CFE Generation Costs Increase by 23 Percent

Photo: Andrey Metelev/Unsplash



According to new data, Mexico’s state-owned electric company, the Federal Electricity Commission (CFE), has increased its generation costs by 23 percent while in operation under the administration of President Andrés Manuel López Obrador (AMLO).

While the average cost in CFE plants stood at 1,508 pesos per megawatt hour in January 2019, the price tag had shot up to 1,852 pesos per megawatt hour by September 2021, revealed a report from the Energy Regulatory Commission (CRE). 

The CRE’s information likewise revealed that the CFE’s natural gas plants experienced a generation cost hike of 28 percent over the three years of AMLO’s presidency, while thermal power plants, like coal, thermoelectric, internal combustion and turbo gas plants, had an average cost increase of 32 percent.

Mexico’s hydroelectric plants, which theoretically have zero fuel costs, have similarly seen their generation costs go up by 35 percent from January 2019 to September 2021.

While the CFE declined to comment on the changes, analysis by industry experts said the price increase could be partially caused by the still-lingering economic effects of covid-19 and its subsequent supply and demand issues, though several pointed out that the CFE has chosen some of its least efficient plants to turn on for use.

Former CRE Commissioner Montserrat Ramiro said the increase in generation costs would either need to be subsidized or they will likely trickle down the line to be paid by the consumer, a trend that has experts concerned considering AMLO’s proposed electricity reform, which would give the CFE majority control of Mexico’s power grid.

That plan has been touted by AMLO as a way to lower the cost of electricity for average consumers. 

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