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UPDATE 2-Mexican president sends bill to Congress to change power industry rules

(Adds context, background)

MEXICO CITY, Feb 1 (Reuters) - Mexican President Andres Manuel Lopez Obrador sent a draft bill to Congress on Monday that aims to change electricity industry law in his efforts to boost state-owned companies in the sector.

The provisions of the bill, which lawmakers must discuss within 30 days, are likely to fan conflict with independent power providers, fuelling debate over its fit with the previous government’s opening of the industry to private capital.

The measure looks to give preference in electricity dispatch to the state-run Comision Federal de Electricidad (CFE), and seeks to eliminate its obligation to buy electricity through auctions.

It also orders a review of how beneficial electricity purchase pacts with independent producers could be for the government.

“It is urgent to deepen the changes already initiated in this matter, in order to strengthen the (...) CFE for the benefit of the national interest,” the text read.

Lopez Obrador has been a trenchant critic of the previous administration’s energy reform, saying it skewed the market to favor private companies at the expense of the CFE and state oil company Petroleos Mexicanos (Pemex). (Reporting by Adriana Barrera; writing by Laura Gottesdiener; Editing by Marguerita Choy and Clarence Fernandez)

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