Following the recent asset modernization drive undertaken by
FirstEnergy Corporation ( FE ), the company's
business division Ohio Edison also announced a $275 million upgrade
plan. The initiative includes improving the company's electrical
system as well as service reliability in the areas of northern and
The infrastructure upgrades are designed to maintain an
effective system on a daily basis as well as to manage future load
growth. Key targets for 2013 involve setting up three new
substations, improving the existing circuits and substations,
scrutinizing and replacing poles and acceleration of the existing
vegetation management programs.
Under the plan, the company intends to complete two new modular
substations in the high-load areas of Montville Town in Medina
County and Brimfield Town in western Portage County. The facilities
are anticipated to be operational by the start of the summer
Ohio Edison in addition to the upgrade plans is looking to
conclude the Black River Substation Project in Lorain. The company
will also remove current transmission lines and substations for the
development of the lake front and riverfront properties. The
combined costs of the above programs are estimated to be around $21
Moving ahead, FirstEnergy plans to shell out $2 million for
enhancing circuit capacity and replacing wires to boost operation
capabilities in the Columbiana, Trimbull, Lorain and Medina
counties. To improve its remote monitoring capabilities, the
company will install high-tech relays and computer control systems
in the Akron, Canal Fulton, Cortland, Garrettsville, Medina, North
Fairfield, Warren and Youngstown substations. Animal guards,
insulators, switches and breaker upgrades are other features that
will be introduced to minimize outages.
For examining and replacing the distribution poles, FirstEnergy
will spend over $8.5 million. A total of 58,000 electric poles will
be inspected this year with replacement of roughly 3,000 poles.
Lastly, FirstEnergy aims to spend roughly $20 million for its
vegetation management projects in the cities of Akron, Alliance,
and Delaware among others. It is expected to prune trees which will
help alleviate damage to distribution facilities. Over 6,200 miles
of lines will be trimmed this year.
In late Feb and Mar 2013 two of FirstEnergy's ancillaries -
Jersey Central Power & Light and Cleveland Electric
Illuminating Company - announced plans to invest $200.0 million and
$152.0 million, respectively, for the development and modernization
of its infrastructures in their service areas.
Although the company is likely to incur higher costs for these
programs, the mix of infrastructure and midstream asset development
initiatives will support its future growth goals.
FirstEnergy currently carries a Zacks Rank #3 (Hold). Other
utility stocks well worth a look are Zacks Rank #1 (Strong Buy)
Otter Tail Corporation ( OTTR ),
Brookfield Infrastructures Partners L.P. ( BIP ) and Pike
Electric Corporation ( PIKE ).
Headquartered in Akron, Ohio, FirstEnergy engages in the
generation, transmission, and distribution of electricity in the
United States.BROOKFIELD INFR (BIP): Free Stock Analysis
ReportFIRSTENERGY CP (FE): Free Stock Analysis ReportOTTER TAIL CORP (OTTR): Free Stock Analysis
ReportPIKE ELECTRIC (PIKE): Free Stock Analysis
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