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Released February 13, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Executives from FirstEnergy Corporation (NYSE:FE) (Akron, Ohio) last Thursday unveiled a new five-year, $26 billion capital program focused on improving the company's transmission and distribution (T&D) business. The planned spending over the 2024-2028 period is about 44% higher than the prior five-year plan, executives said on an earnings conference call.
FirstEnergy (FE) provides electric service to customers in six states: Ohio, Maryland, West Virginia, Pennsylvania, New York and New Jersey. It also operates an electric transmission business.
The new five-year capital program, dubbed "Energize365," will be focused on improving reliability and the customer experience. On the earnings call, FE executives said capital spending would be about $4.3 billion in 2024, which is approximately 15% above 2023 spending levels of $3.7 billion, which was split almost equally between the transmission and distribution businesses. Capital spending last year was about 16% greater than it was in 2022. Aside from the 2024 planned capital spend, the executives did not break out future projected capital outlays.
Industrial Info is tracking 47 capital projects involving FE subsidiaries valued at about $1.9 billion that are scheduled to kick off over the 2024-2028 period. Subscribers to IIR's Global Market Intelligence (GMI) Power Project Platform can click here to view FE's capital projects that are scheduled to kick off between January 2024 and December 2028.
Energize365 is "designed to better serve our customers by further enhancing our transmission and distribution systems to reduce power outages, increase resiliency and enable a smarter, cleaner energy future without compromising on affordability," said Brian Tierney, FE's president and chief executive.
In detailing Energize365, K. Jon Taylor, FE's senior vice president and chief financial officer, said it would feature annual increases in the transmission and distribution businesses. On the distribution side, he said, investments over the 2024-2028 period will focus on "grid modernization, reliability enhancements, smart meter deployment, distribution automation and energy efficiency programs." On the transmission side, he added, investments will be made to "enhance and upgrade the transmission system and add operational flexibility to support projects like the New Jersey offshore wind project and new data center loads."
Tierney detailed last year's "transformational strides to improve the financial strength of FE." One of those steps included the sale of 30% of FE's transmission business for $3.5 billion, which is expected to close next month. Another included a corporate reorganization into "five regulated, mostly wires, companies that are singularly focused on regulated growth to improve reliability and the customer experience."
FirstEnergy has had a rocky recent past: In 2017, it decided to exit its money-losing competitive merchant generation business, then in 2020 it got caught up in a bribery scandal surrounding attempts in Ohio to enact a financial support program for financially troubled nuclear power plants. For more on those issues, see February 8, 2017, article - Stung by Competitive Power Markets, FirstEnergy Focuses on T&D Investments and September 9, 2020, article - Corruption Cases Not Over for Electric Companies in Ohio and Illinois.
The merchant generation portfolio is behind FE, but the corruption investigation is still active, Tierney told investors.
FE's operating earnings from continuing operations last year reached $1.1 billion, a 57% increase from $717 million in 2022. Results for both years included several non-recurring items. In the just-completed quarter, FE earned $175 million from continuing operations, a reversal from an earlier loss of $403 million. All of those numbers conform to Generally Accepted Accounting Principles (GAAP).
Last September, FE raised its common stock dividend for the first time in three years. The FE executives predicted earnings would increase assuming utility regulators approve FE's rate cases following capital investments. In its February 8 earnings statement, FE predicted 2024 earnings in the range of $1.5 billion to $1.62 billion, up significantly from 2023's $1.1 billion.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
FirstEnergy (FE) provides electric service to customers in six states: Ohio, Maryland, West Virginia, Pennsylvania, New York and New Jersey. It also operates an electric transmission business.
The new five-year capital program, dubbed "Energize365," will be focused on improving reliability and the customer experience. On the earnings call, FE executives said capital spending would be about $4.3 billion in 2024, which is approximately 15% above 2023 spending levels of $3.7 billion, which was split almost equally between the transmission and distribution businesses. Capital spending last year was about 16% greater than it was in 2022. Aside from the 2024 planned capital spend, the executives did not break out future projected capital outlays.
Industrial Info is tracking 47 capital projects involving FE subsidiaries valued at about $1.9 billion that are scheduled to kick off over the 2024-2028 period. Subscribers to IIR's Global Market Intelligence (GMI) Power Project Platform can click here to view FE's capital projects that are scheduled to kick off between January 2024 and December 2028.
Energize365 is "designed to better serve our customers by further enhancing our transmission and distribution systems to reduce power outages, increase resiliency and enable a smarter, cleaner energy future without compromising on affordability," said Brian Tierney, FE's president and chief executive.
In detailing Energize365, K. Jon Taylor, FE's senior vice president and chief financial officer, said it would feature annual increases in the transmission and distribution businesses. On the distribution side, he said, investments over the 2024-2028 period will focus on "grid modernization, reliability enhancements, smart meter deployment, distribution automation and energy efficiency programs." On the transmission side, he added, investments will be made to "enhance and upgrade the transmission system and add operational flexibility to support projects like the New Jersey offshore wind project and new data center loads."
Tierney detailed last year's "transformational strides to improve the financial strength of FE." One of those steps included the sale of 30% of FE's transmission business for $3.5 billion, which is expected to close next month. Another included a corporate reorganization into "five regulated, mostly wires, companies that are singularly focused on regulated growth to improve reliability and the customer experience."
FirstEnergy has had a rocky recent past: In 2017, it decided to exit its money-losing competitive merchant generation business, then in 2020 it got caught up in a bribery scandal surrounding attempts in Ohio to enact a financial support program for financially troubled nuclear power plants. For more on those issues, see February 8, 2017, article - Stung by Competitive Power Markets, FirstEnergy Focuses on T&D Investments and September 9, 2020, article - Corruption Cases Not Over for Electric Companies in Ohio and Illinois.
The merchant generation portfolio is behind FE, but the corruption investigation is still active, Tierney told investors.
FE's operating earnings from continuing operations last year reached $1.1 billion, a 57% increase from $717 million in 2022. Results for both years included several non-recurring items. In the just-completed quarter, FE earned $175 million from continuing operations, a reversal from an earlier loss of $403 million. All of those numbers conform to Generally Accepted Accounting Principles (GAAP).
Last September, FE raised its common stock dividend for the first time in three years. The FE executives predicted earnings would increase assuming utility regulators approve FE's rate cases following capital investments. In its February 8 earnings statement, FE predicted 2024 earnings in the range of $1.5 billion to $1.62 billion, up significantly from 2023's $1.1 billion.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
