The Ministry of Energy published the reallocation of CFE´s assets
Terms for the reallocation of generation assets and agreements to the subsidiary productive companies and affiliate entities of the Federal Electricity Commission.
On November 25th, 2019 the Ministry of Energy (“SENER”) published in the Official Gazette the Terms for the reallocation of generation assets and agreements to the subsidiary productive companies and affiliate entities of the Federal Electricity Commission (“CFE”) (the “Terms”).
The Terms have the purpose of contributing to the efficient development of the Nacional Electric Sector, rescue the generation capability of CFE and procure the financial sustainability of CFE´s subsidiary productive companies and affiliate entities; however, the Terms state that its publication does nor represent a solution to CFE´s issues, but will allow an improvement in the efficiency in the generation of electricity.
On the other hand, the Terms state that CFE´s reorganization will, in accordance with the National Development Plan for 2019-2024, pursue the protection of the final user of Basic Supply from market fluctuations, using the variable price of the Old Regime Agreement (Contrato Legado) with the aim of maintaining the final user tariff non affected from such fluctuations.
It is important to note that the Terms respected the original allocation of the external generation plants, which contracts are currently administrated by CFE Generación V, therefore, the administration of such plants remained the same.
Finally, it is noted that CFE must carry out: (i) all necessary steps to assign the generation permits before the Energy Regulatory Commission; and (ii) all necessary adaptations in the operative, financial and market systems for the operation of the plants and billing procedures in the Wholesale Electricity Market derived from the reallocation of assets.
Should you have any question or comment, please do not hesitate to contact us.