Mexico Senate passes energy bill favoring state, fossil fuel

MEXICO CITY (AP) — Mexico’s Senate passed an electrical energy bill that favors government-owned generating plants that largely run on fossil fuels Tuesday, putting renewable and private plants at the back of the line for purchasing power.

The bill has drawn complaints from private business groups and U.S. investors, some of whom backed cleaner gas and renewable power plants in Mexico. Some analysts warn the measure could violate the U.S.-Mexico-Canada free trade pact.

The Senate must still vote on some objections, but President Andrés Manuel López Obrador appeared to have the votes to push the bill through. It passed earlier in the lower house of Congress.

The 68-58 vote in the Senate was widely expected, given López Obrador's insistence that Mexico should become energy self-sufficient, after winter storms in Texas temporarily cut off supplies of imported natural gas last month.

The U.S. Chamber of Commerce said in February that Mexico’s attempts to limit private electricity generation would violate the trade agreement, known as the USMCA.

The chamber said giving priority in electricity purchases to older, more polluting, state-owned power plants “would directly contravene Mexico’s commitments” under the trade agreement.

Neil Herrington, the chamber’s Senior Vice President of the Americas, said in a statement that the bill could re-instate a government monopoly, adding “these changes would significantly raise the cost of electricity and limit access to clean energy for Mexico’s citizens.”

“Unfortunately, this move is the latest in a pattern of troubling decisions taken by the Government of Mexico that have undermined the confidence of foreign investors in the country,” Herrington wrote.

Mexico’s Supreme Court had earlier ruled against...