Former head of Mexican energy regulator barred from public office

The former head of Mexican energy regulator CRE, Guillermo García Alcocer, was barred from holding public office for 10 years by the public affairs ministry.

The decision was attributed to accusations that García Alcocer played a role in authorizing fuel sale permits for a company owned by a relative.

“For public office it is a priority to eradicate conflicts of interest, particularly those surrounding the wrongly named energy reform, which was intended for a few to stuff their pockets by diverting public funds,” public affairs minister Irma Sandoval said in a release, in reference to the opening of Mexico’s energy markets in the wake of the 2014 constitutional reforms.

The minister also claimed that during previous administrations, regulatory bodies like the CRE were used to privatize the energy sector and “weaken public companies, which put the nation’s energy sovereignty at risk.”

Since President Andrés Manuel López Obrador (AMLO) took office, his administration has put in place an anti-corruption agenda which focused on prosecuting officials from previous administrations.

The CRE, meanwhile, presided by AMLO appointee Leopoldo Vicente Melchi García, has significantly slowed down the award of fuel sale and power generator permits requested by private sector players.

Earlier this year, the president’s office sent a memo to the heads of Mexico’s traditionally independent regulatory bodies, including the CRE, which established 17 “commandments” to guide energy policy. Among these, the president asked to stop awards of permits or concessions to private sector players. 

The president also said in June that the CRE was an unnecessary expense and proposed that its obligations, which he mistakenly related to the awarding of spudding permits – which are overseen by hydrocarbons regulator CNH – should be absorbed by energy ministry Sener.

The CRE recently broke six months of permitting paralysis by rubber-stamping two permits requested by public utility CFE two months after they were submitted. The CRE also approved four permits requested by Mexican private firm Veolus between October and December of 2019.

The commission has a backlog of over 50 generation permits requested by a number of private players over the last two years. In the fuel sales segment, the commission has a backlog of over 200 pending requests and has extended permissions to NOC Petróleos Mexicanos to sell high-sulfur diesel, allowing the company to avoid compliance with a requirement that is mandatory for other players.