Mexico Presents Plan to Shutter Private Power Plants

Mexico’s president presented details on Monday of a proposal that is likely to squeeze out hundreds of private power generating plants and may provoke complaints under the Mexico-U.S.-Canada free trade accord, the Associated Press reported. The constitutional reform presented by President Andrés Manuel López Obrador would cancel contracts under which 34 private plants sell power into the national grid. The plan declares “illegal” another 239 private plants that sell energy direct to corporate clients in Mexico. It also would cancel many long-term energy supply contracts and clean-energy preferential buying schemes, often affecting foreign companies. It puts private natural gas plants almost last in line — ahead of only government coal-fired plants — for rights to sell electricity into the grid, despite the fact they produce power about 24% more cheaply. Government-run plants that burn dirty fuel oil would have preference over private wind and solar plants. It guarantees the government utility a market share of “at least” 54%, contradicting promises to reserve 46% for private companies. Rocio Nahle, the secretary of energy, said that means “the private firms are going to be in the market with 46% percent, they are not going to be nationalized at all, not even one screw or one nut.” Read more.
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