Mexican antitrust watchdog urges Congress to reject power market bill

FILE PHOTO: A general view shows high voltage power lines owned by Mexico's state-run electric utility known as the Federal Electricity Commission (CFE), in Santa Catarina, on the outskirts of Monterrey, Mexico February 9, 2021. REUTERS/Daniel Becerril/File Photo

MEXICO CITY (Reuters) - Mexico’s antitrust authority on Monday urged lawmakers to reject a bill sent this month to Congress by President Andres Manuel Lopez Obrador that aims to strengthen the hand of the national power utility in the electricity market.

The Federal Economic Competition Commission (COFECE) said in a statement that unless it is amended, Lopez Obrador’s proposal would “seriously damage” the conditions of competition for generation and commercialization of electricity in Mexico.

The bill, which has already drawn the ire of leading business groups in Mexico and the United States, is due to be fast-tracked through Congress, where Lopez Obrador’s ruling party and its allies hold a comfortable majority.

COFECE’s recommendation to Congress is the latest in a series of disputes between the watchdog and the president over his drive to give the state more control over the energy market.

Earlier this month, Mexico’s Supreme Court upheld a complaint by COFECE that a number of measures taken by Lopez Obrador to help the national power utility, the Comision Federal de Electricidad (CFE), were unconstitutional.

That decision came just two days after Lopez Obrador sent his power market proposal to Congress, which will give priority in electricity dispatch to the CFE, and eliminate Mexico’s obligation to buy power through auctions.

“If it comes into force, this could mean higher final electricity rates, which will be paid by consumers and/or the government via subsidies,” COFECE said of the bill.

Reporting by Adriana Barrera; editing by Dave Graham and Sonya Hepinstall