Thursday, December 7, 2023

Amid questions and criticism, electrical reform initiative postponed till next April

The Morena party and its allies in the lower house of Congress have agreed to postpone the vote on President López Obrador’s controversial electrical reform in the midst of a growing chorus of criticism.

But it doesn’t appear to be the critics who have delayed the vote but the lack of support for it among lawmakers. 

The reform, which the government insists is necessary to guarantee low energy prices, requires a two-thirds majority vote in Congress because it means changing the constitution.

On Thursday, Morena, the Labor Party and the Green Party decided to wait until next April before proceeding with the reform initiative.

Among the critics this week were U.S. lawmakers and López Obrador’s first finance minister. In addition, U.S. Ambassador Ken Salazar stepped in with a Twitter post expressing concern.

“I had important meetings with the Mexican government to discuss the reform of the power sector. I want to learn more about the impetus for the proposed constitutional reform. I also expressed serious concerns for the United States. We committed to continuing our dialogue on these critical issues.”

Former finance minister Carlos Urzúa warned that the reform could prove to be the worst mistake of the López Obrador government, with effects in the short, medium and long term.

Speaking on Wednesday before the Citizens Movement bloc of lawmakers in the lower house of Congress, he said the plan underestimates what may happen as a result of the rejection of clean energy.

“It won’t only have a strong environmental impact but will also cause a long and costly legal process for the compensation they will have to pay, and all this to defend a state company that doesn’t have the resources or the efficiency to guarantee electricity supply throughout the country.”

It would also have a negative affect on the foreign investment that Mexico needs due to the coronavirus pandemic, said Urzúa, who left the federal cabinet after less than a year as finance minister due to differences of opinion with the president.

He described the reform as “the great challenge that Mexico faces” and called on opposition parties to fight it. If it passes he said, it will be “extremely dangerous” for the nation.

In the U.S., 40 Republican lawmakers called for pressuring Mexico over what they called discriminatory actions that hurt U.S. energy companies.

They said in a letter on Wednesday that Mexico’s plans violate the terms of the U.S.-Mexico-Canada trade agreement, and called for “a timely and clear response” to policies and actions that they say violate and undermine the treaty. 

The reform would give the Federal Electricity Commission 54% of the electricity market, and eliminate two independent energy regulators. 

A draft study by the U.S. Department of Energy warned last month that the bill would bump emissions by up to 65% as more electricity would be generated by inefficient and dirty power plants operated by the Federal Electricity Commission. It also predicted higher electrical generation costs.

With reports from El Universal

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