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New requirements for obtaining a Power Generation Permit

On March 30, 2022, the Energy Regulatory Commission ("CRE") published in the Federal Official Gazette the "General Provisions that establish the terms for submitting information regarding corporate purpose, legal, technical and financial capacity, as well as the description of the project, and the application form for power generation permits" (the "General Provisions").1

The General Provisions replace the current regulatory framework issued through CRE's Resolution RES/182/2015, published in the Federal Official Gazette on April 8, 2015 ("RES/182/2015"),2 in order to elaborate on the current requirements for obtaining a generation permit, establish further requirements and even establish new obligations for the permit holders in the event a generation permit is granted.

 

Main changes to the requirements to obtain a Generation Permit vis-á-vis RES/182/2015

  • Legal Requirements. The General Provisions establish that CRE would require information about the corporate structure for the applicant to obtain a generation permit. Historically, this kind of information was only required by CRE to obtain permits for hydrocarbon-related activities. The applicant would be required to state that neither the applicant nor the applicant's shareholders have ongoing procedures before the Financial Intelligence Unit (Unidad de Inteligencia Financiera) that prevent or restrict financial capabilities, as well as neither the applicant nor the applicant's shareholders have been disqualified by the Ministry of Public Duty (Secretaría de la Función Pública). In addition, the applicant would be required to submit and implement organizational and procedure manuals, codes of conduct and human resource policies focused on preventing the hiring of personnel with conflicts of interest, among others, from being hired.
  • Technical Requirements. The General Provisions set forth that CRE would require the submission of the Impact Study issued by National Center of Energy Control, which is not required as of this date. Additionally, the works program on the generation permit has to be more detailed, specifying estimated dates for preliminary works, construction works, interconnection works, commissioning and commercial operations.
  • Financial Requirements. The General Provisions establish that the applicant would be required to disclose total investment costs (including the details of any financing and trusts) as well as to disclose the cost of fuel, operation and maintenance, machinery, internal return rate, capital expenditures and other related financial information.

 

New obligations for permit holders 

Generation permit holders are required to comply with new reporting obligations, such as periodic construction reports and a commissioning report addressing the installed capacity of the plant, yearly gross and net estimated generation, data sheets and "datos de placa" of the generation equipment and other information of the power plant.

In addition, the permit holder have to notify CRE of the agreements executed by the permit holder and its suppliers, transporters and/or distributors in connection with fuels, and would have to submit the documents that may evidence a commercial partnership between them.

Lastly, given that corporate structure information of the permit holder will be included within the new generation permits, permit holders would be obliged to notify CRE any change in its corporate structure and any change in its business plan.

 

1 Available at: https://www.dof.gob.mx/nota_detalle.php?codigo=5647325&fecha=30/03/2022
2 Available at: http://www.dof.gob.mx/nota_detalle.php?codigo=5388235&fecha=08/04/2015

 

Click here to download 'New requirements for obtaining a Power Generation Permit' PDF in Spanish.

 

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