Comisión Federal de Electricidad


The Comisión Federal de Electricidad is the state-owned electric utility of Mexico, widely known as CFE. It is the country's dominant electric company, and the country's second most powerful state-owned company after Pemex. The Mexican constitution states that the government is responsible for the control and development of the national electric industry, and CFE carries out this mission. The company's slogan is "Una empresa de clase mundial".

Affiliations

CFE is not a part of the North American Electric Reliability Corporation, though its transmission system in northern Baja California is part of the Western Electricity Coordinating Council through its interconnection with San Diego Gas & Electric via the Miguel-Tijuana and the LaRosita-Imperial Valley Lines and the Path 45 corridor; it also has a few other interconnections across the border with local utilities in the United States.
On August 2, 2019, the federal government announced it will provide Internet access throughout the country through the establishment of a subsidiary of the Comisión Federal de Electricidad called CFE Telecomunicaciones e Internet para Todos.

Takeover of Luz y Fuerza del Centro

On 12 October 2009, President Felipe Calderón issued a decree dissolving Luz y Fuerza del Centro, the state-owned power company serving most of central Mexico—including Mexico City, most of the State of Mexico and some communities in the states of Morelos, Hidalgo and Puebla. The government claimed that spending had outpaced sales due in part to massive featherbedding, and it no longer made sense for the company to stay afloat. According to the government, spending at the company was increasingly outpacing sales CFE went on to control the national electric system and expand its operations nationwide, while the smaller LFC kept a low profile, maintaining its operations in the central region of Mexico.
LFC provided electricity to several states where, by virtue of a federal law, CFE had no operations. As of March 2010, LFC's operations have been fully absorbed by CFE.

Nickname

Since the CFE is the dominant electric company in Mexico, most customers refer to it as "la comisión". While there are other Mexican government commissions, the term is almost exclusively applied to the CFE.

Controversies

Two corruption scandals in the US cite payments of bribes to officials at the CFE in return for contracts.

2010

In September 2010, ABB, a Swiss corporation, admitted that ABB Network Management, paid bribes to officials at CFE from 1997 to 2004, totaling approximately $1.9 million. In exchange for the bribe payments, according to court documents, ABB received contracts worth more than $81 million in revenue.
The matter was resolved in September 2010 in a US court.

2011

In May 2011, Lindsey Manufacturing Company of the US was convicted by a US federal jury under the Foreign Corrupt Practices Act for their alleged roles in a scheme to pay bribes to officials at the CFE.
The bribes were paid through an intermediary, who allegedly had a corrupt relationship with a senior CFE official. Lindsey Manufacturing allegedly received more than $19 million in CFE business over the course of seven years as a result of working through the intermediary.
According to evidence presented at trial, the intermediary bought a CFE official a $297,500 Ferrari Spyder and a $1.8 million yacht, as well as paying more than $170,000 towards the official's credit card bills. In December 2011, a US District Court dismissed the indictments against Lindsey Manufacturing, citing misconduct by the prosecution. The US Department of Justice said it planned to appeal the dismissal, but in May 2012 the government withdrew its appeal.

2016

Enrique Ochoa Reza settlement agreement scandal

In September 2016, it was reported by Pablo Gomez from Aristegui Noticias, that Enrique Ochoa Reza, who had stepped down two months earlier as head of the commission after being selected leader of his party, had received $1,206,000.00 pesos as a settlement agreement, despite voluntarily resigning his position. Furthermore, Ochoa Reza stayed on the commission's top job for only two years and 155 days, while the "Manual de Trabajo de Servidores Publicos de Mando la CFE" clearly stipulates that settlements can only apply after a minimum three years on the job, and only to those individuals whose retirement is not voluntary. The payment probably constituted a violation of the Mexican Constitution's Article 127 as well, which prohibits settlements of this nature in favour of state-owned corporations' employees. Despite the media and popular backlash, Ochoa maintained the settlement agreement was legal. Two months later, in response to the 2016 San Pablito Market fireworks explosion that occurred in Tultepec on December 20, 2016, Ochoa announced he had given the 1.2 million pesos to the UNAM Foundation and the Michou and Mau Foundation, which specializes in the rehabilitation of children with severe burns.