NGO vs. Federal Electricity Commission over increased rates for electricity generation from renewable sources

Location

Ciudad de México Mexico

Status
Resolved at first instance
Start date
September 17, 2020
Date of judgment or latest existing decision
On October 27, 2020, the definitive suspension was granted.
Summary

The Mexican Center for Environmental Law (CEMDA) filed an amparo lawsuit against Resolution RES/893/2020, dated May 28, 2020, and the Notice published in the Official Gazette of the Federation on June 10, 2020, issued by the Federal Electricity Commission (CFE), through which the rates that electricity generators from renewable sources must pay for the transmission service of the energy transmitted to users (Stamp Duty Rates) were disproportionately increased (from 500% to 800%).

In its lawsuit, the plaintiff organization argues that the actions complained of "discourage the generation, distribution and marketing of clean energy, illegally, disproportionately and unjustifiably increasing tariffs, and favoring the generation and consumption of energy through polluting sources, such as those produced by fossil fuels," which "generates a breach of the various agreements for environmental protection and combating climate change acquired at the international level."

The lawsuit was referred, for initial review, to the First District Court for Administrative Matters Specialized in Economic Competition, Broadcasting and Telecommunications, located in Mexico City, which has granted the definitive suspension of the challenged acts for general purposes, which implies that the CFE cannot impose the collection of the new tariffs on clean energy generators.

Climate element

In the resolution granting the definitive suspension, the Court considered that CEMDA managed to prove, among other aspects, that the increase in Tariffs could mean a setback in the progress that the Mexican State must pursue in terms of decarbonizing generation and transitioning to renewable energy, discouraging clean energy and promoting generation through fossil fuels, which constitutes a violation of the human rights to health and a healthy environment of all Mexicans, in contravention of the Constitution and the international agreements and instruments on combating climate change, signed by the Mexican State.

In the words of the Court:

"[...] through the Paris Agreement, signed with the aim of addressing climate change by reducing greenhouse gas emissions, Mexico committed, among other things, to reducing 22% of these gases and 51% of black carbon, as well as generating 35% clean energy by 2024 and 43% by 2030.

This Court considers that compliance with the aforementioned international commitments could be affected by the issuance and execution of the challenged agreements, because these actions, apparently, limit the generation of clean energy."

Claimants
  • Mexican Center for Environmental Law (CEMDA).
Defendants
  • Federal Electricity Commission (CFE).
Territorial context

Due to its geographic location, Mexico has a variety of climates and natural resources: 34% of the national territory is covered by forests and jungles, and it has an indigenous population of 7.4 million. These characteristics make it highly vulnerable to the effects of climate change.

Regarding electricity generation, 75.88% of electricity is generated from fossil fuels. The main technologies used for electricity production are thermoelectric, coal-fired, combined cycle, gas turbine, and internal combustion power plants. In this respect, the energy sector is the largest contributor to climate change.

Rules and principles invoked

Standards

  • United Nations Framework Convention on Climate Change.
  • Paris Agreement.
  • 2030 Agenda for Sustainable Development.
  • Political Constitution of the United Mexican States.
  • General Law on Climate Change.
  • Energy Transition Law.

Beginning

  • Prevention.
  • Caution.
  • Progressiveness.
Instance
Judicial
Actor type
Civil society organization
Topic
Acuerdo de París y compromisos climáticos
Dirty energy
Obligations of States
Violation of human rights
Defendant type
Public company
Interim measures
Granted
Grounds for claim
Paris Agreement and climate commitments
Right to a healthy environment
National legislation
Other human rights