) is progressing with its modernization work and joining the
drive is the company's business wing Pennsylvania Electric
Company (Penelec). Penelec announced its plan to invest roughly
$105 million to develop and improve its existing electrical
Penelec provides power services to almost 600,000 consumers
across 31 counties under its service area which stretches 17,000
square miles. The program list includes upgrading current
distribution circuits or constructing new ones, scrutinizing and
changing the poles, installation of automated devices as well as
accelerating the vegetation programs. These initiatives are
expected to boost the company's electric system reliability and
make them suitable for future load growth.
The modernization work includes upgrading the distribution
circuit equipment which involves installing fuse and recloser
devices to minimize power outages in Penelec's service zone. The
projected cost for this activity is set at $28 million.
Other installations include the fitting of radio controlled
switches that can be exercised from the dispatch centers enabling
operators to restore power in a speedy and efficient manner.
Also, the company intends to place equipment that will help keep
voltage at appropriate levels. This will especially benefit
industrial and commercial consumers.
Inspection work has already commenced in Jan 2013 and the
replacement jobs will be finished during the fall. FirstEnergy
assigned $19 million for fast-tracking its vegetation projects in
Penn state which comprises of pruning tree arms that disrupt
electric service during storms.
Until now the company's subsidiaries Ohio Edison, Cleveland
Electric Illuminating Company, Toledo Edison, Jersey Central
Power & Light and most recently Metropolitan Edison Company
(Met-Ed) have all announced their utility asset modernization
plans. Ohio Edison and Cleveland Electric will spend a respective
$275 million and $152 million. Toledo Edison, Jersey Central and
Met-Ed will shell out approximately $11 million, $200 million and
$116 million, respectively.
We believe FirstEnergy's concerted efforts towards upgrading
its utility infrastructure will go a long way to enhance
operational quality. This in turn will contribute to the delivery
of uninterrupted services to its consumers and help retain their
loyalty as well as attract non-Penelec customers.
Meanwhile, the company's focus on development of transmission
properties will further complement its broad growth objectives.
FirstEnergy at present carries a Zacks Rank #3 (Hold).
Other stocks in the utility space performing favorably and
worth a look are Zacks Ranked #1 (Strong Buy)
Brookfield Infrastructures Partners L.P.
Pike Electric Corporation
Empresa Nacional Electricidad SA
Based in Akron, Ohio, FirstEnergy engages in the generation,
transmission and distribution of electricity in the United
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