Building a Sustainable Electric Market in Mexico

Building a Sustainable Electric Market in Mexico

The need for flexibility, sustainability, certainty, patience and international best practices were oft-repeated refrains by panelists at the Institute of the Americas’ Mexico Electricity Roundtable.

Almost one hundred attendees from Mexico, the United States and Central America convened on April 9 in Mexico City to discuss the outlook for the electric sector and where Mexico’s energy reform measures stood. Discussions of the draft wholesale electric market rules, the evolving regulatory framework and the role for renewables and natural gas featured prominently.

Sounding much like a management class syllabus, a deeper dive reveals that flexibility, sustainability, certainty, patience and international best practices are a useful summation of the challenges and opportunities in Mexico as it rewrites its electric rules.

The need for flexibility will become ever more apparent as the government refines the market rules over the coming months. And as one former California regulator suggested, “flexible compliance” is a concept that should inform the rules’ implementation once they are set in place on January 1, 2016.

Further, insuring that not only the first several months and year under the new rules are successful will require that the market fosters competition and thus provides sustainability.

Investors’ desire for certainty was perhaps one of the most oft-repeated intonations over the course of discussions, and with good reason. When making significant long-term investments, companies and firms desire predictability and certitude.

On the other side of the coin is the need for patience, particularly in the Mexican context of overhauling 75 years of a statist approach.

But while patience is a virtue for all involved, it should also provide the opportunity for Mexico to redouble its analysis of international best practices. What has worked and what pratfalls to avoid from across the globe should continue to inform the development of the electric market in Mexico. That is to say, continuing to move Mexico up the electric sector learning curve is crucial.

Mexico continues to make international headlines as it strives to overturn years of state control of its energy sector for a market-oriented structure. Many arguments in favor of the reform focused on the role it will play in enhancing Mexico’s competitivity and, perhaps most relevant for the general public, reducing energy costs, specifically power bills across the country.

Without a doubt, the draft market rules announced in late February have unleashed much debate and analysis. The Mexican government has provided assurances that the process is open to feedback and will represent a transparent evolution to find the most balanced and appropriate approach. The next version will be unveiled later this year and the market goes into effect on December 31.

Senior Canadian Diplomat, Jamal Khokhar, Named as IOA’s President and CEO

Senior Canadian Diplomat, Jamal Khokhar, Named as IOA’s President and CEO

LA JOLLA, California — The Board of Directors of the Institute of the Americas is pleased to announce Ambassador Jamal Khokhar as the Institute’s new President and CEO.

Khokhar, a senior diplomat with Canada’s Department of Foreign Affairs, Trade, and Development, is well known for his work on the Americas.  Currently serving as Canada’s Ambassador to Brazil, Jamal Khokhar brings a wealth of understanding, and contacts to the Institute.

IOA Chairman, Richard Hojel, noted Khokhar’s extensive experience and demonstrated track record working in the region with the public and private sectors and non-governmental organizations.

Prior to his current position, Ambassador Khokhar worked in a variety of capacities focusing on the Americas.  Early in his career, he served at the Canadian Embassy in Washington, D.C. where he was responsible for managing Canada’s relations with the U.S. Congress.  While Director General for Latin America and the Caribbean at the Department of Foreign Affairs and International Trade, Ambassador Khokhar helped craft Canada’s Strategy for Engagement in the Americas.  As Regional Director General for Latin America and the Caribbean at the Canadian International Development Agency, he oversaw Canada’s bilateral development assistance programming for the region.  In 2006, he joined the Inter-American Development Bank (IDB) in Washington, D.C. as Chief of Staff to the President and later led the creation of the IDB’s Department of Outreach and Partnerships — a department dedicated to establishing innovative partnerships with the private sector, foundations and NGOs in support of their initiatives.  Ambassador Khokhar studied at McGill University, University of Ottawa, and was a Fellow at Harvard University’s Weatherhead Center for International Affairs.  He is fluent in English, French, Portuguese and proficient in Spanish.

“The Board of Directors is pleased that Ambassador Khokhar has accepted its offer to be the Institute’s new President and CEO.  Having a new President aboard brings renewed vitality to the Institute”, said Richard Hojel, Chairman of the Institute.  “The Board looks forward to working with Jamal to chart a strategic course for the Institute addressing key challenges in the hemisphere and exploring new opportunities, while preserving our 30 year legacy.  We are confident that Jamal will lead the Institute to a bright future,” he added.

Ambassador Khokhar will conclude his duties at the Embassy of Canada in Brasilia in the coming months and will take up his new role in La Jolla over the summer.

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