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FirstEnergy (FE) Unit to Invest $4M to Strengthen Operation

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FirstEnergy Corp’s (FE - Free Report) subsidiary — Potomac Edison — will build substation near Foxville. The unit will also rebuild six miles of 12-kilovolt (kV) distribution line which will connect Wolfsville, Maryland and the substation.

This $4-million project is part of Potomac Edison’s $156-million investment planned for 2018 to upgrade and strengthen distribution and transmission infrastructure

Focus on Transmission and Distribution Lines

A proper network of transmission and distribution lines enables utility operators to serve customers more efficiently and effectively. Proper maintenance and upgrade of the vital infrastructure lowers possibility of outages and ensures uninterrupted supply of electricity to customers. Proper maintenance of electric poles and lines that pass through vegetation require regular investment for maintenance.

FirstEnergy plans to invest nearly $10 billion in regulated business through 2021 to strengthen and upgrade existing infrastructure. This strategic investment will help the company to serve a six million customer base more efficiently. Recently, the company’s subsidiaries completed the inspections of transmission lines. We believe that these kinds of steps provide comfort to customers and faith on the company, which attracts more customers and ensures retention of existing ones.

 Modernization Plans

Since 2014, the company has upgraded or replaced existing power lines and incorporated smart technology in the grid. The company has initiated a modernization drive plan — Energizing the Future. The new substation will also have smart technology installed to detect irregular conditions.

FirstEnergy is using drones as advanced technology to inspect the infrastructure. Usage of drones is gradually becoming popular among the utility service providers in the United States. Xcel Energy Inc (XEL - Free Report) , CMS Energy Corp (CMS - Free Report) and PPL Corporation (PPL - Free Report) have already started to utilize drones to maintain their infrastructure. Considering the benefits of drones, we expect to see higher usage of the same among other providers as well.

Zacks Rank & Price Movement

FirstEnergy carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of FirstEnergy have returned 21.1% against the industry’s decline of 0.9% in the last 12 months. The upside can be attributed to the consistent investments made by the company to upgrade and modernize transmission as well as distribution lines.

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