- The latest project of its subsidiary Energy Development Corporation (EDC) that reached commercial operations in July had been its 28.9MW Palayan binary geothermal facility in the Bicol region.
With additional revenues to be drawn from geothermal assets that are coming on commercial stream, Lopez-led First Gen Corporation is expecting overall profit boost this year, according to a top executive of the company.
First President and COO Francis Giles B. Puno indicated that at least 83 megawatts (MW) of geothermal capacity will beef up their generation portfolio, hence, that will shore up top as well as bottom lines this year.
The latest project of its subsidiary Energy Development Corporation (EDC) that reached commercial operations in July had been its 28.9MW Palayan binary geothermal facility in the Bicol region.
Puno emphasized that while tariff for geothermal energy had been on downtrend this year, First Gen is still optimistic on buoyed cash flow, that in turn will be contributing to its all-inclusive financial performance.
He qualified that the company is still very much ‘in the green’, but what is being carefully watched would be the impact of declining geothermal prices, hence, there is no concrete projection yet on full-year income result.
“Geothermal prices generally were lower. And our production is lower simply because for our steam, we’re still doing the drilling; so the costs are still being borne today,” Puno expounded.
Within this year’s first half, the First Gen executive specified that one of the income drivers had been the availability of its 414-megawatt San Gabriel power facility – especially within the stretch of the supply-strained summer months.
“So far, we’ve been lucky with San Gabriel. Despite (regulatory) intervention, San Gabriel was able to make up about the same as if it was contracted,” he noted.
Nevertheless, Puno sounded off that for the remaining months of the year, “sometimes in December, the demand softens. So, we cannot assure ourselves that we’ll be able to have the same level of income.”
At this stage though, the company can already lean on revenues it can fetch from deferred charges on its use of gas for electricity generation, as its cost recoveries had already been approved by the Energy Regulatory Commission.
The cost pass-on of more than P2.0 billion deferred charges – to be spread at P0.32 to P0.33 per kilowatt hour (kWh) – will start in October billing and will be enforced for one year, thus, the impact on First Gen’s revenues and income will stretch until 2025.
