FirstEnergy(US:FE)2025-10-23 14:00Financial Data and Key Metrics Changes - The company reported third quarter GAAP earnings of $0.76 per share, an increase from $0.73 in the same quarter last year [5] - Core earnings for the quarter were $0.83 per share, up from $0.76 in 2024, with year-to-date core earnings at $2.2 per share, a 15% increase from $1.76 in 2024 [6][22] - The company invested $4 billion in capital for regulated utilities, a 30% increase compared to the previous year, and announced a 10% increase in the 2025 capital investment program to $5.5 billion [6][7] Business Line Data and Key Metrics Changes - In the distribution business, earnings improved by $0.20 year-to-date due to a $225 million annual rate adjustment in Pennsylvania, higher customer demand, and lower operating expenses [22] - The integrated segment saw a 7% increase in earnings year-to-date, driven by formula rate investments in transmission systems across New Jersey, West Virginia, and Maryland [22] - Standalone transmission business earnings increased approximately 7%, supported by a strong capital investment program [22] Market Data and Key Metrics Changes - Customer demand from data centers increased by over 30%, with contracted customer demand expected to raise FirstEnergy's system peak load by 15 gigawatts, nearly 50% from the current 33.5 gigawatts to 48.5 gigawatts by 2035 [9] - The company’s total customer bills increased by 11% in deregulated states over the past year, primarily driven by the generation component [16][17] Company Strategy and Development Direction - The company is focused on enhancing system reliability and resiliency through increased capital investments, with a reaffirmed core earnings growth rate of 6% to 8% [7][20] - The integrated resource plan in West Virginia includes adding 70 megawatts of utility-scale solar and 1.2 gigawatts of dispatchable gas generation, aligning with state initiatives to boost energy capacity [11][12] - The company plans to file for new gas generation approval in 2026, representing a 35% increase in its regulated generation portfolio [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to maintain a strong financial performance and achieve its growth targets despite rising customer bills and regulatory challenges [20][28] - The company is actively engaging with regulators to address rising consumer energy costs and is advocating for changes in capacity auction processes [82][83] Other Important Information - The company expects to see significant increases in industrial load, particularly from data centers, beginning in Q4 and into the next year [24][80] - The consolidated return on equity was reported at 10.1%, slightly above the targeted range of 9.5% to 10% [26] Q&A Session Summary Question: Discussion on West Virginia generation and capital recovery - Management explained that for the build-own-transfer model, capital recovery would occur during construction, with significant earnings expected once the assets are operational [35] Question: Rate case strategy for 2026 - Management indicated that they would follow a similar cadence as previous years, focusing on timely recovery through base rate increases [36] Question: Impact of increased CapEx on earnings growth outlook - Management believes the increased CapEx will support maintaining the 6% to 8% earnings growth range [41] Question: Data center pipeline and transmission CapEx - Management noted that there is approximately $1 billion of CapEx associated with transmission interconnection requests from data centers [44] Question: Confidence in load forecasts - Management expressed confidence in load forecasts based on contracted projects and various criteria to ensure customer commitments [58] Question: Affordability pressures in New Jersey - Management acknowledged the understanding that generation costs are driving bill increases and emphasized efforts to mitigate these impacts [66]