FirstEnergy Corp. (FE) announced the integration of its electric transmission subsidiary, American Transmission Systems Inc. (ATSI), into the PJM Interconnection, the largest competitive electricity marketplace in the world.
With this integration, PJM will assume operational control of the transmission system and will administer competitive wholesale electricity markets in those areas. The PJM Interconnection serves over 58 million customers in 13 states and the District of Columbia.
The integration of ATSI included the transition of FirstEnergy’s operating companies Toledo Edison, Ohio Edison, Cleveland Electric Illuminating and Pennsylvania Power. FirstEnergy pointed out that this integration has brought all of its operating companies under the control of regional grid operator PJM.
FirstEnergy said the alignment of all its transmission facilities into PJM will enhance the long-term planning of its electric system and leverage the operating and competitive efficiencies that reflect ATSI system's strong electric ties with PJM.
With this integration, FirstEnergy will also benefit from PJM’s ample reserves and successful demand response programs. This will help the company to effectively manage customer needs, especially during extended high summer temperatures.
Simultaneously, PJM assumed operational control of the transmission system of the Cleveland Public Power (CPP), the municipal utility of the City of Cleveland.
Based in Akron, Ohio, FirstEnergy is engaged in the generation, transmission, and distribution of electricity, and is also involved in energy management and other energy-related services. The company completed its merger with Allegheny Energy during the first quarter.
Going forward, FirstEnergy expects earnings per share for 2011 to be in the range of $3.20 to $3.50. The Zacks Consensus Estimate for 2011 is currently $3.29 per share. We expect the company’s recent merger with Allegheny Energy to benefit the company.
FirstEnergy currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long term Neutral recommendation on the stock. The company primarily competes with American Electric Power Co. Inc. (AEP) and Dominion Resources Inc. (D).
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