FirstEnergy Corp. ( FE Quick Quote FE - Free Report) recently announced that it has completed much needed inspection and maintenance of its transmission system. This annual event ensures that FirstEnergy’s transmission lines will operate properly during the summer season and efficiently transfer high-voltage power from generation units to designated locations. Utilities generally expect demand for electricity to increase during summers.
FirstEnergy used helicopters to quickly and efficiently inspect its nearly 24,000 miles of transmission lines and take measures to repair the damaged lines and equipment. The company also inspected the transformer cooling systems and transmission mobile substations, which can assist in quick restoration of power during outages. FirstEnergy also trimmed trees, along the transmission lines, to lower the possibility of tree-related outages.
Summer Heat Boosts Demand
The demand for electricity increases during the summer season as warm weather leads to increased demand for air conditioning. Further, as high power-consuming machines start running, electricity usage jumps considerably compared with the normal times.
It is not the only company upgrading and maintaining assets. Utilities like
Hawaiian Electric Industries, Inc ( HE Quick Quote HE - Free Report) and Exelon Corporation ( EXC Quick Quote EXC - Free Report) have also been taking active initiatives to help ensure reliability for customers. Regular Investments
FirstEnergy continues to strengthen the transmission and distribution systems through significant investments designed to improve reliability and support customers’ evolving energy needs. It is upgrading and modernizing the transmission system through multibillion-dollar ‘Energizing the Future’ program.
The infrastructure investments made measurable performance improvements for customers, including a 39% reduction through 2020 in equipment-related transmission outages. The company will invest up to $1.2 billion in 2021 to continue reliability improvements on transmission system. There are incremental investment opportunities for its existing transmission infrastructure of more than $20 billion beyond those identified through 2023. These are expected to strengthen grid and cyber-security and make the transmission system more reliable, robust, secure and resistant to extreme weather events, with improved operational flexibility.
In the past 6 months, FirstEnergy’s shares have gained 29% compared with the
industry’s growth of 4.5%. Image Source: Zacks Investment Research
Zacks Rank & A Key Pick
FirstEnergy currently carries a Zacks Rank #3 (Hold). A better-ranked stock from the same sector is
Otter Tail Corporation ( OTTR Quick Quote OTTR - Free Report) , currently having a Zacks Rank#2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Otter Tail’s current dividend yield is 3.19%, marginally higher than its industry average of 3.17%. The Zacks Consensus Estimate for 2021 earnings for Otter Tail has moved up 3.2% to $2.55 per share in the past 60 days.
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