UPDATE 1-Mexican antitrust watchdog urges Congress to reject power market bill

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MEXICO CITY, Feb 15 (Reuters) - Mexico's antitrust authorityon Monday urged lawmakers to reject a bill sent this month toCongress by President Andres Manuel Lopez Obrador that aims tostrengthen the hand of the national power utility in theelectricity market.

The Federal Economic Competition Commission (COFECE) said ina statement that unless it is amended, Lopez Obrador's proposalwould "seriously damage" the conditions of competition forgeneration and commercialization of electricity in Mexico.

The bill, which has already drawn the ire of leadingbusiness groups in Mexico and the United States, is due to befast-tracked through Congress, where Lopez Obrador's rulingparty and its allies hold a comfortable majority.

COFECE's recommendation to Congress is the latest in aseries of disputes between the watchdog and the president overhis drive to give the state more control over the energy market.

Earlier this month, Mexico's Supreme Court upheld acomplaint by COFECE that a number of measures taken by LopezObrador to help the national power utility, the Comision Federalde Electricidad (CFE), were unconstitutional.

That decision came just two days after Lopez Obrador senthis power market proposal to Congress, which will give priorityin electricity dispatch to the CFE, and eliminate Mexico'sobligation to buy power through auctions.

"If it comes into force, this could mean higher finalelectricity rates, which will be paid by consumers and/or thegovernment via subsidies," COFECE said of the bill.(Reporting by Adriana Barrera; editing by Dave Graham and SonyaHepinstall)