Following the recent asset modernization drive undertaken by FirstEnergy Corporation (FE - Analyst Report), 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 central Ohio.
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 season.
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 million.
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 - Snapshot Report), Brookfield Infrastructures Partners L.P. (BIP - Snapshot Report) and Pike Electric Corporation (PIKE - Snapshot Report).
Headquartered in Akron, Ohio, FirstEnergy engages in the generation, transmission, and distribution of electricity in the United States.