The Second Chamber of the Supreme Court of Justice granted the first injunction against the reform of the Power Industry Law published in the Official Gazette on March 9, 2021.
Last Wednesday, the Second Chamber of the Supreme Court of Justice granted the first injunction against the reform of the Power Industry Law published in the Official Gazette on March 9, 2021.
The ruling protects against articles 3, subsections V, XII, XII bis, XIV, 4, subsection VI, 26, 53, 101, 108, subsection VI, and 126 subsection II. In summary, these provisions prioritized the dispatch of CFE’s power plants, eliminated the obligation of CFE Basic Supply to purchase power through auctions which guaranteed low prices, and changed the rules to grant CEL, favoring CFE as well.
The project was presented by Justice Alberto Pérez Dayán and was supported by Justice Luis María Aguilar Morales, while Justice Yasmín Esquivel Mossa and Justice Lenia Batres Guadarrama voted against it. Additionally, Justice Javier Láynez Potisek abstained, so Justice Alberto Pérez Dayán broke the tie as President of the Second Chamber.
The Supreme Court considered that the reform violates the principles of competition established in article 28 of the Federal Constitution, as well as the principle of sustainable development in energy matters.
Although the injunction was granted only to the companies which filed it, its resolution implies effects for all the market participants. This is because the project presented by Justice Alberto Pérez Dayán indicates the following:
"By virtue of the injunction, consequences cannot fail to produce effects in a general manner regarding all economic agents participating (in the wholesale electricity market); especially since, if these collateral results of Constitutional protection are not recognized, it could create a different distortion in that market, precisely because the complaining companies would be placed in a specific position in terms of competition."
Likewise, the suspensions granted due to other injunctions remain in place. For these reasons the provisions of said reform cannot be applied and, since the decision establishes a precedent for the other injunctions to be resolved in the same manner, it is a great step towards the total annulment of said reform.