Wednesday, December 6, 2023

CFE hikes transmission costs for private energy suppliers

The Federal Electricity Commission (CFE) has raised transmission costs by as much as 800% for some private energy companies.

The CFE published new transmission rates on Wednesday for private companies that signed contracts with the government before the 2014 energy reform.

To transport their power on state-owned high voltage transmission lines, such companies will pay 0.2785 pesos per kilowatt hour, a 469% hike compared to the current cost.

The cost of transmission on medium voltage lines will increase 428% to 0.2586 pesos per kilowatt hour, while transmission on low voltage lines will go up by a whopping 811% to 0.8928 pesos per kilowatt hour.

The CFE didn’t say when the new rates will take effect. The announcement of the steep hikes comes two weeks after the Energy Regulatory Commission approved a request from the CFE to increase transmission costs.

Power plants that generate electricity from both fossil fuels and renewable sources such as wind and solar will be affected by the price hikes.

The federal government is currently waging a quasi-war on the private, renewable energy sector. The Energy Ministry published a new energy policy in May that imposes restrictive measures on the sector that could effectively prevent its expansion in Mexico and consolidate control of electrical power in the state-owned CFE.

That move came after the National Energy Control Center suspended national grid trials for new renewable energy projects, triggering legal challenges from private firms and environmental groups.

President López Obrador claimed last Month that private companies have provided “nothing” to the national electricity system, while two weeks ago CFE chief Manuel Bartlett vowed to put an end to the “simulation and fraud” committed by renewable energy firms at the expense of the state-owned company.

Bartlett accused renewable firms of not paying the CFE for using its transmission lines, a claim the sector rejects.

The CFE said this week that it has incurred losses of around 8 billion pesos (US $366.3 million) this year alone because private energy companies are paying low transmission rates, if at all.

However, reducing those losses is unlikely to be just a matter of publishing new, higher rates in the government’s official gazette.

Energy sector sources expect private energy companies to initiative legal action against the new rates, thus adding to the court battles the CFE will face in the coming weeks and months.

Source: El Financiero (sp) 

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