First Gen aims to secure more supply deals

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FIRST GEN Corp. is aiming to secure power supply contracts for 92% of the capacity it generates this year, an improvement over the 80% it recorded last year, the Lopez-led company told the stock exchange.

The target is among the “strategic thrusts” for 2018 listed down by First Gen in a briefing for analysts and investors on Monday, during which the company also said a final investment decision on a planned $1-billion liquefied natural gas (LNG) terminal should be ready by 2019.

The contracting target comes after the company last month announced the forging of a power supply contract with distribution utility Manila Electric Co. (Meralco) for the sale and purchase of around 414-megawatts (MW) of baseload capacity.

With the power supply agreement (PSA), First Gen said Meralco had secured “competitively priced” baseload electricity, or steady 24/7 power, since its plant’s all-in tariff at an 80% capacity factor is P3.77 per kilowatt-hour.

The power will be sourced from the listed generation company’s wholly owned subsidiary First NatGas Power Corp.’s “already constructed and currently operational” San Gabriel combined cycle natural gas-fired power plant within the First Gen Clean Energy Complex in Batangas City.

The PSA covers six years using gas from the Malampaya field but in the event that LNG becomes available, the term of the PSA could be extended upon mutual agreement with Meralco, it said.

Under the terms of the PSA, power from San Gabriel is available for purchase by Meralco immediately.

However, the sale of electricity to the utility will start only upon its approval by the Energy Regulatory Commission. The PSA is set to expire on Feb. 23, 2024, unless extended by the parties.

In its presentation to analysts, First Gen also said it generated around 21% of the country’s requirement in 2017 “across different load segments using only clean and renewable energy.”

The company has an installed capacity of 3,490 MW fueled by natural gas at 58%, geothermal at 34%, hydropower at 4%, and a combined wind and solar at another 4%.

On Tuesday, shares in the company rose by 22 centavos or 1.31% to close at P16.96 each. — Victor V. Saulon