FirstEnergy's first goal is to generate and deliver power, but
its second goal is to stay profitable in a market undergoing
deregulation. Its ten utilities provide electricity to 6 million
customers in the Midwest and the Mid-Atlantic. The company's
domestic power plants have a total generating capacity of more than
17,000 MW, most generated by coal-fired plants. Subsidiary
FirstEnergy Solutions trades energy commodities in deregulated US
markets. FirstEnergy's other nonregulated operations include
electrical and mechanical contracting and energy planning and
FirstEnergy has power regulated generation, transmission, and
distribution operations. Through FirstEnergy Solutions it is also
engaged in competitive generation and electricity sales. As part of
its assets, FirstEnergy has 2,400 MW of renewable energy (primarily
generated by wind farms) and 24,211 miles of high-voltage
The Regulated Distribution segment distributes electricity
through FirstEnergy's ten utilities which serve 6 million customers
and a combined population of 13.5 million. It purchases power in
Ohio, Pennsylvania, New Jersey and Maryland and controls 3,790 MWs
of generation capacity.
The Regulated Transmission segment transmits electricity through
transmission facilities owned and operated by American Transmission
Systems, Trans-Allegheny Interstate Line Company, and a number of
FirstEnergy's utilities, and the regulatory asset associated with
the abandoned PATH project. The segment accounted for 7% of total
net sales in fiscal 2015.
The Competitive Energy Services segment supplies electricity
through retail and wholesale arrangements, including competitive
retail sale to customer primarily in Ohio, Pennsylvania, Illinois,
Michigan, New Jersey and Maryland, and the provision of partial
Provider of Last Resort and default service for some utilities in
Ohio, Pennsylvania and Maryland. It controls 13,162 MW of capacity.
The segment accounted for 31% of total net sales in fiscal
In fiscal 2015, FirstEnergy's electric utilities accounted for
71% of total net sales, the remaining was accounted for by
FirstEnergy operates and serves customers in an service area of
65,000 square miles in Illinois, Maryland, Michigan, New Jersey,
New York, Ohio, Pennsylvania, and West Virginia.
In 2014 the company's revenues were restated due to reflect its
vestiture of 11 hydroelectric power stations.
In 2015 FirstEnergy's revenues decreased primarily resulting
from a decrease at Competitive Energy Services (CES) partially
offset by an increase at Regulated Distribution and an increase at
Competitive Energy Services' revenues decreased primarily due to
lower sales volumes in line with the segment's strategy to more
effectively hedge its generation.
Regulated Distribution's 2015 revenues grew as the result of the
implementation of new rates at certain operating companies as well
as a year-over-year increase in retail generation revenues.
Regulated Transmission revenues increase primarily reflected a
higher rate base and recovery of incremental operating expenses as
well as American Transmission Systems' transition to a
In 2015 FirstEnergy's net income increased by 93% due to lower
fuel and purchased power expenses, partially offset by increased
Fuel expenses declined primarily in Competitive Energy Services,
resulting from lower fossil generation associated with low energy
prices, lower unit costs, and lower settlement and termination
charges on fuel and transportation contracts. Purchased power costs
also decreased, reflecting lower contract sales.
In 2015 net cash provided by operating activities increased by
27% due to a change in cash collateral and accrued taxes.
FirstEnergy continues to capitalize on investment opportunities
available in its Regulated Transmission and Regulated Distribution
businesses while implementing a conservative hedging strategy in
its Competitive businesses. It is focused on improving its balance
sheet and maintaining investment grade credit metrics at each
business unit, while improving metrics at FirstEnergy over
To raise cash, in 2017 FirstEnergy agreed to sell four
competitive natural gas generating plants in Pennsylvania and its
competitive portion of a Virginia hydroelectric power station to a
subsidiary of LS Power Equity Partners III, LP, for $925
In 2016 FirstEnergy introduced a new branding campaign that
demonstrates the company's commitment to a cleaner energy future.
"The Switch is On" campaign highlights FirstEnergy's environmental
achievements, its transition to cleaner energy sources, and a green
energy electricity option from FirstEnergy Solutions for
residential customers in Ohio and Pennsylvania. The campaign
includes print advertisements in 17 newspapers and business
journals, radio advertisements in 14 markets, and more than 50
billboards in Ohio, Pennsylvania, New Jersey and Maryland.
In 2015, the company planned to focus on to develop the
transmission business, strengthen the regulated utilities, and
manage overall risk within the competitive business The core of
this strategy is the $4.2 billion energizing the Future investment
plan. This program is focused on a large number of small projects
within the existing 24,000 mile service territory that improve
service to customers. The company has identified $15 billion in
transmission investment opportunities across its system beyond
In 2015, the company completed multiple transmission projects
that will further enhance electric service for customers throughout
northern Ohio. The new facilities are designed to ensure system
reliability following the retirement of coal-fired power plants in
the region. The company spent nearly $800 million on transmission
projects to support plant retirements along Lake Erie. FirstEnergy
expects to spend $1.2 billion through 2019 on projects related to
plant retirements across its entire transmission system. The
completed projects represent a significant milestone in the
company's Energizing the Future initiative, and include new 138-
and 345-kV transmission lines and new substations.
As part of its ongoing efforts to help enhance service
reliability, in 2014 Mon Power installed new automated switching
equipment on a 47-mile, 69,000 volt transmission line serving
nearly 6,000 customers in the Marlinton and Snowshoe Mountain
Resort areas of Pocahontas County.
To raise cash to pay down debt, in 2014 FirstEnergy sold 11
hydroelectric power stations to Harbor Hydro for $395 million. The
hydroelectric power stations had a total capacity of 527 MW (less
than 3% of FirstEnergy's generation fleet output).
As states push to reduce carbon emissions, FirstEnergy has been
expanding its renewable energy operations and reducing its
fossil-fuel power plants. In 2013 the company announced plans to
deactivate two coal-fired power plants in Pennsylvania, reducing
its overall power generating capacity from more than 20,000 MW to
more than 18,000 MW.