15 Apr New Energy Regulation in Mexico
On March 18th, 2025, the Mexican government published a decree enacting a series of secondary laws for the energy sector. With this, structural changes have been introduced in the regulation of the energy sector, establishing the new legal framework that will govern the industry in Mexico. As of March 19th, 2025, the eight secondary laws published in the decree have entered into force, marking a transformation in the structure and operation of the energy market in the country.
Which laws were amended and what is their impact?
Among the main changes derived from the decree is the repeal of the Electric Industry Law (the “LIE” for its acronym in Spanish) and its replacement by the new Electric Sector Law (the “LESE” for its acronym in Spanish), which represents a profound transformation of the regulatory framework applicable to the electricity sector in Mexico. With the entry into force of the LESE, the permits, contracts, and administrative acts granted under the LIE shall remain in effect until their expiration date, governed by the terms and provisions applicable at the date of their issuance. However, once they expire, they may not be extended and must be adjusted to the regulations in force at such time.
Additionally, the Law of the State-Owned Company of the Federal Electricity Commission (the “LCFE” for its acronym in Spanish) and the Law of the National Energy Commission (the “LCNE” for its acronym in Spanish) were enacted, which establish new bases for the operation and regulation of the national electricity system.
State participation: What changes with the LESE?
The LESE not only replaces the LIE but also redefines the model of State participation in the electricity sector, consolidating the position in which the State assumes a leading role. Through this new law, the prevalence of the State in electricity sector activities is recognized. The Federal Electricity Commission (the “CFE” for its acronym in Spanish) must maintain at least 54% of power generation, ensuring its predominance in the market.
Furthermore, new restrictions are established on private participation in power generation and commercialization, limiting the structures under which they may operate. Another key aspect is the regulation of electricity tariffs under criteria of accessibility and stability, which will impact the costs and business models of energy-consuming companies.
Reconfiguration of CFE: What does the LCFE establish?
In turn, the LCFE strengthens the role of the CFE as a State-owned company, granting it greater control and operational capacity. This law eliminates the legal separation regime among its subsidiaries, allowing it to operate in an integral manner in the activities of generation, transmission, distribution, and commercialization. Likewise, the new law prioritizes the participation of CFE in the planning and expansion of the electricity system, which could redefine the dynamics of the sector and access to new investments. As part of this transition, contracts entered into prior to the entry into force of this new regulation, both with CFE and its subsidiaries, must be transferred to the new State-Owned Companies, in accordance with the guidelines to be issued by the Ministry of Energy.
In addition, the Ministry of Energy (the “SENER” for its acronym in Spanish) will have the authority to issue binding planning instruments to ensure that the expansion of the electricity system aligns with the State’s objectives regarding reliability, accessibility, and energy transition.
New regulatory authority: What changes with the LCNE?
The LCNE creates a new regulatory body that replaces the Energy Regulatory Commission (the “CRE” for its acronym in Spanish), concentrating electricity market regulation in a single entity. The new National Energy Commission (the “CNE” for its acronym in Spanish) will be responsible for supervising the electricity market, determining regulated tariffs, and issuing generation and commercialization permits, thereby establishing a more centralized structure for the regulation of the sector.
Implications for companies subject to Energy Regulation
These reforms present significant challenges for companies that generate, commercialize, and consume electricity under the structures previously allowed by the former LIE, such as qualified supply, independent power production, and participation in the Wholesale Electricity Market. The new legal framework introduces changes in permits, contracts, tariff regulation, and access to the electricity market, particularly affecting companies that had optimized their operations under the prior regime. It is essential for companies to assess how these changes may impact their operations and to prepare for compliance accordingly.
Our team is available to advise you on these changes and their impact on your business. Should you have any questions, require our assistance, or need additional information, please contact the professionals at Cuesta Campos.
Contact
Berenice Soto García
bsoto@cuestacampos.com
Héctor Ceballos González
hceballos@cuestacampos.com
THE ABOVE IS PROVIDED AS GENERAL INFORMATION PREPARED BY PROFESSIONALS WITH REGARD TO THE SUBJECT MATTER. THIS DOCUMENT ONLY REFERS TO THE APPLICABLE LAW IN MEXICO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE ACCURACY, NO RESPONSIBILITY CAN BE ACCEPTED FOR ERRORS OR OMISSIONS. THE INFORMATION CONTAINED HEREIN SHOULD NOT BE RELIED ON AS LEGAL, ACCOUNTING OR PROFESSIONAL ADVICE BEING RENDERED.