The Mexican electricity sector: Policy analysis and reform (1992–2009) Adriana María Ramírez-Camperos a,n , Víctor Rodríguez-Padilla a , Pedro Antonio Guido-Aldana b a Universidad Nacional Autónoma de México, DEPFI, Ediﬁcio A 1 piso Bernardo Quintana, Circuito Exterior, C.U., Coyoacán, C.P. 04510, Mexico DF b Instituto Mexicano de Tecnología del Agua – IMTA, Paseo Cuauhnáhuac # 8532, C.P. 62550, Jiutepec, Morelos, Mexico HIGHLIGHTS  This paper studies the reform to the Public Electricity Service Act in 1992, considered a partial liberalisation of the Mexican electricity sector.  The reform inserted six modalities which enable the private sector to generate electricity.  The paper also concludes that the result of the reform could be considered a partial progress. article info Article history: Received 2 June 2011 Accepted 18 June 2013 Available online 15 August 2013 Keywords: Electricity reform Modalities of electricity generation Electricity generation abstract This article analyses the cause–effect relation of the structural reform in the Mexican electricity sector, called the Public Electricity Service Act, from 1992 to 2009. One of the main arguments of the reform is to attract private investment in order to reduce the ﬁnancial load of the government in infrastructure for the development of the National Electric Power System by means of six modalities (Power Self-Supply, Cogeneration, Small Power Production, Independent Power Production, Power Export and Power Import). The article presents the global context of reforms adopted in 1990. The major policies and events are presented in chronological order (before and after reform). In addition, it analyses the new institutional framework, the evolution of modalities, technologies of electricity generation and tariffs. The main conclusion is that the result of reform could be considered a partial progress. The Independent Power Production modality shows greater participation, while Power Self-Supply and Cogeneration are lower. The subsidy policy is maintained. Progress is needed in policies and strengthening, and also in updating regulatory and normative frameworks. & 2013 Elsevier Ltd. All rights reserved. 1. Introduction Electricity is a fundamental input for society’s well-being and economic development. Given its importance in the different economic activities of the population, it has taken a public server character, for which State intervention has been necessary. Since the late 19th century, the electricity industry in the world has experimented transformations in its structure, due to a variety of reasons, mainly those of an ideological, political and economic nature. The combination of all of these explanations has condi- tioned the dynamics of its development, forcing governments to adopt reforms. Competitive segments of the industry (generation and retail) have been progressively exposed to competition; monopoly segments (transmission and distribution) have been reoriented to foster competition; consumers have been offered increased choice in the selection of their service providers (Sharma, 2003; Joskow, 2008; Brown, 2011). When we speak about economic reform, this has to be understood as a substitution process of the State participation mechanisms in the economy, a substitution done through ﬁscal and legislative measures or directly. It may also imply a regulation change from a strongly State- intervened economy to a more open one (Larios, 1999). The Mexican energy sector, especially the electric power sub- sector, started the reform process in 1992, with the objective of allowing private participation only in electricity generation, avoid- ing a contradiction with Article 27 of the National Constitution, which gives the Mexican Nation the exclusivity to generate electricity (Vargas, 2010). The Mexican energy sector structure is formed primarily by the Mexican Department of Energy (MDE; Secretaría de Energía, SENER), responsible for coordination of the Sector; it is essentially divided into three branches: (1) hydrocarbons, (2) electricity and (3) energy policy. There also exist in the central government four departments commissioned to regulate and promote different issues of the energy sector: Energy Regulatory Commission (ERC), National Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/enpol Energy Policy 0301-4215/$ - see front matter & 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.enpol.2013.06.063 n Corresponding author. Tel.: +52 55 56223035; fax: +52 55 55509383. E-mail address: ramirezamar@hotmail.com (A.M. Ramírez-Camperos). Energy Policy 62 (2013) 1092–1103