An industrial site in Mexico with 1 MW or more of demand has three ways to buy power, and the choice between them is worth more than any price negotiated inside one of them. It can stay with CFE Suministro Básico on a regulated tariff such as GDMTH, DIST or DIT. It can register as a Usuario Calificado with CRE and contract suministro calificado from a private supplier or from CFE Calificados. Or, if it holds one, it can continue under a legacy autoabasto permit.
As of April 2022 the third route is closing and the second carries regulatory risk that has to be priced rather than ignored. CRE's 2020 revision of the porteo estampilla raised transmission charges for holders of legacy interconnection contracts from July 2020. La Jornada reported on 11 June 2020 that CFE Intermediación de Contratos Legados raised those porteo tariffs by 427 to 811% depending on voltage level. The reform to the Ley de la Industria Eléctrica published in the DOF on 9 March 2021 then directed CRE to revoke self-supply permits obtained through acts constituting fraud against the law.
This piece is about running the procurement and structuring the deal. What tenor to sign, how to make offers comparable, how to price regulatory risk, and where the savings figures quoted in this market actually come from. The clause-level review that follows a signed term sheet is set out separately in identifying risks in energy contracts.
Tenor is the first decision, and 20 years is the wrong default
Corporate PPAs in Mexico are offered from roughly three years to 20 years. The longest tenors carry the deepest headline discounts, because a generator financing a plant will pay for contracted revenue and a lender will pay for certainty.
Indicative pricing at 20-year tenor has come back in the range of 34 to 44% below current CFE supply. That range is measured against current CFE supply and varies materially with tariff class, region, load factor and consumption profile. The figures are illustrative rather than committed, and no range can be confirmed for a specific facility without a review of interval data and 12 months of billing.
We still advise against 20-year tenor for most industrial buyers, and the reason is not the price. It is that the counterparty, the regulatory framework and the buyer's own production footprint are all likely to change inside that window, and the termination formula that governs an exit was written by the seller. Many multinational groups also carry a corporate policy ceiling on service contract duration, which rules out the tenor before commercial review begins. A five to seven year term captures most of the discount while leaving the plant able to re-tender inside a business planning cycle.
Make the offers comparable before you compare them
A power offer in Mexico can bundle four things: energy priced off the Precio Marginal Local, potencia settled through the annual Mercado para el Balance de Potencia, the CRE-regulated porteo charges for transmission and distribution, and Certificados de Energías Limpias. Suppliers bundle differently, and a bid sheet that does not force a common format produces numbers that cannot be ranked.
Specify the format in the request for proposal itself. Require each bidder to state the price of energy separately, to state whether porteo and potencia are fixed or passed through, to state the CEL treatment, and to quote against the same 12 months of the facility's own interval data rather than against an assumed load shape. Require the credit support they will demand and the termination formula they will propose at bid stage, not after selection, because both are price.
New entrants and generators approaching financial close are usually the sharpest bidders. A generator that needs contracted offtake to close a loan has a reason to price aggressively that has nothing to do with your negotiating position. That is an argument for running a genuine competitive process rather than renewing with an incumbent. We run that process for industrial buyers.
Price the regulatory risk rather than arguing about it
The regulatory position as of April 2022 is unsettled in a specific way that matters to contract structure. The March 2021 LIE reform reordered dispatch in favor of CFE generation and extended Certificados de Energías Limpias to clean generation regardless of commercial operation date, which diluted the value of certificates issued to post-2014 private renewables. Its application has been blocked in large part by individual amparo suspensions.
On 7 April 2022 the Suprema Corte de Justicia de la Nación dismissed acción de inconstitucionalidad 64/2021 against that reform. None of the challenged provisions drew the qualified majority of eight votes needed for a general declaration of unconstitutionality, so the reform stayed in the legal order without the Court ruling generally on its constitutionality. Lower courts remain free to decide amparos as they see fit.
SENER's Política de Confiabilidad, published in the DOF on 15 May 2020, was rendered void by an Acuerdo de Insubsistencia on 4 March 2021 following a federal judge's ruling. That sequence is the useful lesson for a buyer. Measures in this market are issued, challenged, suspended and sometimes withdrawn, on timescales shorter than a contract term.
What follows commercially is that a change in law clause is a priced term, not boilerplate. Decide which party carries a CEL price change, a porteo revision and a dispatch rule change, and write each one out. A supplier that accepts all three will charge for it, and our judgment is that the premium usually exceeds the risk on porteo and is worth paying on CELs, because CEL value is the item most directly exposed to a further policy change.
What a workable structure looks like
The shape that holds up for most industrial buyers in this market has five features. A term of five to seven years. A fixed energy price with porteo passed through. Potencia passed through, so the plant keeps the benefit of any load shifting it does during high-risk system hours. CELs priced as a separate line rather than folded into the energy rate. A termination formula tied to mark to market rather than to a multiple of monthly consumption.
That structure gives up some headline discount against a 20-year offer. It buys the ability to re-tender, the ability to see which component moved when the bill changes, and a quantified exit. For a plant director asked in a budget meeting what the power contract will cost in year four, it is the only version of the deal that can be answered honestly.
Test whether migration pays before you tender
One more point before running any process. Migration is not automatically cheaper. Porteo is charged regardless of who supplies the site, registration with CRE takes months, and metering and telecommunications equipment has to be installed. For a facility close to the 1 MW demand threshold, or one whose tariff class already sits at DIT, the arithmetic can favor staying on regulated supply. Run that comparison first, on the site's own billing history, and only then decide whether to go to market.
Decide your contracting route before the next budget cycle
Mexico Energy Partners can compare a facility's current regulated cost against indicative suministro calificado pricing, structure the request for proposal so bids are comparable, and model the tenor and termination trade-off. The review needs 12 months of CFE billing, interval demand data where the meter records it, the tariff class and voltage level, and the site's production plan. Background on the shifting rules sits in regulatory policy.