CEMDA v. Rise of Legacy Transmission Rates (“CEMDA v. Comisión Reguladora de Energía”)
Jurisdiction: District Court
Principle law(s): Energy Transition Law
Side A: Mexican Center for Environmental Law (CEMDA) (Ngo)
Side B: Mexican Electricity Commission (Government)
Core objectives: Whether the Mexican Electricity Commission’s resolution to increase legacy transmission rates that affect renewable energy projects is unconstitutional.
SummaryThe Mexican Center for Environmental Law (CEMDA) challenged the Mexican Electricity Commission’s resolution increasing legacy transmission rates that affect renewable energy projects. Legacy energy projects refer to those energy projects that are regulated by the legal regime that existed prior to Mexico’s 2014 energy reform. Under such regimes, energy projects receive special transmission rates, among other features. In the challenged resolution, the Mexican Electricity Commission increased the transmission rates that such projects must pay by between 500% and 800%, according to CEMDA.
Plaintiff considered that the new transmission rates transgress Mexico’s international commitments on environmental and energy matters. They also highlighted that the increase in the rates is unjustified, disproportionate and will hamper Mexico’s transition to clean energy sources. Finally, they considered that the obstruction of clean energy sources through the increased rates constitutes a violation of the right to a healthy environment since it will lead to an increased dependence on fossil fuels.
The First District Court in Administrative Matters Specialized in Antitrust, Broadcasting and Telecommunications granted a stay of the implementation of the price increase in October 2020 pending the final decision of the trial. In the decision to stay the new rates, the District Court considered that the new transmission rates could signify an increase in greenhouse gas emissions that jeopardize human health, thus potentially infringing in the right to a healthy environment.
In December 2021, the Third District Court in Administrative Matters Specialized in Antitrust, Broadcasting, and Telecommunications was created by the Federal Judiciary Council, and the case was reassigned to it under the number 232/2021.
Related laws and policies
Energy Transition Law
The Energy Transition Act's purpose is to promote sustainable and efficient use of energy, regulate the obligations of power companies related to the mandatory share of clean energies (including natural gas, and CCS with emissions not exceeding 100 kg/MWh), and push for the reduction of the pollu...