Client Alert: Update on Mexico Electric Markets

Analyzing SENER’s “Policy on Reliability, Safety, Continuity, and Quality in the National Electricity System” and Its Implications for the Electricity Industry

Drastic changes are underway in Mexico’s burgeoning electricity markets. On May 15, 2020, following a highly irregular process that failed to provide the legally required notice-and-comment period, Mexico’s Ministry of Energy (“SENER”) published its Policy on Reliability, Safety, Continuity, and Quality in the National Electric System (the “Reliability Policy Resolution”). The Reliability Policy Resolution changed the direction of the Mexican electricity industry by replacing the Reliability Policy SENER published in February 28, 2017 (the “Notice”). Many investors relied on the Notice when investing in the Mexican electricity market, and the Reliability Policy Resolution will have major adverse impacts on these investments. In this Client Alert, we provide a summary of what has transpired and what investors should consider going forward.