Mexico declares state of emergency in the electric system

Mexico City — Mexico’s National Energy Control Center (Cenace) declared an operational emergency state in the electric system. “An operational emergency state is declared in the National Interconnected System,” the Center informed in a document seen by Bloomberg. The declaration was sent at 10:00 pm on January 12, 2024. The electric operator added that it will carry out the necessary operational actions, without specifying more details. Bloomberg consulted Cenace, but did not get an immediate response.

An operational emergency state means that the generation reserve of electricity is below 3% and Cenace only has the option to disconnect users from the electric service, but without disconnecting telecommunications services, hospitals, airports, prisons or government offices.

The emergency declarations in the country’s electric system have appeared during the high consumption seasons, typically, during the summer when the demand reaches its annual peaks. In June 2023, a heat wave hit the country and caused alert declarations in the electric system, a previous step before the emergency, by Cenace.

Bloomberg previously reported that gas prices rose more than 400% due to a deep snowfall that is expected to impact Texas —the main supplier of the fuel to Mexico—. The spot price of the HenryHub index in Louisiana touched US$17 dollars per million British thermal units (BTU) on Friday, January 12. Mexico produces 60% of the electricity with natural gas, mostly imported from the United States.

In February 2021, Mexico experienced a series of blackouts that affected more than 4.6 million users after a winter storm that hit the south of Texas, paralyzed the oil industry of the state, main supplier of Mexico, and that cost MXN$65,000 million to the state-owned company CFE (US$3,250 million according to the exchange rate of that year) due to the price increases of natural gas.

Source: Bloomberg