Mexico's Federal Executive Publishes the Secondary Legislation on Energy Matters

Mexican President Claudia Sheinbaum signed and published in the Federal Official Gazette (Diario Oficial de la Federación or DOF) on March 18, 2025, the "Decree issuing the Law of the State Public Enterprise, Federal Electricity Commission; the Law of the State Public Enterprise, Petróleos Mexicanos; the Electricity Sector Law; the Hydrocarbons Sector Law; the Energy Planning and Transition Law; the Biofuels Law; the Geothermal Law and the Law of the National Energy Commission; it also amends various provisions of the Law on the Mexican Petroleum Fund for Stabilization and Development and amends, adds and repeals various provisions of the Organic Law of the Federal Public Administration," essentially establishing a new framework for the energy sector in Mexico. It is important to note that the decree came into force on March 19, 2025. In addition, on the same day, a decree that reforms, adds and repeals various provisions of the Hydrocarbons Revenue Law, was published in the DOF, but in a separate act.

These reforms aim to establish new regulations for the electricity, hydrocarbons and renewable energy sectors, to modernize and strengthen the country's energy industry. It will be interesting to closely follow the reaction of investors and energy industry participants in the country as a result of these reforms, which substantially alter the national energy sector.

From a general analysis of the new legal framework published, it is important to highlight the following main points:

• The Mexican State assumes strategic control over the energy sector.
• The Ministry of Energy (Secretaría de Energía) is granted most of the powers and prerogatives for planning, regulation and supervision of the energy sector, which were previously assigned to the regulatory bodies that have now been dissolved.
• The National Energy Commission (Comisión Nacional de Energía or CNE) replaces, in its administrative role, the functions of the now-defunct Energy Regulatory Commission (Comisión Reguladora de Energía or CRE).
• The CNE will be composed of a general director, a technical committee and administrative units to handle the procedures under its responsibility.
• The Federal Electricity Commission (Comisión Federal de Electricidad or CFE) will dominate the total annual electricity generation injected into the National Electricity System, with at least 54 percent of its shares.
• PEMEX (Petróleos Mexicanos) will continue to have preference in project assignments involving the exploration and extraction of hydrocarbons in the country.
• The planning of the electricity sector will be binding, ensuring the State's preference in sector activities, aiming to promote electricity generation and supply at the lowest possible price.
• In the electricity sector, joint development projects between private investors and the State will be carried out under the so-called "Mixed Development scheme," which still needs further definition.
• For the hydrocarbons sector, a new system for assigning fields and reserves is established, along with the implementation of new mixed contracts.

It is important to mention that the aforementioned decree repealed the Federal Electricity Commission Law, the Petróleos Mexicanos Law, the Power Industry Law, the Hydrocarbons Law, the Energy Transition Law, the Bioenergy Promotion and Development Law, the Geothermal Energy Law and the Coordinated Regulatory Bodies in Energy Matters Law.

Regarding the information available at the time of the publication of the secondary legislation, please note the following key dates:

• Appointment of the director general of the CNE: The Federal Executive, within 30 calendar days following the implementation, must directly appoint the person to head the CNE as general director without requiring ratification by the Senate. The maximum date for this appointment is April 18, 2025.
• Suspension of deadlines for the CRE and National Hydrocarbons Commission (CNH): To ensure legal certainty regarding the transfer and continuity of actions, requests, matters, procedures, administrative proceedings, or any acts in progress or subject to deadline calculations at the CRE and the CNH, which fall under the jurisdiction of the Ministry of Energy or the CNE, a suspension of deadlines is declared for a period of 90 calendar days, starting from the commencement of the law. That is, restarting terms from June 17, 2025.
• Issuance of the Regulation of the Hydrocarbons Sector Law: The Federal Executive will issue the regulation of this law within 180 calendar days following its implementation. The maximum date for this issuance will be Sept. 15, 2025.
• Issuance of the Regulation of the Energy Planning and Transition Law: The Federal Executive must issue the regulation of this law within 180 calendar days following its entry into force. The maximum date for this issuance will be Sept. 15, 2025.
• Issuance of the Regulation of the Biofuels Law: The Federal Executive must issue the regulation of this law within 180 days following its commencement. The maximum date for this issuance will be Sept. 15, 2025.
• Issuance of the Regulation of the Geothermal Law: The Federal Executive must issue the regulation of this law within 180 business days, starting from the implementation.

Holland & Knight has experienced attorneys in energy matters available to assist clients in understanding the impact of the new regulations on their businesses and projects, as well as to explore the legal alternatives available to address needs in this area.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.