2016 ANNUAL REPORT
Natural gas is a fuel found in reserves beneath the earth, which is extracted by drilling and acidizing to dissolve the rocks blocking the gas. Natural gas is then delivered through pipelines and purified by separating methane from its other components. The purified gas is used to create steam, which is then used to spin an electromagnetic turbine, which creates electric currents.
Natural gas is considered to be the cleanest fossil fuel, as it emits minimal pollutants into the atmosphere during combustion.

SUBSIDIARIES

First Gas Power Corporation (FGPC) owns the 1,000-megawatt (MW) Santa Rita combined cycle natural gas-fired power plant in the First Gen Clean Energy Complex in Batangas City. FGP Corp. (FGP) owns the 500-MW San Lorenzo combined cycle natural gas-fired power plant adjacent to the Santa Rita plant. Both FGPC and FGP are wholly-owned subsidiaries of First Gen.
First NatGas Power Corp. (FNPC) and Prime Meridian PowerGen Corporation (PMPC) are likewise wholly-owned subsidiaries of First Gen. FNPC owns the 414-MW San Gabriel combined cycle natural gas-fired power plant and PMPC owns and operates the 97-MW Avion open cycle natural gas-fired power plant, which declared commercial operations in November 2016 and September 2016, respectively. Both San Gabriel and Avion are expected to maximize their full operational capacities in 2017.

Santa Rita

  • Revenues from sale of electricity decreased by 25.2 percent or by USD180.5 million. This is primarily due to lower average natural gas prices, made worse by FGPC’s lower dispatch. Average natural gas prices in 2016 reached a low of USD6.5/MMBtu, compared to an average of USD9.1/ MMBtu in 2015. Santa Rita’s dispatch declined from 81.5 percent in 2015 to 72.9 percent in 2016 as a result of the Unit 20 incident last August 2016.
  • Operating income increased by 2.3 percent or by USD3.1 million. This is due to lower variable operations and maintenance (O&M) expenses brought about by the 75.0 percent cap in the chargeable net electrical output (CNEO) that was reached in July 2016, supplemented by lower staff costs.
  • Net income increased by 5.5 percent or by USD4.6 million in 2016. This is due to lower operating expenses and lower interest expenses due to scheduled debt payments.

San Lorenzo

  • Revenues from sale of electricity decreased by 19.2 percent or by USD69.3 million due to lower average natural gas prices, but was partially offset by slightly higher dispatch. Like Santa Rita, average natural gas prices in 2016 reached a low of USD6.6/MMBtu, compared to an average of USD9.1/ MMBtu in 2015. San Lorenzo’s dispatch reached a high of 79.3 percent in 2016, compared to 78.4 percent in 2015.
  • Operating income slightly decreased by 0.1 percent or by USD0.1 million due to higher operating expenses.
  • As a result of the absence of insurance claims proceeds received in 2015, net income decreased by 16.5 percent or by USD9.1 million in 2016.