Guidelines for Voluntary Migration of Independent Power Production Permits Published in Mexico

The Ministry of Energy (Secretaría de Energía or SENER) published on April 16, 2026 in the Federal Register (Diario Oficial de la Federación or DOF) the "Agreement Issuing the Guidelines for the Voluntary Migration of Permits for the Independent Production of Electricity."

Pursuant to the First Transitory Provision of the order, the guidelines became effective on the same date as their publication in the DOF.

Background

Upon the entry into force of the Electricity Sector Law (Ley del Sector Eléctrico or LSE),¹ Independent Power Production (IPP) permits granted under the Public Electricity Service Law (Ley del Servicio Público de Energía Eléctrica or LSPEE) shall remain effective until their natural termination, without the possibility of renewal.² Accordingly, SENER issued, through the guidelines, as a voluntary mechanism for holders of valid IPP permits to migrate to a new regime by obtaining a generation permit under the LSE, the review and approval of which corresponds to the National Energy Commission (Comisión Nacional de Energía or CNE).

Key Considerations

The guidelines are aimed at holders of IPP permits granted under the LSPEE that are looking to migrate and have valid power purchase agreements entered into with the Federal Electricity Commission (Comisión Federal de Electricidad or CFE). Although the mechanism is voluntary, it is advisable for all market participants to assess it, since, as mentioned above, the legacy regime granted under the LSPEE will not be extendable once its term expires. Key considerations include:

• Entitlement and Timing. The application should be submitted while the IPP permit is in effect and, in any case, before the beginning of the last year of its term.³ However, permits expiring within the year following the entry into force of the guidelines constitute an exception, and migration may be requested at any time prior to their termination.⁴
• In accordance with the guidelines, each application shall comprise the total migration of the installed capacity of the power plant, without the possibility of partial migration. If there are additional associated permits, all should be consolidated into a single generation permit under the LSE.⁵
• The guidelines provide for three schemes, the choice of which is irrevocable during the term of the new permit:
  • Scheme A: generation for the Wholesale Electricity Market (Mercado Eléctrico Mayorista or MEM), with a hedging agreement with CFE for a minimum of 30 percent of production
  • Scheme B: long-term production exclusively for CFE
  • Scheme C: generation for the MEM with comprehensive management by the permit holder, processed in accordance with the permit provisions⁶
• Deadlines and Procedure. The guidelines incorporate the following deadlines:
  • In the first stage, the CNE has 10 business days to admit the application or request further information, after which the applicant has an equal period to cure any request; if not cured within this period, the application shall be deemed not admitted. Once the application is admitted, the CNE shall notify the migration procedure schedule within the following 10 business days.
  • In the second stage, the working sessions and execution of the migration conditions agreement should be completed within three calendar months following notification of the schedule, extendable only once for up to half the original period. If no agreement is reached within that term, the procedure shall be deemed concluded.
  • The third stage involves the review, analysis and resolution of the application by the CNE.
  • The fourth stage entails the formalization of the corresponding agreements or legal-financial vehicles, which should be developed in accordance with the dates established in the migration procedure schedule.
  • The fifth stage – which comprises the execution of the interconnection agreement, the registration of assets before the National Energy Control Center (Centro Nacional de Control de Energía or CENACE), enablement in the MEM and start of commercial operation – should be resolved within a maximum of 20 business days, although enablement may be granted prior to compliance with the metering systems diagnostic and reduced commercial operation tests (pruebas de operación commercial or POC), provided the permit holder certifies them within 24 months following the submission of the application. At any stage, inactivity attributable to the applicant for more than 10 business days entitles the CNE to terminate the procedure, which is why it is important to closely follow this procedure.⁷
• Technical Considerations. Power plants shall demonstrate compliance with the reduced POC and metering systems diagnostic required by CENACE. Such adaptations may be certified up to 24 months as of the submission of the application date in accordance with the agreed schedule.⁸
• Term of the New Permit. The new permit may be granted for up to 15 years in accordance with the corresponding program approved by the CNE, without the possibility of extension. In cases of a gap between the term of the IPP permit and power purchase agreement, the CNE may grant a "bridge permit" until the termination of such agreement, which is not considered migration and should be expressly requested.⁹

Final Comments

The guidelines represent a time-limited regulatory window that, if not timely pursued, closes definitively. Those who decide not to migrate will retain operation under the legacy regime until the termination of their IPP permit and related agreements; however, they will be required to plan in advance for the scenario following such termination – including closure, transfer or new permitting procedures – without access to the simplified channel offered by the guidelines.

Therefore, it is recommended that IPP permit holders promptly initiate a comprehensive diagnostic that includes: 1) verification of eligibility and deadlines, 2) strategic definition of the scheme considering MEM exposure, financial needs and capacity to comply with technical obligations, 3) regularization of legacy compliance before the CNE and CFE, 4) identification of contractual and financial triggers associated with migration, and 5) preparation of a modernization or rehabilitation plan aligned with the requested term of the new permit.

Holland & Knight's team of professionals has the technical experience and strategic perspective necessary to advise you in evaluating and participating under these guidelines. Our legal approach focuses on identifying the specific implications for your operations, ensuring that the legal structuring and risk allocation of your projects not only comply with the new legal framework, but also maximize their viability and competitiveness in the Mexican energy market.

If you have any questions, please contact the authors.

Notes

¹ Published in the DOF on March 18, 2025

² Fifth transitory provision of the LSE

³ Article 5, Section I of the guidelines

⁴ Third Article provision of the guidelines

⁵ Articles 5, 9 and 15 of the guidelines; Eighth Transitory Provision of the LSE

⁶ Order issued by the CNE setting forth the general administrative provisions establishing the legal, technical, and financial terms for requesting the granting and amendment of electric power generation and storage permits, as well as their term, published in the DOF on Oct. 23, 2025

⁷ Articles 13 and 16 of the guidelines

⁸ Article 13, Section V of the guidelines

⁹ Article 8 of the guidelines

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.