FirstEnergy Corp.’s (FE - Analyst Report) infrastructure modernization drive is progressing well. Its operating wing, Potomac Edison announced the reconstruction of a 138 Kilovolt (Kv) transmission line which will serve 65,000 customers in Carroll, Frederick, Howard and Montgomery counties of Maryland.
The program is a part of Potomac Edison’s overall $55 million investment plan to upgrade electrical systems and service reliability in western Maryland and West Virginia’s Eastern Panhandle territories in 2013.
The 13-mile transmission line was fitted with higher capacity conductor which will link a substation in Thurmont in Frederick County to a substation in Union Bridge, nearby Carroll County. Integral to a $5.3 million initiative it also involved the replacement and modernization of equipment at both the substations. The new equipment will allow the transmission line to effectively handle future load growth.
The original aim was to reconstruct substations along with a transmission line which would have been far more costly. However, the merger with Alleghany Energy in 2011 provided a relief as FirstEnergy was able to economize the program by incorporating local existing equipment. This resulted in greater reliability and at substantial cost-savings.
Besides transmission improvements, FirstEnergy unit will also build new distribution circuits, replace underground cables, examine and replace utility poles as well as carry on with its vegetation management programs.
Expanding transmission assets and upgrading the existing lines have been FirstEnergy’s prime focus in 2013. The company expects to shell out a total of $7 billion in developing transmission infrastructure in the next four years. Recently, FirstEnergy pumped up its transmission investments to $2.8 billion for advancing its “Energizing the Future” project for the period 2014 through 2017.
FirstEnergy’s large-scale modernization efforts will help minimize future maintenance costs as well as amplify the communication chains which will increase systems capacity. This will certainly boost the company’s services thus leading to customer retention and expansion.
Presently, FirstEnergy carries a Zacks Rank #3 (Hold). Other utility players looking attractive at present include Zacks Ranked #2 (Buy) Alliant Energy Corp. (LNT - Analyst Report), Exelon Corp. (EXC - Analyst Report) and Edison International (EIX - Analyst Report).