FirstEnergy Corp. reported it lost $2.5 billion for its fourth quarter and $1.7 billion for the year. While those were significant losses in 2017 for the Akron utility, the numbers were a big improvement from fiscal 2016.
FirstEnergy said its fourth-quarter loss amounted to $5.62 per share on revenue of $3.4 billion. That compares to a 2016 fourth-quarter loss of $5.8 billion, or $13.44 per share, on revenue of $3.4 billion.
FirstEnergy had adjusted fourth-quarter earnings of 71 cents per share, up from 38 cents per share a year ago.
The company said it lost $1.7 billion, or $3.88 per share, on revenue of $14 billion for fiscal 2017 that ended on Dec. 31. That compares to a 2016 loss of $6.2 billion, or $14.49 per share, on revenue of $14.6 billion.
FirstEnergy had adjusted earnings of $3.07 per share for the year, compared to adjusted earnings of $2.63 per share for 2016.
Fourth-quarter and full-year results were impacted by noncash, pre-tax asset impairment and plant exit costs of $2.4 billion, or $3.38 per share, related to nuclear power plant assets and increasing nuclear asset retirement obligations, and also by reducing the carrying value of the Pleasants Power Station in West Virginia. FirstEnergy also recognized a fourth-quarter noncash charge to income tax expense of $1.2 billion, or $2.68 per share, related to the federal tax reform.
FirstEnergy said it also plans to spend more than $10 billion through 2021 on capital improvements on its regulated businesses.
FirstEnergy reported results after the stock market closed Tuesday.
Shares in FirstEnergy fell 25 cents, or 0.8 percent, to $32.80 on Tuesday. Shares are up 7.1 percent since Jan. 1 and are up 5.8 percent from a year ago. In after-hours trading Tuesday, FirstEnergy shares were up 3.2 percent as of 4:50 p.m.
“Throughout the past year, our company has made important progress in our transition to a fully regulated utility,” Charles E. Jones, president and chief executive officer, said in a news release. “This strategy and the opportunities for growth in our regulated businesses earned the confidence of prominent investors. With their equity investment earlier this year, we began 2018 with stronger corporate financial metrics, and we are well positioned to accelerate growth in our transmission and distribution businesses, as we continue our exit from competitive generation.”
FirstEnergy said it anticipates having adjusted earnings of $2.25 to $2.55 per share for fiscal 2018.
Company executives will host a conference call with industry analysts starting 10 a.m. Wednesday. The public can listen in by going online to http://www.firstenergycorp.com/ir.
The utility last week announced it will either sell or deactivate by year’s end its 1,300 megawatt coal-fired Pleasants Power Station, subject to regulatory approval.
The company also last week told state regulators it does not plan to reduce electricity rates following federal tax reform that cut corporate tax rates to 21 percent.
In January, Moody’s Investors Services said it appears likely that FirstEnergy Solutions, the utility’s unregulated power generation subsidiary, will default on a nearly $100 million bond payment due in April.
Moody’s comments came shortly after FirstEnergy said it received a $2.5 billion infusion from equity investors. The utility also formed a restructuring working group in anticipation of FirstEnergy Solutions taking action, including a possible bankruptcy filing, to address its significant debt burden.
FirstEnergy Corp. announced a new chairman of the board and also said it is shaking up its senior executive ranks in preparation for becoming a fully regulated utility.
FirstEnergy’s new board chairman is Donald T. Misheff. He succeeds George M. Smart, who plans to retire in May.
Also elected to the FirstEnergy board was Sandra Pianalto, former president of the Federal Reserve Bank of Cleveland. She succeeds William T. Cottle, who is retiring from the board.
Smart and Cottle reached the mandatory board retirement age of 72, FirstEnergy said.
Misheff, 61, has been a FirstEnergy director since 2012 and is the retired managing partner of the Northeast Ohio offices of Ernst & Young. He also serves as a director of TimkenSteel Corp., Trinseo S.A., and Aleris Corp.
Pianalto, 63, retired in May 2014 as president and chief executive officer of the Cleveland Fed. Pianalto also is a director of Eaton Corp., Prudential Financial Inc., and J.M. Smucker Co.
Smart was a director of Ohio Edison from 1988 until 1997, and became a FirstEnergy director when the utility was created in 1997 through the merger of Ohio Edison and Centerior Energy. He was elected FirstEnergy chairman in 2004.
Cottle has been a director of FirstEnergy since 2003. He retired as CEO of STP Nuclear Operating Co.
Also Tuesday, FirstEnergy announced nine senior management changes that it said are designed to support its transition to a fully regulated utility company and broaden the experience of key executives. The changes will become effective in early March.
The moves are:
• James F. Pearson, executive vice president and chief financial officer, to executive vice president, finance.
• Steven E. Strah, senior vice president and president, FirstEnergy Utilities, to senior vice president and chief financial officer.
• Jason J. Lisowski, controller and treasurer, FirstEnergy Solutions, to vice president, controller and chief accounting officer.
• Samuel L. Belcher, president and chief nuclear officer, FirstEnergy Nuclear Operating Co. (FENOC), becomes senior vice president and president, FirstEnergy Utilities.
• K. Jon Taylor, vice president, controller and chief accounting officer, to president of Ohio Operations.
• Charles D. Lasky, senior vice president, human resources, to senior vice president, human resources, and chief human resources officer.
• Christine L. Walker, executive director, talent management, to vice president, human resources.
• Donald A. Moul, president, FirstEnergy Generation at FirstEnergy Solutions, becomes president, FES Generation Cos. and chief nuclear officer.
• Kevin T. Warvell, vice president, commercial operations structuring and pricing, FirstEnergy Solutions, to vice president, chief financial officer, treasurer and corporate secretary at FirstEnergy Solutions.
FirstEnergy Corp. expects to deactivate a large coal-fired power plant in West Virginia by year’s end that can power 1.3 million homes.
The 1,300 megawatt Pleasants Power Station along the Ohio River in Willow Island, W.Va., will be closed or sold by Jan. 1, 2019, FirstEnergy said Friday in a news release.
The power plant is owned by FirstEnergy subsidiary Allegheny Energy Supply and has about 190 employees.
The plant deactivation is subject to review by PJM Interconnection, the regional transmission organization responsible for electric grid reliability where the power plant is located, the utility said.
FirstEnergy subsidiary Mon Power filed a plan in March 2017 seeking regulatory approval to acquire the Pleasants Power Station. The Federal Energy Regulatory Commission rejected the proposal on Jan. 12.
The utility said in a news release the acquisition would have resolved a projected 10-year energy capacity shortfall and decreased electric bills for customers.
The Public Service Commission of West Virginia had approved the sale subject to significant conditions, FirstEnergy said.
Those conditions, combined with the FERC rejection, make the proposed transfer unworkable, the utility said.
“Closing Pleasants is a very difficult choice because of the talented employees dedicated to reliable operation of the station and the communities who have supported the facility for many years.
“But the recent federal and West Virginia decisions leave FirstEnergy no reasonable option but to expeditiously move forward with deactivation of the plant,” Charles E. Jones, FirstEnergy president and chief executive officer, said in a news release. “We will continue to pursue opportunities to sell the plant while planning for deactivation.”
Affected employees may be eligible to receive severance benefits if the plant closes, FirstEnergy said.
Pleasants Power Station began making electricity in 1979.
It has two 650-megawatt coal-powered generating units.
Beginning in 2016, FirstEnergy announced the sale or closure of 2,471 megawatts of generation in neighboring states Ohio, Pennsylvania and Virginia.
Once the Pleasants plant is deactivated, FirstEnergy said it will own or control generating capacity totaling about 14,795 megawatts of power from coal, nuclear, natural gas and renewable energy plants in Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.
FirstEnergy said it continues to complete the strategic review of its remaining competitive generating fleet.
They always hoped they made a difference.
Perhaps helped her achieve a higher grade.
Sparked an interest in schoolwork.
Maybe even just brightened the young Akron student’s day with words of encouragement.
But then again, you just never know what the future holds.
It was back in 2007 when a pair of FirstEnergy employees decided to volunteer in the Akron Reads Program, where mentors meet weekly with Akron elementary school students who need a little additional help with their reading skills.
So Nancy Grayem and Susan Lloyd would head off to Robinson Elementary School to meet with an eager third-grader by the name of Laurensjai Humphries.
They tutored her through the school year and even gave her Christmas presents.
But at the end of the school year they parted ways.
Grayem, who now works as an executive assistant in Energy Delivery Transmission Operations, said she was looking across a list of new hires when her eyes stopped at a familiar name.
It was the spelling of the employee’s first name, Grayem said, that made her realize that the young girl that she shared a love of reading with had joined the ranks at FirstEnergy as a customer service representative in the company’s Fairlawn Contact Center off West Market Street.
She immediately called her old Akron Reads partner, Lloyd, who is a corporate librarian and advanced communications representative, with the good news.
“I think it is really great to make contact with Laurensjai again,” Grayem said. “A lot of people don’t get to see or hear what happens to the kids you tutor.”
And like old friends, the three picked up right where they left off — down to a corny old joke.
At a recent reunion, Grayem asked Humphries to repeat a joke she used to tell them.
“What do you call cheese that’s not yours?” Humphries asked. “Nacho cheese.”
Guffaws aside, Humphries admits “that’s still one of my favorite jokes.”
After graduating from East High School in 2016, she started work as a temporary employee in the call center before being hired full time by the company.
Humphries said that she loved school and that teachers and mentors like Lloyd and Grayem helped foster that desire to do well in classes.
“I loved Robinson,” she said. “I still go back to visit my old teachers.”
Grayem said it is really neat that Humphries now works at FirstEnergy too.
“This is all like a big circle,” she said. “It has come full circle.”
Carla Sibley, who helps run the Akron Reads program for Akron Public Schools, said this seems to be the first time in the nearly 20 years that the program has been around that a student has landed a job at the same place his or her mentor worked.
“This is pretty special,” she said. “This really speaks to the lasting connection a mentor can make with a young person.”
The program helps around 180 students a year with some 220 community and corporate volunteers. Volunteers meet around 20 times over the school year with a child who needs a little extra help to hone reading and spelling skills.
“For many of these young students, this is a positive interaction that may lead to more reading,” Sibley said.
Craig Webb can be reached at [email protected] or 330-996-3547.
COLUMBUS: The Ohio Supreme Court ruled Wednesday that the Public Utilities Commission of Ohio cannot order Akron-based FirstEnergy Corp. to refund $43 million to customers for the “imprudent” purchase of renewable energy credits made in 2010.
The court in a 6-1 decision said the state agency had approved adding the charges to customer bills and that ordering the refund violates a rule against “retroactive ratemaking.”
The PUCO in 2012 ordered FirstEnergy to refund residential customers by slightly reducing rates by an average of $5. But FirstEnergy opposed the order, leading to the court dispute.
Justice William M. O’Neill, who wrote the leading opinion, said the state’s “no-refund rule” may be perceived as unfair or sometimes results in a windfall for the utility company, but “it is the statutory scheme that requires this result,” and only the state legislature can change it.
The court also ruled that the PUCO did not provide adequate justification for agreeing with FirstEnergy to keep secret some information about participants and amounts paid while selecting and awarding bids to provide renewable energy.
The court said the commission must “provide more specific reasoning for sealing the information or … make it public.”
FirstEnergy agrees with the court’s decision, spokesman Doug Colafella said. He noted that FirstEnergy was not required to pay any refund while the court looked into the case.
“We’re pleased with the court’s decision,” Colafella said.
Justice Judith L. French was the lone dissenting vote.
In her opinion, she stated that FirstEnergy agreed to allow the PUCO to reduce charges to customers for energy credits that were not prudently purchased as part of an overall three-year rate plan, according to Court News Ohio. She wrote that the PUCO was entitled to audit the purchases at a later date to determine if refunds were justified.
“In effect, the commission and the parties needlessly went through more than two years of litigation at the commission when everyone involved should somehow have realized from the outset that FirstEnergy would be entitled to keep virtually all its [renewable energy certificate] costs, whether prudently incurred or not,” French wrote.
PUCO Chairman Asim Z. Haque issued a statement on the ruling.
“While the PUCO is reviewing the court’s decision, we are concerned that today’s ruling will have negative impacts on the agency’s ability to protect Ohio’s utility customers,” Haque said on Wednesday. “Our ability to effectively audit utility expenses is one of our most important regulatory responsibilities.”
The Ohio Consumers’ Counsel said the court ruling indicates the state government needs to act.
The “disappointing court decision again highlights one of the worst ways that Ohio’s rate-setting process is unfair to utility consumers — the law allows FirstEnergy and other utilities to keep unlawful charges instead of giving millions of dollars in refunds to consumers,” Dan Doron, Ohio Consumers’ Counsel spokesman, said.
“Ohioans need their legislature to take swift action to change the law so that utility consumers are protected in the future,” Doron said.
This week, Consumers’ Counsel Bruce Weston testified in favor of House Bill 247, “which would result in refunds of unlawful utility charges to consumers in the future,” Doron said.
The Consumers’ Counsel said his office had appealed to the court to require more refunds than what the PUCO ordered, but that request was denied.
The Consumers’ Counsel partly succeeded in its appeal in asking the court to make more information about the PUCO’s case process less secret and available to the public.
To read the full opinion, go to: http://www.courtnewsohio.gov/cases/2018/SCO/0124/132026.asp#.Wmiah5X2bct.
Moody’s Investors Services thinks it is highly likely FirstEnergy Corp. subsidiary FirstEnergy Solutions will default by being unable to make a nearly $100 million bond payment in early April, meaning bondholders could lose 50 to 70 percent of their investments.
Moody’s on Tuesday downgraded FirstEnergy Solutions, citing FirstEnergy’s news Monday that the Akron utility received an infusion of $2.5 billion from equity investors and formed a new restructuring working group in anticipation of FirstEnergy Solutions to soon take action to address its massive debt problems. The subsidiary’s options include restructuring its debt or reorganizing under Chapter 11 bankruptcy.
“Both the probability of default and expected losses are high,” Moody’s analyst Jairo Chung said in a news release.
FirstEnergy Corp. said it does not comment on investment firm ratings changes.
Moody’s said the likelihood is very low that FirstEnergy Solutions will be able to repay its $98.9 million senior unsecured bond that matures on April 2, a Monday.
“Moody’s views the formation of the restructuring working group as an indication that [FirstEnergy Solutions] is getting closer to default,” the firm said in its release.
FirstEnergy Solutions is the unregulated competitive generation arm of FirstEnergy Corp. FirstEnergy has said it is working to becoming a fully regulated electric utility. Moody’s noted the new restructuring group will advise FirstEnergy on a strategy to exit the unregulated power generation business.
FirstEnergy Solutions owns or controls about 10.2 gigawatts of power generation from coal-fired, nuclear, natural gas and other power plants.
Moody’s downgraded FirstEnergy Solutions Corp.’s corporate family rating to a “highly speculative” Ca, meaning it thinks the business is likely either in or near default. The subsidiary previously had a slightly higher Caa1 speculative rating.
Moody’s also downgraded its “probability of default” rating to Ca-PD, also meaning FirstEnergy Solutions is either in default or near default. The previous rating was a slightly higher Caa1-PD.
Moody’s said it does not appear that FirstEnergy Solutions will get either regulatory or political intervention to help its finances.
Reporter Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or [email protected]. Follow him @JimMackinnonABJ on Twitter or http://www.facebook.com/JimMackinnonABJ.
FirstEnergy Corp. is getting a $2.5 billion infusion of capital that the utility says reduces debt and strengthens its strategy to become a fully regulated utility.
The investment involves private equity firms that have bought a combination of preferred convertible stock and regular shares.
The investment does not include FirstEnergy Solutions, the financially troubled, nonregulated generation arm of the $14.5 billion Akron company.
But the equity infusion will help FirstEnergy accommodate any restructuring that FirstEnergy Solutions may attempt, one of the Akron utility’s top executives said. (Previously discussed options for subsidiary FirstEnergy Solutions have included being spun off and also filing for Chapter 11 bankruptcy to reorganize its heavy debt.)
FirstEnergy shares soared on the news, which was announced prior to the stock market opening Monday.
“We are pleased that these premier investors are demonstrating confidence in our plan to transform FirstEnergy into a fully regulated utility,” Charles E. Jones, FirstEnergy president and chief executive officer, said in a news release.
The plan strengthens FirstEnergy and is positive for the company, its investors and the community, said Jim Pearson, chief financial officer.
“It will be a basis for future growth,” he said. “I look at this as a very positive development for FirstEnergy.”
Investors thought so, too. FirstEnergy shares closed $3.05 higher, or 10.4 percent, to $32.45 after heavy trading Monday. Shares were as high as $34.13 in trading earlier in the day.
FirstEnergy said it will use $750 million of the proceeds to fund its pension plan, on top of a $500 million contribution it made on Jan. 5. It will use $1.45 billion to pay off debt.
An additional $250 million to $300 million will be available for general corporate purposes. FirstEnergy said it anticipates using proceeds for infrastructure improvements to its transmission networks in Ohio and New Jersey, which would also add to earnings growth.
Investment firms Elliott Management Corp., Bluescape, GIC and Zimmer Partners have bought $1.62 billion in mandatory convertible preferred equity and $850 million in FirstEnergy common stock.
“Elliott and Bluescape have proven value-added expertise and investment acumen in power and utility restructurings,” Jones said. “This investment will enable us to accelerate FirstEnergy’s growth and infrastructure improvement plans for our transmission and distribution business, which will benefit our six million customers.”
Pearson described the firms as long-term investors, some of whom had already owned shares in FirstEnergy.
According to the investment terms, the convertible preferred shares can be converted into regular FirstEnergy shares in six months — and must be converted into FirstEnergy common shares by the end of 18 months.
The result will be that the equity partners will own about 89 million shares in FirstEnergy, or 16 to 17 percent of the company, Pearson said.
Discussions with the firms began four to six months ago, he said.
The equity firms are not getting any board seats or governance as part of the investment, Pearson said. Instead, the equity firms are buying the shares to help FirstEnergy move to becoming a pure-play regulated utility, he said.
“They want to provide capital to a business that they feel is undervalued,” Pearson said.
Industry analyst Christopher Muir of New York investment research firm CFRA had positive things to say about FirstEnergy in a note to clients Monday.
“We believe the investment signals confidence in [FirstEnergy’s] growth prospects,” Muir said.
Becoming a fully regulated utility again — FirstEnergy’s status prior to Ohio’s 1999 electric utility deregulation initiative — means the government will set prices, not competitive markets.
FirstEnergy had previously said it planned to issue up to $1.5 billion in new equity through 2019. With this latest program, FirstEnergy said it does not see the need to issue additional equity through the end of 2020 other than for stock investment plans and employee benefits.
The company also has created what it calls the Restructuring Working Group as part of its plan to exit the competitive generation business and become a fully regulated utility.
According to a filing with the Securities and Exchange Commission, the group will meet and provide advisory-only recommendations, suggestions and advice to company executives regarding the restructuring of FirstEnergy Solutions and FirstEnergy’s participation in any restructuring.
Members of the Restructuring Working Group include Pearson; Leila Vespoli, FirstEnergy’s chief legal officer; Gary Benz, senior vice president of strategy; C. John Wilder, Bluescape executive chairman; and Anthony Horton, CFO of Energy Future Holdings Corp.
“This meaningful equity investment and renewed focus on FirstEnergy’s substantial regulated investment opportunities across its utility franchise, along with the [Restructuring Working Group’s] laser focus on helping the company exit competitive generation in a constructive and timely manner, will transform FirstEnergy into a premier, high performance pure-play regulated utility,” Bluescape’s Wilder said in a news release.
According to an SEC filing, FirstEnergy and Bluescape have agreed to make payments to each other based on the performance of FirstEnergy’s stock, with Bluescape eligible for a maximum payment up to $29 million. If FirstEnergy stock significantly outperforms certain criteria, Bluescape may make a payment to FirstEnergy.
Wilder also agreed to retain FirstEnergy equity investments for a certain period of time.
FirstEnergy initially began moving toward becoming re-regulated in 2013, speeding up the process in 2016.
FirstEnergy is scheduled to report fourth-quarter and full 2017 fiscal year earnings on Feb. 21.
Reporter Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or [email protected]. Follow him @JimMackinnonABJ on Twitter.
Sometime this spring, a gaping hole will appear in the top floor of the PNC Building where a row of windows now looks 300 feet down on Cascade Plaza.
From the corner of Main and Bowery streets, a crane 10 feet taller than the building — the second tallest in Akron — will swing over and grab a 25,000-pound hunk of machinery. It hasn’t moved since the skyscraper went up in 1968. But it’ll go all the way down to the ground.
First to be removed will be the old chiller. By summertime, it’ll be replaced with a more efficient unit that could ease the building’s dependence on natural gas. After that, workers will do the same for two equally enormous boilers, also relics from 1968. The pair of cylinders, a puzzle of curved and flat steel plates bolted and welded together, stretch out 24 feet and stand 10 feet high. After they’re removed, five leaner and greener units, each small enough to send up the maintenance elevator, will kick on before next winter.
The $8.5 million project, which also includes new lighting and other energy efficiency upgrades, is the first of its kind for the way it will be funded.
The Development Finance Authority (DFA) of Summit County, formerly known as the Summit County Port Authority, will issue bonds with the blessing of state law and approval from locally elected leaders.
The bond sales, which will cover the project, will then be repaid over the next 18 years at an average rate of about $477,000 annually attached to the skyscraper’s property tax bill.
Win for everyone
This first PACE-financed project in Summit County is being touted by government officials and private business leaders as a win for everyone: the building owners, the tenants, the city (which has no financial responsibility), even the environment.
Upon completion next year, building manager Kathy Cunningham said energy usage will drop 10 to 15 percent. That means a smaller carbon footprint and a lower utility bill. “Savings are always used and passed along to tenants,” Cunningham said. “To the extent that we make this building more efficient, obviously the tenants would benefit.”
And it’s those future energy savings that the building’s owners, Cascade Plaza Associates LLC, say will cover the semi-annual increase in their property tax bill. Even so, no private lenders would cover the renovations on the iconic Akron building, which bears the name of a national bank.
Christopher J. Burnham, the president of DFA, said national companies like Greenworks, which specializes in exactly the type of financing that makes this project possible, wouldn’t lend the money. So DFA, whose board includes CEOs from some of Akron’s largest businesses and a couple of its civic-minded nonprofits, will be issuing bonds just as local, state and federal governments do when financing costly infrastructure projects.
Project green light
Akron City and Summit County Councils approved the special funding arrangement this past week. Once the bonds are sold and the money becomes available, the project is a go.
Already, bids are going out for the work and engineers are contemplating the best ways to remove the top-floor boilers and chiller and replace most of the lighting. The work will likely take place at night.
Overseeing the entire project is Plug Smart, an energy services company in Columbus, which Cascade Plaza Associates had hired to make similar cost-cutting upgrades to another property it owns.
Craig Burkett, chief engineer for the PNC Building, has one of the highest offices in Akron. His desk sits on the 23rd floor in the maintenance section of the building, where blue-collar workers behind the scenes keep the heat and air running and the lights on.
Burkett has spent the bulk of his career, 35 years in all, inside the nearly 50-year-old PNC Building. Cascade Plaza Associates bought the skyscraper in 1999, almost immediately investing $8 million in the landmark structure.
As the chiller and boilers have aged with Burkett, the engineer has found the cost of repairing, maintaining and buying replacement parts has gone up.
The old-school chiller, for example, runs on lithium bromine pumped by steam through 18,056 individual copper tubes, he explained.
The unit that will replace it will run on greener and cheaper electricity, and more efficient motors. “So the gas [use and bill] will go way down,” Burkett said from his office, surrounded by mechanical dinosaurs, 300 feet above the city streets.
NASHVILLE, TENN.: Plans for an underground liquefied natural gas storage hub pegged as a major job creator for Appalachia have cleared their first big hurdle.
Appalachia Development Group LLC says the Appalachia Storage & Trading Hub initiative received approval Wednesday for the first of two application phases for a $1.9 billion U.S. Department of Energy loan. The group also aims to secure $1.4 billion in other financing.
Group CEO Steve Hedrick said it hasn’t been determined where the project will land, but listed West Virginia, Ohio, Kentucky and Pennsylvania.
The American Chemistry Council has estimated the project could attract up to $36 billion in new chemical and plastics industry investment and create 100,000 new area jobs.
Sens. Joe Manchin and Shelley Moore Capito are pushing for the facility to land in West Virginia.
FirstEnergy Corp. will build a $37 million, 88,000-square-foot Center for Advanced Technology building off Mull Avenue near its West Akron campus on White Pond Drive.
The Akron utility on Thursday announced plans for the center, which will be used to evaluate, test and train staff on new digital grid technologies. Once FirstEnergy gets the necessary permits from the city, it expects to break ground in the spring.
The training facility will support FirstEnergy’s efforts to modernize the electric grid across its six-state territory, the company said. The company has more than 24,000 miles of transmission lines in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York.
The new center is designed to provide engineers and other technicians with a hands-on environment for upgrading and maintaining the power grid by simulating real-world conditions on the electric transmission system, according to FirstEnergy.
The training center will be staffed by 20 to 25 FirstEnergy employees.
The new grid technologies FirstEnergy said it will train employees on include digital relay devices that can remotely pinpoint the location of an equipment failure. The facility also will be used for evaluating and testing equipment to ensure that it complies with the latest industry standards, including cybersecurity, FirstEnergy said.
The facility will have classroom space for up to 50 people.
“The center will directly support FirstEnergy’s efforts to design and build a smarter energy infrastructure,” Carl Bridenbaugh, vice president, transmission, said in a prepared statement. “Across our system, we’re replacing older, mechanical devices with new digital devices that can be remotely monitored and can react to real-time issues on the electric grid. Having a facility where we can evaluate and test these technologies under real-world conditions will help us keep power flowing to our customers around the clock.”
The center will support Energizing the Future, a multiyear initiative aimed at upgrading FirstEnergy’s transmission facilities with advanced equipment and technologies to reinforce the power grid and help reduce the frequency and duration of outages, the company said.
FirstEnergy expects to submit this project to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification, meaning if it qualifies the center would meet the highest possible green building standards.
FirstEnergy Corp. raised its earnings outlook for its full fiscal year after reporting comparable earnings but lower revenue for its third quarter compared to last year.
The Akron-based utility had net income of $396 million or 89 cents per share, on revenue of $3.7 billion for the quarter ending Sept. 30. That compares to net income of $380 million, or 89 cents per share, on revenue of $3.9 billion a year ago.
The company said it had adjusted earnings of 97 cents per share.
Earnings beat analyst estimates while revenue fell short.
The company will hold a conference call with industry analysts 10 a.m. Friday. The public can listen in via webcast by going to http://www.firstenergycorp.com/ir
The company said it now expects higher net income of $2.02 to $2.42 per share compared to its previous forecast of $1.95 to $2.25 per share. Adjusted full-year earnings will range from $3 to $3.10 per share, the company said.
FirstEnergy reported third quarter results after the stock market closed Thursday.
Residential electricity sales decreased 14.1 percent, while commercial sales decreased 6.5 percent. Industrial electricity sales increased 1.2 percent, largely because of higher usage in the shale gas sector, FirstEnergy said.
“During the quarter, we achieved solid results from each of our businesses, and made continued progress on our regulated growth strategies,” Charles E. Jones, FirstEnergy president and chief executive officer, said in a news release. “We remain focused on meeting our commitments to the investment community, and we are pleased to raise our full-year 2017 operating earnings guidance above our previous range.”
FirstEnergy swung to a profit for the first nine months of the 2017 fiscal year compared to a loss for the same period in 2016.
For the first nine months of 2017, the company had net income of $775 million, or $1.75 per share, on revenue of $10.6 billion.
For the same period in 2016, FirstEnergy had a loss of $381 million, or 90 cents per share, on revenue of $11.2 billion.
In August, Ohio utilities regulators rejected appeals of an October 2016 ruling giving FirstEnergy Corp. an extra $204 million a year for up to five years. Jones had testified the subsidy, which increases customer bills by about 5 percent, was needed to help avoid a bankruptcy filing by the company’s FirstEnergy Solutions subsidiary.
TOLEDO, OHIO: Ohio’s environmental regulators have more than doubled the proposed fines against a company building a natural gas pipeline from West Virginia to Michigan, saying Wednesday the two sides are at an impasse.
The fines now stand at $2.3 million and stem from what the Ohio Environmental Protection Agency says are numerous water and air pollution violations during construction of the $4.2 billion Rover Pipeline.
The twin pipelines are being built across Ohio to carry natural gas from Appalachian shale fields to Canada and states in the Midwest and the South.
Dallas-based developer Energy Transfer Partners, which also was behind the Dakota Access oil pipeline, has resisted attempts at resolving the fines, said Craig Butler, director of Ohio’s Environmental Protection Agency.
Butler said he is now asking the state’s attorney general to get involved.
Energy Transfer Partners said it will continue to work with the Federal Energy Regulatory Commission to meet its requirements.
The federal commission that oversees gas pipelines this week gave the company the approval to restart drilling operations. New drilling on unfinished sections had been halted after 2 million gallons (7.6 million liters) of drilling mud seeped into a wetland in the spring.
Energy Transfer Partners spokeswoman Alexis Daniel said the project now is expected to be completed and operating by the end of March.
The head of the Ohio EPA said the pipeline company doesn’t think the state has authority to impose regulations because the Federal Energy Regulatory Commission already gave the company approval on the project.
“That really is the heart of the matter,” Butler said.
The developer has complied with orders to begin plans to clean up and restore wetlands that were coated with drilling mud, remove mud contaminated with diesel fuel from two quarries and monitor water wells near those sites, Butler said.
But he said the company is refusing the state’s directive to obtain storm water pollution permits.
Ohio’s environmental regulators and farmers say there have been problems with flooded fields since construction crews began laying pipe in March to meet the company’s initial plan of finishing the project by November.
Employees from two area power companies are working to help with hurricane restoration efforts.
FirstEnergy’s Ohio Edison subsidiary and Hudson Public Power are among utility and municipal power crews from around the nation working in the south to repair and restore downed wires and other hurricane-caused outages.
About 30 Ohio Edison personnel from the Akron and Kent areas are expected to head to Florida at about 6 a.m. Thursday. They will join 200 other FirstEnergy employees to help with hurricane restoration efforts.
This new contingent will join about 400 other FirstEnergy personnel already helping in Florida in the aftermath of Hurricane Irma, which has left millions of people in the state without electricity.
A Hudson Public Power crew and trucks also are working in the south.
The Hudson crew will stage in Birmingham, Ala, with a tentative destination of Clewiston, Fla. which is near Lake Okeechobee in the center of the state between Fort Myers and West Palm Beach.
FirstEnergy Corp. will send nearly 900 linemen, damage assessors, electrical contractors, forestry crews and support personnel to Florida to help utilities there restore power from expected outages caused by Hurricane Irma.
The mutual aid crews are scheduled to leave early Saturday morning from all 10 FirstEnergy utilities in Ohio, Pennsylvania, New Jersey, West Virginia and Maryland. The personnel should arrive at a staging area in Lake City, Fla., by Sunday evening. Support personnel from corporate offices also are going.
Lake City is in northern Florida off Interstate 75, between Jacksonville on the East Coast and Tallahassee to the west.
FirstEnergy personnel will be deployed to the most damaged areas once it is safe to do so after the storm ends.
“FirstEnergy employees are committed to assisting with what is likely to be a massive power restoration effort in Florida,” Steven Strah, senior vice president and president of FirstEnergy Utilities, said in a news release. “While it’s not expected that Hurricane Irma will impact any FirstEnergy service territories, we have carefully assessed conditions and are confident we have the personnel in place to maintain reliable operations for our customers, while also assisting those in need in Florida.”
FirstEnergy said it is a member of multiple electric utility mutual-assistance groups that work to restore service to customers when a natural disaster causes large-scale power outages.
FirstEnergy Corp. is getting $100 million less than it initially wanted in a cash sale of four natural gas power plants in Pennsylvania and a Virginia hydroelectric facility.
The Akron utility on Wednesday announced it had a revised agreement as of Aug. 30 to sell the facilities to New York-based LS Power Equity Partners for $825 million. The sales are expected to be completed by the end of this year and into 2018.
FirstEnergy in January initially said it was selling the plants to LS for $925 million.
The facilities are:
• Bath County Hydro in Warm Springs, Va., the competitive ownership interest from FirstEnergy.
• Springdale Generating Facility Units 1 to 5 in Springdale Twp., Pa.
• Chambersburg Generating Facility Units 12 to 13 in Guildford Twp., Pa.
• Gans Generating Facility Units 8 and 9 in Springhill Twp., Pa.
• Hunlock Creek in Hunlock Creek, Pa.
Following the divestment, FirstEnergy said it will still own or have control of about 15,337 megawatts of generating capacity from nuclear, coal, gas, hydro, wind and solar facilities in Ohio and other states.
The sale to LS is part of FirstEnergy’s strategy to become a fully regulated utility again and to exit what it calls “commodity-exposed” generation.
The deal is still subject to regulatory and other approval, FirstEnergy said in a news release.
The company said it expects to invest the sale proceeds in its “unregulated money pool” and may repay debt or be used for other corporate purposes.
Shares of FirstEnergy were down 22 cents, or 0.7 percent, to $32.30 as of 3:26 p.m.
A federal magistrate in Akron has dealt a significant blow to efforts by some Ohio property owners to stop a high-pressure natural gas pipeline from being built.
U.S. Magistrate Kathleen Burke in a written recommendation filed Monday said the U.S. District Court in northern Ohio lacks jurisdiction to consider a lawsuit filed in May by more than 60 property owners that sought to prevent the Federal Energy Regulatory Commission from approving construction plans for the 250-mile-long Nexus pipeline.
The $2 billion project is designed to carry 1.5 billion cubic feet of gas per day from the Utica and Marcellus shale fields in Appalachia across northern Ohio and into Michigan and Ontario, Canada.
Nexus is a partnership between Calgary, Alberta-based Enbridge and Detroit-based DTE Energy.
The project originally was a partnership between DTE and Houston-based Spectra Energy, which merged with Enbridge earlier this year and is now headquartered in Calgary.
Opponents say FERC shouldn’t be able to violate their property rights for the benefit of a foreign corporation.
Burke’s report said opponents can object administratively to FERC and then to a U.S. appeals court if the regulatory agency approves the project.
U.S. District Judge John Adams will decide whether to accept Burke’s recommendation, a move that would likely result in the lawsuit being dismissed.
One of the leaders in the effort to stop the pipeline acknowledges the lawsuit is now imperiled. Medina County resident Paul Gierosky said opponents aren’t giving up.
“We’ve come too far; we’ve learned too much; and we’re not alone,” Gierosky said. “There are 200 organizations around this country asking Congress to hold hearings on the abuse of power and law by FERC.”
If Adams dismisses the lawsuit, property owners will appeal his ruling to the 6th Circuit U.S. Court of Appeals in Cincinnati, Gierosky said.
“Maybe we have a better chance there,” he said. “I thought we had a good chance here.”
A Nexus spokesman told the Medina Gazette the company is pleased with Burke’s recommendation and looks forward to “prompt FERC approval” of the project.
The company had originally said it planned to complete construction and have gas flowing by late fall.
The U.S. Senate removed one impediment for Nexus approval a week ago when it confirmed the nominations of two new FERC commissioners, restoring a quorum that will allow the commission to resume voting on projects.
FirstEnergy Corp. said James H. Lash, executive vice president of FirstEnergy and president of the company’s FirstEnergy Generation, will retire effective Aug. 1 after 28 years with the company.
With Lash’s retirement from FirstEnergy Generation, the power generation arm of the Akron utility, Samuel L. Belcher, FirstEnergy Nuclear Operating Co. president and chief nuclear officer, will report to FirstEnergy Corp.’s CEO Charles Jones.
Belcher will be FirstEnergy Corp.’s primary contact with the Nuclear Regulatory Commission, Institute of Nuclear Power Operations, Nuclear Energy Institute and other nuclear industry groups.
Belcher rejoined FirstEnergy Corp. in 2012 as vice president and chief operations officer, having previously served as FENOC fleet operations director.
Jones said in a statement that Lash’s “strategic and thoughtful leadership of FirstEnergy Generation has been greatly appreciated in today’s continually evolving utility industry.”
FirstEnergy Corp.’s transmission subsidiaries operate more than 24,000 miles of transmission lines, while its generation subsidiaries control nearly 17,000 megawatts of capacity.
RICHMOND, VA.: Energy giant Dominion Resources Inc. has changed its name to Dominion Energy Inc.
And as a result, Northeast Ohio utility customers starting Friday will be seeing a new name, Dominion Energy Ohio, instead of Dominion East Ohio Gas. Ohio regulators have already approved the name change.
The Richmond, Va., company said in a news release that shareholders voted Wednesday to approve the new corporate name. It also has announced the new name on its web site, http://www.dom.com.
The proposed change was announced in February. Chairman, President and CEO Thomas Farrell II said at the time that it would unify the company’s brands throughout the 18 states where it does business.
Dominion Energy’s electric and natural gas utilities and other businesses will change their names to conform in the coming days. Changes to company bills, employee uniforms and other identifying marks will occur in the coming months.
The company is also has a new logo.
Dominion operates one of the nation’s largest natural gas storage systems and serves more than 6 million utility and retail energy customers.
Many woke up earlier this month caught off guard by the several inches of wet snow that fell overnight while they snoozed away.
Brian Kolts and Tom Workoff were not surprised at all.
They saw the snow coming days away.
This is just the type of devious weather they dread.
Wet sticky snow wreaks havoc on power lines causing them to either droop and touch tree limbs or topples trees onto the lines resulting in widespread power outages.
Tucked away in a second-floor office in FirstEnergy’s large office building off White Pond Drive in Akron, the meteorologists spend their days poring over all sorts of technical weather data to spot potential trouble. They also help with the company’s various environmental technical data.
Large screens cover one wall.
One tracks the precipitation.
Another the cloud cover.
One screen is covered with numbers that show the current wind speeds.
There are large circles and lines on yet another monitor that shows the latest forecast weather models.
FirstEnergy spokesman Mark Durbin said some wonder why a utility would want to have its own meteorologists on staff.
A simple answer is the scope of territory the Akron-based utility and its various monikers cover.
The company’s power lines touch six states — Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York — encompassing some 65,000 square miles from the Ohio/Indiana border to the New Jersey shore and the Great Lakes down to the mountains of West Virginia.
There are some 6 million customers — including 2 million in Ohio alone — who rely on the company to make sure the coffee pot turns on in the morning and there’s light to brush their teeth by at night.
So when Mother Nature is brewing up weather mayhem, Durbin said, it is critical that they are able to muster crews to respond and fix issues along the company’s more than 24,500 miles of transmission lines which help connect the Midwest and Mid-Atlantic regions. FirstEnergy’s utilities also have more than 273,000 miles of distribution lines that run along residential streets.
The area is so expansive that it crosses 11 different National Weather Service offices each with different warning areas so it would be maddening to try to keep track of it all.
“We can have a wind event, snow, freezing rain and severe thunderstorms all going on at once in the same day,” Kolts points out.
Take Northeast Ohio for example, Chardon can be getting hammered by wet, heavy lake effect snow while it is bright and sunny at the FirstEnergy campus in Akron.
Throw in the varying terrain of all the states FirstEnergy touches from mountain ranges to the East Coast shoreline, Workoff said, it can make for some fairly interesting times.
“You wouldn’t be a meteorologist if something did not surprise you,” said Workoff, who once worked at a Buffalo-area TV station and spent a couple years with the National Weather Service.
So don’t ask them whether you should grab an umbrella before heading out, the focus for these two is ominous weather that could spell trouble for FirstEnergy workers and customers.
While the company’s power transmission lines can be pretty resilient, there are some things that can cause outages.
• Winds as high as 40 mph and above
• Freezing rain that accumulates at least a quarter of inch
• Prolonged 90-degree days with overnight lows in the 70s or above
• Heavy wet snow
• Solar flares that could create spikes along the lines
• Lightning strikes
The goal is to be not caught off guard. At the first hint of potential trouble, the company summons the various leaders at its power companies together for a conference call to discuss the storms with the meteorologists.
The number of people on the conference call can number as high as 100, particularly in the case of a large storm like a hurricane along the East Coast that can spawn high winds and storms as far away as here in Ohio.
“It can get pretty busy in here,” said Kolts, who was a meteorologist in the Air Force and once worked in Bermuda.
The goal, Durbin said, is to keep employees safe and the power on.
Kolts pointed out there are times they will also track storms that will miss the FirstEnergy territory but will impact the company because its crews will have to be dispatched to help out fellow utilities thanks to longstanding mutual aid agreements.
Of all the types of weather possible on any given day, the one FirstEnergy fears the most is a derecho — a widespread line of fast-moving damaging winds or severe thunderstorms that cover hundreds of miles over a long period of time.
Kolts can rattle off the date of the last one FirstEnergy had to contend with as easy as remembering a child’s birthday or a wedding anniversary.
June 29, 2012.
The storm caused some $2.9 billion in damages, including flattening giant FirstEnergy power transmission towers and putting tens of thousands of customers in the dark — some for as long as three weeks.
This was followed a few months later by Superstorm Sandy — the second costliest such storm in history causing $75 billion in damage.
“That was a horribly busy time for us,” he said. “I don’t want to go through that again.
“It was a tough year for us.”
Craig Webb can be reached at [email protected] or 330-996-3547.
Julie Carr Smyth
COLUMBUS, Ohio: Oil-and-gas drillers in Ohio have paid $43 million in property taxes to local governments and schools in six shale counties since 2011, according to a report released Thursday.
The finding by the Ohio Oil and Gas Association and Energy In Depth Ohio, a natural-gas research and education group, comes as Republican Gov. John Kasich has renewed calls for a severance-tax increase on the industry.
Kasich’s proposed two-year, $66.9 billion operating budget raises $448 million from the severance-tax increase. The increase would combine with other tax reforms to pay for a net statewide income-tax reduction of $39 million.
Thursday’s report shows Belmont, Carroll, Harrison, Noble, Monroe and Guernsey counties have seen a combined 22 percent revenue boost from the longstanding ad valorem real estate property tax, amid a 35-fold increase in natural gas production.
“I’ve heard from many county commissioners and other elected officials, community leaders in eastern and southeastern Ohio, who’ve told me that they’ve had their budgets saved, thanks to the millions of new tax dollars rolling into their coffers,” said U.S. Rep. Bill Johnson, a Marietta Republican whose district spans much of Appalachian Ohio.
The industry projects that continued growth will allow the same tax to generate between $200 million and $250 million over the next 10 years.
Energy In Depth state director Jackie Stewart said counties have the opportunity to build a coordinated regional growth strategy based on those estimates. She said the tax has been misunderstood and hard to track, so her organization took the initiative to sort out the information and provide it to the counties.
Shawn Bennett, executive vice president of the Oil and Gas Association, said Kasich’s tax proposal could negatively impact an industry that’s already giving money back to the communities.
“Any time you raise taxes on an industry, there is going to be consequences,” he said. “In this instance, you’re going to see less drilling, less development of natural resources. So there’s going to be less wells drilled, and less wells drilled on the fringe counties.”
Kasich argues the industry’s operations in Ohio’s lucrative Utica Shale play is strong enough to sustain a severance tax increase.
His fellow Republicans in the state Legislature have shown little appetite to approve the tax increase.