| MEXICO CITY
MEXICO CITY Oct 12 Mexico's state-owned energy
companies will keep about 40 percent of natural gas pipeline
capacity under an open season scheme, while reserving 615
million cubic feet for new private-sector projects, a senior
official said on Wednesday.
Guillermo Garcia, head of Mexico's Energy Regulatory
Commission, or CRE, said in an interview the announcement of the
capacity allocations is expected in the next week.
Separately, he noted that the CRE will keep at current
levels an incentive known as net-metering that requires national
electricity utility CFE to buy surplus power generated by
rooftop solar panels.
Moving away from an energy industry dominated by former
state-owned monopolies, Mexico is in the process of establishing
new rules for more open oil, gas and power markets.
A top energy ministry official before taking over the CRE in
April, Garcia said CFE and state oil company Pemex
will keep 2.48 billion cubic feet (bcf) of 6.3 bcf in total
pipeline capacity, or almost 40 percent.
Mexico's existing private independent power producers will
keep 1.56 bcf of capacity while 1.64 bcf will be allotted to
other users with capacity rights, he added.
"What we want is to begin next year with a robust natural
gas market where we liberalize the price in areas where there's
competition," said Garcia.
To encourage solar investment, Garcia said the CRE would
maintain the current net-metering cap of 500 kilowatts per
project, allaying fears the threshold could fall due to budget
"We're not going to lower it," he said.
The CRE should begin publishing regional natural gas price
averages in January so pricing hubs can develop, while the
government's long-standing role in determining fuel prices will
gradually be relaxed, Garcia noted.
A landmark energy opening finalized in 2014 stipulates the
government will stop setting gasoline and diesel prices by 2018.
"We will have a calendar in which we establish zones in
which (fuel prices) will be opened before 2018 and with this
calendar in mind, we will also establish the zones that will
keep maximum prices" set by the government, said Garcia.
Areas far from refineries or ports where fuel imports arrive
will likely keep government-set prices longer, he said.
Looking ahead, Garcia said he would like a bigger staff and
budget, beyond a current staff of about 350 and an annual budget
of roughly 600 million pesos ($31 million). He declined to
($1 = 19.2900 Mexican pesos)
(Editing by Dave Graham and Matthew Lewis)