George Baker

The bold step taken by President Felipe Calderón in ordering the liquidation of the power utility Luz y Fuerza del Centro was not remotely as bold as that proposed by President Ernesto Zedillo in February 1999.

Zedillo proposed a three-stage privatization of both companies.

According to a summary at that time by the Energy Regulatory Commission, in order to guarantee an ordered, smooth transition to the new electricity industry, the government intended to organize the reform process in these three stages.

1) The Federal Electricity Commission (CFE) and Luz y Fuerza (LFC) would be transformed into a number of specialized state-owned companies including several generating and distribution companies and one transmission company. This stage would also see the creation of a basic regulatory framework and the design of the electricity market as well as the creation of the government entity responsible for system and market operations and the government entity responsible for nuclear generation.

2) During the second stage, which would have seen the beginning of operations in the electricity wholesale market, generation and marketing will be opened up to domestic and foreign private investment. Generators will be able to set up bilateral contracts with distribution companies and qualified users, with or without the intermediation of marketers. In addition, new concessions were to have been granted to transmission companies interested in developing networks not interconnected with the national transmission system.

3) Finally, the state-owned generation and distribution companies and the transmission company would have been progressively privatized. This process would have been crucial to ensuring a comprehensive, successful transformation of the electricity sector. The government was to have carried out the privatization of public enterprises beginning in December 2000.

Unfortunately, this vision was never implemented. 

At the time of its publication Rogelio Gasca Neri was director general of CFE, but a few days afterwards he was replaced by Alfredo Elias Ayub, still the incumbent a decade later.

Today, Gasca Neri is one of the 4 independent (i.e.: PRI) members of Pemex' s board of directors.