Mexico's Supreme Court on Thursday endorsed a controversial electricity reform opposed by the United States and other major trade partners -- a ruling celebrated by President Andres Manuel Lopez Obrador's government.

The top court deemed a key part of legislation approved by Congress in 2021 aimed at strengthening the state-owned Federal Electricity Commission (CFE), to the detriment of private firms, to be constitutional.

"History will judge those who betray the homeland and the interests of the people," Lopez Obrador's spokesman Jesus Ramirez said in a tweet welcoming the outcome.

But the US ambassador to Mexico, Ken Salazar, said in a statement that Washington was concerned that the electricity law "is likely to open the door to endless litigation, creating uncertainty and impeding investment."

Until now, private companies have had priority uploading their power to the national grid, but the law that was promoted by Lopez Obrador gives energy dispatch priority to the CFE.

The Supreme Court found that the reform does not violate free competition, a North American trade deal with the United States and Canada, or environmental rights.

However, "those who feel affected can resort to international bodies," such as a trade dispute resolution mechanism, constitutional expert Francisco Burgoa told AFP.

In parallel Lopez Obrador is promoting constitutional energy reforms in Congress that have alarmed the United States, Canada and Spain, whose firms have invested in Mexico.

Those changes would ensure that the CFE has at least 54 percent of the electricity market -- a move the government says is needed to prevent soaring power prices.

The reforms also aim to move towards a state monopoly in the exploration and mining of lithium, a vital material in the production of electric car batteries.

Critics say the changes favor polluting fossil fuels over renewable energy.

"Mexico's energy policies damage the environment, US business and investor interests in multiple sectors, and hamper joint efforts to mitigate climate change," US Trade Representative Katherine Tai said last month according to her office.

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