Mexico President Andrés Manuel López Obrador has sent to legislators a proposed energy reform that would do away with the sector’s two main regulators and limit private sector competition in the electricity market.

AMLO

The reform, if passed, would modify the constitution to eliminate upstream oil and gas regulator Comisión Nacional de Hidrocarburos (CNH) and midstream, downstream and electricity regulator Comisión Reguladora de Energía (CRE).

Independent power grid operator Centro Nacional del Control de Energía (CENACE), meanwhile, would be absorbed by state-owned power company Comisión Federal de Electricidad (CFE).

The legislative overhaul would also mandate that CFE supply 54% of electricity generated in the country, with the private sector supplying the remaining...