Contract swaps now allowed in Mexico

New guidelines issued by Mexican energy regulators allow private power generating companies to swap natural gas supply contracts signed with Pemex and replace them with cheaper CFE supply contracts. EdF, which runs a CCGT plant in Altamira under a 25 year gas supply contract with Pemex and a 25 year power supply contract with CFE, is the first company to switch suppliers under the new rules. Unlike the CFE, Pemex charges additional costs, such as transportation, not included in the original contracts. These additional costs have led to complaints of poor financial planning. Now CFE can also supply natural gas TransAlta, Iberdrola, and Union Fenosa are expected to follow EdF in the coming months.