The Electrifying War between Concamin and the CFE
By RICARDO CASTILLO
Just how far and to where the fight between the Mexican government and clean energy producers will go is an open question. What is a fact now is that private-sector solar and wind electricity producers have filed suits and are going to court. And, meanwhile, Mexican industrial and business organizations are using the issuance of an attempt by the National Center for Energy Control (Cenace) – a branch of the Energy Secretariat – to modify regulations controlling clean energy production.
The conflict is moving from push to shove in the media as the Mexican Confederation of Industrial Organizations (Concamin) is calling Federal Electricity Commission (CFE) Director Manuel Bartlett “a liar” and Bartlett is calling the clean energy producers, who sell their produce to the CFE, “thieves.”
The name-calling broke out on Friday, May 22, when Bartlett was interviewed by Reuters and the Mexican daily La Jornada. In both interviews, he had scathing comments to make about the clean energy producers, many of whom are still in the process of getting protective habeas corpuses known in Mexico as amparos from various courts against a new Cenace ordinance that essentially bans the use of clean energy to produce electricity.
Bartlett said that he had delivered to the independent Energy Regulation Commission (CRE) an order to end “the theft being carried out by large commercial companies” such as Grupo Salinas, convenience store chain Oxxo, supermarket chains Walmart and Soriana, mining and foundry company Peñoles, movie houses Cinépolis and tissue paper manufacturer Kimberly Clark, to name a few.
These companies, Bartlett said, pay very low prices for the electricity they consume because they have a simulation arrangement as members of clean energy producing companies such as Iberdrola, Enel Energía, American Light and Power. Their association with these companies allows them to use the CFE’s electricity network for free, as do transnational companies who own wind and photovoltaic plants. As just one example of the alleged abuse, Oxxo alone has 18,000 convenience stores nationwide and is paying very little for electricity.
“That’s not an electricity market, its robbery,” Bartlett said.
“It’s heaven on Earth for the investors, who have taken over the great consumer market in an illegal way, through abuses. It’s all about simulated consumer societies that were once CFE clients, and the 17,000 clients they now claim to have been taken away by us through trickery.”
Bartlett also said what Mexican President Andrés Manuel López Obrador (AMLO) has repeated over the years, that this heist formed part of a divestment of the CFE plan first promoted by former President Carlos Salinas de Gortari (1988-1992) but finally concluded by Enrique Peña Nieto (2012-2018), to leave the nation’s electricity supply in the hands of foreign concerns.
Between 2014 and 2016, Peña Nieto awarded over 100 permits to foreign companies to produce both wind and solar energy.
The Concamin response came swiftly, claiming in a document validated by Concamin President Francisco Cervantes Díaz what has been happening with the government trying to shove clean energy producers out of the market place is an “attempt to recover the nature of an absolute monopoly of the CFE.” By doing this, the Concamin leader said, the Mexican government is acting against international commitments it acquired in the past regarding environmental sustainability, Cervantes Díaz also said the Cenace ruling will hurt consumers, “who would end up paying more for their light bills.”
Yes, the on-going war of words is all about money and the cost of energy.
Bartlett said that the CFE subsidizes industrialists and store owners because the existing contracts forces the “CFE to charge these privates rates that are way below the transmission costs, thus causing grave deterioration on its finances. That is to say that the CFE is forced to charge the privates less than its operational costs.”
Concamin answered: “Bartlett lies when he insinuates that private companies don’t pay for using the lines of transmission.”
The agreement issued by Cenace thus far has not done well in the courts of laws, with at least two-thirds of the plaintiff companies receiving their amparos, but the message from both Cenace and the Energy Secretariat is clear: The new electricity policy will be based on fossil fuels (mainly fuel oil) and the once-prolific government incentives or subsidies to connect to the CFE electricity transmission network will be eliminated, if the courts permits.
Beyond the name.calling, this is an issue that will have to be settled in courts of law, and could perhaps go all the way up to the Mexican Supreme Court, which, will most definitely be a last resource for plaintiffs.
No doubt about it, this is the political talk of the day in Mexico.