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UPDATE 1-U.S. sees 'openness' in Mexico to resolving energy bill concerns

(Adds details of Mexico’s power market, comments by U.S. Energy secretary, background)

MEXICO CITY, Jan 24 (Reuters) - There is openness inside Mexico’s government to addressing U.S. concerns about proposed Mexican legislation aimed at strengthening state control of the power market, U.S. Energy Secretary Jennifer Granholm said on Monday.

Speaking after a visit to Mexico last week where she set out how the United States believes the bill championed by President Andres Manuel Lopez Obrador risked crimping investment, Granholm said she had been encouraged by the response she received.

“There was receptivity to what we were saying, in the same way that I was receptive to hearing the explanation for why this law was put forward,” she told Reuters in an interview.

“So I think there is an openness for resolution, and I hope that that happens,” she added, noting that Mexico’s current proposal “would not create a level playing field” for U.S. companies wanting to invest in renewable energy there.

Lopez Obrador, who has vowed to lower Mexico's carbon footprint with more hydroelectric power, last year pitched his constitutional reform here to enhance state control of the power market as a matter of national security here.

He argues that previous, corrupt governments rigged the market in favor of private capital to the detriment of the public and government finances.

But critics say Lopez Obrador’s bid to give market control to national power utility the Comision Federal de Electricidad (CFE) is holding back wind and solar power investment. They also say it makes Mexico too reliant on fossil fuels, which the CFE uses to generate much of its power, and that it will ultimately prove more expensive for consumers.

Moreover, they say that curbing clean energy output in Mexico risks sapping investment by manufacturing companies that are increasingly committed to reducing greenhouse gas emissions.

Granholm agreed, and said that while the U.S. government respected Mexico’s right to energy sovereignty, it was important to communicate the reservations it had as Mexico’s partner.

“I was really candid in conveying our concerns that the current and the proposed energy policies are really inconsistent with the shared vision for North American cooperation and global competitiveness,” she said.

On Friday, following his meeting with Granholm, Lopez Obrador said his government would address energy disputes with affected companies “case by case.” His office did not immediately respond to a request for comment on Monday.

Lopez Obrador has urged North America to work together to lure manufacturing investment across the Pacific from Asia, and his government has complained that some U.S. policies in carmaking in particular are protectionist.

Granholm said Mexico raised those concerns during her talks, but she would not be drawn on whether that could result in the United States amending its policies if Mexico did the same.

“I’ll just say that I’m confident that we’re both going to continue a constructive dialogue on these issues,” she said.

Granholm applauded Lopez Obrador’s stated desire to root out corruption in the energy business, and expressed hope that a more mutually acceptable bill could emerge.

“I think there is an opportunity now and in the next couple of months for certainly the president of Mexico and the Mexican legislature and ... industry to weigh and to shape something that gets to the goals that everybody would like,” she said.

Granholm repeated that she believed Mexico had immense potential in renewable energies and emphasized that Lopez Obrador understood it too.

“It is so enviable and mind-blowing how Mexico could lead North America, Mexico could power North America with clean energy between solar and wind and geothermal.”

“The amount of solar that Mexico has, how they could power themselves ten times over. What do you do with that extra? You could create clean hydrogen which the rest of the world is looking for,” she added. “And be able to use that as an export opportunity. The opportunity is just so amazing and positive. And the energy reform is an impediment to that.” (Reporting by Dave Graham in Mexico City Editing by Daniel Flynn, David Gregorio and Matthew Lewis)

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