On December 20, 2024, the Decree amending, adding, and repealing various provisions of the Political Constitution of the United Mexican States, regarding Organic Simplification (the “Decree”), was published in the Official Gazette of the Federation (“DOF”). This Decree seeks to assign certain bodies to various institutions of the Federal Executive Power, aiming for greater administrative and budgetary efficiency. The Decree dissolves the following public bodies: Energy Regulatory Commission (“CRE”); National Hydrocarbons Commission (“CNH”); Federal Telecommunications Institute (“IFT”); Federal Economic Competition Commission (“COFECE”); National Council for the Evaluation of Social Development Policy (“CONEVAL”); and National Institute for Transparency, Access to Information and Protection of Personal Data (“INAI”, together with CRE, CNH, IFT, COFECE, and CONEVAL the “Bodies”).
Constitutional Reform in Energy: Functions of CRE and CNH Transferred to SENER
On December 20, 2024, the Decree amending, adding, and repealing various provisions of the Political Constitution of the United Mexican States, regarding Organic Simplification (the “Decree”), was published in the Official Gazette of the Federation (“DOF”). This Decree seeks to assign certain bodies to various institutions of the Federal Executive Power, aiming for greater administrative and budgetary efficiency.
The Decree dissolves the following public bodies:
• Energy Regulatory Commission (“CRE”);
• National Hydrocarbons Commission (“CNH”);
• Federal Telecommunications Institute (“IFT”);
• Federal Economic Competition Commission (“COFECE”);
• National Council for the Evaluation of Social Development Policy (“CONEVAL”); and
• National Institute for Transparency, Access to Information and Protection of Personal Data (“INAI”, together with CRE, CNH, IFT, COFECE, and CONEVAL the “Bodies”).
1. Modifications in the Energy Sector.
The Decree extinguishes the CRE and CNH as coordinated constitutional regulatory bodies in the energy sector, so their functions, powers, and attributions will be directly transferred to the Ministry of Energy (“SENER”), which will have the powers to carry out technical and economic regulation in the field of electricity and hydrocarbons; as well as the sanctioning authority in the energy sector, under the terms determined by secondary laws.
It is important to mention that, although the CRE and CNH were part of the Executive Power, they enjoyed technical, operational, and management autonomy; however, there had to be a coordination relationship with SENER to determine public policies within the energy industry. Through this Decree, the powers and attributions are centralized and directly transferred to SENER, so that, in addition to dictating public policy, it will hold all regulatory powers and attributions.
It is not yet official how the structures will be articulated and the functions and attributions of the CNH and CRE will be transferred to SENER; however, in order not to lose their technical functions, it is possible that these bodies will adopt the form of decentralized bodies of SENER. This is very similar to the organic structure of the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector, dependent on the Ministry of Environment and Natural Resources.
Finally, the explanatory statement of the Decree draws attention to the part that states that “with the current reform proposal, the Federal Electricity Commission (CFE) assumes the establishment of electricity rates and the Ministry of Energy assumes the other powers and attributions of the CRE […]”. However, nowhere are those rates to be established by the CFE expressed, so it remains to wait for the reforms to secondary laws.
2. Transitory Provisions.
The Congress of the Union will have a period of 90 (ninety) calendar days, following the publication of the Decree in the DOF, to make the corresponding reforms to the secondary laws to reflect and develop what is provided in the Decree.
The adjustments to the secondary laws must consider the elimination of the CRE and CNH and their administrative units or structures, to avoid duplication of functions. This, without prejudice to the fact that the legal acts issued by these regulatory bodies before the entry into force of the corresponding secondary legislation, will remain valid, except for all those provisions that oppose the Decree, which will be repealed.
On the other hand, all legal instruments, agreements, inter-institutional agreements, contracts, or equivalent acts of the regulatory bodies made or published before the Decree will remain valid and in force. It will be necessary to observe the modifications and adjustments made by the Congress of the Union to the applicable secondary laws to determine how the attributions, powers, organic structure, and personnel of the CRE and CNH will be articulated within SENER.
See. Opinion of the Constitutional Points Commission, with a draft decree amending, adding, and repealing various provisions of the Political Constitution of the United Mexican States, regarding organic simplification, November 2024, p. 13. Available at: https://gaceta.diputados.gob.mx/PDF/66/2024/nov/20241113-VI.pdf
