© . A general view shows 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, Feb. 9, 2021. REUTERS/Daniel Becerril
By Drazen Jorgic and Dave Graham (NYSE:) MEXICO CITY () – Mexican President Andres Manuel Lopez Obrador’s plan to increase state control of electricity generation was rejected in parliament on Sunday, as opposition parties united against a bill that they say harm investments and violate international obligations. His National Regeneration Movement (MORENA) and its allies fell nearly 60 votes short of the two-thirds majority needed in the 500-seat Congress, collecting just 275 votes after a fierce session that lasted more than 12 hours. To reverse previous constitutional reforms that liberalized the electricity market, Lopez Obrador’s proposed changes would have put an end to the requirement that state-owned Comision Federal de Electricidad (CFE) must sell the cheapest electricity first so it can make its own electricity. sell before other energy companies. Under the bill, the CFE would also be set to generate a minimum of 54% of the country’s total electricity, and would have shifted energy regulation from independent bodies to state regulators. The controversial proposals were criticized by business groups and the United States, Mexico’s main trading partner, as well as other allies who claimed it would violate the regional trade agreement, the United States-Mexico-Canada Agreement (USMCA). Lopez Obrador had argued the bill would have protected consumers and made the country more energy independent, saying the legislation was vital to his plans to “transform” Mexico. Though the odds were against his party, he was in the mood to capitalize on his victory in last weekend’s referendum on his leadership. Before the vote, Jorge Alvarez Maynez, a lawmaker from the opposition Citizens’ Movement party, said the proposals, if passed, would harm Mexico. “There is no specialist, academic, environmentalist or activist with a shred of doubt – this bill would raise electricity prices, delay the transition to (clean) energy in our country and violate international agreements,” he added. The bill also included a provision to nationalize lithium sources. Lopez Obrador said this week that if the bill were rejected, he would send another bill to Congress Monday aimed at getting at least the lithium portion of the proposed legislation passed.