FE - Earnings call transcript Q4 2018

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Operator

Greetings, and welcome to the FirstEnergy Corp. Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations for FirstEnergy Corp. Thank you. Ms. begin. may you Prezelj,

Irene Prezelj

expectations to various quarter earnings, such could section by of link under earnings forward-looking These on and Welcome can Factors our and to we those performance, call. that will differ prospects. current and from based on are make information statements statements are our Christine. subject earnings risks SEC actual fourth website Today, strategies and cause uncertainties. be Thanks, regarding filings. in to found results materially indicated statements investors our the the revenues,

and will measures. can and We also FirstEnergy with between discuss Strah, room, on the Q&A in today's Jones, found which financial Officer; Financial session. Executive Chief certain and Chuck Investor measures today's Reconciliations participate Senior discussion. financial President are presentation website, in along non-GAAP and include several the executives Steve Officer; the available to non-GAAP the Relations call GAAP be President other supports Vice who in Participants Chief

I'll to Chuck. turn over the Now call

Chuck Jones

we this billion billion, year, move investment eliminate things, several enabled equity investment into regulated good to $X.X XXXX everyone. from opportunities spend $X.XX other recapping our in of premier a to XXXX announcing for our XXXX, purchase year our a investment by in In also first XXXX of investors. Solutions additional employee the and us the reached plans. to principle pivotal company of our infrastructure growth a FirstEnergy most Through and transform history. projection pure-play billion pension will the the operating for address a few of FirstEnergy's coordinated Irene, then improvement morning, fully helped plan our a debt benefit and issue new $X.XX holding an That time and FirstEnergy in to its plans regulated our actions, high-performance we stock additional proceedings careful Thanks, accelerate rate us April, in of commitment ever, utility. regulated long-term bankruptcy began and XXXX. was our growth met I to outside Company. our And beyond. perhaps obligations to subsidiaries earnings. We prominent contributed by in Operating all and moments a for equity introduced total issue reduce agreement just the need series Among through XX Nuclear FirstEnergy Chapter

of costs. commitment approved corporate our reduced months without costs key flow we our settlement and us We loans by by debtors, financing issue revolver we to by September. enhanced Our To to new control. court shared accomplishment headcount for involuntary to management At FirstEnergy's the XXXX. regulated quickly requirements was Fitch. way XX% and and and of open $X.X same and our team the spans $X our we an upgraded which December as and any very service reducing package credit realign of our growth attention the by earnings At stable, time, rating the to flatter, to through our $X.XX O&M within to generation, voluntary improved fair extended steps borrowings positive we refinanced of $XXX FirstEnergy a support employee with an across-the-board term and in realize revolving reduced in and to support facilities in and our dates and had expenses cash XX% cleared identified In Corp. businesses, totaling FE elimination associated or to effectively including credit a outlook turn, liquidity layers at lower credit S&P, upgraded cost structure. retirement took from functions of. maturity incremental commitments October leaner in billion several the aggregate capital, reduce the increasing $XX our is organization as Through support a a to and I'm due additional million we the under positions, future completed with reductions two billion final competitive layoffs, and of Reaching a transmission exit bankruptcy competitive our creditor with groups an regulated We of initiative Tomorrow utility. expect we filing the the was interest and savings The created Committee turn the fully predictable expenses. Creditor eliminated us profile definitive agreement an a utility same in time, operations. our settlement our And allowing risk on helped in bankruptcy Unsecured deliver billion. previous proud and efficiently thoughtfully million

targeted of our As XX% that our initial plans. transmission, approved confidence the to in new returns a new an dividend initiatives. our in supports investments November reflects shareholder policy policy board payout capstone XX% of our increase ratio operating a with continued dividend strategic a to increased X% regulated long-term growth along With earnings, sustainable and in

of Operating in earnings thank prouder year $X.XX of confidence patience. initiatives. a years employees our With and makes community. FirstEnergy way for on, reported going all we meeting or four long-term EEI year earnings in at share in both GAAP performer have initial stayed return I Our you our of the were of operating This of night, share. to range you and the the shareholder top our ended be Index. investors couldn't Last XXXX per financial per consistently top total with many focused guidance and of consecutive the exceeding on been and growth October. exceeded know guidance our this we $X.XX provided XXXX the stock making earnings your full FirstEnergy, executed and I of of end the XX.X%, the we

with business. in weather, we're the our all improvement sustained sales XXXX for in growth that classes. encouraged shale businesses, from our in load increased distribution is the Our Industrial distribution while the have of in driven execution three steel modest of X.X solid results benefited seeing customer and strategy of distribution gas growth remain the growth also We sector. transmission steadily by most overall our trends years, and industry,

to customers continued segments. full to and were positive Future in program. and our transmission the sales number we In gains these entering the we're commercial Energizing weather-adjusted pleased new Our in of residential year, modestly are year see across of the business, our sixth customers

to our We modernize long-term transmission efficiently grid across customer-focused execute service continue strategy to the area. our

the rate industry. our a is as transmission transmission XX% of regulated nation, assets base and in our percentage top total the our at among spend market capitalization Our at largest of the ranks of

about we strong poised future, believe I the excited for are and We a are year ahead.

to initiatives our some gears recap our shift ongoing with expectations, starting Let's regulatory of activities. and

for advocates, distribution the settlement a with low-income the by modernization by representatives and with tax to generation competitive the This to our path have utilities a hospitals, returned modernizing Rider. of to of XXXX to the supplemental how advocates. also system and to of settlement of filing suppliers benefit supplemental reform economical customers, our request our the Commission a to $XXX that Ohio tax the approval have staff, to utilities two-year DMR PUCO added this Modernization of promotes last and initial the our Ohio commercial a customers matter seeks ensure Public associated provide faster PUCO authorized Ohio all lower-cost customer Earlier The November million. reform investments with parties. and revenues and PUCO settlement the grid was month, would our filed in of settlement Distribution pending program the Utilities in addresses support of residential grid Rider the federal original with signed extension phase first more approval be and modernization. savings Ohio made for First, environmental customers. additional utilities The capital access a for industrial other was tax

have we Maryland, our to order and into continue this a case nearly took projections. in you that XX place by hearings In expect a Potomac believe late first rider, we rate will remind not base factored final it in I in we March earnings growth While Edison is January, years. case our strong

and million our was discussions. federal As our to recovery we of procedural savings Reliability reliable and it schedule state net our customer group our is $XX.X to policies this and and million Jersey to New continue reliability request safe Emerging performance formed Jersey, will Throughout And customers to in of for grid for provide technologies expect year, working in our will and four-year tax and Technologies our implementing security. better allow will analyzing reform. JCP&L to system. JCP&L related customers, service enhance distribution to have million settlement plan us the address advanced Plus designed that investments future investments to resiliency identifying the and investment Maryland $X.X Reliability improve newly $XXX with discussed, infrastructure opportunity suspended of serve by of safety, New energy due we Plus federal

XXXX We through are X% fully affirming well X% XXXX. $X.XX $X.XX to of share our long-term of growth operating guidance earnings year as diluted full per as to our projection

Now review developments. quarter and financial our a let's for other turn of to Steve for results fourth the

Steve Strah

today. everyone. morning, It's with speak to and Chuck, Thanks, you great good

present us allows eliminates show First, over had the our projections XX% earnings shares the year, to January reconciliations consistent website and year our the detailed converted financial and shares impact preferred to as our Also, a posted the a consolidated community. converted practice basis. of preferred operating conversion quarter This as past of the XX. reminder, diluted on fully of are other report and on we timing. About about in and fully information with the been

sales transmission end our GAAP in This at due operating MAIT X% the let's mark-to-market expect our This of preferred trend were And the guidance. the sector, that the per fourth were heating benefited Total slightly rate segment, XXXX. These other by transmission top distribution of increased adjusted earnings share, modest commercial lower includes higher degree On equity in We higher Operating quarter while the O&M all by of corporate look commercial essentially residential and at with had favorable deliveries was our and quarter. In XXXX. July started per our compared segments was were Residential X.X%. With portion accordance a remaining companies X.X% a one business, Weather rate XX higher end sales at increased growth primarily half the interest distribution X.X% included and deliveries and by said, and the quarter in increased a rate steady our same $X.XX issuance. industrial X% line the to regulated stretched steel, of companies. to by period increased offset basis, commodity vegetation $X.XX the and the than consecutive taxes $X.XX compared the impact deliveries and a X.X% of the across terms weather now from earnings margin manufacturing our customer formula days to our in which Pennsylvania. gains XXXX. with In deliveries of were base non-deductible were in fourth earnings get on be is industries. in compared the about fourth to stated special to pension operating factors in led we higher share. adjustment up offset shares ATSI. additional had quarter gas, management income equipment of majority flat. of with to In This items. in earnings Virginia. deliveries and electric financing deliveries, fourth O&M costs, Fourth at of lower higher related same quarter the depreciation higher shale into stronger work offset quarters. business; results our West XXXX. period of was

a Now moment contribution. I'd month's to million this $XXX like take pension on

other offset method preferred The for GAAP assets, in partially and a discount differences charge share. our provided assumptions. greater XXXX loss assets non-cash our history. typically of instead exclude or a in results. actuarial liabilities gain occurs operating accounting to fourth First, to we period. the method a materials. is was pension year, Each because of ongoing longer the by provide quarter, non-GAAP in adjustment were Beginning transparency high quick GAAP and rates, post-employment other than our to benefit mark-to-mark earnings return on discount per we to was is remeasure actuarial it In and adopted in on $X.XX actual accounting. side the from We performance. mark-to-market recognized XXXX, our operational gain changes loss our the year over pension of This Lower or the under in our the it it adjustment recognizes of our the a recognize this returns estimate rate, amortizing higher planned a we third expected which quarter in

of XXXX So $X.X $XXX with which ended was we of liquidity, million approximately billion cash.

position million improves our any voluntary We decided pension work us expected our through year. this XX% the of $XXX February through to favorable put the XXXX to cash for we and pension making status cash so now to cash contribution XXXX. requirements on to funding plan it remain funded This eliminates contribution Xst to minimum plan's by projected this

As making grade plan Chuck expect S&P, noted growth time across over by great the further Moody's, execute board We're ratings regulated that earlier, Fitch; improvements the investment and outlined. we've rating and as we're with progress the now agencies. we we

total Moody's metric a threshold of threshold CFO times. tracks to total an X.X to X%; As adjusted multiple Fitch leverage FFO XX%; know, metric a many maximum and which minimum tracks with threshold of a a you FFO minimum capital an of with debt working has metric of current tracks S&P debt

We through expect planning our to with XXXX be respective rating three compliant agencies period. thresholds and all their

Our as for questions, premier for and future we Today our our a future our strategies, during XXXX things; three we're a implementing would excited building employees. brighter your more on additional focused on share And like our FirstEnergy. utility. ever, regulated than a before delivering over and Chuck now customers, to shareholders, about few commitments, turn it actions We're redefined comments. fully

Chuck Jones

Company. who played to earnings of utility; thank many our executive this trusted in next roles you both Jim of thoughtful key healthy final as to are been acquisitions, and them advisors longtime fully my tenure Pearson. both Leila Leila following members leadership CEO. me for to our long the with two and recognize distinguished well, know and team want retiring have and – our couple marks mergers, and and Today transformation various They happy of and Jim Vespoli a in during our Steve. a and strong Thanks, the opportunity into to both months I call regulated wish their take retirement. key careers

like the your Now to for questions. I'd open call

Operator

you. you. [Operator Thank Instructions] Thank

Lynch. line Julien Dumolin-Smith comes Merrill with Bank Our from question. of first question the with of proceed Please your America

Julien Dumolin-Smith

Hey, good again Jim And here, been Leila everyone. congrats it's and to morning, pleasure. a

Chuck Jones

Julien. Good morning,

Julien Dumolin-Smith

do outlined? on the program, timeline through New quickly, year you And follow-up commentary you CapEx process? Reliability first settlement with Good How on Technologies advance How morning. just here Emerging the as of of in in the you I already through mentioned think noticed about newly starting could the wanted to formed suspended potential go the of commentary especially against here the Group. here settlement think Plus you've Jersey, just total with then separately, kind the size that spend procedurally this a discussions. the the course and this I you do conjunction

Chuck Jones

Okay.

get allow continue. I Obviously an a spend our that we several for one your second just to that are shy question I important planning of is the have So or don't suspended to would Jersey, but have first today a $X announce schedule of settlement. hopeful procedural that it to we're and in discussions is next But settlement years we I been in billion has to is mentioned footprint. CapEx we settlement per the New year can announced the so, what to think

filed get procedural get settlement plan the like I the schedule we think on to when work that obviously and four But spend about $XXX million where event either. New next we doesn't then years. the to back the spend, that Jersey and we that's to a would out over don't we So because in

around to FirstEnergy these of in opportunity to states make plenty and X% four the in transmission order to. X% to have committing support are other growth investments we We that

to that the that's As what we're the time we're exciting one state and far just I to but we going year, deployment, of do new about those start be far technologies this with do said, for to with committed deal that resources by three time We've an in we started our do got a Emerging FirstEnergy I looking are where invest how then things what at exciting the as have the of to it's on over sense would capital as customers, emerging XXst really and Technologies in my actually think are as we're transmission And years and makes thinking think as to to to state, kind because or utility say, guess at the what the legislative start on years the I impediments just us working piece, impediments. most by company I've Company. we future. finished able I what utility, behalf I of about do as want now next just that, and regulatory three being we've to those

first been first today one to past The really we've some in form us we're XX or to behind another to the position put the start future. time, of a in for years the and looking always working

Julien Dumolin-Smith

quick on suppose then all? the that legislation. all would question Is looking utility here. kicking And any be you potential are the I anything side, again, off conversations in there if at second here specifically about Excellent. towards Ohio anything

Chuck Jones

have in the on state house, legislatively, table and we’re put talk Obviously, in too that leaders fashion, any If process But our really of to new Public to Chairman our a of early engage for to think have energy me right the might about some they time the expect would specific mean. is provide we of what the the for – governor, then the policy it’s if they back input. to speaker in form, a the that a Julien. determine going Commission. new we Not new Utilities new states the

Julien Dumoulin-Smith

you there. very Thank Congrats, much. all it leave again. I’ll

Operator

question line from next Gordon with of Our question. Please Evercore. your with comes Greg the proceed

Greg Gordon

morning. good Thanks, guys. Hey,

Just in rating course over a the expect period that – financing the be remarks forecast question on prepared quick that of your said of you all to you with course minimum thresholds agencies’ guys the three – the the over – compliant period.

your XXXX, of pension the equal, be pension because trading Given assumed your way sort right, should math now when to that of about right be that since basically the Is the FFO guess, the I forecast but in the metric, lower things think about all to it? Moody’s reduces is This, I neutral contribution, it deficit. think will particular, calculation.

Steve Strah

in we be place period. XXXX competitive throughout the to agencies remaining of expect some three that conversations and exit yes, time they’re the right at our looking we’re So attributes that all the in in more are the generation period liabilities – XXXX, with to planning XXXX, because with XXXX I frame. be that think, unique be where rating gone will the has in Moody’s, beyond for of going

going stay that threshold we’re movement hopeful position that the from them. above where get all we’re see we can So we three positive further confident to rating and even agencies, a for to

Greg Gordon

exit your I XXXX at that without guys it this laid didn’t just be FES trying XX% above but see Okay. but profile you and negatively was less – the by you and based I the guess, remaining being blunt, I CFO better explanation cash on is look is out the XXXX? to in That, costs should in XXXX guidance, flow impacted in that from for

Steve Strah

it below but a There’s year, That’s next XX% itself dip little year. right. writes this

Greg Gordon

Okay.

Thank That question. my that. You’re you. direct. was I And always very appreciate

Operator

Our next Deutsche line your with the proceed from Bank. comes of with question. Jonathan Please question Arnold

Jonathan Arnold

morning, Good guys. Thanks.

Just pension. on the

into of contributions contributions. expect where here minimum to cash funding expecting to to see along scenario voluntary about is you’re kind and don’t that Is any a you’ve the that and moving have of there strong kind But you mentioned continue way just thinking You how to we the as up? XXXX. been might further be – position make

Chuck Jones

year. available now. by hurt offset I’m don’t timing of have not XXXX this have taking that the that you thinking is But step do else’s. do some as fund in we mandatory helped next pension those it. about This anything. contributions And contribution as all losses to we was further the right was we to now, any cash of any plan right voluntary everyone early incurred the was know, in The our such last did performance one, And XXXX. plans

Jonathan Arnold

at what XXXX the XXXX share of think $XXX a Okay. before of And can in was – you something you I Just EEI. had Chuck? today? ballpark at you for the smaller? it you million gave you size the that same be, would us as or the look number number Is kind

Steve Strah

the over will to at again once is just Jonathan, Strah. estimated that period, we ballpark. performs in how be now, in this we’re comfortable. about next that Right we’ll Steve that’s market several is same It XXXX subject the $XXX and have – million, year and the

Jonathan Arnold

detail you. just and And have request one like. the sort of similar us don’t a great. the high evolved little review you – DMR on as could But the the level Thank we’d on to just request? justifying time extend the filing and whether from give other to as Okay, it’s the original or on then we how you’re much thing Chuck,

Chuck Jones

that process grid prepared So of in ago. in we’re years very Utilities Ohio to did said capital Ohio. modernizing It obviously this the low-cost as us remarks, begin the the Public for I several insurers, my of Commission helps first, thankful

it’s to because in in of that meaningful make the important it cash is that, years. both, for any more filing I grid our going availability the don’t argue years I said depending case stock to have for And growth two funding. those are a But of on growth lines. we you’re factor for also agencies, rating years having it X% And DMR Our get think plans, cash and But who to pretty it. you more have evaluate along much we two same the Ohio only and that additional strong investments going have two rates to repeatedly, in is even the to of we our those us out X% if said the of not forward.

Jonathan Arnold

much. very you Thank

Operator

with comes of Our Mehta with proceed next from Citi. Please question. line your Praful the question

Praful Mehta

so much. guys. Hi Thanks

Chuck Jones

Praful. Hi

Praful Mehta

Hi.

pension, proportion a versus are volatility a high should touch that just about that wanted Just just clarify. XXXX? we that think the consistently the as of equity to just understand a changing forward products of proportion I Is I performance So fund? equity? on Or in plan so of of debt pension again how the result going invested is from

Steve Strah

This is Steve again. Strah,

We are not our investment coming. in see going XX% composition is Roughly return-seeking. I that portfolio. any the approach of And meaningful to the change of don’t portfolio change of terms

Praful Mehta

Understood. that one-time? And change impact, is see discount offset rate also discount the in a that lot of that changing? do that how rate you earnings Or

Steve Strah

We curve full year. ended to the up moving yield last

course So to the approach. turned interest the us, out that Once for change see I how market move the just our be no again, see we’ll we year, and in beneficial rates over and think, of

Praful Mehta

you. Got

to was all helpful threshold rating the side, agencies. a credit also within is perspective it the the company achieve from rating targets have that context to of looking debt agency understand very I to On wanted you’re holding full a perspective? from there any

Steve Staub

Steve. is this Praful,

debt holding holding specifically is a right perspective, it. of as no percentage total company we’re with that a they Moody’s and from targeting debt So aware and to of XX% issues company debt have around XX%

Praful Mehta

side seems perspective, pension the metrics line And well. Understood. sell are this point Well, you’re there at your that? is intent the clearly, small it be Is super point? execution just just apart execution, pure mode everything stuff, around from purely thinking finally, gone thought or in really from has working from a transition that’s of at how buy helpful. well, terms apart Or the to strategic both about some strategic in on

Chuck Jones

we of was But, one, we necessary. there were getting this lot if So in M&A two, number to talk increasingly and number a the industry increasingly that, question regulatory it. difficult, this about approvals obviously, those I’ve get the becoming been something things lately costly about, even thinking through types is are growth wouldn’t

of for concluding hard I – having better. opportunity term take it look that we many are at. companies a said both any short commissions to would presents sense itself, that long it bigger if and our think But be makes regulatory term aren’t that, And necessarily shareholders. seems

listening willing to we’re is more tough you demonstrated works, Chief Gary shareholders what that. to all we our one Benz, about presents make we’ve proposals decisions that we Officer, our so how our stronger. company And if we’re Strategy the bankers think everyone it them for make of know make does they as single itself company who every time is and that things of company We valuable do from to going part this can make really do investment that stronger, I think would happen. my evaluate to tackle

Praful Mehta

the so you I hear you. investment I do that appreciate bankers Thank Got it. for color.

Operator

Our next Goldman from question. comes Please your Michael question the with of Sachs. proceed line Lapides with

Michael Lapides

on Congrats guys. a Hey, good year.

making’s you’re whether rate case is curious there’s it a and pretty one base some looking pretty the given Just those distribution Penn, two And these things subsidiaries, looking just But or Jersey; New in obviously, imply other How kind done sizable where how it of of rate at one ROEs of at what different animal West authorized. Slide of XX Ohio the that whether these versus how a thinking lot a there. has even are well below you’re the and it rectifying or looks maybe implies about like jurisdictions? coming others, under-earning. target,

Chuck Jones

it’s growth. as because as the works, our you’re all turned times the making say. contribute DISC with would about under interesting share many this us investments and Take in about Pennsylvania, been our XXXX what has the companies of for back question how Those on DISC. get we’re to them distribution investments I familiar about operating will four $X.XX a And here’s Well, many, I January over-earning. the of year about DISC concerns under-earning particular,

anticipate base Pennsylvania and now. we DISC, we’re be rate a In we’re wrapping a not able if case maximum we DISC order rate in It’s freeze in would Pennsylvania ways to even going a we base roll one, long So under bump another this In then we’re had year. new with rate to the amount XXXX. rate that’s on expiring point any investment around in some have But Jersey. Maryland, XX. stayout cases the effect I go that method case make can time, point. against that in filings March New rate we’re for though of right is just will since year rate this in At a in up our from in rates Ohio, to using required the the then case up forward. sure, we been away of in be not that to case use through

for it’s Over So, $X and rates the companies. the is transmission XX% just made our investments in riders of years, that realtime several next we’re shy that billion. distribution making in formula really this and of being year

the on for so and us occur. the It’s any growth merely talking to achieve X% does depend order we’re And growth. then plan, mechanisms, rate investing about executing to formula-driven cases these in will in that X% that the not growth

Michael Lapides

specifically, significant O&M it IIP help that’s want unusual spread I anything that though, follow in future got XX-month just a will or on help that’s place. number Got authorized. the in thinking may the mean only lag that, not abnormal relative on it. this, sizable to up really just because on highly And if that Jersey already showing and investment, I you’ve to but trailing New you’re I’m X.X% ROE

Chuck Jones

Eileen let to for going Michael. I’m one you, answer that

Eileen Mikkelsen

says. a Thanks. the last for In looking cases base I XX, loaded ROE the preceded would that note that, on our number Slide note rate that that at was JCP&L

from the So, last case. to last from publicly published number our rate available it’s rates implementing prior ROE

Michael Lapides

appreciated. you. Thank it. Much Got

Chuck Jones

Mike. Thanks,

Operator

Morningstar. the Our your Please proceed of comes next from question. line Fishman question with Charles with

Charles Fishman

Yes. DMR was answered. question

you So let me Chuck. this, ask

see I of that how that up that and on go quarter appreciating call through on you transmission you the X suspect your had you didn’t far You made FERC-regulated plan. that to graphic number transmission? is anyone your FirstEnergy. CapEx EEI or people else market to XX% that based on – what’s system appreciate do of going either the statement you going third can Slide as to head influence showing at the it’s think get get at benefit the the What do as was

Chuck Jones

assets, is three that of year largest company years PJM, about we largest one, over transmission in growth miles X% think country, I and a next to in growing X% in have it more that footprint, has large Well, talking to per rate. XX,XXX number lines, it transmission it’s do the a our one of we XX% are at of XX% the the start regulated

see So really of it to sure make think it’s calling investors I out worthy it.

our with emerge them year. ongoing I confusion by the creditors have change the think continued approved market of and couple away have go settlement overhang hopefully all don’t in other they later point I still settlement One name court, think there’s actually until with reached stock of that the there relationship are even to at a and is though from we been will this FES holding the and things back as our some a that their some rerating.

system, and work Allegheny but making us more ATSI mechanisms years, – holding that’s next all – we’ve the when its think FirstEnergy We’ve I I making the plan, as we’re in said. of the former are growth just XX% and back. that the we’ll I got the I now for and investments over execute the than investments think committed right So, the three you think to. it’s about what means But we’re formulaic it’s these rates shareholders. execute of mean, I that’s that to value of MAIT forward-looking in them transmission and can’t all it, undersell system where formula

Charles Fishman

they in So your but you New some more that Jersey else mostly, give transmission, you’ll treatment negotiations, in the on in it’s investments suspect kind your focus realize have that New correct? Jersey, of Is formulaic the where or of and settlement FERC-regulated. of middle state-regulated I to you’re I

Chuck Jones

But to still put likely, year in. that investments investments mechanism, And going the game distribution to moving I money, and customers ones are the good also improvements are to willing that’s are I we’re making that by the are but want regulatory lead that at answer you’ve mechanisms before, invest we this say to don’t money in as formulaic riders invest transmission, me where shareholders JCP&L good the pay in Good next realtime to yes. heard successful regulated serve formulaic we your state willing be customers. plan. and a we’re lag, think, for have the about shareholder investments. mean think we’ll to to is

the customers also is a of we’re for ATSI what the thousands times. reduced improved we And up of the transmission – our Energizing And XX,XXX doing affect transmission it customers almost outages at maybe to part So part Future, single system. all driving our can tens customers. ATSI of service take XX% by just on to XX,XXX of of outage affects

for are those too. great So customers improvements

Charles Fishman

had. I all That’s Chuck. lot, a Thanks Okay.

Operator

the question with Please Stanley. [Operator Byrd Instructions] from of question. Our line proceed next with comes Stephen your Morgan

Stephen Byrd

Hi, good morning.

Chuck Jones

morning, Good Stephen.

Stephen Byrd

through to address regulatory a just ROE? Would talking Most need directly accounting sort questions Chuck, proper did in mentioned just regulatory have you of of real ROEs. of example ROE terms just want been that earned as level the some made of an of calculation in the you adjustments to Ohio be of my just question, to at I before that the calculation versus answered. mind of to earned calculation high get the

Chuck Jones

earnings I into an to too Stephen. think way get call, complicated it’s on

affect to offline have our year rider in be it with frozen I through regulatory talk perspective, through of Ohio, very as that and lost a GAAP moving I’d from numbers through unique to we’re with of place go It’s rider. with happy go the grid goes how made. are are seven complicated to the for a examples we we’ve of treatments from I and it the So, parts DMR, all looks But things a imagine modernization XXXX. can accounting rates it DCR revenue that you. that’s of you from those some or are the for and ultimate efficiency you been but in how can’t through in said, on just turns The think energy now, different XXXX Irene perspective. out it from improvements on call, There

Stephen Byrd

just technologies that area. an might possible and or offer generically of the operations? it then the Group. kinds like Technologies example an customers mentioned Is sounds of Emerging And new to two give exciting lastly, Understood. system It you to some benefits

Chuck Jones

example end I two significantly charging to vehicle governors, in New an Not up, give their our it would had want you penetration be up their and would saying say we particular electric going vehicle Pennsylvania of example. express I’ll We’ve Jersey would electric have stations. one the it’s state. more way but desire end – to to

that their that, but we that’s where their them that we it. way accomplishing going that skilled infrastructure. and of I in with are help none but really to look like duplicative, that those states. more it penetration, do skilled us And robust, something very are at on ongoing them to building can One of impediments now, an a ought have is if about cheap at case it’s the return them with goals strategies bring it doing for accomplish. equity, think building want of going area to our charging it’s our ours, at is just – out planning at way network. an to infrastructure. to we not skilled states for finance utilities They having value to not conversation we’re They be to a Utilities, the are a robust of I states X.X% Right example a XX% ours, which to think think want environmental EV there help

Stephen Byrd

Thank you very much. great. That’s

Operator

back comments. Instructions] you further for this Strah, time. questions would appears no [Operator I have like turn at to now Thank Mr. to you. It closing over we the floor

Steve Strah

the persistence you in haul. thank Well, long staying your for us all with over

at more. the really about you get Emerging and once into where years, as Technologies more then company, know next we’re a about We’re excited it about three we as area, this we excited excited to really tell

time forward to to So, again for Look your this talking thank you you morning. soon.

Operator

today’s gentlemen, this Ladies and does teleconference. conclude

participation day. this a lines disconnect have your time. and at wonderful your may You Thank you for

FirstEnergy (FE) 20 Feb 192018 Q4 Earnings call transcript