Summary

Mexico's recent electricity sector reforms fundamentally reconfigure the structural basis of competition among generators for the sale of electricity. Competitive outcomes are no longer determined primarily through price-based rivalry, productive efficiency, and merit-order dispatch, but through the architecture of planning, permitting, and institutional design. The displacement of market-based allocation by regulatory discretion does not eliminate competition as such but relocates and reshapes it - shifting the decisive arena from dispatch and price formation to upstream administrative processes. The principal antitrust concern is structural. Exclusion from the market or competitive disadvantage need not arise from unlawful conduct in the classic sense; but may occur lawfully, as a function of policy-engineered market architecture. The competitive neutrality of the regulatory structure and the extent to which administrative discretion is exercised in a manner compatible with open and contestable markets will be key for the much-needed expansion of the system.

This paper will be part of the OGEL Special Issue on "State Aid and Competition Rules in the Energy Sector". More information here www.ogel.org/news.asp?key=840