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Good news for the Industry

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With the recent approval of the controversial “Energy Reform” which prompted several disagreements among Mexicans, I believe it would be good to ask ourselves whether there are noticeable benefits.

Focusing strictly on electric energy, this reform will allow private companies to have the possibility to generate and supply this type of energy and compete with CFE (Federal Electricity Comission).

Even when this reform will not take effect until 2016, it seems CFE started working on its efficiency throughout 2015.

CFEctiva Empresarial representative Abraham Cuamba, who is in charge of industrial clients, introduced us to the new cost reductions on industrial fees.

The cost per kilowatt hour has been steadily increasing throughout the last few years between a 2 to 4 percent per year.

Nonetheless, CFE’s intention of being an effective and competitive company has prompted it to work on cost reductions.

It presented a medium voltage cost reduction of an average of 22% when comparing each month of 2014 with the same period of 2015.

On the “H-M” voltage service, this reduction averages 24 percent, while “H-S” and “H-T” services average a 23% reduction.

In other words, the costs paid by companies after this reduction are in par with those of 2011.

Still, the question is: what did CFE do in order to reduce costs? The answer is they achieved cost reductions on energy generation itself through the use of technology, thereby increasing the efficiency of processes.

On the “O-M” voltage service, savings average 16%, while “H-S” sees a 22.4% reduction and “H-S”, 21.7%.

It is a fact that CFE is working on its processes in order to become a competitive company, and starting 2016 a possibility will open to negotiate pricing with companies, their policies will be flexible, and CFE can even elaborate costs and savings forecasts using specific generation data for each company.

And even when fees in the last year were around 5%, CFE had forecast a reduction of just 16% to 18% in 2015, which implies their forecast fell short, and even though prices per kilowatt hour have been declining since January 2015, it is expected to stabilize and result in cost fluctuations, which are expected to happen at some point.

And thanks to these changes, companies and industrial investments in Mexico will be benefited. Good news are to be shared!