Mexican president López Obrador in talks with Iberdrola officials.

Last week, less than a month after hundreds of thousands of Mexicans mobilized to mark 85 years since former Mexican president Lazaro Cardenas nationalized México’s oil industry, the López Obrador administration announced its plans to purchase 13 electric energy generation plants owned by the Iberdrola, a major energy multinational based in Spain. México’s federal power utility, the Comisión Federal de Electricidad, the CFE, will operate the plants. The Trade Unions for Energy Democracy Bulletin has just published a perspective on the purchase, and we offer an excerpt here.

“The rescue of the CFE,” said president Andrés Manuel López Obrador in Tuesday’s televised announcement, “represents “a new nationalization of the electricity industry.”

“Most important of all, in this way, we guarantee that electricity prices will not increase for consumers, as has been the case in the last four years,” López Obrador added.

With hydroelectric plants “being rehabilitated with new turbines, all under the CFE,” AMLO continued, “we can affirm that the Mexican state will maintain around 65 per cent of all energy generation at the end of my six-year term.”

“México is the country with the lowest energy rates in the OECD,” observed Energy Ministry secretary Roció Nahle “because with PEMEX (Petroleos Mexicanos) and CFE, it allows us to have rates below inflation.”

Currently, nearly 40 per cent of the energy generated by the Comisión Federal de Electricidad comes from clean energy: 67 per cent hydroelectric, 24 per cent nuclear, and 9 per cent geothermal, with solar and wind projects also underway.

The US and Canada have long claimed that AMLO’s energy policies disadvantage U.S. firms in favor of the Mexican state-owned CFE power utility and its oil producer Pemex, thereby “undermining” international firms and cross-border supplies in violation of the USMCA.

In 2022, the US and Canada requested dispute settlement talks. If Mexico were to lose and fail to take "corrective action,” it could face billions of dollars in retaliatory tariffs from Washington and Ottawa. In January 2023, the Biden administration escalated the situation, announcing an ultimatum. The Office of U.S. Trade Representative Katherine Tai has pressured Mexico to make “one final offer” to open up its markets and agree to more supervision.