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Mexico energy regulator fines Spain’s Iberdrola $467 mn

Mexico’s energy regulator fined Spanish firm Iberdrola $467 million for improperly selling electricity to third parties in violation of domestic “self-supply” laws, a document published Friday said.

The Energy Regulatory Commission (CRE) said Iberdrola “was obliged to generate electricity exclusively to satisfy the self-sufficiency needs of its partners… and not to sell, resell or by any legal act dispose of capacity or electricity,” according to the document.

Mexico’s “self-supply” contracts require private electricity generators to only provide energy to the specific partners listed at the time of the contract’s signing.

Private generators’ surpluses may be sold to the state-owned Federal Electricity Commission (CFE), which holds a monopoly on the transmission and distribution of electricity to end consumers.

The CRE document argues that the violations occurred at Ibedrola’s branch in the northern industrial city of Monterrey, between January 1, 2019 and August 31, 2020.

The fine comes at a tumultuous time for Mexico’s power industry, as President Andres Manuel Lopez Obrador tries to bring it back into the public sector.

Mexico’s Congress rejected a constitutional reform bill in April that would have strengthened the role of the state in electricity generation, a key measure of the left-wing Mexican president that has been publicly criticized by the United States.

That reform would have reversed a 2013 move to privatize Mexico’s electricity sector and given more power to the state-owned Federal Electricity Commission (CFE) over the private sector and foreign companies.