Comisión Federal de Electricidad
Encyclopedia
The Comisión Federal de Electricidad (Federal Electricity Commission) is the Mexican
state-owned
electric
widely known as CFE. It is the dominant electric company and the second most powerful state-owned company in Mexico after Pemex
. The Mexican constitution
states that the government is responsible for the control and development of the national electric industry, and CFE carries out this mission. The company's slogan is "Una empresa de clase mundial" ("A World-Class Company").
CFE is not a part of the North American Electric Reliability Corporation, though its transmission system in northern Baja California
is part of the Western Electricity Coordinating Council
, and it also has a few other interconnections across the border with local utilities in the United States
.
". Proponents claim that CFE has grown up to become a monopolistic
company, used by the federal government to control the electric industry and as a source of income. Critics point out the inefficient service provided by private gas companies (gas service was provided by CFE until 1997), and that customers have to pay high prices (even though they were told that the privatization of this service would decrease costs). Currently, critics claim that private utilities (which sell electric excedents to CFE) could be used as a first step towards a privatization.
issued a decree dissolving the state-owned company Luz y Fuerza del Centro (LFC, also rendered on logo as "LyF"), which served customers in Mexico City
, as well as most of the State of Mexico and some communities in the states of Morelos
, Hidalgo and Puebla
. LFC was, perhaps, an anachronism within in the Mexican energy sector because it was meant to be dissolved when President Adolfo López Mateos
nationalized the private electric companies in September 1960, but the process was never carried out. Pressure from LFC workers, whose value as political force for the PRI regime was considerable, may have played a role in the company's continued existence. From then on, CFE went on to control the national electric system and expand its operations nationwide, while the smaller LFC kept a low profile, maintaining its operations in the central region of Mexico.
LFC provided electricity to several states where, by virtue of a federal law, CFE had no operations (a 1985 agreement between CFE and LFC increased the areas served by the former). The company was often regarded as an inefficient, corrupt company which could not be reformed, and its image was always negative. Some people even coined the term "Luz y A Fuerzas" (roughly translated as "Barely Light and Power"), because the obsolete equipment and networks LFC used, as well as the rampant corruption within the company.
The presidential decree became the center of legal controversies because it was believed that the President was not legally entitled to dissolve a state company. The Mexican constitution
, however, grants presidents the power to dissolve such companies, as pointed out by renowned legal experts, without needing to inform or even request permission from the Congress. As of March 2010, LFC's operations have been fully absorbed by CFE, and plans to modernize and expand the old LFC network have been drafted, waiting for approval. CFE employees replaced LFC's staff, which sparked protests from SME members (SME was the labor union grouping LFC employees), who demand to be hired by CFE (CFE workers are members of SUTERM, SME's rival).
Another source of tensions is the frequent protests and aggressions against CFE employees by SME members. Acts of sabotage have occurred since LFC's incorporation into CFE, but SME has denied any involvement. SME claims that CFE staff is unexperienced and poorly organized, and that damages in LFC systems cannot be repaired by CFE. However, these allegations are baseless, since CFE has the control of high-scale projects across the country (operating high voltage lines, power plants, substations, etc.), whereas LFC does not.
, most customers refer to it as "la comisión" (e.g. "The commission"). While there are other Mexican government commissions, the term is almost exclusively applied to the CFE.
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
state-owned
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
electric
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
widely known as CFE. It is the dominant electric company and the second most powerful state-owned company in Mexico after Pemex
Pemex
Petróleos Mexicanos or Pemex is a Mexican state-owned petroleum company. As of 2010, with a total asset worth of $415.75 billion, it is the second non-publicly listed largest company in the world by total market value, and Latin America's second largest enterprise by annual revenue as of 2009...
. The Mexican constitution
Constitution of Mexico
The Political Constitution of the United Mexican States is the current constitution of Mexico. It was drafted in Santiago de Querétaro, in the State of Querétaro, by a constitutional convention, during the Mexican Revolution. It was approved by the Constitutional Congress on February 5, 1917...
states that the government is responsible for the control and development of the national electric industry, and CFE carries out this mission. The company's slogan is "Una empresa de clase mundial" ("A World-Class Company").
CFE is not a part of the North American Electric Reliability Corporation, though its transmission system in northern Baja California
Baja California
Baja California officially Estado Libre y Soberano de Baja California is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is both the northernmost and westernmost state of Mexico. Before becoming a state in 1953, the area was known as the North...
is part of the Western Electricity Coordinating Council
Western Electricity Coordinating Council
The Western Electricity Coordinating Council was formed on April 18, 2002, from the merger of the Western Systems Coordinating Council which itself was formed on August 14, 1967, the Southwest Regional Transmission Association , and Western Regional Transmission Association...
, and it also has a few other interconnections across the border with local utilities in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
Constitutional reforms
Over the years, plans for a reformed electricity sector, which include private investments on CFE, have been discussed. Most of these plans have been rejected because customers perceive this as an "undercover privatizationPrivatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
". Proponents claim that CFE has grown up to become a monopolistic
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
company, used by the federal government to control the electric industry and as a source of income. Critics point out the inefficient service provided by private gas companies (gas service was provided by CFE until 1997), and that customers have to pay high prices (even though they were told that the privatization of this service would decrease costs). Currently, critics claim that private utilities (which sell electric excedents to CFE) could be used as a first step towards a privatization.
Divisions
CFE's coverage area is divided into several divisions:- Baja California (Baja California peninsula)
- Baja California
- Baja California Sur
- Noroeste (North West)
- Sonora
- Sinaloa
- Norte (North)
- Durango
- Chihuahua
- Golfo Norte (North Gulf)
- Coahuila
- Nuevo Léon
- Tamaulipas
- Bajío (Lowlands)
- Aguascalientes
- Guanajuato
- Hidalgo
- Querétaro
- Zacatecas
- Golfo Centro (Central Gulf)
- Tamaulipas
- San Luis Potosí
- Jalisco
- Jalisco
- Nayarit
- Centro Occidente (West Central)
- Colima
- Michoacán
- Centro Sur (South Central)
- Estado de México
- Mexico City
- Morelos
- Guerrero
- Centro Oriente (East Central)
- Puebla
- Tlaxcala
- Oriente (East)
- Veracruz
- Sureste (South East)
- Chiapas
- Oaxaca
- Tabasco
- Peninsular (Yucatán peninsula)
- Campeche
- Quintana Roo
- Yucatán
Takeover of Luz y Fuerza del Centro
On 12 October 2009, President Felipe CalderónFelipe Calderón
Felipe de Jesús Calderón Hinojosa is the current President of Mexico. He assumed office on December 1, 2006, and was elected for a single six-year term through 2012...
issued a decree dissolving the state-owned company Luz y Fuerza del Centro (LFC, also rendered on logo as "LyF"), which served customers in Mexico City
Mexico City
Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...
, as well as most of the State of Mexico and some communities in the states of Morelos
Morelos
Morelos officially Estado Libre y Soberano de Morelos is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 33 municipalities and its capital city is Cuernavaca....
, Hidalgo and Puebla
Puebla
Puebla officially Estado Libre y Soberano de Puebla is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 217 municipalities and its capital city is Puebla....
. LFC was, perhaps, an anachronism within in the Mexican energy sector because it was meant to be dissolved when President Adolfo López Mateos
Adolfo López Mateos
Adolfo López Mateos was a Mexican politician affiliated to the Institutional Revolutionary Party who served as President of Mexico from 1958 to 1964...
nationalized the private electric companies in September 1960, but the process was never carried out. Pressure from LFC workers, whose value as political force for the PRI regime was considerable, may have played a role in the company's continued existence. From then on, CFE went on to control the national electric system and expand its operations nationwide, while the smaller LFC kept a low profile, maintaining its operations in the central region of Mexico.
LFC provided electricity to several states where, by virtue of a federal law, CFE had no operations (a 1985 agreement between CFE and LFC increased the areas served by the former). The company was often regarded as an inefficient, corrupt company which could not be reformed, and its image was always negative. Some people even coined the term "Luz y A Fuerzas" (roughly translated as "Barely Light and Power"), because the obsolete equipment and networks LFC used, as well as the rampant corruption within the company.
The presidential decree became the center of legal controversies because it was believed that the President was not legally entitled to dissolve a state company. The Mexican constitution
Constitution of Mexico
The Political Constitution of the United Mexican States is the current constitution of Mexico. It was drafted in Santiago de Querétaro, in the State of Querétaro, by a constitutional convention, during the Mexican Revolution. It was approved by the Constitutional Congress on February 5, 1917...
, however, grants presidents the power to dissolve such companies, as pointed out by renowned legal experts, without needing to inform or even request permission from the Congress. As of March 2010, LFC's operations have been fully absorbed by CFE, and plans to modernize and expand the old LFC network have been drafted, waiting for approval. CFE employees replaced LFC's staff, which sparked protests from SME members (SME was the labor union grouping LFC employees), who demand to be hired by CFE (CFE workers are members of SUTERM, SME's rival).
Another source of tensions is the frequent protests and aggressions against CFE employees by SME members. Acts of sabotage have occurred since LFC's incorporation into CFE, but SME has denied any involvement. SME claims that CFE staff is unexperienced and poorly organized, and that damages in LFC systems cannot be repaired by CFE. However, these allegations are baseless, since CFE has the control of high-scale projects across the country (operating high voltage lines, power plants, substations, etc.), whereas LFC does not.
Miscellaneous
Since the CFE is the dominant electric company in MexicoMexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
, most customers refer to it as "la comisión" (e.g. "The commission"). While there are other Mexican government commissions, the term is almost exclusively applied to the CFE.
See also
- Electricity sector in MexicoElectricity sector in MexicoThe energy sector in Mexico has certain limitations in terms of private participation and foreign companies are allowed to operate in the country only through specific service contracts. As required by the Constitution, the electricity sector is federally owned, with the Federal Electricity...
- Ernesto PiedrasErnesto PiedrasErnesto Piedras is an economist professor in the ITAM-London School of Economics and General Director of The Competitive Inteligente Unit, S.C. Besides the telecommunications industry, he has occupied several positions in the Public Administration, in the Secretaría de Hacienda y Crédito Público,...
, occupied several positions in the Commission
External links
- CFE official site
- Servicio de Administración y Enajenación de Bienes (SAE) "Organismo Descentralizado Luz y Fuerza del Centro" (LFC)
- Mexico: The Murder of a Union and the Rebirth of Class Struggle by Richard Roman and Edur Velasco Arregui, The Bullet #279, November 25, 2009.