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FirstEnergy's (FE) Unit Penelec Upgrades Underground Network
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FirstEnergy Corp.’s (FE - Free Report) subsidiary, Penelec, has started a large project to help prevent or minimize service interruptions in downtown Johnstown, Cambria County, by strengthening its underground electrical network.
For around 900 downtown customers, the work entails rebuilding crucial sections of one of the four main underground cables. The work also involves the installation of fresh underground transformers and safety equipment that can quickly identify and isolate damage when issues arise and redirect electricity through nearby lines to stop or reduce the length of power outages.
Additionally, a new transformer and protective device were recently changed, and crews plan to replace another six pieces of crucial equipment this summer and fall. This electrical circuit replacement is a part of Penelec’s Long Term Infrastructure Improvement Plan (LTIIP II), a $200 million initiative to accelerate capital investments in the company's electric distribution system over five years.
Need for Upgrades
Underground cables increase the resilience of the entire electric distribution system and allow the utility operator to provide 24x7 services to customers during extreme climatic conditions. Even though the maintenance requirements of the underground cables are lower compared with overhead lines, maintenance of the underground cables is essential for smooth operation during summer months when demand for electricity rises.
The Regulated Distribution segment of FirstEnergy plans to invest more than $9 billion (or 53% of the entire FirstEnergy investment plan) from 2021 to 2025. Strengthening the transmission and renewable generation assets will allow the company to transmit electricity even during adverse weather conditions.
Utilities’ Focus on Infrastructure
Along with FirstEnergy, other utility companies like DTE Energy Co. (DTE - Free Report) , NiSource Inc. (NI - Free Report) and Xcel Energy Inc. (XEL - Free Report) are adopting measures to strengthen their existing infrastructure.
DTE Electric expects to make capital investments of $18 billion over 2023-2027. Additionally, the company plans to invest $45 billion over the next 10 years to support reliability, the addition of renewable resources and the increased pace of electric vehicle adoption.
DTE’s long-term (three-to-five years) earnings growth rate is 6%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) implies an increase of 1.6% over 2022’s reported figure.
NiSource invested $2.6 billion in 2022 and expects to invest $3.3-$3.6 billion in 2023. It projects an investment of approximately $15 billion during the 2023-2027 period, including capital investments to support the generation transition strategy.
NI’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for 2023 EPS implies an increase of 8.8% over 2022’s reported figure.
Xcel Energy aims to spend $29.5 billion during the 2023-2027 time frame. It plans to invest nearly $18 billion for strengthening its electric distribution and transmission operations in the same period. Nearly $0.9 billion will be invested to enhance its renewable power generation operations.
XEL’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS implies an increase of 6% over 2022’s reported figure.
Price Performance
In the past month, shares of FirstEnergy have rallied 3.6% against the industry’s 3% increase.
Image: Bigstock
FirstEnergy's (FE) Unit Penelec Upgrades Underground Network
FirstEnergy Corp.’s (FE - Free Report) subsidiary, Penelec, has started a large project to help prevent or minimize service interruptions in downtown Johnstown, Cambria County, by strengthening its underground electrical network.
For around 900 downtown customers, the work entails rebuilding crucial sections of one of the four main underground cables. The work also involves the installation of fresh underground transformers and safety equipment that can quickly identify and isolate damage when issues arise and redirect electricity through nearby lines to stop or reduce the length of power outages.
Additionally, a new transformer and protective device were recently changed, and crews plan to replace another six pieces of crucial equipment this summer and fall. This electrical circuit replacement is a part of Penelec’s Long Term Infrastructure Improvement Plan (LTIIP II), a $200 million initiative to accelerate capital investments in the company's electric distribution system over five years.
Need for Upgrades
Underground cables increase the resilience of the entire electric distribution system and allow the utility operator to provide 24x7 services to customers during extreme climatic conditions. Even though the maintenance requirements of the underground cables are lower compared with overhead lines, maintenance of the underground cables is essential for smooth operation during summer months when demand for electricity rises.
The Regulated Distribution segment of FirstEnergy plans to invest more than $9 billion (or 53% of the entire FirstEnergy investment plan) from 2021 to 2025. Strengthening the transmission and renewable generation assets will allow the company to transmit electricity even during adverse weather conditions.
Utilities’ Focus on Infrastructure
Along with FirstEnergy, other utility companies like DTE Energy Co. (DTE - Free Report) , NiSource Inc. (NI - Free Report) and Xcel Energy Inc. (XEL - Free Report) are adopting measures to strengthen their existing infrastructure.
DTE Electric expects to make capital investments of $18 billion over 2023-2027. Additionally, the company plans to invest $45 billion over the next 10 years to support reliability, the addition of renewable resources and the increased pace of electric vehicle adoption.
DTE’s long-term (three-to-five years) earnings growth rate is 6%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) implies an increase of 1.6% over 2022’s reported figure.
NiSource invested $2.6 billion in 2022 and expects to invest $3.3-$3.6 billion in 2023. It projects an investment of approximately $15 billion during the 2023-2027 period, including capital investments to support the generation transition strategy.
NI’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for 2023 EPS implies an increase of 8.8% over 2022’s reported figure.
Xcel Energy aims to spend $29.5 billion during the 2023-2027 time frame. It plans to invest nearly $18 billion for strengthening its electric distribution and transmission operations in the same period. Nearly $0.9 billion will be invested to enhance its renewable power generation operations.
XEL’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS implies an increase of 6% over 2022’s reported figure.
Price Performance
In the past month, shares of FirstEnergy have rallied 3.6% against the industry’s 3% increase.
Image Source: Zacks Investment Research
Zacks Rank
FirstEnergy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.