FirstEnergy Corp. (FE) continues to improve its utility systems. The company’s unit West Penn Power Company, an electric utility operator in Pennsylvania, announced that it has completed upgrading the substation near Ryerson Station in Greene County, PA.
Per the project, West Penn Power has installed a new 73-ton transformer in the substation which allows it to convert electricity to 25 kilovolts (kV) from 138 kV, while moving along the transmission system to serve its customers. This newly installed unit is joined with an existing transformer of the same size in the upgraded facility.
With the two transformers working simultaneously, West Penn Power will be able to serve its customers reliably even when the unit is offline due to maintenance, renovation or severe weather conditions. Apart from this, the project will also enable the company to fulfill the power demand from local coal mines.
As of Aug 5, 2014, FirstEnergy holds the largest transmission system in Pennsylvania, New Jersey and Maryland (PJM) covering over 24,000 transmission miles. The company makes regular investments to enhance existing capacity, add new assets and replace aged infrastructure.
On Sep 23, 2014, FirstEnergy’s subsidiary, Jersey Central Power & Light Company (JCP&L), upgraded 16 major circuits in nine counties of New Jersey. The company put in flexible polymer fuses, 10-foot cross-arms and fault indicators. The objective of the venture was to improve service reliability through the utilization of modern technology.
In 2014, FirstEnergy plans to invest $1.35 billion in its regulated transmission projects, which is significantly higher than the prior-year investment of around $0.5 billion. These systematic investments in transmission projects will allow the company to meet the increasing demand, primarily from commercial and industrial customers.
Currently, FirstEnergy has pending rate cases in several states, including Pennsylvania, New Jersey and Ohio. Positive outcomes from these rate cases will encourage the company to invest more in its transmission projects.
As of Jul 31, 2014, FirstEnergy had total available liquidity of around $3.66 billion. During the first half of 2014, the company’s operating cash flow stood at roughly $0.62 billion, up around 26.2% from the prior-year level. A stable liquidity position and strong cash generating capacity will help FirstEnergy to finance its development projects.
FirstEnergy currently holds a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Black Hills Corporation (BKH), Pepco Holdings, Inc. (POM) and Pinnacle West Capital Corporation (PNW), each with a Zacks Rank #2 (Buy).
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