On April 3, 2026, the National Energy Commission (“CNE, per its acronym in Spanish) published in the Federal Official Gazette the General Administrative Regulations setting forth the criteria to be observed by the National Energy Control Center in the implementation of competitive mechanisms to procure capacity, energy, ancillary services and other associated products aimed at ensuring the reliability of the National Electric System (the “Regulations”).

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The purpose of the Regulations is to establish the criteria to be followed by the National Energy Control Center (“CENACE”, per its acronym in Spanish) in the implementation of the mechanisms for procurement processes for energy and associated products, the registration of physical assets and accreditation as a Market Participant, the settlements, invoicing and collections arising from the contracted energy and associated products, as well as temporary exceptions to the Market Rules and other general administrative regulations applicable to sellers participating in such mechanisms, when necessary to ensure reliability of the National Electric System (“Grid”).

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The Regulations apply to all members of the electricity sector, as well as to interested parties and sellers participating in the competitive mechanisms to procure capacity, energy, ancillary services and other associated products established therein.

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With respect to the activation of the Reliability Procurement Mechanisms, the Regulations provide that CENACE must identify scenarios in which demand and reserve requirements become insufficient and, once the order of priority set forth in the Regulations has been exhausted, it must notify the CNE and request the corresponding authorization from the Ministry of Energy. Among the events that may give rise to the activation of these mechanisms are, among others, operating reserve levels falling below the thresholds set forth in the Grid Code, the accumulation of scheduled outages, forced outages and emergency outages of power plants or elements of the National Transmission Grid or the General Distribution Networks, declarations or forecasts of emergency operating states, delays in the commencement of operation of generation or transmission projects resulting in insufficient resources in the Grid, as well as changes in demand forecasts, weather conditions, generation availability, or external factors affecting the Grid.

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The requests for proposals must set out the requirements to be met by interested parties under the Regulations and must be published in the Market Information System. Such requests for proposals must include the geographic area where the Reliability Procurement Mechanisms will apply, a description of the energy and associated products that CENACE seeks to procure, the start and end periods, including hourly allocation and dispatch profiles when applicable, the required interconnection points, the communication channels through which interested parties must submit their proposals to CENACE, the applicable deadlines, and any other information required by CENACE.

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Once the offers have been selected, CENACE and the relevant seller (formerly the interested party) must execute the corresponding agreement for the sale of energy and associated products.

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The contract will include, among other aspects, specification of the physical asset and Interconnection Point, MAXIMUM Capacity allowed, hourly energy profile required by CENACE, bundled price in MXN ($/MWh), and a term of validity sufficient to ensure the operation of the SEN in conditions of Accessibility, Efficiency, Quality, Reliability, Continuity, Safety and Sustainability.

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The Regulations became effective on April 6, 2026, thereby repealing Resolution A/020/2018, issued by the former Energy Regulatory Commission, which set forth the criteria applicable to the procurement of capacity through reliability auctions and the allocation of net costs among Load Serving Entities.

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