Photo: Markus Spiske/Unsplash

By KELIN DILLON

If Mexico’s controversial proposed reform to give carbon-based energy priority to the state-owned Federal Electricity Commission (CFE) reaches passage, the CFE will be required to heighten its budget and subsequently “charge a bill” to the Mexican government or the shift will likely result in blackouts, revealed a study by the Mexican Institute for Competitiveness (IMCO).

The reform would give the CFE a 54 percent majority control of the entirety of Mexico’s energy supply, a 16 percent jump from its current 38 percent that will require an increased budget for it to operate effectively.

Mexico’s energy consumption reportedly increases by 3 percent annually, necessitating a budget of 60 billion pesos of investment to keep growth on a positive trend. As the CFE has been allocated less than 30 billion pesos per year by the Secretariat of Finance over the past half-decade, the state-owned company stands in a poor position to financially handle Mexico’s growing electricity demand.

According to the CFE, if the reform is not passed, it will have to reduce its energy capacity to a 30 percent share of Mexico’s industry by 2024.