New Geothermic Energy Law will regulate the exploration and development of geothermal resources
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| (Courtesy CIA.gov) |
Further to the Mexican Energy Constitutional Amendments approved on December 12, 2013, President Enrique Peña Nieto signed decrees enacting Secondary Laws for Mexico's Energy Reform. Published in the Federal Official Gazette on August 11, 2014, this new legislation consists of nine new laws and 12 amendments to existing laws.
Highlights of the secondary laws focusing on the electric power sector include:
- The Geothermic Energy Law will regulate the exploration and development of geothermal resources in Mexico, both for the electricity sector and otherwise. Private parties may obtain the exclusive right to develop a geothermal field for a period of up to 30 years, through a concession granted by the Secretaría de Energía.
- Newly independent production, transmission, distribution, purchase, sale and supply activities in the electricity industry ensure open access and efficient operation in the electric sector.
- Generation, purchase and sale of electricity are now open to free competition, and private investment is now allowed.
- The Comisión Federal de Electricidad ("CFE") was transformed into a State Productive Entity, responsible for public electric power transmission and distribution services. The proposed legal scheme contemplates contracts between CFE and private parties, in which the private parties contribute technology and experience to expand and improve Mexico's transmission and distribution networks.
- The Electric Industry Law distinguishes between a "Producer" and an "Exempt Producer" on the basis of installed capacity. Additionally, based on their electricity consumption, users are classified as "Basic Users" and "Qualified Users."
- Suppliers are required to obtain a permit from the Comision Reguladora de Energia ("CRE") to provide services and must execute supply agreements with final users using forms approved by CRE.
