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Mexican president may seek constitutional change in power industry

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Mexico's President Andres Manuel Lopez Obrador gestures during a news conference about the results of the mid-term election, at the National Palace in Mexico City, Mexico June 7, 2021. REUTERS/Henry Romero

MEXICO CITY, June 10 (Reuters) - Mexican President Andres Manuel Lopez Obrador said on Thursday he could send a bill to Congress seeking to weaken terms for foreign and private power companies in favor of state utility CFE, despite not having the votes for a constitutional reform.

Lopez Obrador's leftist allies lost congressional seats in midterm elections last Sunday, making it harder to reach the two-thirds majority required for amending the constitution, which would be required to undo his centrist predecessor's overhaul of the energy industry.

"If they're necessary, I'll present them even if they do not pass or are rejected," Lopez Obrador said in a regular news conference.

"We have to solve the problem of lack of support for the CFE," he said, arguing that the company has been "destroyed" under the energy reform of the last government which he said gives preference to private interests.

Current law, however, gives preference to dispatching the lowest-cost power onto the grid, which has often favored renewable sources operated by private companies over the CFE's use of costly fuel oil at several of its biggest plants.

Lopez Obrador has aimed to roll back the last government's liberalization of the energy market, which sought to increase private investment in the industry and boost competition in sectors that for decades were dominated by state-run monopolies.

The president has repeatedly insisted that electricity rates will not rise on his watch.

Reporting by Ana Isabel Martinez, writing by Cassandra Garrison; Editing by Frank Jack Daniel

Our Standards: The Thomson Reuters Trust Principles.

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