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Mexico's Energy Reform Strains US Ties 01/23 09:18


   MEXICO CITY (AP) -- Mexico's plan to favor its own state-owned electrical 
power plants and limit energy sales by private, foreign-built projects could 
affect U.S. investment in Mexico, officials said during bilateral talks this 

   According to statements issued Friday, the U.S. government has "real 
concerns with the potential negative impact" on U.S. firms and investments.

   "In each meeting, we expressly conveyed the Biden-Harris Administration's 
real concerns with the potential negative impact of Mexico's proposed energy 
reforms on U.S. private investment in Mexico," according to a statement by U.S. 
Secretary of Energy Jennifer M. Granholm. "The proposed reform could also 
hinder U.S.-Mexico joint efforts on clean energy and climate."

   Mexican President Andrs Manuel Lpez Obrador said he received a list of 
U.S. and Canadian firms who had voiced complaints and said he would "review 
them if they believe there has been an injustice."

   Granholm said "I was assured that Mexico is committed to supporting clean 
energy and resolving current disputes with energy projects within the rule of 

   Last year Lpez Obrador proposed a constitutional reform to restrict sales 
by private power generators and favor Mexico's state-owned utility company.

   The bill that Lpez Obrador submitted in October would cancel contracts 
under which 34 private plants sell power into the national grid. The plan would 
also declare "illegal" an additional 239 private plants that sell energy 
directly to corporate clients in Mexico. Almost all of those plants are run 
with renewable energy sources or natural gas.

   The measure also would cancel many long-term energy supply contracts and 
clean-energy preferential buying programs, often affecting foreign companies.

   It puts private natural gas plants almost last in line -- ahead of only 
government coal-fired plants -- for rights to sell electricity into the grid, 
despite the fact they produce power about 24% more cheaply. Government-run 
plants that burn dirty fuel oil would have preference over private wind and 
solar plants.

   The plan guarantees the government electrical utility a market share of "at 
least" 54%, even though the U.S.-Mexico-Canada free trade pact prohibits 
favoring local or government businesses.

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