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FirstEnergy's (FE) Arm Spends $120M, To Meet Long-Term Plan
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The Pennsylvania utilities of FirstEnergy Corp. (FE - Free Report) invested more than $120 million in major projects during 2020 to upgrade its distribution system’s infrastructure and technology. These utilities include Pennsylvania Power (Penn Power), West Penn Power, Pennsylvania Electric Company (Penelec) and Metropolitan Edison (Met-Ed).
Long-Term Infrastructure Improvement Plan
These investments are part of the five-year plan, termed as FirstEnergy's LTIIP II, which is running from 2020 through 2024. Per the plan, the utility will invest $572 million in enhancing the reliability of its services and minimizing the impact of outages on its customers. The plan is an extension of the phase one capital plans, which made investments worth $360 million during the 2016-2019 time frame.
Both these phases of Long-term capital investment plan include replacement of older utility poles, renovation of underground and overhead lines and fuses, installation of new substation equipment, network vaults and manhole covers, reconfiguration of circuits and placement of more automated equipment in the field.
The plan will benefit customers from the new automated reclosing devices, which limit the frequency, duration and scope of service interruptions. The electrical devices act like a circuit breaker in a home, cutting the power when trouble occurs plus automatically reenergizing the supply line within a short span for specific outages to provide uninterrupted services. These devices will automatically restore services without requiring any utility personnel to fix it. Also, in terms of safety and efficiency, this technology is better.
Ongoing Strengthening of Infrastructure
Apart from LTIIP, the company executed other projects like replacing existing power lines with thicker, durable wires, which can withstand severe weather. New utility poles and additional power lines were constructed to increase the flexibility while redressing outages. Also, new fencing was done in certain substations to prevent animals from climbing and protect against electrical equipment interference that can cause power cuts.
These planned investments are benefiting the electric distribution system. The frequency of service interruptions from line and equipment failure declined 9% in 2020 from the 2019 level for Met-Ed's projects while for West Penn Power, the same fell 10% in 2020 from the 2018 reading. Also, the same for Penn Power's projects has decreased 20% since the 2016 tally. Penelec's automated technology along with well-trained control center dispatchers helped restoring power in less than five minutes to additional 45% more customers in 2019 from the 2015 baseline.
In the past six months, shares of the company have gained 9%, outperforming the industry’s rise of 8.2%.
Key Picks
A few better-ranked stocks from the same industry are Atlantica Yield PLC (AY - Free Report) , Korea Electric Power Corporation (KEP - Free Report) and CenterPoint Energy (CNP - Free Report) , each sporting a Zacks Rank #1 at present.
The long-term (three to five years) earnings growth rate for Atlantica Yield is pegged at 29.83%. The Zacks Consensus Estimate for 2020 earnings has been revised 1.1% upward over the past 60 days.
The long-term earnings growth rate for Korea Electric Power is pegged at 5%. The Zacks Consensus Estimate for 2020 earnings has been revised 1% upward over the past 60 days.
CenterPoint Energy’s long-term earnings growth rate stands at 5%. It has a trailing four-quarter earnings surprise of 13.22%, on average.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
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FirstEnergy's (FE) Arm Spends $120M, To Meet Long-Term Plan
The Pennsylvania utilities of FirstEnergy Corp. (FE - Free Report) invested more than $120 million in major projects during 2020 to upgrade its distribution system’s infrastructure and technology. These utilities include Pennsylvania Power (Penn Power), West Penn Power, Pennsylvania Electric Company (Penelec) and Metropolitan Edison (Met-Ed).
Long-Term Infrastructure Improvement Plan
These investments are part of the five-year plan, termed as FirstEnergy's LTIIP II, which is running from 2020 through 2024. Per the plan, the utility will invest $572 million in enhancing the reliability of its services and minimizing the impact of outages on its customers. The plan is an extension of the phase one capital plans, which made investments worth $360 million during the 2016-2019 time frame.
Both these phases of Long-term capital investment plan include replacement of older utility poles, renovation of underground and overhead lines and fuses, installation of new substation equipment, network vaults and manhole covers, reconfiguration of circuits and placement of more automated equipment in the field.
The plan will benefit customers from the new automated reclosing devices, which limit the frequency, duration and scope of service interruptions. The electrical devices act like a circuit breaker in a home, cutting the power when trouble occurs plus automatically reenergizing the supply line within a short span for specific outages to provide uninterrupted services. These devices will automatically restore services without requiring any utility personnel to fix it. Also, in terms of safety and efficiency, this technology is better.
Ongoing Strengthening of Infrastructure
Apart from LTIIP, the company executed other projects like replacing existing power lines with thicker, durable wires, which can withstand severe weather. New utility poles and additional power lines were constructed to increase the flexibility while redressing outages. Also, new fencing was done in certain substations to prevent animals from climbing and protect against electrical equipment interference that can cause power cuts.
These planned investments are benefiting the electric distribution system. The frequency of service interruptions from line and equipment failure declined 9% in 2020 from the 2019 level for Met-Ed's projects while for West Penn Power, the same fell 10% in 2020 from the 2018 reading. Also, the same for Penn Power's projects has decreased 20% since the 2016 tally. Penelec's automated technology along with well-trained control center dispatchers helped restoring power in less than five minutes to additional 45% more customers in 2019 from the 2015 baseline.
Zacks Rank & Price Performance
The stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past six months, shares of the company have gained 9%, outperforming the industry’s rise of 8.2%.
Key Picks
A few better-ranked stocks from the same industry are Atlantica Yield PLC (AY - Free Report) , Korea Electric Power Corporation (KEP - Free Report) and CenterPoint Energy (CNP - Free Report) , each sporting a Zacks Rank #1 at present.
The long-term (three to five years) earnings growth rate for Atlantica Yield is pegged at 29.83%. The Zacks Consensus Estimate for 2020 earnings has been revised 1.1% upward over the past 60 days.
The long-term earnings growth rate for Korea Electric Power is pegged at 5%. The Zacks Consensus Estimate for 2020 earnings has been revised 1% upward over the past 60 days.
CenterPoint Energy’s long-term earnings growth rate stands at 5%. It has a trailing four-quarter earnings surprise of 13.22%, on average.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>