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Despite the fact that a Mexican federal court last month granted a legal injunction to the Spanish energy firm Iberdrola that would allow it to continue operating its Dulces Nombres power plant in Pesquería, Nuevo León, and requiring that the country’s Federal Electricity Commission (CFE) reconnect it to the national grid, the CFE has steadfastly refused to comply and has prevented the company from being reconnected, affecting hundreds of companies it supplied.

“The problem is that the suspension (of the cut-off from the grid, which was granted on March 22) has not been executed,” a source close to Iberdrola said about the plant, which has a capacity of 500 megawatts.

The CFE did not appear at the hearing on April 19 to review the judge’s ruling, so that hearing was postponed until Thursday, April 28.

The halted units provided energy to hundreds of companies in the north of Mexico through a self-supply scheme, but after the stoppage of the Iberdrola plant, these companies were forced to purchase their electricity from the CFE, at a cost that is between 20 and 40 percent more expensive.

At least five companies have terminated the contract with Iberdrola, arguing noncompliance, for which the Spanish company will have to pay penalties.

Meanwhile, Mexican President Andrés Manuel López Obrador (AMLO) on Wednesday, April 20, threatened all companies with self-supply energy concession contracts that if they did not suspend operations immediately, he would file criminal prosecution charges against them.

Speaking during his daily press conference at the National Palace on Wednesday, AMLO, who was still simmering after the Sunday, April 17, parliamentary defeat of his controversial Electricity Reform Bill (which would have prioritized power from contaminating carbon-based state providers over clean energy from private companies), said that since his controversial Electricity Industry Law (LIE) was declared constitutional by Mexico’s Supreme Court (SCJN) on April 7, he will not allow what he called “fraudulent schemes” to continue operations.

Under the specifications of the LIE, which the SCJN ruled did not violate the Mexican Constitution despite the fact that seven of the 11 Supreme Court justices believed it did, the federal government is allowed to monopolize the country’s energy sector, even though Article 28 of the constitution eliminated the possibility of any state monopoly on electricity generation.

“There is now a legal framework, so I can file criminal complaints against these these companies,” López Obrador said.

“There are about 20 such companies, mostly foreign, and they provide electric service to about 70,000 other companies.”

Notwithstanding his threats to “incarcerate” those company heads who do not comply with the new law and who fight to maintain the power-generation concessions that they were previously granted by the government, AMLO said that he was willing to “sit down for dialogue” with the alleged culprits.

“I’m finishing an analysis of who they are, in complete illegality, violating the constitution,” he said.

“Hopefully, they will begin to review what the Supreme Court ruled with their lawyers, so that they understand that it is now illegal (to produce their own energy) and that the self-supply mechanism they created is a fraud.”

Although he did not offer details, AMLO said that there will be a transition process for the negotiates between the energy companies and the government.

According to his interpretation of the SCJN’s ruling — which not only passed without a majority, but is already being challenged legally internationally for violating existing trade accords —  all self-supply schemes, including pre-existing concessions, such as the one held by Iberdrola, are now illegal.

“The ruling clearly declares self-supply concessions illegal,” he said, a declaration that will no doubt be contested in the weeks ahead.

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