FirstEnergy Corp.’s (FE - Analyst Report) business wing, West Penn Power, energized its 138 Kilovolt (Kv) transmission line yesterday which links the substation close to Kirby, Pa. with a substation near Monongalia County, W. Va. Although the majority of the line is in the West Penn region, the West Virginia portion will provide transmission services to another FirstEnergy ancillary, Mon Power.
The line was built to boost FirstEnergy’s regional transmission network, meet future load growth and provide power service reliability to Greene County consumers in Pennsylvania.
The construction work on the 14-mile transmission line commenced in spring 2012. FirstEnergy shelled out approximately $20 million for the project. Both the Kirby and Monongalia County substations were expanded and upgraded to make them suitable for the new line.
Part of the plan also included connecting the line to a 500 kV substation adjacent to Mt. Morris in Greene County through a separate transformer which cost around $8.5 million. Besides initiating this transmission line, West Penn Power intends to expend roughly $110 million for improving electrical systems in its 24-hour county service zones.
Diligent focus will also be given to vegetation management programs in West Penn’s service regions via cutting of tree climbs for maintenance of clearances along the 4,500 miles of distribution and sub-transmission lines. Nearly $25 million is estimated to go out of the company’s pocket for this project aimed at minimization of tree-related storm outages.
Utility companies have lately been investing in modernization of their existing infrastructure to propel future growth. Beginning 2013, FirstEnergy disclosed a series of upgrade plans for its subsidiaries, which included building new circuits, replacing underground cables, and examining and replacing utility poles.
Another operator spending aggressively on asset upgrades is Integrys Energy Group Inc. (TEG - Analyst Report). The company received regulatory approval for its ambitious $220 million modernization project at its Wisconsin Public Service subsidiary.
FirstEnergy’s large-scale upgrade initiatives are appreciable as these will improve the quality of electric services, help retain its customer base as well as attract non-FirstEnergy customers. The combination of asset upgrades and transmission investments will prove beneficial for the company in the near term.
FirstEnergy at the moment carries a Zacks Rank #3 (Hold). Other utility players better placed in the market are Zacks Ranked #2 (Buy) PNM Resources Inc. (PNM - Snapshot Report) and UNS Energy Corp. .