CFE industrial clients face massive price jump

Source: Heren

2017/12/08

The publication of the first basic supply tariff for industrial clients of Mexico’s state power utility CFE on 7 December finally offers market participants a level of transparency that they have been seeking for months.



Initial ICIS calculations show that large-consuming industrial users in high-consumption regions such as Mexico City could pay 30-40% more for electricity in December when compared with the previous month. These calculations confirm estimates expressed to ICIS earlier this year by market participants.



The new tariff definitions, which apply to clients of CFE’s regulated market supply arm CFE Suministro Basicos, are outlined in detail on the CFE website, and are broken down to the level of municipality.



The new tariffs for the first time give a true estimate of the cost of energy which CFE can offer clients without government subsidies which remain in place to domestic power sector.



The price rises also increase the potential for industrial users to move away from the regulated market, towards buying power through bilateral over-the-counter transactions on the deregulated market.



Consumers have been reluctant to move away from CFE until now because they did not have the tariff prices to compare with the service costs of the CFE’s growing number of competitors, known on the deregulated market as qualified suppliers.



Electricity market participants have expressed frustration with the lack of information available in the Mexican power market, and the publication of industrial tariffs inches the market closer to a level of transparency that will incentivise additional liquidity. claudia.espinosa@icis.com