The Mexican government faced off with the powerful Electrical Workers Union Monday after announcing the closure of a state-run power company that serves more than one fifth of the country.

The government said Sunday it was closing down Luz y Fuerza — which supplies power to Mexico City and the surrounding region — because it wastes large amounts of electricity, after ordering hundreds of police officers to occupy its installations.

Another, larger state company, the Federal Electricity Commission, was to take over operations, government officials said.

The shutdown came amid a fierce dispute between the government and the state-run Luz y Fuerza company.

“It’s a difficult decision, but (it’s) indispensable for the sustainability of Mexico in the future,”

Finance Minister Agustin Carstens said of the shutdown on national television Monday.