Three countries, three answers: grid codes and utilities in Canada, Mexico and the United States

Bajío Ventures · August 2026

Canada, Mexico and the United States share electrical borders, equipment suppliers and much of the same technical vocabulary. NERC, North America’s reliability organization, covers all three countries — in Mexico, only northern Baja California, which is synchronized with California. But on two basic questions — who writes the rules for connecting to the grid, and who owns the wire — each country gives a different answer. For a company deciding where and how to build, that difference matters more than the price per kWh.

United States: federal rules, fragmented grid

In the United States the rules come from three different sources.

• Reliability. Reliability standards have been mandatory since the Energy Policy Act of 2005. NERC drafts them and FERC, the federal regulator, approves them; there are now more than 80.
• Interconnection procedure. FERC sets it. Order 2023 (July 2023) replaced one-by-one studies with 150-day cluster studies on a “first-ready, first-served” basis. It required site control and deposits, penalized projects that withdraw, and put firm deadlines on transmission providers. The D.C. Circuit upheld the order in full on 31 July 2026.
• Technical requirements. These are IEEE standards: 1547-2018 for distributed resources and 2800-2022 for inverter-based resources connected to transmission. In addition, FERC approved three NERC standards for inverter-based plants in July 2025: PRC-028, PRC-029 and PRC-030. Since 15 May 2026, every inverter-based plant of 20 MVA or more connected at 60 kV or above must register with NERC.

The grid itself is fragmented. Close to 3,000 distribution utilities — investor-owned, municipal and cooperative — sit alongside seven market operators (ISOs/RTOs) that serve about two-thirds of demand. The Southeast and the West still run on vertically integrated utilities. ERCOT, in Texas, operates as an electrical island outside FERC jurisdiction, though not outside NERC’s.

The bottleneck is the interconnection queue. According to Lawrence Berkeley National Laboratory, about 2,060 GW was waiting to connect at the end of 2025. That is more than the country’s entire installed capacity of 1,281 GW. The median wait from request to operation exceeds five years, and only 13% of the capacity requested between 2000 and 2020 was ever built.

Canada: ten provincial grids

In Canada, electricity falls under provincial jurisdiction. There is no federal grid code: the Canada Energy Regulator oversees only international lines, some interprovincial lines and exports. Each provincial utility publishes its own connection requirements. Hydro-Québec, for example, has one document for plants connected at 44 kV and above and another for distributed generation.

NERC standards apply province by province. They are adopted by statute in British Columbia and Manitoba, by agreement in Saskatchewan and Québec, and through market rules in Ontario. In Newfoundland and Labrador they are voluntary practice. Distribution-level connection of distributed resources falls under CSA C22.3 No. 9.

On the utility side, a vertically integrated Crown corporation dominates in most provinces: Hydro-Québec, BC Hydro, Manitoba Hydro, SaskPower. Only Alberta and Ontario have competitive wholesale markets. Ontario launched a day-ahead market with nodal pricing in May 2025, and Alberta is redesigning its market to introduce nodal pricing by around 2027. Hydro supplies 55% of generation.

Nearly all of Canada’s electricity trade is with the United States: in 2025 it exported 32.7 TWh and imported 22.1 TWh. In March 2025 Ontario imposed a 25% surcharge on exports to the US and suspended it within days. The episode shows that in North America the grid is also trade policy.

Mexico: a national code that also governs load

In Mexico the Código de Red (grid code) is a national instrument. The first version was published in 2016; the current one, known as version 2.0, on 31 December 2021. It has a feature its neighbours do not share: it regulates consumers as well as generators. Load centres connected at medium voltage with 1 MW or more of contracted demand, and all high-voltage load centres, must meet power-quality requirements covering power factor, harmonics and unbalance. In the US and Canada that is handled through the distribution utility’s tariff. In Mexico it is a regulatory obligation, backed by a compliance plan.

The 2021 text itself built in a step change: from 8 April 2026, the minimum power factor rose from 0.95 to 0.97, measured in five-minute intervals and met 95% of the time. It is not a new code, but many Bajío plants have not yet adjusted their compensation to that figure.

The institutional framework changed in 2025. The legislative package of 18 March 2025 replaced the CRE with the Comisión Nacional de Energía (CNE), a body under the Energy Ministry (SENER) rather than an independent regulator. The transitional articles of the Electricity Sector Law and the CNE Law keep the grid code and market rules in force until they are replaced; no new code has been published to date. In the meantime, the CNE has issued specific rules. The most relevant here are the April 2026 storage provisions, which, according to published legal analyses, require grid-forming capability from systems that inject power into the grid.

On who owns the wire, Mexico’s answer is the simplest of the three. Transmission and distribution are reserved exclusively to the State, through CFE. CENACE operates the system and the market. It also defines the infrastructure an interconnection requires and the order in which requests are processed; the law sets no deadline for those studies. The State must keep at least 54% of the energy injected into the grid, as an annual average. The system had 90.5 GW of installed capacity in December 2024, and the PLADESE 2025–2039 expansion plan estimates that 76 GW more is needed. In May 2024, with operating reserves at 10.56% against a 13% planning minimum, CENACE declared an operating emergency.

The three, side by side

	United States	Canada	Mexico
Who writes the technical code	IEEE + NERC, FERC procedure	Each provincial utility; CSA for distribution	National Código de Red (CRE 2021, now CNE)
Does it regulate load?	Via tariff	Via tariff	Yes: ≥1 MW at medium voltage and all high voltage
Who owns transmission and distribution	~3,000 investor-owned, municipal and co-op utilities	Provincial utilities, mostly Crown-owned	The State (CFE), exclusively
Wholesale market	7 ISOs/RTOs, ~2/3 of demand	Alberta and Ontario only	One national market run by CENACE
Bottleneck	Interconnection queue (~2,060 GW, >5 years)	Negotiation with the provincial utility	Grid capacity and CENACE’s queue order
Installed capacity	1,281 GW (2025)	156 GW (2024)	90.5 GW (2024)

The takeaway

1. In all three countries the problem is the grid, not the permit. In the US, the cost is the interconnection queue. In Canada, it is the relationship with a provincial utility that both owns the grid and competes with you. In Mexico, it is a grid that only the State can expand. That is why, in the Bajío, the shortest route is still behind the meter: exempt below 0.7 MW, with a simplified self-supply process between 0.7 and 20 MW. It is the same conclusion as “Permitting is no longer the problem”.

2. Technical requirements are converging even where institutions are not. Voltage and frequency ride-through, reactive-power control and now grid-forming capability: IEEE 2800, NERC’s PRC standards and the CNE’s storage rules all point the same way. Equipment that complies in Texas does not automatically comply in Guanajuato, but the gap is narrowing. Specify inverters and storage systems to the strictest requirement of the three.

3. Mexico’s grid code is an obligation and an opportunity. A plant of 1 MW or more at medium voltage that falls short of a 0.97 power factor faces regulatory non-compliance, not just a line item on the bill. Reactive compensation, harmonic filtering and storage with reactive-power control solve compliance and, in the same investment, cut demand charges. That is the kind of project Mexican regulation rewards, and one that US or Canadian rules do not even contemplate.

This note is for information only and does not constitute legal advice. US and Canadian figures come from the official sources cited; the Order 2023 compliance status and the Alberta redesign are taken from law-firm analyses.

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Sources: FERC — Reliability explainer · FERC — Explainer on the Interconnection Final Rule (Order 2023) · White & Case — D.C. Circuit upholds FERC Order No. 2023 (2026) · IEEE 2800-2022 · FERC — approval of PRC-028/029/030, July 2025 · pv magazine USA — NERC IBR registration, May 2026 · EIA — number of US electric utilities · FERC — Electric power markets · EIA — generation capacity · LBNL — Queued Up 2026 · CER — Who regulates what in Canada · NRCan — Canada’s electric reliability framework · Hydro-Québec — connection requirements · CSA C22.3 No. 9 · Statistics Canada — 2024 generation · CER — 2025 Canada–US energy trade · IESO — Market Renewal · IESO — export surcharge suspended · McCarthy Tétrault — Alberta 2026 · DOF 31 Dec 2021 — Código de Red 2.0 (RES/550/2021) · Ley del Sector Eléctrico · Ley de la Comisión Nacional de Energía · PLADESE 2025–2039, DOF 17 Oct 2025 · El Financiero — operating emergency, 7 May 2024

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