First Gen Corp. said regulators must soon decide on definitive rules in the recovery of the cost of power produced using imported liquefied natural gas (LNG).
The company said this will send the right signal to investors as at present, First Gen is only limited to collect pass on costs from the landed cost of LNG but not for other factors such as storage and processing.
Last March, the Energy Regulatory Commission (ERC) said any cost other than the landed cost of LNG such as the additional fixed costs resulting from storage, testing and commissioning of First Gen’s LNG facilities may not be recovered yet as it needs to be approved in a separate application.
“It’s a painful transition because we end up absorbing these costs but we hope there’s resolution because the LNG itself is needed,” Francis Giles Puno, First Gen president and chief operating officer, told reporters at the sidelines of an energy forum in Taguig City yesterday.
Puno said they have long been pushing the recovery of costs to the Department of Energy and the ERC especially that the company’s LNG import terminal is considered an energy project of national significance.
“When the market intervenes, it sends wrong signals also to the investors, why will it build new capacity? So, in a lot of ways, we’re in a situation today where we need to provide the right signals for investors, including for First Gen to continue to grow and invest in new assets, but they have to have to be given the right signals,” Puno said.
