Akron, OH based FirstEnergy Corporation FE through three of its subsidiaries has planned to invest approximately $784 million in 2015 to enhance the overall efficiency and reliability of its electric system. The three subsidiaries had collectively spent $1,078 million in 2014
While FirstEnergy’s Toledo Edison is planning to spend $120 million in infrastructure upgrade programs, Ohio Edison and The Illuminating Company expect to incur $383 million and $281 million respectively for reliability programs in their service areas.
Of the total amount set aside for the strengthening of infrastructure, more than $475 million will be spent on transmission projects owned by FirstEnergy’s American Transmission Systems, Inc.
Infrastructure upgrades include expansion of transmission lines, installation of new transmission substations, replacement of distribution poles and circuits, installation of remote-control equipment and voltage regulating equipment to stabilize voltage levels and finally refurbishing manholes.
These investments are part of the company’s “Energizing the Future” initiative that began in 2014 and is expected to continue through 2017. This plan was undertaken predominantly to upgrade and expand the company’s transmission system. In 2014, FirstEnergy shelled out approximately $1.4 billion in its regulated transmission business and has allocated roughly $970 million for 2015.
Apart from reliability, these investments are being made to add resiliency to the bulk electric system. FirstEnergy feels the need for hardening its distribution systems particularly after a string of recent storm events.
In the fourth quarter of 2014, the utility reported operating earnings of 80 cents per share, outpacing the Zacks Consensus Estimate of 76 cents by 5.3% and the prior-year earnings by 6.7%.
For 2015, FirstEnergy expects operating earnings per share in the range of $2.40 to $2.70.
Zacks Rank
FirstEnergy currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the electric utility space include Abengoa Yield plc ABY, sporting a Zacks Rank #1 (Strong Buy) and Avista Corp. AVA and Enersis S.A. ENI, holding a Zacks Rank #2 (Buy).
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