Akron, OH-based FirstEnergy Corporation (FE) through two of its subsidiaries has collectively invested $250 million in 2014 to enhance the overall efficiency and reliability of its electric system.
While FirstEnergy’s Pennsylvania Power (Penn Power) has spent $115 million in infrastructure upgrade programs, its Metropolitan Edison (Met-Ed) utility has incurred $135 million for reliability programs in their service areas.
Of the total capital outlay for the strengthening of infrastructure, $93 million was spent on transmission projects owned by FirstEnergy’s transmission company, Trans-Allegheny Interstate Line Company (TrAILCo).
Infrastructure upgrades included expansion of transmission lines, installation of new transmission substations, replacement of distribution poles and circuits, installation of remote control and voltage regulating equipment to stabilize voltage levels and trimming trees along power lines for proper clearance.
Apart from benefiting from enhanced electric systems, FirstEnergy’s customers will also receive additional assistance from Power Center outage maps developed by the company. From this technology, FirstEnergy users have access to extensive details in connection to a power outage restoration.
Due to the investments made in 2014 to strengthen electric infrastructure, the Met-Ed service area saw a 14% cutback in the number of customers experiencing an outage compared with 2012 levels.
Recent Developments
Other than making reliability investments in its service areas, FirstEnergy is focused on expanding transmission lines to cater to the boom in the U.S. shale gas industry. This has triggered demand for additional electric load. Earlier in the week, FirstEnergy announced that it is investing nearly $35 million in transmission-related projects in western Pennsylvania (read: FirstEnergy Invests More to Support the Shale Gas Industry).
Looking Ahead
FirstEnergy will continue to allocate capital expenditure for enhancing service reliability this year. The utility has new projects for substations, transmission lines and circuit upgrades lined up. The company intends to shell out $4.2 billion from 2014 through 2017 to meet rising electric load growth of 1,100 MW in the next five years.
Zacks Rank
FirstEnergy currently has a Zacks Rank #3 (Hold). Stocks with a better rank in the electric utility space include Abengoa Yield plc (ABY), Enersis S.A. (ENI) and Huaneng Power International, Inc. (HNP). All three stocks currently sport a Zacks Rank #1 (Strong Buy).
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