FirstEnergy To Rebuild Transmission Line In Pennsylvania

FirstEnergy Corporation (NYSE:FE) announced that the company along with its subsidiaries is set to rebuild and modernize an electric transmission line that will enhance the service reliability of its customers in the Western Pennsylvania region.

With the completion of this work, the company will be able to provide customers from West Penn Power and Penn Power in Butler and Mercer counties with reduced frequency and duration of power outages. The same will be achieved by reinforcing the local electric system and using smart technologies.

Project Details

As a part of the project, the company will replace the existing 69-kilovolt (kV) poles and wires with new structures which will be capable of supporting 138-kV operation. The 7.5 miles of the upgraded line will extend between existing electric substations of Slippery Rock Township, Butler County and Grove City Borough, Mercer County. The project includes addition of remote control switching devices which allow grid operators to more rapidly respond to operational conditions.

The project is underway at the moment and is scheduled to be over by end of this year. Per the state law, the Pennsylvania Public Utility Commission has sanctioned FirstEnergy to carry on with the rebuilding.

Energizing the Future Plan and Regulatory Approvals

FirstEnergy’s modernization drive has been boosting the company’s service reliability and leading to customer retention. This in turn created the ambitious “Energizing the Future” plan through which the company aims at upgrading and expanding its regulated transmission capabilities. Under this initiative, the company is poised to invest nearly $1 billion in 2017 and $4.2 to $5.8 billion between 2017 and 2021.

To improve the service reliability for its customers in the Penelec and Met-Ed service territories, the company has planned to invest nearly $600 million in transmission projects through 2018. Earlier, the company announced that its subsidiary, Jersey Central Power & Light (JCP&L), has taken a step toward trimming trees as part of its $34-million vegetation management program for 2017. (Read More: FirstEnergy's Unit's Tree Trimming to Improve Reliability)

FirstEnergy is striving to transform itself into a regulated company by mid 2018. It has secured regulatory approvals for base rate increase in Pennsylvania, New Jersey and Ohio which are expected to boost its top line in 2017.

All these above mentioned initiatives are expected to boost FirstEnergy's growth trajectory. Indeed, in a competitive industry like utility, major players like NRG Energy, Inc. (NYSE:NRG) , NiSource, Inc. (NYSE:NI) and Dominion Energy Inc. (NYSE:D) are all putting in extra effort to increase their customer base and therby expand their profit margin.

Price Movement

Shares of FirstEnergy have returned 6.2% outperforming the Zacks industry’s gain of 3.6% in the last three months.

The outperformance must have been driven by the company’s focus on increasing service reliability and customer retention initiatives.

Zacks Rank

FirstEnergy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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