Photo: Unsplash

By KELIN DILLON

On Wednesday, Jan. 31, Mexico’s Supreme Court Justice of the Nation (SCJN) ruled Mexican President Andrés Manuel López Obrador’s (AMLO) controversial reform to the Electrical Industry Law (LIE) as unconstitutional.

The LIE reform, which passed into law in March 2021, gave the state-owned Federal Electricity Commission (CFE) priority upload to the country’s electricity grid over the private sector and sustainable energies. 

However, the SCJN’s Second Chamber struck down the law’s legitimacy in its decision Wednesday through a two-way tie broken by chamber president Minister Alberto Pérez Dayán.

According to the SCJN ruling, the reform violates several parts of the Mexican Constitution’s regulations on electricity generation and the country’s wholesale electricity market.

“Deciding that the dispatch be carried out favoring a certain group of plants distorts the process of competition and free competition in the electric energy generation sector; it hinders the formation of a new market by what is ordered by the Reforming Power of the Constitution, and it discourages the participation of new agents in that market, and breaks the neutrality mandate that was entrusted to the National Energy Control Center (Cenace),” read the SCJN ruling.

“Likewise, the reformed system violates the principle of sustainable development of the energy industry, following the mandates also provided by the power itself,” continued the SCJN, which went on to say that the CFE cannot be prioritized over free market competition and Mexico’s transition toward renewable energies.

The SCJN’s decision is effective immediately, meaning the CFE and other electricity companies must revert to operating under the prior version of the LIE.