CFE rates to increase up to 811%

The Federal Electricity Commission (CFE) will apply an increase, from 468% to 811%, to the tariffs for the Transmission Service to the holders of the Legacy Interconnection Contracts, which have electric power generation plants with renewable sources or efficient cogeneration.

MEXICO CITY – Through its subsidiary CFE Intermediation of Legacy Contracts, published in the Official Gazette of the Federation (DOF), what will be the new charges, this after the Energy Regulatory Commission (CRE) will approve the adjustments.

Currently, 251 legacy contracts are in force, and 42 more are about to enter into force, to which the new tariffs would be applied.

Thus, the charge for Transmission Services for renewable energy or efficient cogeneration in its high voltage range will be of 0.27857 pesos per kilowatt-hour, which will mean an increase of 468.5% 0.04900 pesos per kilowatt-hour that were approved by the CRE in May this year.

Similarly, for medium voltage, the charge went from 0.04900 pesos to 0.25865 pesos per kilowatt-hour, which means an increase of 428 percent.

In the case of low voltage, it will be the one that will register the most significant impact, since the rate for the use of the network will be 0.89284 pesos per kilowatt-hour, equivalent to an increase of 811.2 percent compared to the 0.09799 pesos that were charged until last month.

Under the provisions of Resolution No. RES/893/2020 of the Energy Regulatory Commission, the charges for the electric power transmission service at 2018 prices to be applied by CFE Intermediation of Legacy Contracts, are issued to holders of Legacy Interconnection Contracts with power generation plants with renewable energy sources or efficient cogeneration, under the Transmission Methodology established in Resolution RES/066/2010,” reads the document published in the Official Gazette.

To date, neither the State-owned company nor the CRE has disclosed the calculation methodology or the details for determining the new rates.

USER IMPACT

In an interview, Paul Alejandro Sánchez, director of the organization Ombudsman Energy Mexico, said that the CFE published the tariffs without being an authority, which will have a significant impact on a group of companies in the country, who will see an increase in their energy costs.

He said that this could even have a direct impact on inflation since these are companies dedicated to the production of various products since their business ranges from cement, steel, mining, and even food and beverages.

“The big companies like Oxxo, cement companies, self-service chains, logistics, glass factories, bakeries, car manufacturers, and auto parts companies, have an auto supply contract”. The specialist explained that although the increase per kilowatt-hour does not seem significant, the consumption of these companies makes electricity one of their primary raw materials and production costs.

The new charge for the use of transmission lines is the result of complaints that the CFE filed with the CRE, as it said that the legacy contracts had left losses of up to 22.82 billion pesos from 2018 to 2020.

Last Tuesday, Mario Morales Vielmas, general director of Intermediation of Legacy Contracts, said that this damage to the company’s finances is due to the use of the lines from private companies.

He insisted that charging the company the real cost could reduce the subsidies granted by the government and even manage to adjust the rates or bills of the final consumers downwards.

Increase in cost to users

The Confederation of Industrial Chambers (Concamin) rejected what it is called an “electrolinazo” in Spanish because it believes that the increase published by the Federal Electricity Commission (CFE) will not only increase costs for energy consumers, particularly in the industrial and commercial sector that does not have subsidized rates but also denigrates competition in the industry.

In a statement, the business agency said the state-owned company’s publication violates legal and contractual orders since the authority in charge of these processes is the Energy Regulatory Commission (CRE).

The CFE has once again assumed authoritarian functions, justifying decisions that have not been explained or made transparent by the CRE itself, which is mandated by law to act independently and objectively. This situation evidences a deterioration in the checks and balances system required by an absolute rule of law.

The increase in the transmission and distribution charge is a measure that will affect the final costs of the energy consumed.

The Yucatan Times
Newsroom



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