Mexico’s energy sector faced more challenges this week as President Andrés Manuel López Obrador continued to cast doubts over contracts signed during the previous administration. However, citizens will have been happy to hear about his intentions to keep electricity bills low.
Here is a rundown of the big news in the energy sector this week.
AMLO Questions IEnova, Carso and TransCanada Contracts
Mexican President Andrés Manuel López Obrador (AMLO) said on Monday that the contracts the Mexico’s Federal Electricity Commission (CFE) holds with three major private companies (TransCanada, Carso and IEnova) should be reviewed in order to keep electricity prices low.
The president stated his belief that the contracts, for the construction of long-distance natural gas pipelines intended to supply power plants for electricity generation, were one-sided. He stated that it was unfair Mexico was paying for pipelines that were still incomplete but that the government was contractually obliged to do so.
However, companies defended their work with TransCanada stating that its Tuxpan–Tula gas pipeline was delayed by a number of factors outside of their control, including the local government’s still-unresolved negotiations with indigenous communities over the pipeline’s route.
Questions Cause Market Woes
CFE’s decision to review contracts held with IEnova caused a 6.8 percent drop in the company’s securities on the BMV, with investors warning that the noise around energy contracts is causing investors to sell their shares.
AMLO Says Electricity Prices Will Not Go Up
The resident promised that end-users would not see a rise in the price of their electricity bill during his sexennial.
Despite the recent cancellation of the fourth long-term electricity auction and the Ixtepec-Yautepec Transmission Line, AMLO said that the CFE was working with private contractors to come to an agreement that would be for the benefit of Mexican people.
CRE Priorities for 2019 Mapped
AMLO announced criticisms of the CRE by saying that President Commissioner Guillermo García had a “conflict of interests” which he will say more about, and prove, next week.
Added to that, he mapped out his intentions for the CRE across this year. Safe to say, 2019 will be an exciting time for energy in Mexico.
Shadow Cast on Transparency for CFE and PEMEX
PEMEX and the CFE were found to work under low levels of corporate transparency by an index rating carried out by influential Mexican NGO, México Evalua.
The report was based on OECD guidelines and found that the lack of transparency in the state-owned companies are an obstacle for potential investment.
Shake Up at the Top as AMLO Sends Candidates Suggestions for CFE Positions
President Andrés Manuel López Obrador on Monday sent his list of candidates to replace high-ranking commissioners and councilors at CFE.
AMLO has been a long-term critic of several CFE leaders, suggesting they have put personal interests before the nation’s best interests.