Mexico Pushes Electricity Market Overhaul, Will Raise Trade Tensions with U.S. and Canada

The Financial Times reported that Mexico’s Congress is expected to pass a new bill to overhaul the electricity market, when power dispatch will be given the highest priority by state-owned power companies, which will hit the renewable energy usage that was the top and cheapest and raise trade tensions with the United States and Canada.

Carlos Ramirez, a consultant for Integralia, believes this is because Mexican President Andres Manuel Lopez Obrador intends to overturn landmark legislation that deregulated the energy sector in 2013.

A former energy sector official said $41 billion in private investment in power generation could be at risk, and experts predict the new law will trigger lawsuits, including a possible violation of the U.S.-Mexico-Canada trade agreement (USMCA) signed at the end of 2019.