FirstEnergy Corp. (FE) has plans to increase its investments in the ambitious “Energizing the Future” transmission project to $2.8 billion for the period 2014 through 2017. The initiative was first announced in May 2012 as part of the company’s goal of enhancing its high-voltage transmission system.
The initial phase will aim at construction of the 69 kilovolt (kV) transmission lines and substations in areas covered by the company’s Ohio Edison, Cleveland Electric Illuminating Company, Toledo Edison and Penn Power divisions. The program will gradually extend to other FirstEnergy service territories in the next several years. The preliminary program cost is estimated to be $1.8 billion in Ohio, Pennsylvania, West Virginia, New Jersey and Maryland over the next five years.
The large-scale project was undertaken in the wake of the Mercury and Air Toxics Standards (MATS) rule which caused deactivation of coal-fired plants in the region.
The work will involve replacement of ageing infrastructure with state-of-the art equipment to boost customer service reliability and help minimize the duration of outages. About 7,200 circuit miles of 69 kV and higher transmission lines will be examined and renovated as well as over 170 substations will be modernized. Also, work on the list includes evaluation and restoration of 70,000 transmission structures.
The 69 kV line is the key infrastructure connecting the high voltage transmission lines and the distribution network that services the end users. Focus on tightening security at substations by adding new fencing, thermal imaging devices and various surveillance options is also on the cards.
The strategic transmission investments in the service territories where future economic growth is expected, especially in Ohio's shale oil areas, will offer promising results for FirstEnergy. Beginning Nov 2013, FirstEnergy has been busy upgrading its existing high-growth facilities, which will improve service quality and lead to customer retention.
Presently, FirstEnergy carries a Zacks Rank #3 (Hold). Other utility players looking attractive at present include Zacks Ranked #2 (Buy) The AES Corp. (AES), Exelon Corp. (EXC) and Edison International (EIX).