What poor power quality costs a Mexican plant

An industrial site in Mexico billed at 0.85 power factor pays a surcharge of 3.5% on its entire CFE invoice. The same site at 0.95 earns a credit of 1.3% instead. That swing is worth 48,000 pesos a month for every million pesos of monthly billing, and it comes from a formula published in the DOF on 31 October 2000 that CFE still applies to medium voltage accounts.

Power factor is only the visible half. The other half is the Código de Red, issued by the Comisión Reguladora de Energía as RES/151/2016 and published in the DOF on 8 April 2016. CRE reissued it as RES/550/2021, published in the DOF on 31 December 2021 and in force since 1 January 2022. It binds every centro de carga connected above 1 kV, whatever the contracted demand and whatever the supply scheme. Load centers already connected in April 2016 had until 9 April 2019 under that resolution to show compliance or file a signed work plan.

So the decision is narrow, and it belongs to whoever signs capex. Commission the measurement study and price the corrective work, or carry an open exposure that Article 165 of the Ley de la Industria Eléctrica puts at 50,000 to 200,000 UMA. At the 2024 UMA of 108.57 pesos a day, that band runs from 5.4 million to 21.7 million pesos.

What the Código de Red actually requires

CRE issued the code and holds compliance and sanction authority over it. CENACE operates the system and the market and does not sanction load centers. The distinction matters when a plant receives correspondence and has to decide who it is answering.

Scope is set by connection voltage, not by industry. Media tensión means above 1 kV and up to 35 kV. Alta tensión means 35 kV and above. In CFE tariff terms, the code captures GDMTO and GDMTH, both defined in CRE Acuerdo A/039/2021 as demand above 25 kW per month at medium voltage, plus the industrial categories DIST at subtransmission and DIT at 220 kV and above. A site on PDBT or GDBT sits at low voltage and falls outside. If you want the regulation itself rather than a summary, our earlier piece on what the Código de Red requires of industrial consumers works through the obligations in order.

The requirements are performance limits at the connection point. They are not an equipment list. CRE sets out the applicable families in its guide on the technical requirements for centros de carga.

The guide states that the power quality analysis should be carried out with instruments rated Class A under NMX-J-610/4-3-ANCE or IEC 61000-4-30. That single line decides the cost of the study, because Class A instrumentation and a full week of logging at the service entrance is a different job from a spot reading with a clamp meter.

Two claims circulate in the market that a budget holder should reject. The first is that the code obliges a plant to install capacitor banks and voltage stabilizers. It does not. It sets parameters and leaves the route to the site. The second is that only an authorized inspector may sign the file. CRE does not authorize or certify inspectors for these studies, and its guide states plainly that the electrical and power quality studies may be performed by the load center itself or by specialized firms.

Where power quality lands on the CFE invoice

The power factor charge is the part a finance director can verify this week without commissioning anything. Under the disposiciones complementarias published in the DOF on 31 October 2000, the supplier applies a surcharge to the invoiced amount when the measured power factor falls below 90%. The surcharge is 3/5 x ((90 / FP) - 1) x 100, capped at 120%. At or above 90% the supplier owes a credit of 1/4 x (1 - (90 / FP)) x 100, capped at 2.5%.

Run the arithmetic and the numbers stop being abstract. At 0.85 power factor the surcharge is 3.5% of the total bill. At 0.80 it is 7.5%. At 0.75 it is 12%. These are percentages of the whole invoice, not of some reactive line item, and they apply every month the average stays there.

The physics behind the charge changes what you fix. Reactive demand raises the current needed to deliver the same real load. Moving from 0.95 to 0.85 power factor raises current by 11.8%, and resistive losses inside the plant's own cables and transformer windings rise by roughly 25%, because those losses scale with the square of current. The meter bills the extra kilowatt hours. The transformer runs hotter for them.

What non-compliance exposes

Article 165 of the Ley de la Industria Eléctrica, published in the DOF on 11 August 2014, carries the sanctions. Fracción II covers failure to observe the provisions on quality, reliability, continuity and security of the National Electric System, at 50,000 to 200,000 minimum wage units. Those references have been read in UMA since the constitutional decree published in the DOF on 27 January 2016 and the Ley para Determinar el Valor de la UMA published on 30 December 2016. INEGI set the 2024 daily UMA at 108.57 pesos in the DOF of 10 January 2024.

How often CRE has actually applied that band to a centro de carga is not public. No register of Código de Red sanctions by load center is published. On our read the honest treatment is a bounded contingent exposure rather than a probable cost, which is still a number a board can be shown.

What a voltage sag costs

Fines are the tail. The recurring cost is process interruption, and most of it never appears as an outage. A voltage sag lasting a few cycles trips contactors, variable frequency drives and PLCs exactly as a loss of supply would. The plant logs a stoppage of unknown cause. The utility logs nothing, because supply was never lost. Class A measurement at the service entrance is what tells the two apart, and it is the same measurement the code already asks for.

Mexican interruption cost data at plant level is not published. The closest dated benchmark is American. Lawrence Berkeley National Laboratory, in report LBNL-6941E of January 2015, put the weighted average cost of one momentary interruption for medium and large commercial and industrial customers at 12,952 US dollars, and a one hour interruption at 17,804 dollars, both in 2013 dollars. Read those as an order of magnitude from another market, not as a Mexican figure.

Renewable supply does not fix any of this

Procurement and power quality get conflated, and the conflation is expensive. A corporate power purchase agreement in Mexico changes where supply is contracted and at what price. It does nothing to voltage sags, current imbalance or harmonics inside the fence. Where on-site solar does meet the code is at the point of common coupling, because inverters inject harmonic current, and an alta tensión load center carries a harmonic distortion limit that its array now contributes to.

Sequence also matters. A code study measures fixed parameters at the connection point against fixed limits. An audit looks at consumption and process and answers a different question, as our note on what an energy audit covers sets out. For a site above 1 kV that has never been measured, the code study comes first, because its result constrains what the audit can sensibly recommend.

What to do with this

Pull twelve months of CFE invoices and read the power factor line. Below 90%, the surcharge is already being paid, and the payback on correction is arithmetic rather than a forecast. Above 90%, the credit is capped at 2.5%, so there is no billing case for chasing unity power factor.

Then read the connection voltage off the supply contract. Above 1 kV the code applies and the 9 April 2019 date is long past, so the live question is what evidence the site holds. A plant with no Class A measurement file holds none.

Budget the measurement before the remediation. A study that finds the site inside the limits closes the file. A study that finds a breach names the parameter and the margin, which is what converts a capex request into a defensible number instead of a proposal.

Check your load center against the Código de Red

Send the contracted capacity and tariff category, the single line diagram, and twelve months of CFE invoices showing power factor and billed demand. Mexico Energy Partners returns a scope opinion on whether the load center falls under the code, the parameters that would need measuring, an indicative study cost and an expected timeline. Nothing is promised on savings or on the outcome of a measurement that has not been taken.

Sources

• Comisión Reguladora de Energía, RES/151/2016, "Disposiciones administrativas de carácter general que contienen los Criterios de eficiencia, calidad, confiabilidad, continuidad, seguridad y sustentabilidad del Sistema Eléctrico Nacional: Código de Red", DOF, 8 April 2016.
• Comisión Reguladora de Energía, RES/550/2021, "Código de Red", DOF, 31 December 2021. The reissued code, in force since 1 January 2022.
• Comisión Reguladora de Energía, "Guía sobre los requerimientos técnicos del Código de Red aplicables a Centros de Carga", version 2, gob.mx, undated.
• Secretaría de Hacienda y Crédito Público, "Acuerdo que modifica las disposiciones complementarias a las tarifas para suministro y venta de energía eléctrica", DOF, 31 October 2000.
• Ley de la Industria Eléctrica, Article 165, DOF, 11 August 2014.
• Decreto de reforma constitucional en materia de desindexación del salario mínimo, DOF, 27 January 2016.
• Ley para Determinar el Valor de la Unidad de Medida y Actualización, DOF, 30 December 2016.
• INEGI, "Unidad de Medida y Actualización", DOF, 10 January 2024.
• Comisión Reguladora de Energía, Acuerdo A/039/2021 on CFE Suministrador de Servicios Básicos final tariffs for 2022, DOF, 28 January 2022.
• M. J. Sullivan, J. Schellenberg and M. Blundell, "Updated Value of Service Reliability Estimates for Electric Utility Customers in the United States", LBNL-6941E, Lawrence Berkeley National Laboratory, January 2015.