Mexico: Guidelines Of The Electric Market

On 8 September 2015, in accordance with the third transitory article of the Electric Industry Law ("LIE", for its acronym in Spanish, "Ley de la Industria Eléctrica"), the Ministry of Energy published the Guidelines of the Market (the "Guidelines", "Bases del Mercado"), as the general administrative provisions which establish the principles for the design and operation of the so-called Wholesale Electricity Market ("MEM", for its acronym in Spanish, "Mercado Eléctrico Mayorista"), including those provisions related to the auctions referred in the LIE.

The Guidelines are part of the Rules of the Market and define the rules that all market participants ("PM") as generators, traders, suppliers, non-supplier traders or qualified users, as well as the competent authorities must comply with, and the procedures they must follow in order to maintain the proper management, operation and planning of the MEM. Pursuant to the Guidelines, which will subsequently be supplemented by guidelines of market practices, operational guidelines and criteria and operating procedures, the various participants of the electricity industry will be able to carry out activities which are now open to private participation, due to the so-called Energy Reform that took place in late 2013, and which were legislated and regulated through the LIE and its regulations (such activities include, among others, transactions of sale of electricity and related services, power, financial transmission rights and clean energy certificates).

The Guidelines were classified into 19 blocks and contain a comprehensive list of topics that define the way in which the National Energy Control Center ("CENACE" for its acronym in Spanish "Centro Nacional de Control de Energía") and the PM will carry out activities within MEM. Such blocks were classified as follows:

Guideline 1. Establishes the nature of the guidelines and briefly describes their content; this block indicates the stages and the expected terms for the implementation of the MEM; additionally, this section establishes the structure of the Rules of the Market, as well as how the same will develop.

Guideline 2. It contains the list of defined terms and the meaning of each one of them; this block also establishes certain basic rules of interpretation.

Guideline 3. Sets the procedure for those parties interested in participating in the MEM to be registered as PM and to be certified to carry out transactions therein. In addition to the execution of the corresponding agreement with CENACE, in order to perform transactions within the MEM, it is essential that all PM duly guarantee the obligations assumed before CENACE.

Guideline 4. Describes in detail how all PM should guarantee compliance with the corresponding obligations assumed before CENACE regarding their participation in the MEM. This block also indicates the instruments that may be used as insurance and the mechanisms that CENACE will use to manage the risk of default on obligations of any PM.

Guideline 5. Describes the conditions of access to the National Electric Grid ("SEN", for its acronym in Spanish "Sistema Eléctrico Nacional"). This block sets forth the criteria for the interconnection of power plants and the connection of loading centers, as well as the procedures for the transfer of assets between all PM.

Guideline 6. Establishes the criteria for CENACE to determine the offer of cost of opportunity for certain limited energy units, based on the analysis of the optimal use of its resources. Such offers shall be sent by the representatives of limited energy resources to CENACE in the Short-Term Energy Market (as such term is defined in the LIE).

Guideline 7.Sets forth the principles and rules to be followed for the establishment of special schemes for the operation of small electrical systems which integrate the SEN as well as for the control area of Baja California and for the interconnected system of Baja California Sur.

Guideline 8. Describes the basic models used in the MEM, including the physical grid model representing the electrical parameters and topology of the grid elements and business model of the market, which will adjust the physical grid model to the requirements of unit allocation, the generation dispatch and operation of the MEM. In this block the invoicing model that complements the business model of the MEM, adding power stations and loading centers, which are indirectly modeled and no individually included in the physical grid model, is included.

Guideline 9. Includes a detailed description of the supplies required for the operation of the Short-Term Energy Market (as such term is defined in the LIE) as well as the offers for the sale and purchase of energy and related services, virtual offers, bilateral transactions and import/export transactions and the calculation of opportunity costs. This block also includes a description of the forecasts used by CENACE.

Guideline 10. Describes in detail the operation of the Short-Term Energy Market (as such term is defined in the LIE), including the regulation of bequeathed interconnection agreements (as such term is defined in the LIE) and related services included in this market. This block also includes aspects of coordination of the MEM and the natural gas market, taking into account, among other factors, the feasibility of obtaining firm gas supply and transport, and the availability of reprogramming availability and scheduled maintenance in the supply and transport of gas.

Guideline 11. Describes the operation of the Market for Power Balance.

Guideline 12. Describes the market for clean energy certificates, which will seek to ensure the installation of generation capacity to meet the minimum requirements of the Energy Regulatory Commission ("CRE" for its acronym in Spanish "Comisión Reguladora de Energía").

Guideline 13. Describes financial transmission rights, which will be acquired through assignment (bequeathed), auctions or by funding the expansion of the grid.

Guideline 14. Describes medium and long term auctions, which will allow the participation of those entities responsible for freight who intend to purchase, under this mechanism, electric coverage agreements for electricity, power and clean energy certificates. A medium-term auction will be held annually for the coverage of electricity and power for the next three years and a long-term auction will be held annually for agreements for the coverage of power, electricity from clean energy resources and clean energy certificates. The delivery of such products will begin three years after the auction takes place and will last for fifteen or twenty years.

Guideline 15. Describes the terms of access to information in the MEM.

Guideline 16. Describes the characteristics that tax metering systems must comply with (invoicing quality), including responsibilities concerning installation, verification and maintenance, as well as for the acquisition, processing and delivery of metering records from settlement processes, which is essential to carry out the settlement of all transactions carried out within the MEM.

Guideline 17. Describes the procedures to be carried out by CENACE to issue the corresponding payments to all PM, thus maintaining the accounting of the MEM on a balanced basis.

Guideline 18. Describes the responsibilities that the authorities responsible for the surveillance of the MEM, the monitoring unit and the independent monitor of the MEM will have regarding performance monitoring, including the verification of offers made by the PM. This block refers to the Code of Conduct to be observed by PM, carriers, distributors and CENACE.

Guideline 19. Establishes the corresponding procedures for the restriction or suspension of participation in the MEM for those who fail to comply with their obligations, and for the termination of contracts with PM. This block also describes the procedures for the settlement of disputes between CENACE and carriers or distributors, or between the PM and carriers or distributors.

Finally, we consider that, with the publication of these Guidelines, our country sets an essential component of the legal framework that will govern the new Mexican electric industry.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.