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ARTICLE · 31 AUGUST 2018

Mexico's Fourth Long-Term Power Auction: An Update On SLP-1/2018

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As part of Mexico's Energy Reform, the generation and wholesale of electricity now takes place under a regime of free enterprise and open competition.

MexicoEnergy and Natural Resources

Background

As part of Mexico's Energy Reform, on August 12, 2014, a new electricity law became effective. Prior to the law's enactment, the Mexican electric industry was governed by a restrictive legal framework that limited private sector participation and reserved most of the market for the state-owned Federal Electricity Commission (Comisión Federal de Electricidad, CFE). Now, the generation and wholesale of electricity takes place under a regime of free enterprise and open competition.

Power Auctions

Under the new electric industry regime, the National Energy Control Center (Centro Nacional de Control de Energía, CENACE), the regulatory agency managing the wholesale electric market, may call for competitive bidding processes in which (i) qualified users and power suppliers (including CFE-affiliate companies providing basic and qualified services) may present offers to purchase power, capacity and clean energy certificates (CELs, and along with power and

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