Mexico to investigate officials over electricity contracts

MEXICO CITY (Reuters) – The Mexican government will investigate allegations that officials at state power firm the Comision Federal de Electricidad (CFE) signed fraudulent contracts with private energy companies, President Andres Manuel Lopez Obrador on Wednesday.

The contracts were signed before the leftist president took office. He had already ordered formal complaints to be drawn up alleging fraud by mostly foreign power companies that produce electricity from renewable sources. So far, he has given no evidence for his allegations.

Lopez Obrador said some annexes to agreements under which private companies supply power to CFE included unfair rates. He gave no details for the contracts which he said were signed several years before he took office in late 2018.

“Formal accusations are being prepared in order to proceed against those responsible,” Lopez Obrador told a regular news conference, referring to CFE officials and owners of private companies. He said he is open to a dialogue.

CFE and the sector’s regulator Cenace recently announced changes to the rules that govern the electricity market, some of which have been suspended pending a Supreme Court ruling.

Critics argue these have put up obstacles to private firms and mean higher distribution costs for them.

“It’s not just a legal or court matter, it’s a matter that has to do with public morals, that has to do with corruption,” Lopez Obrador said.

So far, Lopez Obrador has focused much of his criticism on Spanish company Iberdrola, a major investor in Mexico.

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