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FirstEnergy’s Met-Ed Revamps Project to Boost Reliability

Zacks

FirstEnergy Corporation’s FE subsidiary Metropolitan Edison Company (Met-Ed) announced that it has successfully completed the upgradation of project equipment worth $3 million at a substation in Reading, PA. The equipment upgrade will enable the company to efficiently meet the increasing electrical demands of 2,500 customers in the Glenside area of the city going forward.

Details of Upgrades

Per the details, the upgradation primarily included the replacement of an old transformer and other equipment built back in 1940. The project upgradation was designed keeping in view the local electric system's capacity without expanding the substation's area or constructing additional power lines.

Additionally, novel circuit breakers and relay devices that have been introduced following the revamp will protect equipment by interrupting the flow of electricity against tree-related outages and lightning strikes. Going ahead, the company's dispatchers will monitor conditions at the substation closely to help reduce the duration of outages, a feature that was absent during the time the substation was originally built.


Other Projects

FirstEnergy’s modernization drive has been boosting the company’s service reliability and leading to higher customer retention. To improve the service reliability for its customers in the Penelec and Met-Ed service territories, the company has planned to invest nearly $600 million in transmission projects through 2018. Previously, the company announcedto rebuild and modernize an electric transmission line to enhance service reliability in the Western Pennsylvania region. (Read more: FirstEnergy to Rebuild Transmission Line in Pennsylvania)

Additionally, FirstEnergy’s ambitious “Energizing the Future” plan is also aimed at upgrading and expanding its regulated transmission capabilities. Under this initiative, the company is poised to invest nearly $1 billion in 2017 and $4.2-$5.8 billion over the 2017-2021 time period.

Our View

FirstEnergy’s Met-Ed unit currently serves approximately 560,000 customers in 15 Pennsylvania counties. The aforementioned upgradation project is a testament of the company’s focus to meet the growing electrical demands in the Glenside area of Reading.

We believe that FirstEnergy’s step toward enhancing service reliability through electrical upgradation and renewing work will aid the company to position itself as a competitive utility operator for sustained customer service-oriented growth. Toward this, we anticipate the company and its subsidiaries alike to deliver safe and reliable electric services along with meeting the growing electrical needs of customers over the times to come.

Utility is a regulated, yet highly competitive market. Upgrading and modernizing the existing infrastructure is important for giving better service to the customers. Consequently, apart from FirstEnergy other utility firms like NextEra Energy, Inc. NEE, American Electric Power Company, Inc. AEP and Duke Energy Corporation DUK are also taking steps to strengthen existing and replacing old infrastructure to provide better-quality services to customers.

Price Movement

Shares of FirstEnergy have returned 8.3%, outperforming the industry’s gain of 5.2% in the last three months.

FirstEnergy’s broadening regulated structure and growing transmission lines are supporting its performance. In addition the initiatives like Energizing the Future will support and further strengthen its operation resulting in better earnings.

Zacks Rank

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

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