I. What constitutes the Electric Industry?

a. The Electric industry encompasses the generation, transmission, distribution and marketing of Power, the planning and control of the National Electric System, and the operation of the Wholesale Electric Market. The Power sector includes the Electric industry and the provision of primary supplies for the industry. The activities of the Electric industry are a matter of public interest.

b. The planning and control of the National Electric System and the Public Service of Power Transmission and Distribution, are strategic areas. In these areas the Mexican State retains ownership; however, it may enter into contracts with private parties under the terms of the Electric Industry Law. Basic Power Supply is a priority activity for national development.

II. Electric Industry Law

a. The purpose of said Law is to promote the sustainable development of the Power industry and to guarantee its continuous, efficient and safe operation for the benefit of its users, as well as the fulfillment of Clean Energy requirements and the reduction of pollution emissions.

III. Electric Industry in Mexico

a. The Mexican power sector faces major challenges, such as ensuring the availability of supply for the whole country, lowering the high costs of electricity generation, increasing the participation of non-­‐fossil fuels and promoting the use sustainable energy. In order for said challenges to be faced, the legal and regulatory framework of the Mexican Power sector showed significant changes with the Energy Reform, creating a new national energy policy.

b. Thus, the generation, transmission, distribution and marketing of power, represent areas of opportunity in which the participation of private companies is both feasible and desirable, in the interests of greater and better power supply for all Mexicans.

c. On September 8th, 2015, the Resolution by means of which the Ministry of Energy issues the Electric Market Guidelines was published in the Federal Official Gazette. Said guidelines contain the design and operation principles of the Wholesale Electric Market which shall be operated by the National Energy Control Center (CENACE), including the auctions that will take place pursuant to the Electric Industry Law.

IV. Project Development in the Electricity Sector.

In the development of a Power Generation Project, among others, the following permits will be required:

a. Power Generation Permit, before the Energy Regulatory Commission. Template.

b. Environmental Permits.

c. Social Impact Evaluation, before the Ministry of Energy.

d. Acquisition of Rights of Way for the transmission lines.

e. Local permits and authorizations.