Presidential energy reform ruled out by Mexican Supreme Court

29 April 2002 – Mexico’s Supreme Court on Thursday ruled unconstitutional last year’s presidential decree that allowed some private participation in the state-run industry. The court ruled that only congress has the power to alter energy regulations

The ruling will be a setback for Mexican President Vicente Fox who attempted to reform his nation’s energy sector by allowing private generators to sell up to 50 per cent of capacity to the Federal Electricity Commission. He also proposed to allow the government agency to enter into contracts with private companies in order to meet demand.

The 8-3 vote in the Supreme Court struck down President Fox’s backdoor measure which seeks to stimulate an increase in energy production by permitting limited private sector participation.

Opposition politicians welcomed the ruling including the Secretary of the Congressional Energy Commission, Rosario Tapia of the leftist Party of the Democratic Revolution. She said that alternative energy reform proposals would also allow some private investment and participation in energy production. Opponents object to opening up the energy sector because they fear a foreign takeover of the industry.

Mexico nationalized its oil industry in 1938 and put the electricity generating industry under state control in 1960. The government fears that increasing electricity demand will not be met by the state-run industry and that energy shortages and rolling blackouts are likely in the near future.

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