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February 17, 2021 02:07 PM

Power outages from extreme cold hitting manufacturers in Mexico

Stephen Downer
Correspondent
Plastics News Correspondent
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    Entergy

    Crews from utility companies across the Gulf Coast were busy responding to outages linked to extreme cold.

    Mexico City — Power cuts across much of Mexico caused by freezing temperatures have led to billions of dollars in losses to manufacturers and sparked widespread criticism of the federal government for its sluggish response to the crisis.

    National maquiladora organization Index (Consejo Nacional de la Industria Maquiladora y Manufacturera de Exportación de México) said erratic power supplies since February 15 had affected 800 of its members in the north, where many of the companies have plastics processing operations. Index covers 21 maquiladora associations and 2,600 member companies nationally.

    By the evening of Feb. 16, radio and television broadcasters were reporting lengthy outages in at least half of Mexico's 32 states, including as far south as Puebla.

    "Companies in the automotive, aerospace and other sectors have stopped producing because of the power cuts that have lasted for more than 15 hours," Mexico City-based Index said in a Feb. 16 news release.

    On one day alone, one plant in the north lost US$10 million, "and that does not include the damage done to its manufacturing equipment," Index said in a news release, adding that companies "cannot plan production or workers' shifts" because of the unreliability of the electricity supply.

    It criticized the federal government's slow reaction to what it described as an energy crisis and its failure to provide alternative supplies of electricity. Energy Secretary Rocio Nahle blamed frozen natural gas ducts in Texas and northern Mexico for much of the energy shortfall.

    President Andrés Manuel López Obrador told reporters Feb. 17 his government would import additional supplies of liquefied petroleum gas. He was confident normal service would be restored by the weekend.

    The crisis comes a couple of weeks after López Obrador sent Cthe Mexican congress a bill which aims to give priority in the distribution of electricity to national power utility Comisión Federal de Electricidad (CFE). It also aims to do away with Mexico's obligation to purchase electricity through auctions.

    Concamin, the confederation of industrial chambers to which plastics trade group Anipac belongs, condemned the move, saying it would "arbitrarily impede competition in the electricity sector."

    The CCE, the private sector's business coordinating council, described the president's move as an "indirect expropriation" of privately owned generating plants. It would lead to a CFE monopoly, mean higher bills for consumers and discourage national and foreign investment in Mexico, it said.

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