Northern Mexico suffers second day of power outages after Texas frost

Northern Mexico experienced blackouts for a second consecutive day on Tuesday as several power plants faced natural gas supply failures from Texas, where a rare deep freeze has also left millions of users without lights and heat. Rolling power cuts impacted Chihuahua, Coahuila, Tamaulipas and Nuevo Leon, Mexican states that border Texas, according to national electricity grid operator CENACE.

Northern Mexico experienced blackouts for a second consecutive day on Tuesday as several power plants faced natural gas supply failures from Texas, where a rare deep freeze has also left millions of users without lights and heat.

Rolling power cuts impacted Chihuahua, Coahuila, Tamaulipas and Nuevo Leon, Mexican states that border Texas, according to national electricity grid operator CENACE. Later in the day, states further south will be included in the rotating blackouts, including major auto manufacturing centers Puebla and Guanajuato. Many of the states hit by the power issues have a heavy industrial presence, from big-box consumer manufacturing to oil companies. Manufacturing lobby INDEX said 2,600 businesses were affected with hourly losses of $200 million.

"We have to deal with that crisis," Arturo Gutiérrez, chief executive of Nueva Leon-based bottling company Arca Continental, said about the outage on a call with analysts. About 4.7 million users in northern Mexico lost power on Monday after cold weather froze pipelines and natural gas deliveries from Texas slowed. The freeze also knocked out electricity for more than 2 million customers in Texas.

Power had been restored to about 80% of users by Tuesday, Mexican President Andres Maneul Lopez Obrador said, though CENACE asked users to cut back on non-essential energy consumption due to the lack of fuel. Mexico imports large volumes of a natural gas from the United States amid a growing deficit in its own production. While Mexico's costs have been traditionally low in the North American gas market, they spiked in recent days due to weather-related issues.

Mexico does not have a natural gas storage infrastructure, which has left it vulnerable to supply cuts or weather emergencies like the Texas cold snap. State electricity company CFE said on Monday it would shore up the system with hydroelectric and coal generation, in addition to seeking liquefied natural gas (LNG) to supplement slowed deliveries from Texas.