CEMDA v. Rise of Legacy Transmission Rates

The Mexican Center for Environmental Law (CEMDA) challenged the Mexican Electricity Commission’s resolution increasing legacy transmission rates that affect renewable energy projects. Legacy energy projects refer to those energy projects that are regulated by the legal regime that existed prior to Mexico’s 2014 energy reform. Under such regimes, energy projects receive special transmission rates, among other features. In the challenged resolution, the Mexican Electricity Commission increased the transmission rates that such projects must pay by between 500% and 800%, according to CEMDA. Plaintiff considered that the new transmission rates transgress Mexico’s international commitments on environmental and energy matters. They also highlighted that the increase in the rates is unjustified, disproportionate and will hamper Mexico’s transition to clean energy sources. Finally, they considered that the obstruction of clean energy sources through the increased rates constitutes a violation of the right to a healthy environment since it will lead to an increased dependence on fossil fuels. The First District Court in Administrative Matters Specialized in Antitrust, Broadcasting and Telecommunications granted a stay of the implementation of the price increase in October 2020 pending the final decision of the trial. In the decision to stay the new rates, the District Court considered that the new transmission rates could signify an increase in greenhouse gas emissions that jeopardize human health, thus potentially infringing in the right to a healthy environment. In December 2021, the Third District Court in Administrative Matters Specialized in Antitrust, Broadcasting, and Telecommunications was created by the Federal Judiciary Council, and the case was reassigned to it under the number 232/2021. On May 15, 2023 the Judge decided that the plaintiff, as an NGO, did not have legal standing to file the lawsuit because the plaintiff did not offer evidence that would allow to affirm that the challenged acts affect the environment. Furthermore, the Court considered that even though the civil organization has, as its purpose, the legal defense of the right to a healthy environment, this is not enough to prove its legal standing. Therefore, the case was dismissed. On June 2, 2023, CEMDA challenged the Court’s decision. On July 25, 2024, the Collegiate Court solved the appeal and confirmed the District Court’s decision. Then, the case was dismissed.