress towards a better economy, well-being, sovereignty and energy security for the country,” he assured.
Lawyer Julia González Romero warned that the electrical reform López Obrador’s proposal violates Article 24 of the Vienna Convention, at least 20 bilateral investment protection agreements, and a dozen more multilateral treaties, “which give protected investors certain rights that allow them to directly sue Mexico, which will result in compensation costs of more than 70,000 million dollars, equivalent to 20.3% of the budget for 2022 and that will have to come out of our taxes.
Meanwhile, Luis Manuel Hernández, president of the National Index, explained that the State can continue to be the guarantor of sovereignty, but ensuring that energy reaches affordable prices that do not impact public finances, as it is estimated that it could happen in the model. What is proposed.
“The reform as it should be proposed is to accept that the PI can participate in this sector in the regulated manner as we have been doing in recent years,” he assured.
Finally, Juan Luis Hernández, rector of the Ibero-American University of Torreón, considered that in Mexico we have a large market and little State, and the little we do have is usually captured by political and economic elites that have eternalized themselves to do private business, such as the incursion of the sector in energy matters, so this reform is the ideal opportunity to modify the course of this phenomenon that, according to all calculations, would lead to the disappearance of the State company in favor of private companies with their dynamics and interests.
“In fact, we have a State that fails in its essential purpose, which is to build public goods that today are scarce and unequal by region,” he said, “Violence is the result of social inequalities, thousands of migrants, thousands of young and adolescent assassins, thousands of entrepreneurs, especially small ones, who do not finish consolidating a business that allows them the certainty of a minimum profit”.
Therefore, he considered it necessary for the State to give positive incentives to companies so that they invest in a win-win scheme, a scheme of entrepreneurs who understand that investment and business must also have a community good with a State as guarantor of the sovereignty has to guarantee the transition towards renewable energies from the condition of being a constructor of public goods.