FirstEnergy Nears Completion Of Transmission Project In Ohio

FirstEnergy Corp. (NYSE:FE) and its subsidiaries are on the verge of completing a rebuilding and modernizing project worth $26 million in Portage and Trumbull counties, OH.

The project involves replacing the existing 69-kilovolt (kV) line with newer sets of poles and wires that will strengthen existing electric substations and enhance service reliability for Ohio Edison customers.

Details of Upgrade

Upgrade of the existing transmission line will result in addition of new switching devices that can be remotely monitored and controlled. Notably, addition of these to the line will allow grid operators to respond to power outages, faster and efficiently. Further, equipment will be used to enhance the line's capacity for meeting the growing electric demand. Notably, all of this is anticipated to be energized by the end of this year.

Once completed, the upgraded lines will utilize smart technologies to help reduce the frequency and duration of power outages.

Outcome Expected?

Notably, the ongoing reliability venture is part of FirstEnergy’s ambitious “Energizing the Future”project that was initiated by the company to reinforce the power grid along with reducing the frequency and duration of customer outages. Toward this, the company plans to invest nearly $1 billion in 2017 and $4.2-$5.8 billion over 2017-2021, under the initiative.

On conclusion of the ongoing reliability operations, the outcome is expected to benefit Ohio Edison customers and help strengthen the company’s existing grid. Further, it will increase the company’s flexibility to meet the rising demand for electricity.

Recently, the company's Ohio utilities proposed a $450 million investment plan for redesigning and modernization plan with the Public Utilities Commission of Ohio (“PUCO”) for reducing thefrequency and duration of power outages at Ohio Edison, Cleveland Electric Illuminating and Toledo Edison divisions. (Read more: FirstEnergy Corp Proposes $450M Modernization Investment)

FirstEnergy’s Consistency with Modernization

It is not new for FirstEnergy to carry out improvement measures to enhance reliability in its service territories. In fact, the company has been enhancing and upgrading transmission lines, since 2014. Further, it has been introducing smarter technology into the grid, and outfitted substations with newer equipment and enhanced systems.

These efforts have aided the company to serve customers in a better way. Notably, such reliability improvements across the company's transmission system have aided the company to perform well in last few quarters. Such performance has aided the company to has earn a positive surprise of 4.67% in three of the last four quarters.

Considering that transmission lines and grid systems are susceptible to damages due to uncertain weather conditions, other utilities like American Electric Power Company, Inc. (NYSE:AEP) , Duke Energy Corporation (NYSE:DUK) and NextEra Energy, Inc. (NYSE:NEE) have been undertaking investments toward transmission and distribution operations to ensure reliability of services and provide better electricity services to customers.

Price Movement

Shares of FirstEnergy have returned 13.7% outperforming the industry’s growth of 4.9% in the last six months.

This can be attributed to the company's focus on continuous upgrading of transmission lines and modernizing efforts in its distribution network, through solid investments. FirstEnergy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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