FirstEnergy Corporation (FE) on June 3, 2010, received a grant of $57.4 million from the Department of Energy (DOE) to improve reliability and interactivity of the electric distribution infrastructure in its Pennsylvania, Ohio and New Jersey service territories.
The company aims to enhance the operating performance of the distribution systems and offer incentives to customers for reducing energy use through the introduction of smart-grid technology in these areas.
The grant was awarded in October 2009 as part of the American Recovery and Reinvestment Act.
FirstEnergy’s estimated smart-grid installation budget, for all the three states, sums to $114.9 million. The utility commissions in New Jersey and Pennsylvania have approved matching funds for the respective programs in their states, while the Ohio commission is still reviewing the project proposal. As a result, FirstEnergy will begin implementing programs in New Jersey and Pennsylvania.
The DOE grants and approved utility commission funding will be used to install smart-grid technology in the York, Pennsylvania, area served by Metropolitan Edison Company (Met-Ed), and expand the technology already deployed in a number of communities throughout the Jersey Central Power & Light (JCP&L) service area.
Smart-grid technologies help in providing distributed automation, direct load control, smart metering, volt control, advanced protection devices with wireless security. This increases system reliability and efficiency and enable customers to save money by better managing their energy usage.
Headquartered in Akron, Ohio, FirstEnergy Corporation is a diversified electric utility holding company operating within a 36,100-square-mile contiguous service territory, including parts of Ohio, Pennsylvania and New Jersey. Through its subsidiaries and affiliates, the company engages in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services.
We believe strong performance by FirstEnergy’s generation fleet, new regulatory assets, share repurchase programs, asset divestitures and an increased dividend payout make it a compelling conservative growth story, going forward. However, we remain concerned about the current lack of visibility at FirstEnergy Solutions and potential customer migration in Ohio. We maintain our long-term Neutral recommendation on the stock, supported by a Zacks #3 Rank (Hold).
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