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Sources of Over-Costs and Distortions in State-Owned Utilities in Mexico


  • Eduardo Martínez Chombo


This paper describes and tries to quantify the effects of some factors that have affected costs of state owned electric utilities in Mexico (energy losses, fuel and labor). It is noted that the impact of the increases in fuel prices on the electric utilities´ total cost in the last years has been important. However, the ´´over-cost´´ associated to energy losses and labor is also significant and comparable to the impact of the increase in fuel prices. The structure of cross subsidies in the industry is also described, pointing out that it is complex and makes the performance evaluation of the state owned electric utilities difficult.

Suggested Citation

  • Eduardo Martínez Chombo, 2009. "Sources of Over-Costs and Distortions in State-Owned Utilities in Mexico," Working Papers 2009-07, Banco de México.
  • Handle: RePEc:bdm:wpaper:2009-07

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    More about this item


    Electricity sector; state-owned utility; energy losses; CFE; LyFC.;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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