FirstEnergy (FE) expects to complete construction of the Fremont Energy Center by the end of 2010 and start commercial operation in 2011. Earlier, the company had extended the construction schedule of the plant through 2012 due to challenging economic environment and lower electricity demand.
FirstEnergy had purchased the partially complete plant from Calpine Corp. (CPN) in January 2008. The plant includes two natural gas combined-cycle combustion turbines and a steam turbine with 544 MW of load-following capacity and 163 MW of peaking capacity. With the revised construction schedule in place, FirstEnergy expects to spend around $200 million to complete the plant.
Ohio-based FirstEnergy is a diversified energy company engaged in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. It controls over 14,000 megawatts of generation capacity and serves more than 4.5 million customers in Ohio, Pennsylvania and New Jersey.
FirstEnergy remains focused on maintaining a strong balance sheet and improving operational efficiency. These have resulted in consistent operating performance in recent quarters despite slowing economic conditions.
Going forward, the shift of FirstEnergy’s subsidiaries to market based rates in 2011 will drive strong earnings and cash flow. However, these positives are effectively priced in its current share price. Hence, we maintain our Neutral recommendation for the company.
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Read the full analyst report on “CPN”
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