Reynosa’s strained power grid is raising costs for businesses and threatening investment

REYNOSA, Tamaulipas — Reynosa’s aging electrical grid is becoming a growing obstacle to business growth and forcing companies to invest in costly backup systems while limiting the city’s ability to attract new development, according to business leaders and government officials.

The Reynosa National Chamber of Commerce, Services and Tourism, or CANACO SERVYTUR Reynosa, estimates a citywide power outage could cost the city’s commerce and services sector 5.38 million pesos, or about $305,700, per hour. 

Meanwhile, some businesses are spending millions of pesos on backup generators just to keep operating during outages.

CANACO Reynosa said power outages, intermittent service interruptions, and voltage fluctuations have affected businesses and thousands of families, while also causing disruptions to hospitals, drinking water pumping systems, electrical equipment, and other essential services.

The problem isn’t electricity — it’s delivering it

State and local officials say Reynosa has enough electricity to meet demand.

The problem, they say, is that the equipment that delivers power — including transformers and substations — is overloaded and can no longer keep up, especially during the summer when electricity use peaks.

Tamaulipas Secretary of Energy Development Walter Julián Ángel Jiménez said Reynosa is among the municipalities experiencing the highest number of power interruptions.

“Energy is not the problem — it hasn’t been the problem for the last 10 years,” Jiménez said. “The problem is the distribution network and transformation.”

Jiménez said overloaded transformers and substations have become the weakest points in the system as electricity demand increases during the summer months.

To address the issue, he said Mexico’s Federal Electricity Commission, or CFE, is carrying out a 1.2 billion-peso grid modernization program across Tamaulipas, worth about $68.2 million. Of that, 560 million pesos, or about $31.8 million, is already being invested to replace transformers, recalibrate electrical circuits, and strengthen the state’s power distribution system.

Even so, Jiménez said the work will provide only temporary relief.

“What is being done today will temporarily address the electricity problems in the short term, but unfortunately it will not be enough,” Jiménez said.

Reynosa Secretary of Public Works Eduardo López Arias said the electrical grid has become one of the city’s biggest infrastructure challenges as it works to remain competitive and attract new investment.

Although Reynosa has enough electricity generation capacity, López Arias said it lacks enough transformers and substations to deliver that power reliably.

“We do have electricity. What we don’t have is transformation,” López Arias said.

He said many of the city’s transformers are already operating at or near capacity.

“The transformers we have throughout the city are also saturated because of overloads, low voltage, and all of that has a significant impact,” he said.

Those limitations, he said, are already affecting development opportunities.

“There are industrial parks saying, ‘We want to develop an industrial park, but we don’t have water, we don’t have electricity,’” López Arias said.

Businesses invest to stay open

While government agencies work to upgrade the grid, some businesses are taking matters into their own hands.

Su Bodega Longoria installed a backup generator about two years ago at a cost of 2 million to 3 million pesos, or about $114,000 to $170,000, according to assistant manager Bernardo Santos.

The generator automatically starts in less than a minute whenever power is interrupted.

“Without a generator, the store’s operations would practically come to a halt,” Santos said.

Santos estimated the store would lose between 400,000 and 500,000 pesos, or about $22,700 to $28,400, in sales if it went a full day without electricity.

Even with the backup generator, voltage fluctuations continue to pose a major risk.

“Voltage drops are what affect our equipment the most. A compressor can end up burning out,” Santos said, referring to the store’s refrigeration and air conditioning systems.

Before installing the generator, Santos said the store typically had to close for two to three hours whenever outages occurred during periods of peak electricity demand.

A growing business concern

According to CANACO’s Energy Vulnerability Analysis, 77.9% of the economic impact from a power outage would come from lost sales. Another 16.9% would result from spoiled merchandise and disruptions to the cold chain, while 5.2% would come from wages paid during business interruptions.

For CANACO SERVYTUR Reynosa President Gildardo López Hinojosa, reliable electric service has become essential to the city’s economic future.

“Electricity has ceased to be merely a public service; today it is a strategic factor for competitiveness, investment, job creation, and the quality of life of our citizens,” López Hinojosa said.

The business organization called on authorities to modernize substations, expand the city’s power distribution capacity, and increase preventive maintenance across the electrical grid.

López Hinojosa said Reynosa’s infrastructure must evolve alongside its economy.

“Reynosa requires an energy infrastructure that matches its industrial, commercial, and service-oriented profile,” López Hinojosa said.