CAINTRA rejects the modifications to the methodology for Legacy Supply Contracts in Agreement A/037/2020 as an illegal measure that violates the legal framework in force. Basic Supply Contracts in Agreement A/037/2020, for being an illegal measure that violates the legal framework in force, deteriorates the conditions of competition with a direct impact on consumers, as well as the creation of distortions in the market for Basic of distortions in the market of clean energy certificates and its violation of the right to a healthy environment. healthy environment.

As background, it is important to point out the changes made by this agreement. In the first instance, new First, new terms are established for the duration of the CFE Basic Supply Legacy Contracts with the Legacy Power Plants originally contemplated. Legacy Power Plants originally contemplated. Initially, there was a limited period in order to to favor the prompt replacement of inefficient and polluting plants, reduce the cost of supply to consumers and support generation to consumers and support clean generation goals. Now, with the new deadlines, this situation will no longer be possible. will no longer be possible.

In the second instance, the way to select the Legacy Power Plants is modified, by ending the auctions and granting SENER the authority to decide which plants enter and which do not. auctions and granting SENER the authority to decide which plants will enter and which will not. In this process CFE thermal plants that have not yet begun construction are included in this process. In addition, fixed capacity charges for consumers In addition, the fixed capacity charges to consumers that CFE Suministro Básico grants to each legacy power plant are increased.

With these modifications, the effects are varied:

1. The current legal framework is violated by not following the processes of regulatory improvement, omitting a cost-benefit analysis, as well as contravening the Electricity Industry Law by cost-benefit analysis of the measure, as well as contravening the Law of the Electricity Industry by allowing SENER to modify the allowing SENER to modify the criteria for the selection of power plants, and allowing the contracting of energy for Basic Supply without sub-subsidies. energy for Basic Supply without auctions.

Competition conditions deteriorate, with a direct impact on consumers, forcing them to assume the costs of inefficiencies due to the lack of technological substitution and favoring consumers, forcing them to assume the costs of inefficiencies due to the lack of technological substitution and favoring the concentration of the generation market in the CFE. concentration of the generation market in the CFE.

3. The right to a healthy environment is violated by making it impossible to meet the goals of clean energy adoption set forth in the Energy Transition Law and condemns the mechanism energy adoption goals set forth in the Energy Transition Law and condemns the Clean Energy Certificates mechanism to non-compliance. of Clean Energy Certificates to non-compliance.

With this, we call on the energy authorities to reconsider the implementation of this agreement and to open a dialogue to find solutions in the electricity market. and open the dialogue to find solutions in the electricity market.

CAINTRA NUEVO LEÓN