Mexican court delays discussion of anti-trust challenge to energy policy

MEXICO CITY, Jan 27 (Reuters) - Mexico’s Supreme Court on Wednesday postponed a decision on how to proceed with an anti-trust challenge to a policy proposed by the energy ministry that aims to favor indebted state power company CFE.

If the Supreme Court were eventually to side with the energy ministry, it would bolster nationalists in the cabinet of President Andres Manuel Lopez Obrador who want to reverse the previous government’s energy liberalization.

Anti-trust regulator COFECE sent the challenge to the court in mid-2020, shortly after the energy ministry issued a new regulation that would give the government more power over the electricity sector and boost CFE.

The policy modified rules on who can generate electricity and in what quantity, and set new rules for renewable power plants.

Local companies have taken legal action against the policy.

Pablo Lopez, a researcher at the Tec de Monterrey university, warned that both companies and consumers would loose out if the judges were to dismiss COFECE’s anti-trust challenge.

“It could result in a loss of competitiveness in the sector, but also the consumer loses since clean energies are highly competitive in cost,” Lopez said.

“It could create a precedent that inhibits investments in the renewable sector and unnerve others that the institutional framework of the sector is fragile.”

Lopez Obrador, a sharp critic of the 2013 constitutional overhaul enacted by his predecessor, has expressed a clear preference for the government to play a central role in domestic energy markets.

Last year, the president said he might reverse the energy reform if he is unable to “rescue” CFE and state oil company Petroleos Mexicanos, or Pemex.

More recently, he has said that institutions like the anti-trust regulator could be merged into ministries. Lopez Obrador defended the idea on grounds of saving public funds. (Reporting by Adriana Barrera, additional reporting by Stefanie Eschenbacher; Editing by David Gregorio)