Electricity reform, high in favoritism: RRO

The head of Mexico’s public finances, Rogelio Ramírez de la O, has already made public his position regarding the Electricity Reform of President Andrés Manuel López Obrador.

He did it in the United States. Perhaps because of his previously agreed schedule. In fact, he did so by answering a specific question on the subject.

He served on the Atlantic Council, a nonpartisan organization that promotes constructive US leadership and engagement in international affairs.

In short, what the Secretary of the Treasury said clearly shows that he agrees with the initiative to reform the Electricity Industry Law. He defends it and assures that it seeks to promote an orderly and reliable development of the national electricity industry.

The Secretary of the Treasury is perfectly aligned with the position of the Chief Executive Officer and the Secretary of Energy, Rocío Nahle.

Ramírez de la O, said verbatim: This government has put an end to the practices of public concessions and policies that favored select business groups.

This situation also occurred in the electricity sector, to the detriment of public finances.

He stressed that the bill promotes private participation and investment in the sector since the CFE will continue to buy electricity and capacity from private producers, but without the state company being its financial support. This will incentivize efficiency and improve financial cost.

And then he highlighted: “there was abuse by private generators who promoted the simulation of a self-supply model when in reality it seemed more like a business model. I do not go into details because it is still in a period of analysis ”.

The official repeated, in his response, exactly the same arguments, although without mentioning the names of the companies.

The day before, during the “morning” were exhibited as abusive: Oxxo, Coca-Cola, Tec. De Monterrey (Femsa); WalMart; Domino’s, Starbucks, Chili’s, Burger King (Alsea), Movistar, Grupo Salinas; Telmex, Telcel, Sanborns, Sears (Grupo Carso); HSBC, 7-Eleven and Cinemex among others.

From the point of view of Ramírez de la O, the electricity bill does consider the participation of the private sector in electricity “but with order.” He recalled that the proposal calls for the Federal Electricity Commission (CFE) to have a quota of 54% participation in the sector, while the private sector will be able to develop the remaining 46%.

He commented that the Mexican government is attentive to the reactions that the rating agencies and the market have had to be doubly sure that they will provide Mexico with a regulatory framework for the electricity sector that will be consistent with the service and with the market rules.

The position of the Secretary of the Treasury does not differ at all, at least in his first comment, from what the President of Mexico and his counterpart in energy have said.

Since his arrival at the Ministry of Finance became known, most observers considered him an official who would seek to build bridges with the business sector.

Previously, the expectation had been generated that it would have a position more in line with the perspective of an electricity market that allows the growing participation of private initiative under a competition scheme that is reflected in the benefit of end consumers.

By speaking out in favor and defending the initiative and endorsing the presidential accusations against the companies that have allegedly abused, it is clear that this will not be the case.

With the head of public finances in favor of the initiative to reform the Electricity Law, a monolithic position is observed in the government. A severe train crash is foreseeable with the private sector in general and with the electric power sector in particular.

Unless the private initiative decides to yield. So far no coordinated action has been seen and the official narrative is gaining ground in the hearings. We will see.

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Rich and powerful

He has worked continuously in newspapers, magazines, radio, television and the Internet, in the last 31 years he has specialized in business, finance and economics. He is one of the three hosts of the Alebrijes, Águila o Sol program, a program specialized in economic issues that is broadcast on Foro TV.

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