Public Bid Launched
Reform of Power Industry Proposed

Public Bid Launched

On September 3 2002 the Comisión Federal de Electricidad published an invitation to bid (18164093-011-02) for a public works contract for the construction of civil, electro-mechanical and associated works, and for the procurement, installation, engineering, transportation, testing and start-up of two turbogeneration units with a generation capacity of at least 670 megawatts (MW), located in the municipalities of Yesca and Santa María del Oro, in the state of Nayarit. The expected investment is expected to be in excess of $1 billion.

Reform of Power Industry Proposed

President Fox has submitted a proposal for a comprehensive reform of the power industry to the Mexican Congress. The reforms include amendments to existing legal provisions and the enactment of new statutes, including:

  • an amendment to Articles 27 and 28 of the Constitution;

  • amendments to the Electric Power Public Utility Law;

  • amendments to the Energy Regulatory Commission Law;

  • the enactment of the Organic Law of the Comisión Federal de Electricidad; and

  • the enactment of the Organic Law of the National Power Control Centre.

This proposal aims to open up the power generation industry by allowing third parties to participate and compete in the sale of power capacity and output to certain qualified users on a spot market. These private producers would also sell to Comisión Federal de Electricidad, which would in turn allocate the power for public service purposes.

The proposed model is based on the redefinition of 'public service'. The proposal suggests that the state is responsible for providing electricity for personal consumption (public service). However, industrial end users would not be covered under the definition of 'public service', and would be able to choose from various electricity supply alternatives. These users are identified as qualified users.

'Qualified users' are users that consume in excess of 2,500 MW per year. Qualified users must register with the Comisión Federal de Electricidad.

The proposal will allow qualified users to buy electric power:

  • from the Comisión Federal de Electricidad;

  • from any private generation company;

  • through the National Power Control Centre itself; and

  • via imports.

For further information in this topic please contact Rogelio López-Velarde at Lopez Velarde, Heftye, Abogados by telephone (+52 55 50 81 1424) or by fax (+52 55 50 81 1425) or by email ([email protected]).