Too Much Ado About Nothing: The Undelivered Reform of the Mexico Electric Power Sector and the Denial of the Freedom to Choose
10 Pages Posted: 20 Jun 2003
Date Written: April 2003
The Mexico road to power reform has been a political zigzag toward an undelivered reform, current executive initiative keep several key factors intact all of which are obstacles toward a future broad electricity market. The current political openness is creating a populist turn back in infrastructure market reforms, therefore Mexico is lagged behind international experience and each time is far away from an electricity market formation. The current executive initiative before Congress maintains the State participation in generation, transmission and distribution for almost 75% of the users, and only provides choice for a 558 users (0.002%) that consume 24.5% of the electric power and generate 17.1% of the total revenue of the state-owned monopoly entity. Such users indeed have a broader choice range than the rest of the users because self-supply and joint-generation have been permitted since 1993 deregulation policy. New generators will keep enter under contractual agreements with the state-owned monopoly as independent power producers rather than competitors.
Keywords: Mexico, power reform, electricity markets
JEL Classification: L94, L98, Q48
Suggested Citation: Suggested Citation