Wednesday, December 6, 2023

Gov’t strikes again at Spanish firm Iberdrola, disconnects electrical plant from grid

The federal government has dealt another blow to Spanish energy company Iberdrola, disconnecting a power plant it owns in southern Tamaulipas from the state-owned grid.

The National Energy Control Center (Cenace) disconnected the Enertek plant in Altamira on Thursday even though Enertek – an Iberdrola subsidiary – had obtained a court order against such a move. The newspaper Reforma sought comment from Cenace about its actions but didn’t receive a response.

The plant’s permit has expired but Enertek obtained a court order in March that was supposed to stop Cenace from disconnecting it from the grid. The plant, which began operations in 1998, sought to modify its permit last year, but the Energy Regulatory Commission rejected the request.

The disconnection of the 144-megawatt plant comes after Iberdrola’s power station in Pesquería, Nuevo León, suffered the same fate earlier this year.

The government has also put the brakes on a US $150 million wind farm built by Iberdrola in Guanajuato and fined the Spanish energy giant over 9 billion pesos (US $451 billion) for violating a now-defunct electricity law, a punishment the company has challenged in court.

Iberdrola, which has a presence in 15 states, is one of the largest private energy companies in the Mexican market, but its investment here fell to just US $16.1 million in the first quarter of 2022, a 93% decline compared to five years ago and a 60% drop in the space of a year.

President López Obrador, a staunch energy nationalist determined to “rescue” the state-owned Federal Electricity Commission (CFE), has held the company up as an example of what he calls unscrupulous foreign firms that have “looted” the country. In a variety of ways, his administration has sought to make doing business here difficult for foreign and private energy companies, many of which generate renewable energy from sources such as wind and solar.

The government’s nationalistic energy sector policies triggered challenges by both the United States and Canada under the three-way North American free trade pact known as USMCA.

Víctor Ramírez, an energy analyst, told Reforma that with actions such as Thursday’s disconnection of the power plant in Altamira, the government is forcing companies’ to purchase electricity from the CFE.

“The government is using every trick in the book to avoid competition and block [private energy companies] that can compete,” he said.

“It’s forcing customers to buy from CFE, which isn’t necessarily the cheapest [electricity supplier],” Ramírez said. “… It’s not giving them any other option but to … [purchase power from] CFE, which is contrary to the competition policy that is enshrined in the constitution.”

In Nuevo León, where Iberdrola’s Dulces Nombres plant was disconnected in February, the Spanish firm’s commercial customers were forced to enter into expensive CFE contracts with a duration of at least five years, according to people who spoke with Reforma on the condition of anonymity. The sources said that CFE’s rates were up to 30% higher than those charged by Iberdrola.

With reports from Reforma 

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