The electric sector’s development is essential for expanding competitiveness in Mexican economy. Nevertheless, the electricity service within the country represents a high cost mainly due to political decisions that have hindered the efficiency of its production. The process is quite expensive because of the lack of incentives needed to operate efficiently in the absence of a competition framework where electric rates do not answer to the market’s signals, where operations are made under unacceptable conditions and a noteworthy dependence on volatile energy inputs. These issues have been hidden with the crossed subsidies in the rates established by the government where industrial and commercial consumers are partially paying the costs of residential and agricultural consumers. In order to tackle this problem, the Center of Research for Development (CIDAC) presents a series of policies where the electric industry is virtually disintegrated, thereby creating a wholesale market but keeping transmission and distribution as regulated and segmented monopolies. Unlike the federal government’s energy reform proposal, this document considers that the aforementioned measures have to be accompanied by a vigorous strengthening of the Energy Regulation Commission (CRE) in order to avoid opening procedures that will only benefit some private companies. While the hydrocarbon sector’s reform impulse would imply upsetting several markets of high added value, an electric reform would affect efficiency of most of Mexican economic activities.
CIDAC
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