First Gen Corp., a unit of the Lopez Group, plans to build two 450-megawatt, natural gas-fired power plants in Batangas, namely Santa Maria and Saint Joseph, as part of an expansion program.
“The company expects that the construction and operation of these new facilities would benefit from synergies throughout the gas projects, such as efficiencies from the shared fuel delivery and shared fuel storage facilities,” First Gen disclosed to the Philippine Stock Exchange over the weekend.
First Gen said the use of similar generation technology would enable the company to take advantage of the operational expertise of its personnel.
First Gen’s natural gas power generation portfolio includes the Sta. Rita, San Lorenzo, Avion and San Gabriel facilities, all in its energy complex in Batangas.
Its energy platform also includes geothermal, hydro and solar.
First Gen reported a flat growth in recurring net income of $163 million in 2017 due to the impact of calamities and weak spot market prices for the hydro and geothermal facilities.
“The flat earnings growth does not reflect the many noteworthy achievements of 2017 that strongly positions the company to develop a cost-competitive and flexible platform. This platform is best prepared to both enable and address a low-carbon energy future,” First Gen president and chief operating officer Francis Giles Puno said earlier.
The company, meanwhile, reported an attributable net income of $134 million in 2017, down $29 million from a year ago due to the one-time effect of break funding costs.
It incurred the funding costs as a result of the $500-million refinancing of the 1,000 megawatt Santa Rita power plant’s long-term debt in May last year, as well as premiums paid for the partial buyback of the US dollar-denominated bonds of First Gen and Energy Development Corp..
These were in addition to EDC’s earthquake- and typhoon-related expenditures.
Puno is optimistic of the company’s prospects this year with the recent approval of First Gen’s ancillary service contracts.
“2018 is already off to a good start as the San Gabriel contract with Meralco has already been signed, while the ERC has provisionally approved FG Hydro’s Ancillary Service contract,” Puno said.
“San Gabriel and Avion have been running at high dispatch levels and benefitting from higher electricity prices at the Wholesale Electricity Spot Market as a number of older base load plants are going through maintenance in preparation for the hot summer months. Moreover, EDC’s Leyte projects are on their way to a full recovery,” he added.
Consolidated revenues of First Gen from the sale of electricity increased nine percent to $1.708 billion from $1.561 billion in 2016.
