CENACE suspends preoperative tests of Power Plants

Photo by: Public Power Association

Sanitary Contingency Declaration. Derived from the declaration of a pandemic made by the World Health Organization (WHO) on March 11th, 2020, and multiple administrative provisions and decrees published in the Federal Official Gazette (Diario Oficial de la Federación), there have been considerable affectations to certain industrial and commercial sectors, including the power industry.

Management of the National Energy Policy. In terms of the Power Industry Law (Ley de la Industria Eléctrica) (“LIE”), the Ministry of Energy (Secretaría de Energía) (“SENER”) is responsible for establishing, conducting and coordinating the country’s energy policy regarding electricity.

Based on the foregoing, and as a result of the general decrease in the consumption of electricity by final users, SENER informed the National Center of Energy Control (Centro Nacional de Control de Energía) (“CENACE”) of the need to implement certain mechanisms and measures in order to strengthen and maintain the “Quality, Reliability, Continuity and Security of the Electric Supply”.

Administrative Provisions for Suspension. As a result of the abovementioned, on April 29th, 2020, CENACE published in the Market Information System (Sistema de Información de Mercado — SIM) the ADMINISTRATIVE PROVISIONS to guarantee the efficiency, quality, reliability, continuity and security of the National Electric System (“SEN”), due to the recognition of the epidemic of disease by the SARS-CoV2 virus (COVID-19) (the “Administrative Provisions”).

Suspension of Preoperative Tests. In accordance with the Administrative Provisions, and as a result of several failures in the SEN, CENACE determined, among others, that as of May 3rd, 2020, the preoperative tests of the following Power Plants are suspended for an indefinite period:

(i) wind and photovoltaic; and

(ii) those that have not initiated commercial operation.

In this regard, the Administrative Provisions may generate several affectations to those generators that are in the circumstances mentioned in sections (i) and (ii) above, regarding the following:

(a) the effective date to start operations;

(b) financing;

c) compliance of commercial obligations for the acquisition and/or commercialization of energy; and/or

(d) any other type of agreement, covenant or contract related to the previous sections.

Against the Administrative Provisions, generators can file an amparo indirecto before the Administrative competent Court (Juzgado de Distrito en Materia Administrativa) on duty, since it is an urgent matter during the health contingency.

Should you require additional information on these issues, or specific advice regarding a specific case, please do not hesitate to contact any of the members of our Infrastructure & Energy practice team.

Lupita Esparza Sánchez lesparza@rrs.com.mx

María Fernanda Solís Álvarez msolis@rrs.com.mx



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