Mexico pulls plug on giant electricity company

In the wee hours* this morning President Felipe Calderon dissolved one of Mexico’s main electricity providers and sent police to guard the headquarters (pictured above). This followed days of negotiations between the federal government and the obscenely overpaid union that controls Luz y Fuerza del Centro. The state-run company thrived on the worst Mexican diet of graft and inefficiency, receiving billions of public pesos and providing crappy service (the electricity in my neighborhood goes out at least once a week for hours on end).

In deciding to shut it down Calderon declared that Luz y Fuerza wasn’t sustainable and handed over its operations to the Federal Electricity Commission. Luz y Fuerza, he said, lost a third of its energy to theft and mismanagement and recieved twice the money in subsidies that it brought in. The subsidies matched the funds earmarked for Oportunidades, Mexico’s wildly successful anti-poverty program that serves millions of families and has been adopted in 30 countries.

Now, if only they could do something about the state-run oil monopoly, Pemex.

[*Ed note: Police first showed up shortly before midnight Saturday.]