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Mexico's State Power Utility To Build Lines For Wind Projects

May 16, 2007 - Anthony Harrup - Dow Jones & Company, Inc.

MEXICO CITY - Mexico's state-owned electric utility Comision Federal de Electricidad, or CFE, said it plans to build transmission lines to carry power from private wind-driven projects under way in southern Mexico.

In a press release, the CFE said it signed an agreement with private companies for an open season to reserve capacity on lines in the Isthmus of Tehuantepec, with the aim of determining demand.

Under Mexico's energy laws, private companies can generate electricity for their own consumption, but transmission and distribution is done by state companies.

Several private Mexican companies are planning wind-driven power stations in Tehuantepec, in the southern state of Oaxaca, to supply their own electricity needs. They include Cemex giant Cemex (CX), and retailers Organizacion Soriana ( SORIANA.MX) and Wal-Mart de Mexico (WALMEX.MX).

The CFE said it plans to build a substation and a 145-kilometer transmission line to connect them to the national grid.

Despite favorable conditions for wind power in Tehuantepec, at present Mexico has only 85 megawatts of wind capacity, out of a total of more than 48,000 megawatts. The private projects call for combined wind-driven capacity of more than 500 megawatts.

By Anthony Harrup, Dow Jones Newswires; (5255) 5080 3450, anthony.harrup@ dowjones.com