Federal Government announces that it will review and cancel energy contracts after SCJN failure

This Thursday, the SCJN acknowledged the validity of the articles in the Electrical Law that provide for the possibility of revoking permits obtained if it is considered that these were fraudulent

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Fotografía fechada el 13 agosto
Fotografía fechada el 13 agosto de 2021, de una sucursal de la Comisión Federal de Electricidad (CFE), en la Ciudad de México. EFE/José Pazos

Just one day after the Supreme Court endorsed the Electricity Industry Law, the Presidency of the Republic reported that irregular self-supply permits will be reviewed and revoked, and contracts for independent electricity production will be canceled or renegotiated.

Through an information card, the federal government detailed that there are 234 self-supply schemes, among which it considers 110 illegal, adding that they have 77,000 client-partners among whom electricity is bought and sold.

“The legality and financial profitability for the State of independent production contracts will be reviewed, which, if necessary, must be renegotiated or terminated early,” he says.

He argued that the constitutionality of the Electricity Industry Law determined by the Supreme Court had favorable consequences for the Mexican State, for example the integration of power plants that were decommissioned in the past, in addition to those built recently.

This Thursday, April 7, the SCJN recognized the validity of the articles in the Electrical Industry Law that provide for the possibility of revoking permits obtained if it is considered that these were fraudulent; and to review, renegotiate or terminate contracts entered into with independent producers.

According to the administration of the so-called fourth transformation, with Enrique Peña Nieto's Energy Reform in 2013 the CFE was dismantled to create the subsidiary Legacy Interconnection Contracts (CIL), contracts that contain the figure of Autosupply Companies and that deliver energy to their simulated partners without paying for the use of the infrastructure of the CFE.

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