Lopez-led First Gen Corporation recorded a recurring net income of Php3 billion ($59 million) in the first quarter of 2022, a 25.1% decline from the Php3.8 billion ($78 million) posted in the same period last year.
The company said its natural gas and geothermal platforms both suffered from a drop in operating income.
First Gen’s natural gas platform recorded a 27% decrease in its recurring earnings to Php2 billion for the first quarter from last year’s Php 2.5 billion due to the damages incurred by the 48.5-megawatt (MW) Unit 1 of the Avion gas-fired power plant, as well as the derating of the 420MW San Gabriel power plant due to supply restrictions.
“While all four natural gas-fired plants benefited from greater electricity sales, higher fuel prices and operating expenses contributed to its lower earnings,” First Gen said. Aside from Avion and San Gabriel, the firm also owns the 1,000MW Sta. Rita and 500MW San Lorenzo gas plants – all located in Batangas City and are dependent on fuel from the Malampaya gas field in Palawan.
Meanwhile, the Visayas power plants of Energy Development Corporation (EDC) – First Gen’s renewable energy unit – also suffered from outages following the onslaught of Typhoon Odette, which led to transmission constraints. Lower wind generation from its Burgos Wind Farm in Ilocos Norte also led to lower income in the first quarter.
“Both Avion and EDC were affected by unplanned outages. In EDC’s case, it led to high replacement power costs as Typhoon Odette debilitated transmission capacity despite the plants’ ability to produce power,” First Gen President and COO Francis Giles Puno said in a statement.
As for the gas restriction issue, Puno said that First Gen’s LNG import facility can reduce the importation of expensive liquid fuel.
“To address this recurring issue, the importation of LNG can happen by 4Q22 when the LNG terminal operates,” Puno said. In a Department of Energy briefing last week, officials said First Gen’s interim offshore LNG facility – also in Batangas – is one of the facilities seen to commence commercial operations soon.
In other developments, First Gen unit FGP Corporation was penalized by the Energy Regulatory Commission (ERC) as its 265MW San Lorenzo Unit 50 exceeded the maximum allowable outage days in 2021.
According to a report by The Philippine Star, ERC directed FGP to pay the administrative penalty of Php246,600 for incurring 10.75 days of unplanned outages. Only 7.7 days of unplanned outages are allowed for gas-fired power plants.
The San Lorenzo unit went on a forced shutdown from March 10-21, 2021 for the replacement of its lube oil and to correct the high bearing vibration. In the process, the company discovered issues with the steam turbine clutch which led to the extension of the emergency shutdown.
