Mexico may adopt electricity reform measures

August 6, 2013

The Mexican electricity industry currently exists as a state-run monopoly, with no competition whatsoever from private corporations. However, this could soon change. Pressure on Mexico's ruling political party - the Institutional Revolutionary Party (PRI) - from the opposing National Action Party (PAN) has provoked the PRI to propose reform measures that might allow for a level playing field upon which electric companies can compete. This may provoke discussion among local industry leaders and could also prompt calls to foreign business partners, made using international calling cards.

According to Oil & Gas Journal, the PAN and PRI will need to agree to amend three articles of the Mexican Constitution, one of which - Article 27 - also prevents private energy companies from being involved in the oil and gas industries. The terms of the PAN's proposal dictate that all of these sectors would be open to private competition, and would also call for initiatives to help reduce Mexican dependence on oil money and promote energy efficiency and increased sustainability. 

Reuters reported that the PRI's proposed reforms are a good deal less wide-reaching and inclusive. For one, while electricity generation would be fair game for private sector competition, transmission and distribution would remain the sole province of the Mexican government. A legislator involved in the reform talks, who refused to identify himself to the news source, elaborated on the PRI's aims with its particular reform measures.

"It will build a secondary electricity market where, without losing state control over transmission and distribution, there are clear rules so it is more efficient," the lawmaker said. "The idea here is you can generate [electricity] regulated by the state...and sell it more efficiently." He went on to say that the PRI proposal included plans for subsidies that would allow for increased access to electricity among the nation's poor.

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