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FirstEnergy (FE) Completes Infrastructure Inspection for Summer

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FirstEnergy Corporation (FE - Free Report) recently announced that it has completed the much-needed inspection and maintenance of its transmission system. This proactive yearly inspection ensures that FirstEnergy’s transmission lines operate properly during the summer season and efficiently transfer high-voltage power from generation units to designated locations. This annual event is essential in enhancing service reliability and keeping customers comfortable during hot summer when temperatures climb and more electricity is utilized for cooling purposes.

FE 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 has inspected nearly 17,750 miles of high-voltage transmission lines via helicopters.

FirstEnergy inspected transmission mobile substations and used thermovision cameras to collect the infrared image of defective electrical equipment in substations, which can aid in the rapid restoration of electricity during outages. It also trimmed trees along the transmission lines to lower the possibility of tree-related outages.

Need for Maintenance

A rise in temperature, accompanied by heat storms, not only increases the demand for electricity but also creates a threat to electric infrastructure. The increased demand for air conditioning and the running of high power-consuming machines during warm weather may overload electric lines causing power outages. These inspections and maintenance work ensure a steady flow of electricity during the warm summer season and lower the possibility of outages.

Regular Investments

FirstEnergy is working consistently on maintaining its infrastructure to serve its six million customers more efficiently. Per the ‘Energizing the Future’ plan, FE aims to invest $3.3 billion in 2022, 15% higher compared with the 2021 investments, to strengthen the grid and lead a clean energy transition.

FirstEnergy expects to invest $17 billion in the 2021-2025 period, of which $8.6 billion will be directed toward grid modernization and increasing resiliency, $1.7 billion for conservation & $6.5 billion for the clean energy transition and customer-centric growth projects. FirstEnergy is also exploring more than $20 billion future investment opportunities to further strengthen its transmission operations.

Utilities’ Focus on Infrastructure

To provide a 24X7 electricity supply for consumers, utilities are investing heavily in strengthening their infrastructure. They are replacing old transmission and distribution lines, undergrounding distribution lines and adopting technological upgrades to increase the resiliency of infrastructure for withstanding the impact of extreme weather conditions. To name a few are Xcel Energy (XEL - Free Report) , NiSource (NI - Free Report) and Pinnacle West Capital (PNW - Free Report) .

Xcel Energy continues to invest substantially in its utility assets and aims to strengthen and expand its transmission, distribution, electric generation and renewable projects. XEL aims to spend $26 billion during the 2022-2026 period, which includes $1.5 to $2.5 billion in incremental opportunities.

NiSource is working on a long-term utility infrastructure modernization program and made capital investments worth $1.9 billion in 2021 and plans to invest in the range of $2.4-$2.7 billion in 2022. NI estimated $40-billion long-term natural gas and electric infrastructure investment opportunities, which are expected to drive earnings beyond 2024.

To efficiently serve its expanding customer base, Pinnacle West Capital has systematic investment plans to increase generation and strengthen its transmission and distribution lines. After investing $1.5 billion in 2021, it aims at investing $1.53 billion in 2022.  Pinnacle West Capital also plans to invest $4.7 billion during the 2022-2024 period.

Zacks Rank & Price Performance

Currently, FirstEnergy carries a Zacks Rank #4 (Sell). In the past six months, shares of FE have declined 11.4% compared with the industry’s decline of 8.7%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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