Industry leaders and electricity bills at a press conference in Tijuana. Industry leaders present electricity bills at a press conference in Tijuana.

CFE hikes up to 300% threaten industry

Whopping rate increases in Baja California trigger protest by industry leaders

Skyrocketing electricity prices in Baja California will cause companies to close, jobs and investment to be lost and send the cost of living through the roof, business groups warn.

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They say that even security could become worse as a result of Federal Electricity Commission (CFE) rate hikes between 200% and 300% since the end of November in the northern border state.

There are two main reasons behind the sudden price hike.

First, the state’s electricity network is not connected to the rest of the country and second and most significant, the Energy Regulatory Commission (CRE) introduced a new pricing model in December.

In a press conference held Wednesday in Tijuana, the presidents of three business organizations said the prices of consumer products and services could go up by as much as 40% as a result of the escalating power costs.

The business leaders took aim at President Enrique Peña Nieto and Finance Secretary José González Anaya, labeling statements by the two that power prices wouldn’t go up as deceitful. They also presented electricity bills from local businesses to emphasize the extent of the increase.

Metalwork company Aluminio de Baja California paid just over 2.4 million pesos (US $126,000) for its energy consumption between October 31 and November 30, 2017. However, its bill for December came in at almost 4.4 million pesos (US $231,000) even though it used less power.

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Hot tub manufacturer Jacuzzi de México experienced a similar hike.

It was charged just under 669,000 pesos for its energy consumption in November but just over 1.2 million pesos for December. It too used less power in the latter month.

Small businesses suffered even bigger increases in percentage terms, with monthly costs for some going from 15,000 pesos to 50,000.

The president of the National Chamber for Industrial Transformation (Canacintra) stressed that the price increase will inevitably be passed on to consumers.

“This issue is not exclusive to the industrial sector because at the end of the day, the rise in the electricity rate is going to have an effect on the goods and services that you consume every day,” Marcello Hinojosa Jiménez said.

“. . . It will cause the closure of companies, paralysis of new investment, mass dismissals, unemployment and insecurity . . .” he added.

The president of the Otay Mesa Industrial Association said that energy is one of the five biggest expenses for companies and combined with other factors, the increase will likely have an impact on investment.

“The gas increases, electricity increases and what we’re going through now with the negotiations with our northern neighbor, obviously that places us in a more worrying [and difficult] situation to make our state look like a competitive one for foreign investment,” Salvador Díaz González said.

The head of Index, a manufacturers’ association, said more than 600 companies and around 300,000 jobs were placed at risk by the rate hike and urged those responsible to reconsider.

“The CFE has to look at the consequences of this decision and the CRE as well . . . because otherwise there will be an escalation of prices,” Luis Hernández González said.

Through the state government, the leaders are seeking a meeting with CRE director Guillermo García Alcocer to better understand how the new rates were established. They are also considering legal action.

They warned that if the new rates remain, companies could leave Baja California and head to parts of the country where electricity prices are more competitive, such as the Bajío region.

Source: Zeta Tijuana (sp), Frontera.Info (sp)

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  • Are there any websites we can access that outline the new rates these businesses are subject to? I can’t seem to find them

  • cooncats

    Get rid of CFE if you want lower electricity prices.

    • I think CFE is great. My electric bill is quite reasonable, dirt cheap compared to what I would pay above the border. CFE’s service is superlative too, quick and efficient. It’s a well-organized outfit. Of course, I do not need AC where I live, a big plus.

  • WestCoastHwy

    Another form of Mexican oppression towards it’s own corporations as it reduces and some times eliminates same from bribe paying foreign giant global corporations. But then again Pedro sold me his sister Juanita!

  • Vernon King

    This is why many places generate electricity themselves. To sell electricity at more than the cost that a generator uses is just not right but I don’t blame commercial customers. Commercial/Business uses don’t get the discount that we get up to a certain amount. In my house four 260w solar panels reduced my bill from 3200P to 119P so the payback is quite short in Mexico for Generators, solar and wind. Expect more commercial installations if this CFE trend continues.

  • MortimerSnerd

    It’s almost as if they put them on DAC rate…no notice. It’s like gasoline, they suddenly raised the price 20%. Going solar is an option but can be an expensive one because the dealers overcharge by selling turnkey packages.Solar panels are cheap but you’d never know it from the prices they charge. .I am installing both solar hot water heaters eliminating the gas man as gas is up over 600 pesos for an exchange bottle…only use gas for cooking Thermosyphon solar hot water is not expensive to buy, mine cost around US$250, and wow, does it ever work. I suspect the rest of the country will follow soon with electricity hikes like that… Solar panels… 280 watt panels should only cost about US$175-200 each, and a grid tie inverter is as low as $125 for a 1kw unit.

  • Gary Snead

    Over 90% of Baha’s power generation is geothermal near Mexicali , probably the cheapest method known ,the real cost increase has come from demand.

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