Mexico’s Top Court Sets Back President’s Plans for State Power Company

Mexico’s Supreme Court docket on Wednesday ruled that improvements in rules for the country’s electrical energy market providing priority to the state-owned utility about non-public energy generators is unconstitutional.

The ruling is a setback for President Andrés Manuel López Obrador’s plans to restore the dominance of state-owned electricity companies, and bodes badly for a monthly bill he sent to congress this week that would give the state-owned utility CFE a commanding position in the energy market.

It also could set up a confrontation between the court and the president, a nationalist who seeks to reverse key pieces of a historic electricity-sector overhaul carried out less than his predecessor that finished Mexico’s state monopoly on the oil market and opened electrical energy markets to bigger non-public expenditure.

Mexican courts are emerging as an obstacle to Mr. Lopez Obrador’s push to centralize energy, say analysts. A variety of lower court selections have absent versus the government in the electricity sector, and the Supreme Court docket had stopped the government from decreasing the salaries of senior officials at autonomous institutions these as the central bank.

Wednesday’s ruling by a four-one vote knocks down key facets of a plan printed last year by the Electricity Ministry that needed the national energy grid operator to just take electrical energy generated by CFE prior to much less expensive selections from non-public generators that have invested billions of dollars in the place, specifically in wind and photo voltaic stations. The ministry argued that the alter was vital to make sure community trustworthiness.