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Mexico’s state-owned Federal Electricity Commission (CFE), widely touted by President Andrés Manuel López Obrador (AMLO) as his solution to lower energy prices for the average Mexican, has in fact reportedly increased its costs by 20 percent from January to April of this year.

The CFE’s use of expensive, nonrenewable fuels is apparently driving its prices up, as April’s average generation cost was 1,820 per megawatt hour, a full 20.1 percent higher than in January.

During the same time frame, private solar and wind projects only cost 370 megawatts per hour, 3.6 percent lower in price from January to April.

After his controversial law prioritizing the CFE was suspended by the nation’s judges, AMLO has since announced his intention to reform Mexico’s constitution to give the CFE a 54 percent market share of the energy sector, and preferential uploads of its power to the grid over private companies.

“His proposal is not going to lower the rate,” said energy expert Víctor Ramírez. “The way to lower it is to put in more and more lower-cost energy. The problem is that this is incompatible with the vision of the president, because he is basing his ideology on a myth and clings to the idea that the CFE is the cheapest generator of energy.”

New York-based financial rating agency Moody’s likewise reported that Mexico is not likely to see an increase in private investment throughout its energy sector within the next three years, thanks to AMLO’s preferential treatment of the CFE.


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