Freezing weather in Texas led to a chain of events that left almost 5 million customers in northern Mexico without power Monday as a shortage of natural gas disrupted electricity production.

Mexico’s government-owned utility, the Federal Electricity Commission, said its operations were left short as the winter storm in Texas froze natural gas pipelines. It said some private power plants also began shutting down Sunday night. Private plants supply about 80% of power in northern Mexico.

Mexico uses gas to generate about 60% of its power, compared to about 40% in the United States. Mexico built pipelines to take advantage of cheap natural gas from the U.S., often obtained by fracking in Texas, but Mexico does not allow fracking in its own territory.

The utility said U.S. electricity demand also rose as temperatures plunged across the border, leading to much higher prices. It said gas prices had risen from about $3 per million BTUs to as much as $600 in recent days.

The commission said that by midday Monday it had restored power to about 65% of the 4.8 million customers affected by the blackout, mainly in the northern border states of Chihuahua, Coahuila, Nuevo Leon and Tamaulipas. A smaller number of users were also affected in Durango and Zacatecas.

The commission said it was seeking to make up for the shortfall by bringing on line more electricity from hydroelectric and coal-fired plants as well as gas supplied by tanker ships.

The utility's director of fuel purchasing, Miguel Reyes Hernández, suggested that what happened in Texas was a perfect storm of factors that choked off imports of gas that Mexico uses to run many of its power plants.

“Electricity demand in the United States rose by a little over 20% in just four days," Reyes Hernández said. "The increase was due precisely to the drop in temperatures, and obviously the use of heating in the United States meant an increase in natural gas demand on the one hand, and precisely because of the low temperatures, there was a decrease in renewable energy.”

He said U.S. wind turbines “had their blades frozen ... and there was freezing in many pipelines and even at wells.”

It was the latest embarrassing failure for the Federal Electricity Commission, the government utility that has become a pet project for President Andrés Manuel López Obrador, who wants to reduce the role of private power generation.

In January, the utility acknowledged it had presented a falsified report on a Dec. 28 blackout, which it had blamed on a purported brush fire beneath transmission lines that caused the two-hour power failure affecting one-fourth of Mexico’s customers.

López Obrador has not only defended the state-owned company, but he is seeking to eliminate competition from cleaner, privately built generating plants and renewable energy.

In January, he proposed a bill that would put cleaner, natural gas and renewable private plants — many built with foreign investment — last in line for electricity purchases. The private and renewable energy plants were encouraged by López Obrador’s predecessors in order to reduce carbon emissions.

López Obrador sought in an executive order in 2020 to shore up the government utility by limiting permits to bring other companies' power plants online, including some wind and solar facilities. The president contends green-energy incentives give those plants an unfair advantage over the state utility.

With electricity use down overall during the pandemic, the state utility faces declining revenue and increasing stocks of fuel oil it has to burn in power plants. It has also come under pressure to buy coal from domestic mines.

By: DocMemory
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