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Energy Reform: Losing Heads.

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When Strategy asked this correspondent to follow Mexico’s energy policy, oil prices were in record levels and renewable energy sources were in fashion, including madness like growing corn to be burned as fuel. In Mexico, the party that ruled the country from 1929 to 2000 was returning to power after 12 years, and President Peña put energy reform as one of the boldest moves in his agenda.

Published: May, 2016

Published: May, 2016

Since 1936, Mexico kept oil and gas as resources exclusively in state hands, and the same happened for electricity from 1962. Peña’s reform allows private firms; no more Pemex monopoly and welcome to an electric market. However, it seems that as oil prices have nose-dived, the same has happened to the President’s attention to the subject.

Peña’s reform tried to create stronger regulators. Hence, new powers and structure were given to the National Hydrocarbons Commission (CNH) and to the Energy Regulation Commission (CRE). In both cases the number of board members (commissioners) was increased from 5 to 7. In a couple of years, it seems facts have convinced Mr. Peña that so many heads were useless. CRE requires 2 new commissioners to be appointed, and CNH needs 3.

CRE has 2 commissioner positions to be filled in, and one of them is the Commission’s President, since Mr. Francisco Salazar’s period concluded last December and he was not allowed by law to remain in charge. How do you explain to the world that a crucial position, in charge of driving competitive rules in electricity and fuels markets, is not filled in? Lack of interest would be the lesser evil but political patronage sounds as the most likely reason. Opposition parties in the Senate demand places for their own choices and probably the government hasn’t agreed with them about how many or about their credentials for the position. Political patronage is an ominous sign for a technical body like CRE and other positions related to Mexico’s energy reform.

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