Decision of the Supreme Court of Justice on Amendments to the Electricity Industry Law | Hogan Lovells

As is known, several participants in the Mexican electricity market have filed amparo suits against changes to the Electricity Industry Law.

District judges specializing in economic competition have granted stays of execution with general effects to all market participants and, therefore, the implementation of these amendments has been halted. It is important to mention that the authorities have appealed against these suspensions before the collegiate circuit courts specialized in economic competition and these have decided to revoke them given that, to date, participants in the Mexican electricity market have no grievance to make since they must be executed by the Authorities, in order to bring an action for amparo.

Likewise, the Senate, the Federal Commission for Economic Competition and the Colima State Government contested the amendments, believing that they interfered with their powers and functions. As a result of these proceedings, the Supreme Court of Justice of Mexico ordered, through General Agreement 3/2022, the postponement of the resolution of the amparo lawsuits by the collegiate courts specialized in economic competition that were filed against decisions made by the District Judges regarding the amendments.

In this regard, in a session held on April 7, 2022, the Supreme Court of Justice resolved the said proceedings. A qualified majority was obtained on certain amended provisions and, consequently, they were validated. These provisions address issues related to technical feasibility as a condition of free access to the electricity network; the grouping of candidates for the interconnection of power plants or load centers for the execution of extensions or modifications; the criteria for maintaining the security of transmission, the reliability, the quality and the continuity of the national electricity system and the network and concerning the self-supply regime and independent energy producers, as well as the that the changes do not infringe on environmental human rights (although in the event of any commercial grievances, actions can be taken under international law in the matter).

On the other hand, the qualified majority not having been reached on the amendments to the ordinance for the dispatch and granting of Clean Energy Certificates, the Supreme Court of Justice did not rule on their constitutionality (they been rejected); therefore, the amparo actions brought by the Electricity Market Participants in relation to these amendments remain in force.

Therefore, district judges and collegiate circuit courts are not required to consider the reasoning of Supreme Court justices when deciding filed amparo claims, although they may use them as guiding criteria for solving them.

Notwithstanding the foregoing, we consider it likely that the Collegiate Circuit Courts would apply, when resolving amparos, the criteria they have used to revoke stays of execution granted by district judges in these terms ( as explained above), namely, to decide that the modifications, to date, do not affect the Participants in the Electricity Market since they must be applied by the Authorities, in order to file an action for amparo.

It is important to mention that it is likely that the Authorities of the electricity sector would carry out Acts and procedures to apply the provisions validated by the Supreme Court of Justice of the Nation.

Finally, and with regard to the electricity constitutional reform initiative tabled in September 2021 by the Federal Executive Branch which aims to incorporate into the constitutional rank, among other issues, the amendments mentioned; we are of the opinion that it is unlikely to be approved by the Mexican Federal Congress because the legislative coalition within the federal government does not currently have the constitutional qualified majority necessary for these purposes.