Mexican president calls for steps to keep power prices low

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Mexican president calls for steps to keep power prices low

Mexican president calls for steps to keep power prices low

MEXICO CITY (Reuters) – Mexican President Andres Manuel Lopez Obrador mentioned on Monday contracts non-public firms have with state-run power software CFE will have to be revised to keep electrical energy prices low, sending stocks in a single company tumbling.

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Mexico’s President Andres Manuel Lopez Obrador attends a media convention at Palacio Nacional in Mexico City, Mexico, January 30, 2019. Picture taken on January 30, 2019. REUTERS/Carlos Jasso

“We are urging companies that have agreements with the Federal Electricity Commission (CFE) to come together to review contracts and above all to reach an agreement that electricity prices will not increase,” Lopez Obrador mentioned all the way through his morning press convention.

The president, a leftist who took place of business in December, pledged all the way through the marketing campaign to improve the CFE and keep away from power value hikes all the way through his time period.

Lopez Obrador famous that the state-owned software is already contractually obliged to pay billions of bucks to the personal firms that evolved seven herbal fuel pipelines to provide power crops, despite the fact that the initiatives are incomplete and not able to ship fuel.

Those firms are Mexican power infrastructure company IEnova, a unit of U.S.-based Sempra Energy; TransCanada Corp; and Mexican rich person Carlos Slim’s Carso, mentioned CFE leader Manuel Bartlett.

Over the previous couple a long time, Mexico has transitioned to herbal fuel to generate maximum of its power, depending increasingly more on imports by way of pipeline from the United States.

At Lopez Obrador’s behest, Bartlett cited via title a number of former public servants who are actually power corporate executives, accusing them of participating in a scheme to “destroy” the CFE.

“If the pipelines can’t be built, as is happening in seven large gas pipelines, the companies still have to be paid even if there’s no gas,” mentioned Lopez Obrador.

IEnova’s stocks dropped up to 6.95 %, TransCanada’s zero.67 % and Carso’s zero.94 % after the feedback.

In a observation to the Mexican inventory alternate, IEnova mentioned it has one pipeline that started operations in 2017 however that “sabotage” interrupted provides to CFE.

Some firms had been not able to entire development of pipelines on account of opposition from native communities. In different circumstances, the corporations can not ship the fuel despite the fact that the pipelines had been finished on account of delays in construction and changing power crops.

Lopez Obrador has been a staunch critic of 2013-14 power reforms that ended the wholesale electrical energy monopoly held via CFE.

“We are looking to achieve a voluntary restructuring of agreements and commitments within the framework of the law … the government is committed to not increasing electricity prices for consumers, but we want private companies to help,” he mentioned.

Reporting via Anthony Esposito and Miguel Angel Gutierrez; Additional reporting via Marianna Parraga and Noe Torres; Editing via Jeffrey Benkoe and David Gregorio

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