Wiki source code of FirstEnergy Corp

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5 = Summary =
6
7 * FirstEnergy Corp is an American holding company that operates in the electric utility industry in the U.S. The company was established through a merger of Ohio Edison Company and Centerior Energy Corporation in 1997.
8 * The company runs substantially all of its businesses through its subsidiaries. There are many running and closed subsidiaries of the company. Mainly, the company runs ten regulated distribution subsidiaries.
9 * The infrastructure of the company includes 269,000 miles of distribution lines; transmission operations include over 24,000 miles of transmission lines and two regional transmission operation centers.
10 * For the first three months ended on March 31, 2023, the company has reported total revenue of $3,231 million which was $2,989 million for the same quarter a year earlier. Operating profit during the first quarter of 2023 is $551 million as compared to $559 million during the same period a year earlier. Earnings attributable to FirstEnergy is $292 million and $288 million for the periods, respectively - an increase of $4 million.
11 * During the year 2022, the company has generated a total revenue of $12,459 million as compared to $11,132 million a year earlier, an increase of $1,327 million. Total operating income of the company has been $1,910 million as compared to $1,726 million, an increase of $184 million over the year. Net income attributable to FE in 2022 is $406 million compared to $1,283 million a year earlier, a decrease of $877 million.
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13 = Brief Company Summary =
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15 [[image:FirstEnergy_Logo.svg.png||alt="firstenergy corp logo" height="103" style="float:left" width="424"]]FirstEnergy Corp (NYSE:FE) is an American holding company that operates in electric utility industry and is involved in the transmission, distribution, and generation of electricity. The company serves over six million customers in the Midwest and Mid-Atlantic regions. FirstEnergy is a holding company with its primary assets being its subsidiaries. Substantially all the businesses are conducted by the subsidiaries as well. FirstEnergy’s 10 regulated distribution companies form one of the nation’s largest investor-owned electric systems. The infrastructure of the company includes 269,000 miles of distribution lines; transmission operations include over 24,000 miles of transmission lines and two regional transmission operation centers. The 10 subsidiaries of the company are Ohio Edison (OE), The Cleveland Electric Illuminating Company (CEI), Toledo Edison (TE), Met-Ed (ME), Penelec, Penn Power (PE), West Penn Power (WP), Jersey Central Power & Light (JCP&L), Mon Power (MP), and Potomac Edison (PE). However, apart from these subsidiaries, the company has more subsidiaries (in some cases under the ownership of other subsidiaries).
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17 The subsidiaries of the company can be broadly classified into two categories - regulated utility operating subsidiaries and regulated transmission operating subsidiaries. The revenue of the company is generated from service provided by the Utilities and Transmission Companies. However, the company has two operating segments - regulated distribution and regulated transmission.
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19 (% style="text-align:center" %)
20 [[image:First Energy Campus.jpg||alt="firstenergy corp campus"]]
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22 FirstEnergy is listed in the New York Stock Exchange (NYSE) under the symbol FE. As of May, 2023, 52-week price range of the company was $42.29 to $33.76. Trailing P/E of the company is 58.30 times, price to sales ratio is 1.90 times, profit margin is 3.28%, return on assets (ttm) is 2.60%, return on equity is 4.73%. Trailing annual dividend yield of the company as of May, 2023 is 4.43%, payout ratio is 219.72%. Diluted earnings per share for the first quarter of 2023 is $0.51, which was $0.50 for the same quarter a year earlier, total number of shares outstanding on March 31, 2023 is 572,836,882.
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24 == Consolidation of Pennsylvania Companies ==
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26 FirstEnergy is proceeding with the consolidation of the Pennsylvania Companies into FE PA, a new, single operating entity. The PA Consolidation will require, among other steps: (a) the transfer of certain Pennsylvania-based transmission assets owned by WP to KATCo, (b) the contribution of Class B equity interests of MAIT currently held by PN and ME to FE (and ultimately transferred to FET as part of the FET Minority Equity Interest Sale), (c) the formation of FE PA and (d) the merger of each of the Pennsylvania Companies with and into FE PA, with FE PA surviving such mergers as the successor-in-interest to all assets and liabilities of the Pennsylvania Companies. Following completion of the PA Consolidation, FE PA will be FE’s only regulated utility in Pennsylvania encompassing the operations previously conducted individually by the Pennsylvania Companies. Consummation of the PA Consolidation is contingent upon numerous conditions, including the approval of NYPSC, PPUC and FERC, which filings were submitted on March 6, 2023. Subject to receipt of such regulatory approvals, FirstEnergy expects that the PA Consolidation will close by early 2024.
27
28 = Recent Developments =
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30 * On March 27, 2023, FirstEnergy announced that the FE Board had appointed Brian X. Tierney to the position of President and Chief Executive Officer, effective as of June 1, 2023. John W. Somerhalder II will cease serving as Interim President and Chief Executive Officer at the conclusion of May 31, 2023, and will continue to serve as the Chair of the FE Board.
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32 = Recent Financial Activities =
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34 * For the three months ended March 31, 2023 and 2022, capitalized financing costs on FirstEnergy’s Consolidated Statements of Income include $8 million and $13 million, respectively, of allowance for equity funds used during construction and $13 million and $6 million, respectively, of capitalized interest.
35 * On February 2, 2023, FE along with FET (FirstEnergy Transmission, LLC, the parent company of ATSI, MAIT and TrAIL) entered in FET P&SA II with Brookfield and Brookfield Guarantors where the latter agreed to purchase an additional 30% equity of FET for a purchase price of $3.5 billion, of which $1.75 billion will be in the form of promissory note issuance and the rest is cash.
36 * On December 13, 2021, FE privately issued to BIP Securities II-B L.P., an affiliate of Blackstone Infrastructure Partners L.P., 25,588,535 shares of FE’s common stock, par value $0.10 per share, at a price of $39.08 per share, representing an investment of $1.0 billion.
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38 = Financial Performance Highlights =
39
40 == Q1 2023 Highlights ==
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42 For the first three months ended on March 31, 2023, the company has reported total revenue of $3,231 million, of which $2,826 million is from the regulated distribution segment and $461 million is from the regulated transmission segment. The revenue for the same quarter a year earlier was $2,989 million, of which $2,589 million was from the distribution segment and $453 million is from the other segment. Both quarters had some corporate and other reconciling adjustments. Revenue has increased by $242 million over this period. Operating profit during the first quarter of 2023 is $551 million as compared to $559 million during the same period a year earlier, a decrease of $8 million over the periods. Earnings attributable to FirstEnergy is $292 million and $288 million for the periods, respectively - an increase of $4 million. Diluted earnings per share of the company during this quarter is $0.51 million as compared to $0.50 million for the same quarter a year earlier.
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44 The $237 increase in total revenue of the company has resulted mainly from $258 million increase in total generation sales, $18 million decrease in distribution services revenue and $3 million decrease in other revenues. Regulated Distribution’s earnings attributable to FE decreased $29 million in the first three months of 2023, as compared to the same period of 2022, primarily resulting from lower weather-related customer usage, higher pension and OPEB expenses, and higher interest expense, partially offset by higher revenues from capital investment programs, higher weather-adjusted customer usage and demands and lower other operating expenses.
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46 Revenues from the regulated transmission segment increased by $8 million primarily due to the recovery of higher rate base and operating expenses, partially offset by the absence of a formula rate adjustment at JCP&L in the first quarter of 2022. Regulated Transmission’s earnings attributable to FE decreased $11 million in the first three months of 2023, as compared to the same period of 2022, primarily due to the 19.9% minority equity interest sale in FET that closed in May 2022, and charges resulting from ongoing audits and proceedings, partially offset by higher rate base and lower net financing costs.
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48 Financial results at Corporate/Other resulted in a $44 million decrease in loss attributable to FE in the first three months of 2023, as compared to the same period of 2022.
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50 As of March 31, 2023, FirstEnergy had $177 million of cash and cash equivalents and $29 million of restricted cash compared to $160 million of cash and cash equivalents and $46 million of restricted cash as of December 31, 2022, on the Consolidated Balance Sheets. Cash provided from (used for) operating activities was $(112) million compared to $355 million in the first three months of 2023 and 2022, respectively. Cash used for investing activities for the first three months of 2023 increased $124 million, compared to the same period of 2022, primarily due to capital investments. In the first three months of 2023 and 2022, cash provided from (used for) financing activities was $828 million and $(964) million, respectively.
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52 == Annual Performance Highlights ==
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54 During the year 2022, the company has generated a total revenue of $12,459 million as compared to $11,132 million a year earlier, an increase of $1,327 million. Total operating income of the company has been $1,910 million as compared to $1,726 million, an increase of $184 million over the year. Net income attributable to FE in 2022 is $406 million compared to $1,283 million a year earlier, a decrease of $877 million. Of the total loss, $337 million is from the regulated distribution segment, $47 million is from regulated transmission segment and $499 million is from corporate/other and reconciling adjustments. Diluted earnings per share of the company during 2022 is $0.71, which was $2.35 and $1.99 during the years 2021 and 2020, respectively.
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56 Regulated Distribution's net income decreased $331 million in 2022, as compared to 2021, primarily resulting from higher other operating expenses, customer rate credits associated with the PUCO-approved Ohio Stipulation, change in pension and OPEB mark-to-market adjustments, and higher pension and OPEB expenses, partially offset by higher weather-related usage, rider revenues from capital investment programs, as well as the absence of a $27 million refund for previously collected decoupling revenues in Ohio, with interest.
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58 Regulated Transmission's net income decreased $14 million in 2022, as compared to 2021, primarily due to a charge resulting from the filed settlement by MP, PE and WP with FERC in January 2023, as well as expected customer refunds associated with the FERC Audit, as further discussed below, partially offset by higher rate base and lower net financing costs.
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60 Financial results from Corporate/Other and reconciling adjustments resulted in a $499 million increase in net loss for 2022 compared to 2021, primarily due to higher income tax expense resulting from an income tax charge of $752 million in 2022 representing the deferred tax liability associated with the deferred tax gain on the 19.9% sale of FET membership interests to Brookfield that closed in May 2022, as well as expenses associated with the FE debt redemptions. These were partially offset by the absence of the $230 million DPA monetary penalty, higher net investment income on certain equity method and other investments and the change in pension and OPEB mark-to-market adjustments.
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62 As of December 31, 2022, FirstEnergy had $160 million of cash and cash equivalents and $46 million of restricted cash compared to $1,462 million of cash and cash equivalents and $49 million of restricted cash as of December 31, 2021, on the Consolidated Balance Sheets. Net cash provided from operating activities was $2,683 million during 2022, $2,811 million during 2021, and $1,423 million during 2020. Cash used in financing activities of the company is $912 million and $542 million for 2022 and 2021, respectively. Cash used for investing activities during 2022 increased $517 million, compared to 2021, primarily due to the absence of proceeds from the sale of Yards Creek received in the first quarter of 2021 as well as planned project spend at Regulated Distribution and Transmission.
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64 = Business Overview =
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66 FE and its subsidiaries are principally involved in the transmission, distribution, and generation of electricity. The subsidiaries of the company can be divided as regulated utility operating subsidiaries and regulated transmission operating subsidiaries.
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68 **Regulated utility operating subsidiaries**
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70 The Utilities’ combined service areas encompass approximately 65,000 square miles in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. The areas they serve have a combined population of approximately 14 million.
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72 |(% style="width:356px" %)**Subsidiary Name**|(% style="width:457px" %)**Operational Area**|(% style="width:248px" %)**Population Covered**
73 |(% style="width:356px" %)Ohio Edison Company (OE)|(% style="width:457px" %)Central and Northeastern Ohio|(% style="width:248px" %)2.4 million
74 |(% style="width:356px" %)Pennsylvania Power Company (Penn)|(% style="width:457px" %)Western Pennsylvania|(% style="width:248px" %)0.4 million
75 |(% style="width:356px" %)The Cleveland Electric Illuminating Company (CEI)|(% style="width:457px" %)Northeastern Ohio|(% style="width:248px" %)1.7 million
76 |(% style="width:356px" %)The Toledo Edison Company (TE)|(% style="width:457px" %)Northwestern Ohio|(% style="width:248px" %)0.7 million
77 |(% style="width:331px" %)Jersey Central Power & Light Company (JCP&L)|(% style="width:457px" %)Northern, Western, and East Central New Jersey|(% style="width:248px" %)2.9 million
78 |(% style="width:356px" %)Metropolitan Edison (ME)|(% style="width:457px" %)Eastern and South Central Pennsylvania|(% style="width:248px" %)1.3 million
79 |(% style="width:356px" %)Pennsylvania Electric Company (PN)|(% style="width:457px" %)Western, Northern, and South Central Pennsylvania|(% style="width:248px" %)1.2 million
80 |(% style="width:356px" %)The Potomac Edison Company (PE)|(% style="width:457px" %)Maryland, Virginia and West Virginia|(% style="width:248px" %)1.0 million
81 |(% style="width:356px" %)Monongahela Power Company (MP)|(% style="width:457px" %)West Virginia|(% style="width:248px" %)0.8 million
82 |(% style="width:356px" %)West Penn Power Company (WP)|(% style="width:457px" %)Pennsylvania|(% style="width:248px" %)1.6 million
83
84 **Regulated Transmission Operating Subsidiaries**
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86 FE has a subsidiary namely FET (FirstEnergy Transmission, LLC), of which it owns 80.1% and soon will be selling another 30% equity to Brookfield - the other co-owner, through which the company operates all its transmissions. FET is the parent company of ATSI, MAIT, PATH, and TrAIL.
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88 |(% style="width:268px" %)**Subsidiary Name**|(% style="width:305px" %)**Operational Area**|(% style="width:488px" %)**Specifications**
89 |(% style="width:268px" %)American Transmission Systems, Incorporated (ATSI)|(% style="width:305px" %)Ohio and Pennsylvania|(% style="width:488px" %)345 kV, 138 kV, and 69 kV. 7,900 circuit miles of transmission lines
90 |(% style="width:268px" %)Trans-Allegheny Interstate Line Company (TrAIL)|(% style="width:305px" %)From Southwestern Pennsylvania through West Virginia|(% style="width:488px" %)150 miles of 500 kV line and a total of 260 circuit miles of transmission lines.
91 |(% style="width:268px" %)Mid-Atlantic Interstate Transmission, LLC (MAIT)|(% style="width:305px" %)Pennsylvania|(% style="width:488px" %)nominal voltages of 500 kV, 345 kV, 230 kV, 138 kV, 115 kV, 69 kV and 46 kV
92 |(% style="width:268px" %)KATCo|(% style="width:305px" %) |(% style="width:488px" %)It was formed to accommodate new transmission construction in the WP, MP and PE footprint and currently does not own or operate any transmission assets.
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94 Apart from the utilities company and the transmission companies, FE also has a service company namely FESC. It provides legal, financial, and other corporate support services at cost, in accordance with its cost allocation manual, to affiliated FirstEnergy companies.
95
96 **Operating Segments**
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98 FirstEnergy has two operating segments - regulated distribution segment and regulated transmission segment.
99
100 //**Regulated Distribution**//
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102 The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies, serving approximately six million customers within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey, and Maryland. This segment also controls 3,580 MWs of regulated electric generation capacity located primarily in West Virginia and Virginia. The segment's results reflect the costs of securing and delivering electric generation from transmission facilities to customers, including the deferral and amortization of certain related costs.
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104 (% style="text-align:center" %)
105 [[image:firstenergy generation.jpeg||alt="firstenergy generation"]]
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107 **Regulated Transmission**
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109 The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy's utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment's revenues are primarily derived from forward-looking formula rates. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual rate base and costs. The segment's results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy's transmission facilities.
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111 (% style="text-align:center" %)
112 [[image:transmission lines.jpg||alt="firstenergy trnasmission lines"]]
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114 **Corporate/Other**
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116 This segment reflects corporate support and other costs not charged or attributable to the Utilities or Transmission Companies, including FE's retained Pension and OPEB assets and liabilities of the FES Debtors, interest expense on FE’s holding company debt and other investments or businesses that do not constitute an operating segment. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. As of December 31, 2022, 67 MWs of electric generating capacity, representing AE Supply's OVEC capacity entitlement, was also included in Corporate/Other for segment reporting. As of December 31, 2022, Corporate/Other had approximately $5.4 billion of FE holding company debt.
117
118 = Company History{{footnote}}https://firstenergycorp.com/about/company_history.html{{/footnote}} =
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120 FirstEnergy Corp. was formed in 1997 through the merger of Ohio Edison Company and Centerior Energy Corporation. Through this merger, FirstEnergy became the holding company for Ohio Edison and its Pennsylvania Power Company subsidiary, as well as The Cleveland Electric Illuminating Company and The Toledo Edison Company.
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122 Based in Akron, Ohio, the new company employed some 10,000 employees, served 2.2 million customers within 13,200 square miles of northern and central Ohio and western Pennsylvania, and had approximately 12,000 megawatts of generating capacity.
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124 FirstEnergy nearly doubled its revenue to more than $12 billion and customers served to more than 4.3 million when it merged with the former GPU, Inc., based in Morristown, New Jersey, in 2001. GPU served 2.1 million customers in a 24,000 square-mile service area in Pennsylvania and New Jersey through its three operating companies: Metropolitan Edison Company, Pennsylvania Electric Company, and Jersey Central Power & Light Company.
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126 In 2011, FirstEnergy expanded its customer base and service territory by completing a merger with Allegheny Energy, a Greensburg, Pennsylvania-based company that served 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. 
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128 FirstEnergy announced its plan to move away from commodity-exposed generation and transform into a fully regulated transmission and distribution utility in 2016. The final milestone in this successful separation took place on February 27, 2020.
129
130 = References =
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132 {{putFootnotes/}}
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