First Gen Corporation is waiting for a ruling from regulatory bodies on the reimbursement of expenses related to the utilization of liquefied natural gas (LNG).
In a report by Business World, First Gen President and Chief Operating Officer Francis Giles B. Puno is positive that a resolution would be reached, pointing out how the firm’s petition for expense recovery is justified.
Puno explained the financial strain the company is under due to investments in operating LNG, which is viewed as a “painful transition.”
The First Gen president stressed the importance of LNG as a “transition fuel” toward renewable energy; however, he did not discount the challenges posed by current regulatory frameworks.
In March, the Energy Regulatory Commission (ERC) stated that cost recovery should be based solely on the landed cost of LNG, with additional costs like storage and commissioning requiring separate approval and amendments to power purchase agreements (PPAs).
Puno added that they have already presented their case to the Department of Energy (DOE), saying that this initiative is of national significance and that there is a need to provide clear signals to investors to encourage continued investment in new assets.
He stressed that while there is strong investor interest, the lack of clarity in predicting revenue from these investments poses a challenge.
