The Mexican Supreme Court has rejected government changes to the country's electricity laws that would promote private sector power generation. The court ruled that the modifications, made by the government in the face of budget cuts, was unconstitutional.
The change to the law was designed to enable the state electricity company CFE to purchase additional capacity from private sector power generators to boost the national supply. However the court ruled that law can only be changed by the legislature - parliament - not the executive.
Under Mexican law, private companies can generate power for their own use and can sell their excess to the national grid, but CFE would only purchase up to 20 MW, and then pay only the marginal cost for the power supplied. The change would have allowed private generators and cogenerators to sell more than 20 MW to the state company. That scheme has now been rejected.
The current government is hoping to reform the electricity sector in Mexico by creating a wholesale market where private and state owned companies can complete. However the move is meeting stiff resistance from opposition parties.
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