...Reform Opens Sector: Mexico's recent energy reform intends to create an open and competitive wholesale market. Large industrial users will be allowed to contract directly with new private investors (NPIs), independent power producers (IPPs) or the Comisi=n Federal de Electricidad (CFE). IPPs accounted for about 31% of total generation in 2013 and sell most of their output to CFE. Fitch Ratings does not expect a significant increase in bilateral transactions until current contracts between IPPs and CFE expire; this process could take more than two years after the approval of the reform's secondary rules. CFE Remains Incumbent Player: CFE (rated `BBB+'/Stable by Fitch) will remain Mexico's largest generator and maintain its monopoly on transmission and distribution activities in the country. CFE is allowed to enter into agreements with private parties to develop infrastructure in these subsectors. The energy reform changed CFE into a state-owned productive enterprise with greater budgetary...
