The modest improvement in the economy in FirstEnergy's service
territories and a growing transmission business are expected to
boost earnings going forward. FirstEnergy through its investments
in the Energizing the Future initiative is strengthening and
enhancing its existing operational capabilities, which will enable
it to service the extra load. The company's revenues increased 2.7%
during the first nine months of 2014 from prior year and its
operating cash flow improved 4% in the same period. However, the
EPA's Clean Power Plan proposal, which aims at lowering carbon
emissions, might impact its coal-fired electricity producing units.
The competitive environment of the wholesale and retail electric
market could put pressure on the company's bottom line. We have
retained our Neutral recommendation on the stock.
Headquartered in Akron, OH, FirstEnergy Corporation is a
diversified energy company. Through its subsidiaries and
affiliates, the company engages in the generation, transmission and
distribution of electricity, as well as energy management and other
energy-related services. Following its merger with Allegheny Energy
Inc., FirstEnergy operates in seven states, namely, Ohio,
Pennsylvania, New Jersey, New York, Virginia, Maryland and West
Virginia. FirstEnergy has the nation's largest investor-owned
FirstEnergy's diverse generating fleet features non-emitting
nuclear, scrubbed coal, natural gas, and pumped storage hydro and
other renewable energy plants. The company had a total generating
capacity of roughly 17,790 megawatts (MW) as of Sep 30, 2014, of
which 14,000 MW comprised its competitive generation fleet and
3,790 MW its regulated fleet.
FirstEnergy provides electricity services through its utility
operating subsidiaries Ohio Edison (OE), Cleveland Electric
Illuminating Company (CEI), Toledo Edison (TE), Penelec (PN),
Met-Ed (ME), Penn Power (PP), West Penn Power (WP), Jersey Central
Power & Light (JCP&L), Monongahela Power Company (MP), The
Potomac Edison Company (PE), American Transmission Systems, Inc.
(ATSI), and Trans-Allegheny Interstate Line Company (TrAIL) the
company sells energy and related products and services through its
unregulated competitive subsidiaries FirstEnergy Solutions Corp.
(FES) and Allegheny Energy Supply Company, LLC (AE Supply).
FirstEnergy covers 65,000 square-mile areas of Ohio, Maryland,
New Jersey, New York, Pennsylvania and West Virginia. As of now,
the company maintains a utility customer base of 6 million.
FirstEnergy Corp. (FE): Read the Full Research
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