| VIEW FROM THE TOP
TRANSITIONING TO THE NEW ENERGY POLICY GUILLERMO GARCÍA President Commissioner of CRE
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Q: What were the most relevant developments in
to the AMLO administration and how do you expect these
the Mexican energy market in 2018 and which CRE
to affect the development of the energy sector?
achievements during last year make you most proud?
A: I think the main change, which will be good, is that
A: In electricity, there was a great advancement in
state-owned companies will be given more strength. It
distributed generation, which is the democratization of
is important to note that the Mexican industry has space
energy, the possibility that any consumer, regardless of
for very large and important state-owned companies and
size, can take control of his or her electricity bill. This
also for the private sector; there is no doubt that a strong
is something that a few years ago was unthinkable and
effort from both sectors is required. The coming focus on
CRE provided the legal framework for this development,
strengthening and fixing the finances of the state-owned
which has many benefits. The first is that consumers can
companies will help to complement the joint effort we have
determine how much they will pay for energy use.
to make as a country.
Having multiple injections to the distribution network
Q: What opportunities does CRE see for its activities as a
creates a more stable system with frequency regulation
result of this policy change?
and high-power services throughout the day. Moreover,
A: What we see as a great opportunity, but also a challenge,
this development is creating employment opportunities
is being able to leverage the energy sector benefits on the
and strengthening the Mexican industry, which is a priority
social base that the new government enjoys. We believe
for the new presidential administration. Distributed
this will help us to unlock many projects that unfortunately
generation has the enormous advantage of requiring a
have been halted because of inadequate community
great deal of human capital. For instance, in the US, there
engagement. I think the president’s high esteem in many of
are over 100,000 employees in California alone focused
these communities can help to unlock many problems and
on distributed generation. This means that distributed
construct new projects such as pipelines, energy generation
generation has the capability of creating well-paid jobs
terminals or access wells, which in turn will result in better
throughout the country.
energy conditions for the country.
It is important to highlight that we finished 2018 with
If we can capitalize on this prospect for dialogue with
approximately 82,000 solar roofs, which represent
society, it will be a great opportunity and at the same time
around a 70 percent increase from 2017. This increase is
a challenge going forward. For instance, we could have
the result of the simplified regulation we created for the
a great deal of gas available for the Yucatan Peninsula,
interconnection, which is a non-permitted activity that
unlock the pipeline from Tuxpan to Tula, provide gas to the
requires an interconnection contract with the distribution
region of Sonora with the connection of the pipeline from
system. The contract we designed for this purpose, in only
the south of Sonora to Sinaloa, or install a renewable plant
two pages, outlines all conditions and users can choose
in Yucatan. I think that the possibility for communication
the interconnection modality, which can be net metering,
with communities that this new administration has is very
net billing or direct sale. To achieve this, we had a very
different from what we saw in previous administrations.
intense dialogue with CFE, since the company filed for legal protection against distributed generation conditions.
Q: What will be the 2019 priorities for CRE in order to
Ultimately, we managed to convince CFE that this would
ensure a competitive market while adjusting to the new
be beneficial.
policy regime? A: 2018 was an interesting year in terms of electricity
Q: What do you consider to be the main changes in energy
tariffs. The tariff we had before 2018 was a closed fee that
policy as Mexico shifted from the Peña Nieto administration
obeyed to an income objective and that did not recover
