Provisional suspension against the new Electricity Industry Law
Decree Publication. On March 9th, 2021, the Ministry of Energy (“SENER”) published in the evening edition of the Federal Official Gazette (“DOF”) the Decree through which several provisions of the Electricity Industry Law (“LIE”) were amended and included.
Amendments and additions to the LIE. The Decree contemplates the modification of articles 3, sections V, XII and XIV; 4, sections I and VI; 12, sections I; 26; 35, first paragraph; 53; 101; 108, sections V and VI, and 126, section II; and adds a section XII Bis to article 3 of the LIE.
Furthermore, the Decree in its transitory articles establishes, among others, that:
(i) The Decree will enter into force the day following its publication in the DOF;
(ii) SENER, the Energy Regulatory Commission (“CRE”) and the National Energy Control Center (“CENACE”) will have a maximum period of 180 calendar days, counted from the entry into force of the Decree, to make the necessary modifications to all resolutions, guidelines, policies , criteria, manuals and other regulatory instruments issued in the matter of electrical energy in order to be consistent with the Decree;
(iii) The self-supply permits granted or processed under the Public Electricity Service Law that continue to have their legal effects and obtained based on legal fraud, must be revoked by the CRE through the corresponding administrative procedure; and
(iv) The Power Generation Capacity Commitment Agreements and Power Purchase and Sale Agreements executed with independent energy producers under the LSPEE, must be reviewed in order to guarantee their legality and compliance with the profitability requirement for the Federal Government and, where appropriate, must be renegotiated or early terminated.
Amparo Lawsuits. On March 10th, 2021, two clean energy generators filed before the Federal Judicial Power an amparo lawsuit in which the provisions of the Decree are challenged, and the provisional suspension of the Decree is requested as a precautionary measure.
Provisional Suspension. As a result of the amparo lawsuits filed in relation to the Decree, on March 11th, 2021, the District Court resolved to grant the provisional suspension, which will have, among others, the following effects:
(i) That all the consequences derived from the Decree be suspended until the final sentence is issued;
(ii) That the precautionary measure (provisional suspension) has general effects, that is, it applies to all participants in the electricity industry and other individuals who carry out any regulated activity in the electricity sector or who are in the process of entering into the sector;
The foregoing, in order not to give the petitioning party (quejosa) a competitive advantage over other participants in the electricity industry and not affect free competition and development of the sector.
(iii) Ensure the effectiveness of the amparo sentence so that, in the event of obtaining a favorable sentence, things keep the state in which they were prior to the issuance of the Decree; and
(iv) The authorities subject to compliance with the LIE, that is, SENER, CRE, CENACE and the Federal Electricity Commission must refrain from applying the Decree until the final sentence is issued.
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.
