Mexican Watchdog Plans Tougher Entry Rules For Power Generators

The Mexican Energy Regulatory Commission is planning to make it tougher for companies to obtain permits to generate electricity in the country that could further erode competition in the sector in favor of the state utility CFE.

The Regulatory Commission, or CRE, is proposing to increase the requirements to obtain a generation permit in a proposal presented Dec. 23 and now open for comments from the industry.

Among the many proposed changes, CRE will require companies to present the results of an interconnection impact study of a project prior to obtaining a permit. The move represents a material change as companies present a study only after obtaining a permit under the current regulation.

The proposed modifications would alter the order of the legal steps to develop and operate energy projects in Mexico, law firm Cortes & Quesada wrote in a note to clients. The information required as per the new regulation would force companies to initiate the process at an earlier stage of development, the firm said.

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