Mexico Congress votes on energy reforms

Mexico’s lower house of Congress will vote on constitutional changes today favoring state electric utility company Comisión Federal de Electricidad (CFE).

President Andres Manuel Lopez Obrador’s proposal would secure over 50% of the market for CFE and prioritize the state utility’s power plants in the dispatch order—the flow of electricity to consumers—over those of private companies. The reform would also increase natural gas use and give CFE’s gas plants priority over renewable energy plants.

Opposition politicians contend the changes will decrease market competitiveness and delay Mexico’s green energy transition. López Obrador’s center-left Morena party delayed the lower house’s original April 12 vote to cobble together greater support for the changes and made concessions, including maintaining the independence of energy sector regulators.

Expect the proposed constitutional changes to fail to gain the required Congressional votes. López Obrador’s proposal comes as politicians globally combat a cost-of-living crisis, and opposition politicians—whose votes are needed to pass the changes—are unlikely to do anything viewed by constituents as raising costs. Further, they are unlikely to support changes that hamper sustainability goals as anxiety over climate change worsens. The loss would be a setback for Morena and López Obrador, who is ineligible for reelection in 2024.