FirstEnergy Announces $2.8 Billion Expansion of "Energizing the Future" Transmission Initiative
Projects Designed to Enhance Service Reliability by Using Remotely Controlled "Smart" Technology
AKRON, Ohio, Nov. 12, 2013 /PRNewswire/ -- FirstEnergy Corp. (NYSE: FE) has announced that it plans to invest an additional $2.8 billion over four years to expand its previously announced "Energizing the Future" transmission initiative. The main focus of the initial construction effort will be the 69 kilovolt (kV) transmission power lines and substations in the Ohio Edison, Cleveland Electric Illuminating Company, Toledo Edison and Penn Power areas. The program is expected to be expanded into other FirstEnergy service territories during the next several years.
"Our work on the backbone of our network will focus on enhancing the service reliability to the communities, businesses and homes in our service areas," said Anthony J. Alexander, president and chief executive officer, FirstEnergy. "The average age for much of this equipment is more than 40 years old. Our goal is to replace outdated equipment with state-of-the-art 'smart' technology that can be operated remotely in order to help prevent some outages from occurring. And if an outage does occur, the new equipment can help reduce the number of customers who are affected, and shorten the duration."
Work on these new "Energizing the Future" projects is expected to begin in 2014 and continue through 2017.
The 69 kV system is the vital link between the high voltage transmission lines and the distribution network that provides power to end-use customers. As part of this program, approximately 7,200 circuit miles of 69 kV and higher transmission lines will be evaluated and rebuilt, as needed. More than 170 substations will be inspected and upgraded, along with 70,000 transmission structures that will be evaluated and rebuilt, as needed.
The scope of the work will involve adding redundancies to the network, which is another step designed to enhance customer service reliability. Work also will be done to improve security at substations by adding new fencing, thermal imaging devices, and various surveillance options.
While some of the projects will be done by FirstEnergy personnel, certain aspects of the work will be completed by area electrical contractors, which will benefit the local economy by creating additional construction jobs. Over four years, this program is expected to put more than 1,100 contractors to work, with the majority being union workers from northeast Ohio.
Once operational, FirstEnergy's investments are expected to benefit the communities where the company has substations, transmission lines and equipment by increasing tax payments, which will support local schools and police and fire services. Because most of the work will be done on the company's existing rights-of-way or at existing substations and other facilities, the environmental impact to communities is expected to be minimal.
Overall, the new transmission projects are designed to increase FirstEnergy's load serving capability in areas where future economic growth is anticipated, particularly in Ohio's shale gas regions; improve reliability of service; create more flexibility to restore service following storms; reduce line losses; and lower the company's overall transmission maintenance costs.
The "Energizing the Future" initiative previously was announced in May 2012 as part of FirstEnergy's ongoing commitment to enhance its high-voltage transmission system. Many of the projects – including new or rebuilt high-voltage power lines, new substations, and the installation of specialized voltage regulating equipment – are needed to help support system reliability as coal-fired power plants in the region are deactivated based on the U.S. EPA Mercury and Air Toxics Standards (MATS) and other environmental rules. Overall, these initial "Energizing the Future" projects represent about a $1.8 billion investment in Ohio, Pennsylvania, West Virginia, New Jersey and Maryland over the next five years.
FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York. Its generation subsidiaries control more than 18,000 megawatts of capacity from a diversified mix of scrubbed coal, non-emitting nuclear, natural gas, hydro, pumped-storage hydro and other renewables. American Transmission Systems, Incorporated, owns FirstEnergy's transmission lines and substations in Ohio. Follow FirstEnergy on Twitter @FirstEnergyCorp.
Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular, the impact of the regulatory process on the pending matters before FERC and in the various states in which we do business including, but not limited to, matters related to rates and pending rate cases, the uncertainties of various cost recovery and cost allocation issues resulting from ATSI's realignment into PJM, economic or weather conditions affecting future sales and margins, regulatory outcomes associated with storms, including, but not limited to Hurricane Sandy, Hurricane Irene and the October snowstorm of 2011, changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil, and availability and their impact on retail margins, the continued ability of our regulated utilities to recover their costs, operation and maintenance costs being higher than anticipated, and the success of our policies to control costs and to mitigate low energy, capacity and market prices, other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water discharge, water intake and coal combustion residual regulations, the potential impacts of CSAPR, CAIR, and/or any laws, rules or regulations that ultimately replace CAIR, and the effects of the EPA's MATS rules including our estimated costs of compliance, the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to deactivate or idle certain generating units), the uncertainties associated with the deactivation of certain older regulated and competitive fossil units including the decision to deactivate the Hatfield's Ferry and Mitchell Power Stations, the impact on vendor commitments, and the timing thereof as they relate to, among other things, the RMR arrangements and the reliability of the transmission grid, adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant), issues arising from the indications of cracking in the shield building at Davis-Besse, adverse legal decisions and outcomes related to ME's and PN's ability to recover certain transmission costs through their TSC riders, the impact of future changes to the operational status or availability of our generating units, the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments, replacement power costs being higher than anticipated or inadequately hedged, the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates, changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates, the ability to accomplish or realize anticipated benefits from strategic and financial goals including, but not limited to, the ability to reduce costs and to successfully complete our announced financial plans designed to improve our credit metrics and strengthen our balance sheet, including but not limited to, proposed capital raising and debt reduction initiatives, the proposed West Virginia asset transfer and potential sale of non-core hydro assets, our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins, the ability to experience growth in the Regulated Distribution segment and to continue to successfully implement our direct retail sales strategy in the Competitive Energy Services segment, changing market conditions that could affect the measurement of liabilities and the value of assets held in our NDTs, pension trusts and other trust funds, and cause us and our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated, the impact of changes to material accounting policies, the ability to access the public securities and other capital and credit markets in accordance with our announced financial plan, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries, actions that may be taken by credit rating agencies that could negatively affect us and our subsidiaries' access to financing, increase the costs thereof, and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees, changes in national and regional economic conditions affecting us, our subsidiaries and our major industrial and commercial customers, and other counterparties including fuel suppliers, with which we do business, issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business, and the risks and other factors discussed from time to time in our SEC filings, and other similar factors. Dividends declared from time to time on FE's common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FE's Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaim any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.
SOURCE FirstEnergy Corp.
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