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Market Restructuring in Electricity in M exico: Lessons from International Deregulation
Author(s) -
IbarraYunez Alejandro
Publication year - 2015
Publication title -
latin american policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.195
H-Index - 4
eISSN - 2041-7373
pISSN - 2041-7365
DOI - 10.1111/lamp.12067
Subject(s) - restructuring , deregulation , business , electricity market , market power , industrial organization , electricity , market economy , economics , finance , electrical engineering , monopoly , engineering
This article analyzes asymmetries in market design between regional electricity markets in M exico and infrastructure management in the United States, specifically of ERCOT in T exas and WECC/CAISO in C alifornia. It focuses on market spaces for suppliers of utilities and nonutilities on both sides of the border in the midst of Mexico's 2013–2014 regulatory reform. Many power producers are critical players in modern unbundled electricity markets. They could use their market muscle to restrain supply or face regulatory risk that reduces market commitment if the recently enacted laws show loopholes and gray areas. Meanwhile, the transmission and distribution segment could underinvest to create congestion and high prices artificially. The article studies the nature of unbundled versus integrated systems and typifies the multiple players in the increasingly restructured market. It compares main stakeholder positions in the U nited S tates, E urope, C anada, and M exico, and also compares the market position of players in unbundled markets—such as retailers, distribution, ancillary service providers, schedulers, and qualifying facilities—that create a complex market but offer many strategic opportunities. Lessons learned from restructured markets can be useful in creating a framework to evaluate the 2013–2014 energy reform proposed in Mexico under the P eña N ieto administration.