FE - Earnings call transcript Q2 2024

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Operator

Hello, and welcome to the FirstEnergy Corp.

Second Quarter 2024 Earnings Conference Call.

As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Irene Prezelj, Vice President, Investor Relations and Communications.

Please go ahead, Irene.

Irene Prezelj

you. Thank and Second everyone, Review. XXXX to welcome morning, Quarter FirstEnergy's Earnings Good

Jon Vice President Brian he today, by Officer, Chief will our will joined Our Executive call Tierney, and Financial and President Chief lead our be Taylor, Officer. Senior and

presentation financial release, our financial related statements. SEC results cause with can that in measures website and and our on include the financial information discussion differ could firstenergycorp.com. be forward-looking presentation Today's today's these materially slides the non-GAAP will available use along our earnings The Our are at statements of non-GAAP forward-looking filings. includes to from of measures. information of appendix found supplemental Factors reconciliation

my call turn the pleasure over it's to Brian. Now to

Brian Tierney

us also legacy review for are on I the quarter we executing I you, updates the value shareholders. in FirstEnergy. financial recent interest our our as today and for offer we Thank trends morning, provide well for Good discuss proposition Irene. the our will and your and will everyone. performance highlights Thank regulatory our seeing and developments, second review as joining plan. business industry progress in you issue

Jon XXXX second address share number the earnings share GAAP quarter second items will few our that $X.XX special last of GAAP to were per which quarter in quarter $X.XX at Looking year. results, results, We a of compared per in recorded second minutes. impacted a

sale higher maintenance with respectively. customers. improving X% were per adjustments offset of utility quality. up Customer share quarter FET. impacts driving operations earnings for the items our XX% dilution residential a the $X.XX second per were share and trend year, point expenses to and earnings sales planned earnings positive Operating growth positively expected the impact from partially These $X.XX for also the to investments of was better and expected of commercial The and rate versus impacting quarter positive an last X%, quarter weather-adjusted were quarter demand and operating by associated serve increase XX%,

customer months This XX% sheet the our improve to EnergizeXXX X improved experience investments the the year. capital our enables first plan. for increased capital that Our is reflective balance of of

executing are operating achieve goals track $X.XX guidance Today, per range we the our outlined. we've are and reaffirming to XXXX on are well earnings per $X.XX share We in XXXX of share. to

We versus $X.X in XXXX, are of our billion we earnings to rate. reaffirming and operating are XXXX CapEx our long-term X% $X.X plan X% annual reaffirming growth billion

my FirstEnergy. X-year X June with anniversary marked

year, the made organized Our X an positioning employees amount operations major X From significant have standpoint, success. company representing progress we for a new last the have businesses. in of into our segments FirstEnergy

decision-making a executives internal company and We to and have changes to recruited strong put the closer These leadership, restructured external company responsibility lead customer. into the model and businesses. these operating promoted

well-trained people in effort to ensure investing workforce with to engaging customers, line a are paying and serve an unions program to to we mid-cycle journey started a support serve by customers forming our hire further our are to and help wages apprenticeship forward. new our we to workforce. going We We our enact representative level our workers better skilled pay to adjustments competitive are

over a transition plan. billion initiated our customer we and program, $XX to investment, capital X-year the increase enable reliability XX% capital in represents EnergizeXXX investment new experience. X-year EnergizeXXX Regarding our previous the energy and improve investment

V unresolved rate X number case, left that Maryland, we May We XX% engagements constructive front, one Jersey in we currently for issues. received representing a proceedings base. but order New West our have regulatory concluded traditional the Virginia, FirstEnergy's of constructive a flight. in In Ohio, regulatory in rate On of and ESP

Grid are filed a of Mod issues our more II deploying clarity in We in our focused all during case those to seeking settlement are have on phase. We and customers. April, for asked for this automated late obtain in agreement on approximately an and rehearing equity concluded meters partial XX.X% on X, July requesting an XX%. anticipating ROE rate issue order in May, case of noncontroversial the average on a filed ratio fourth this and Hearings we our quarter. base We

We other will be updating V today reflect that changes from ESP the filing order to and updates.

this expect into case We continue well to XXXX.

In of $XXX adjustment equity an XX.X% rate XX.X%. Pennsylvania, base and we an including in April, filed early ratio case ROE a a requesting rate million

an a in in is the we settlement engage to As intervening Pennsylvania, customary reach mid-August. prior with scheduled in will effort hearings parties to

Plan X-year our to are billion filed to on January will prior plan proposed expected rates This Infrastructure the benefit in July in in for Investment X XX. the strong to twice we ability enhanced of $X.X our The balance X result Pennsylvania, reliability. LTIP long-term and customers. plan New be effective Also X, XXXX. about sheet investment the our support investments our of invest demonstrates is approximately

which in using in November was filed size Electric duration upgrade $XXX is Energize the in New technology of and plan plan, Light New This are modern February. in and Central Finally, million devices and designed for to we reduce infrastructure, Jersey, Grid help updated Jersey Jersey smart outages. a & settlement currently Power discussions to

We a are and discussions reach hope currently in constructive outcome. settlement to

the and future operating XX, equity On $X.X companies. last the down to raise of has $X.X short the past to the nothing July sheet its been to pay the XX, From debt made a remarkable. strides FET. of the billion financial were transformed short- our the transaction prospects sale. transaction multiyear This long-term reequitize March This the improve of balance cash the standpoint, XX% FirstEnergy of company. $X billion of has year a and that was closed received On used final sell company company over its billion

our outlooks. all from S&P Rating BBB+ or FET's X places utilities. practices taken credit senior and management senior at week, FirstEnergy retained unsecured its notice as reflects governance outlook. rating S&P fully FET's of grade unsecured upgrade investment regulated rating and positive with FET's This rating to rating agencies liquidity, and Last Corp's ratings and senior the positive X-notch have in cash unsecured enhancements Fitch BBB- retaining above and increased

transition to large reliability investments from as as the of energy It customer and amounts were a needed we that major and experience. we'll balance well at significant the strengthened to the of our or the sheet to our enable debt this sheet basis for significant higher on improve have continue significantly raise to transformation Many introduce This differentiator many is to able balance make still EnergizeXXX represents have of FirstEnergy, equity peers. and of to peers volumes rates. issue grow a

The our of have not either. sheet transformation component to balance does do FirstEnergy complete. is

of regulatory the executing benefit our plans for our and customers. We are now focused on operating

Slide to X. Turning

data Let's centers. talk about

of have a developers load year. getting more last across are number doubled from service load for from than development We area. requests fair study of data studies our this type center Large

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our utilities. states, wires-only of we X in know X you As are

and is ensure states capacity working growing interested energy with help the to adequate other enable load are customers, parties there transition. We to meet and

all serve future new to Finally, are same on able time, negotiate serve changes, affordably. find tariff customer enough we need our protections. terms state-by-state regarding basis. will maintain We tariffs existing to the the to we we file loads is us them to need If current adjustments, tariff be think us potential for flexibility for a at retail loads allow reviewing there and to and

ethics second for prosecution of Ohio XX, U.S. compliance significant issues. the During that progress and for and program. period resolving we a filed including implementation quarter, was a a deferred obligations, confirming to report On agreement, of legacy FirstEnergy the it remediation the successfully the status under the Office Southern perform X-year made Attorney's completed the required measures July District

to reporting have result, requirements ended. obligations a the those As related

As an as obligations. continue compliance. other move and and ethics, outstanding cooperate a integrity provided other company we step DPA, continue past as matters, we under will and put us the was reporting forward will fully with culture the DOJ to on stronger behind with of This important the the we robust

on We an which subject commission principle SEC reached staff would settle set the DPA. based claims in fact against have in forth security the of agreement approval proposed with is to settlement the SEC FirstEnergy. The the the the

this a have of We $XXX settlement. reserve million recorded for

expected is final facts General resolve based are Commission. The include a resolution Civil Similarly, and Investigations Organized the of Crime agreement against with a we FirstEnergy. to is the Ohio on the expected DPA Case resolution the Ohio and non-prosecution in the Attorney stages to

reserve cases related a $XX.X of PUCO. docketed recorded of resolving to issues move legacy million anticipation continue to X these both have the forward matters. at in The We Ohio

Discovery XX scheduled October on for the political is X Discovery separation An on on audit Rider report scheduled with the the audit. and ongoing and charitable hearing DMR/DCR is spending X continues on a is hearing due review. corporate for August review. February

to our these usual of review and activity cases. appreciate cases the this audits rate appropriate cooperate that not these continue a form as in for We business and are

moment proposition FirstEnergy's review take a value Let's to shareholders. to

growth growth earnings base an in to annual X%. rate of X% operating on X% Our predicated is rate average

system our the benefit our our of strong in Our ability as by for sheet. to enabled invest customers balance

to the necessary the to improve energy investments reliability enable customer have make the and We opportunity and need, and the means experience. transition

supports attractive an profile solid metrics. has that low-risk BBB FirstEnergy credit

profile investment do traditional means foreseeable benefit expected anticipate increase has XX% and The FFO improved our are beyond needs to our customer programs. our is employee to affordability incremental equity over targeting the to strong debt future. for EnergizeXXX and our for XX% earnings remain We utility the that a of horizon quality plan earnings not

return combined earnings dividend, represent operating total proposition XX%. XX% annual long-term of Our to a growth shareholder with rate our

our plans. and focused that operational, are made our customers. balance The men issues have execution strengthening behind progress putting regulatory our FirstEnergy financial and sheet, on and focusing We legacy and serving women on restructuring our us significant business, singularly on of

their years Walker, will of past over behalf personally Human the Chris many to over of our like her her Before for year, thank for call Chris employees. XX to years X like of gratitude after Chris be for done I dedicated me of I also significant a years for retire in her service. owe service retirement. many well and of debt thank has Officer, I all management on wish executives nearly with would she service and transitions mark Resources Jon, to decision We company. would me the to to Two Chief of our retiring recently the have notified turn FirstEnergy.

of Many Relations retire. than years know have XX Head you Irene Prezelj more has to of After service, and our Investor as gotten of Communications. to decided Irene

years, been many For alike. company has to the Irene of the investors the public in face

to dedication Irene the for best wish and and employees, We going our customers are serving to investors, her leadership grateful forward. public. the her We

will I turn Jon. that, With call over the to

K. Taylor

sincere everyone. in my me Chris and have Brian, been and always work wishes Irene. I been bit you, want the employees the their them and to over gratitude Thank extend and wish I of also great of the years for best have to good morning, happiness They to with every retirement. company. and there

regulatory customer discuss an our on trends our financial review I'll Today, initiatives. financial and update and economic performance, provide and

to the obligations reviewing recognized residuals second Costs quarter from the commitment proceeds legacy These using with impoundment shareholder a results. impacted EPA the legacy debt transfer site a our Let's and OOCIC impact connected the in derivative of start ESP planned settlement and with partially larger Ohio in the regulatory the V and the special the from rule. FET to resulting associated associated retirement third-party the new anticipated from proceeds the with increased the offset high-cost include of items transaction, insurance GAAP connection combustion by a by SEC charges redeeming asset investigations, lawsuit order. receipt that resolution coal charges of

we of improvement. The And significantly across share, strong solid of of businesses XXXX. our earnings discipline on $X.XX a and execution customer of culture demand. to new of base and rates formula capital guidance capital EnergizeXXX second that, of business, per to primarily continue in $X.XX is for operating our quarter invested quarter delivered above because see continuous and reflect rate and program, year-over-year compares per share investment our which our second the We investment midpoint programs all higher the integrated strong financial results

part This the distribution reflects share Looking planned last in the in share our expenses results credit second in programs settlement. higher at XXXX were segment per $X.XX growth a in we by investment lower previously, $X.XX operating earnings rate for quarter, offset and compared to our business, formula and of our increases quarter year. Ohio per rate as operating discussed customer demand base in partially test customer rate earnings of

Jersey in Integrated primarily reflect $X.XX versus and share were our Maryland, earnings into share Results new last rates programs the Virginia in over higher partially operating and effect months. investment $X.XX in higher FirstEnergy by New to Operating In stand-alone in more closed in and from segment year. of Transmission that X share the a quarter result of distribution demand, our base XX% this the investment second second $X.XX West went XX% Rate quarter per transmission of the past per rate per sale XXXX. program, by impact a offset were formula LLC increased growth segment, base than offset rate. in per customer of share this our the tax transmission base of was which compared rate effective interest earnings the March as Year-over-year of year. Brookfield, dilution transmission but $X.XX to

Corporate found lower debt. financing our year-to-date the second we quarter second segment of afternoon. in $X.XX XXXX. and yesterday were from the be on website result high-cost strategic our document share to ongoing $X.XX versus and in can is financial the our IR improvement costs per per the redemption losses of highlights quarter in results posted share This of More detail Finally,

impacts which base share $X.XX in offset of higher contribution rates by the and Looking continued rate to per integrated quarter, our from are third ahead, business, new planned customer providing the continued we base growth reflects lower guidance demand of Signal $X.XX partially Peak. for earnings a

look growth the look to year X% growth earlier, and in long-term reaffirming months. to over our as perspective, the from we're Brian X.X% months. mentioned over region, share Recent customer classes guidance of load earnings that region. year, by the and up to we of his related customer has X% remarks, taking of seeing trends demand broader the including Brian demand our shared under rate. just averaged in of demand annual our increases of the the that XXXX center quick operating data past expand past X% growth X% customer last over over positive And XX weather-adjusted service X.X% the the In X% the on $X.XX positive are GDP and territory. trends at for I industrial in per a economic with a as as a our employment are just past XX respectively. And in our services in want $X.XX primarily auto to resulting some in X.X% commercial sectors, and at economic activity XX% and well from

so as a And customers in adjust to reliable position our service. we we're will believe program serve our needed great ensure capacity and investment to and

remaining from the billion, billion the month, received financing we in $X.X plan to FET interest $X.X sale XX% this Brookfield. earlier From a perspective, proceeds

investment we program. balance proceeds when with an transaction of billion were billion initial final the proceeds a received further deploying XX. transform our We're our grid payment accretive extinguished in to March, support the $X.X in our consistent plan EnergizeXXX July closed the recall sheet on that Brookfield's remaining those notes and interest-bearing $X.X in You'll with credit manner, that

at FE nearly redemptions multiple. years trailing we've of As $X second debt $XXX of a resulted in equivalent these for in $X were a pay capital financed XXx discussed, completes debt over to In quarter, billion total, XXXX the nearly long-term off billion with billion including PE price been last the bonds $X Corp, debt otherwise share at million transactions utility the of redemptions proceeds share $XX debt that the the $X utilities. series billion in X.X high-cost at over have sale short-term that and remaining or in would an equity our used in long-term

the in also investment this subsidiaries. were rating subsidiaries further agencies. grade X S&P our by and Moody's week S&P, FET restoring at and upgraded Following it upgraded and our corporate upgraded this March, closing ratings continued as of last credit its credit momentum The to at all was transaction rating

execution a Going investment in forward, our flat BBB and regulatory financing credit-supportive achieving legacy robust our credit consistent of our outcomes, focus a issues is moving credit-supportive on plan, with profile. continued past plan manner,

company. Additionally, liability. successful is all earlier This of this a remaining we removing nonregulated million at in pension pension launched of December earnings on proposal we transaction, the liability first pension approximately liability, further lift-out the dollar. eliminate month, volatility in and would a year, $X.XX transaction pension nonregulated second to the for quality that improve lift-out pension of last million the request of for executed $XXX pension transaction the $XXX reduce Recall eliminate

year. now we review million while rates zero. recent in Ohio, rate those a capitalization In rate base and equity our Turning XXXX proposed Riders in riders customer and and Mod of investments XX, base and ratio was which keeping a activity. test May affordable regulatory rates on experience return billion, in a for equity recovery I based rate filed to base $XX includes capital The The request resetting adjustment rate on the the investments XX.X% $X.X to XX% adjustment on AMI, on recovery system the distribution investments Grid for case DCR includes enhancements of customers. supports a

including costs case actuarial the to mechanism a And update as to includes with to tracking a the an pension file total of previously impacts is pension the companies update May The request. the program information a will lights Ohio actual incurred addressed service through to update review rate updated restoration the recovery include incurred, it request losses test costs as XXXX a pension volatility from financial year costs the major an base XX of street filing convert ESP avoid to and future. order rate only includes results. recovery to including costs, also to V It well other to reflect the previously May change operating and in in LEDs. cost storm for Today, request to XX necessary

Our X.X% on ranging average effective in modifications, residential X.X% the impact excluded Ohio. through order rate our case, Ohio, overall The of of from an but base across an the DCR expenses. XX, or with Rider approving extended deferral of to which order represents typical issued X. Rider the a major X.X% bill June Edison estimated CEI order customers a recovery conclusion V investments of initial an ESP of in storm for increase increase for May The of in first X Toledo decrease Also request years the and became vegetation in expenses management DCR. ESP the rate for from recovery provided also certain prospective PUCO

of term, regarding terms ESP rate the the ESP clarity appreciate we to V many with terms the provide in for these our period case support key not directed order the the X-year for While key resolution. did for the base near entire of

regarding gives for summer settlement, order rehearing through during case for more customers. purposes full certainty there the for filed an for fourth our the X seeking The terms the for rate parties consideration. DCR decision. time no to Mod as This other its Ohio an included We application held the economic investments the and filed anticipate in and the proposed Earlier shortening statutory granted quarter. applications the V further key to of conclusion all were order in II make the final PUCO the that preserve step decision, Grid rehearing we this hearings of providing the PUCO term proposals recovery the base deadline subsequently is by month, value which of greater well modifications ESP the as years, of

of In total includes includes infrastructure infrastructure program. and billion projects improvements our $X.X phase Pennsylvania, X phase part LTIP customers the a targeted state supplements more modernization investments X earlier and service investments plan building the on filed month, LTIP completed resiliency investment includes accelerate LTIP over million remaining more projected the grid reliability we and which for investments our X, EnergizeXXX LTIP this focused system known in of improvement on third enhance the while program in to the and projects. years, X the This reliability long-term both X as than for affordability. third of of X help

is rate improvement revenues Pending X% the actual based impact recovered $X.XX capital on in or increase. and with DSIC quarter currently XXXX through first or estimated benchmark deployment to ROE, XXXX. The which are Investments system second charge, the of PUC capital begin we X.X%. quarter a average cumulative distribution approval, through is customer the expect DSIC to in DSIC a begin recovered structure of residential

Also April. base hearings our in begin Pennsylvania, in in review will mid-August, in rate filed

on rates The request discussed return in equity ratio. we with programs quarter's utilities on As comparable adjustment keeping modern of built our on a rate in an service call, million and investments billion, other this rate review in base reliability proposed additional with $XXX for while state. grid and Pennsylvania last equity to a capitalization $X.X is XX.X% a XX.X% the electric enhancements on customer-focused smart, a

The storms, vegetation outages, associated COVID-XX conversions, Key costs major tree-caused implementing XX-year costs, reduce and a recovery with reduce changing to changes time traditional components future XX%, includes cash to from pension average light pension management legislative LED-Street reduce actuarial savings federal of rates. including and restoration include blended outage from program of maintenance a provide state enhanced recovery tax review continues losses. approximately to also recognized customer but expense, also federal statutory previous rate tax and contributions previously to

mentioned, we actual the and mid-August. in application scheduled an OPEB between mechanism And to intervening prior as in reach to and the settlement engaging differences defer reduce the are volatility with parties track the proposes expense test year effort Additionally, pension a pension. hearings to Brian from normalization to

million. New XXXX, are $XXX plan, the covers filed XXXX, settlement New infrastructure Finally, Plan. from proposal, January June with in XXXX, BPU Energize the peak Jersey proposed portfolio in discussions period Conservation decarbonization order required in suspended reduction Energy programs and improvement of Efficiency of X, in the A revenues engaged July return December on a our for on addressing decision light and approximately no our is building lost later demand which a budget It we of investments. final recovery with XX, through The BPU This with to than and this of procedural the and a discussions. provides of discussions schedule addition these XX consists was the energy October Jersey also settlement year. efficiency, X BPU settlement of

making We're good progress in XXXX, we're executing well.

strong our We to and strategy and growth. have a opportunities continue positive momentum

Thank you open today, your and I'll time the call your questions. for to

Operator

Instructions]. [Operator

from first with Guggenheim Partners. Our question comes Shahriar Pourreza

Shahriar Pourreza

potential and of the couple of on the Brian, a Just you're And load, but you load still energy-intensive quick figure how peers opportunities capacity out on here. when kind obviously, numbers holding growth centers there. growth X% and take back? investors transmission about ones guess, impact. there? consumers, expectations, have A you what's there, are the large of out to you your around just this lot data I quantifying highlighting raising thinking around of are upsides have the been have some kind updating

Brian Tierney

for of we're seeing going that, right are the growth now. future you things that our positive We're data some Shahriar. Thank evaluation center side. Look, our rate through from load

not in it center, seeing isn't growth, talk from we overall, of a it, those out of Jersey. New of this generally data still adoption knock we're And positive like out. at if and But so some been get as places still EVs impacts level, growth seeing they're Some and look at Maryland years a at even seeing modest, steady few taking low earnings We're service the about point. which transmission when park impactful. the Shahriar. There's load we much

PJM impactful to over for in we us Northern way worth $XXX customers opportunity Open we has existing of in data existing around Today, Virginia, the of load centers spread where could the our around system capacity Panhandle, were positive that be that But some to some transmission the that's opportunity real been things as data units. center that million of area. rate Window like it a X, to in invest serve Maryland about awarded more

So we'll that's I more data be load EEI, growth. seen, able we've be seen update more to centers, from the to probably impact and the on where you around but anticipate

Shahriar Pourreza

Okay. I co-located could sort Pennsylvania saw the like there? somewhat see current states lastly and on haven't have? the peers Perfect. Susquehanna of data noisy AWS. similar mean Ohio related. your deals most nuclear some around Susquehanna maybe out been what's at and deals PJM. of FERC why like I docket in complaint you guess, It's filed in stance And then we and around ISA And your center with your current when of

Brian Tierney

Yes.

service to to for not takes it FERC not that for things time. that think you us thank be do net I'm on as that. like this our of view So what or block I to that, to I'm existing not business where whether in question. out sure what are we will what point, would has figure what something It's tools and the able their say market given is capacity customers. their Look, about out see those are that territory at and FERC impactful And are. to interested

We PJM capacity just on prints the auction saw pretty yesterday. high some

print a solve attract to or I'm mechanism one increased print investment are offered that looking and no the PJM or significant a sure going There problem region. and a was think yesterday. generation I I X-year print that to don't into capacity think does, X-year is not X-year people that just print resource right? generating virtually to auction it really new solve That's that in adequacy. was that happened

we issue is But be the going think auction customers. something that It's I out. to it's important So to PJM is don't our We're the need for that place discussion. figure actively in engaged solved. where

Shahriar Pourreza

quick rates? Got to what of on potentially it, certain assets referring follow-up the are? and you discussions owning Is Brian. And that. peaking just that a a amount Are

Brian Tierney

have constructive say, we return. we that come And people would states, today, states we the are asset not that they're Ohio behalf challenges legal our certain we're invest we a we could in So circumstances like some In we you capacity And today, happen. think regulated in not. And to to could of capacity. to customers. allowed issue Those could. generation the other dispatchable us aren't and happen. for help Maryland in our own If under were of states certain if But things we'd under is our at would to Virginia, life the to think of of are how adding to allow benefit and be that discussions would those we our other customers. the form that in on in have to circumstances West do

Operator

Our next with comes question Research. Fleishman Wolfe from Steve

Steven Fleishman

First, know but there if first Irene settlement years on and mentioned she discussions congrats question, you I don't guess, was XX on close I XX working started Irene when retirement. just to there. getting you're her years to old, Pennsylvania,

Just Pennsylvania? on you the a be any to settlement might that likelihood in kind reach able sense of yet

Brian Tierney

present that, that it's And point, but be So in discussions. would we're early we'll always a thanks -- hearings for something and the this able Steve. before talks Those like at optimistic are stages done the to to and that we to get settlement in reach say early commission, hopefully I'd August.

Steven Fleishman

just definition? sounds clauses? keep over guess, of I to life some to the is it of limited kind just to V, going the really with benefit that the get just the to shorter on of do this ESP the ESP time it less want Okay. the like there better you'll these an kind benefit definition have be And Ohio of you with Or ESP then of period, that on you're of seeking --

Brian Tierney

V to punted rate the some what aspects base Here's case. key the happened, of commission ESP

case. beyond And accept X-year so uncertainty hard a for to when the rate plan it's us current there's

more the X-year it, things it's certainty. more an for that a get case. And certainty on us after to got over so It's were for of better, those we certain time get what's a term little to base rate we and really if with us to punted in accept resolution ESP to items to happen those V know easier up hard going

Steven Fleishman

your ESP obviously, Got it's And it. not. right. an whether decision That's or then accept to

part that's it. got So the of --

on enough Okay. quarter. issues this you far are, guess, on take some Ohio that of mentioned I a know reserve I to those the you

and to talk X resolving just Just period. then DPA maybe the you could

how on So overall kind maybe just of could you viewed days? your these environment the and is take talk just FirstEnergy there to

Brian Tierney

Yes.

thank the significant that. to and take for responsibility any make we those for on very progress. penalties this of quarter was payment that real we've The some in Steve. So very, worked that, to was thing move happened in that made we what Look, positive hard beyond issues, past, you need very X and

the term Southern there requirements the was Office recognizing fully the that that Ohio ended during First, and Attorney's filing the U.S. compliant for District term. that the DPA the X-year by had with we've been of of

agreement to And Second, make we an achieving us. on reserve OOCIC be SEC. take behind approval we to then will to put the able were were required the progress make we a able the third, to that to and with subject in able that progress principle think amount we were for commission

of all being So received well those I those across progress putting and on future. real all it's And fronts, on behind us in think issues legacy we're making venues. focusing the

Operator

with Our next JPMorgan Chase. Tonet Jeremy question from comes

Jeremy Tonet

in thoughts new wanted bit there strategic of larger happening Just about there. customers to on potential share see to earlier use? and you potential form do to generation, VIUs this? stem think a of here. for rise power capacity curb together just efforts IRP, greater any anything legislation see build reserve, you a you to state this just Could the kind just energy prices? coming follow FRR consolidated support little in do headroom And Or -- a on both multiple up for And out you any points on impacts given general, higher prices, the prices wondering more how to some state

Brian Tierney

in Jeremy, that was you That question. industry have used in amazing. every we acronym the about just

late of we're some doing the are It right right? was now, news that things afternoon. breaking Here yesterday

we States So One be United are by in the impact is prices in the saw the we're of prices are those going rolling gas yesterday. have of the on some a prices a some analysis electricity rolling same that and of things. reflective there we of capacity of those still higher jurisdiction-by-jurisdiction Ukrainian also and higher print in. couple capacity time, impact But prices energy will off, at the that

impact will customers be the impact and to kind the will will a trying a that happen wash. jurisdiction-by-jurisdiction think Virginia, to determine right we're basis, what we West So of how on our be. In now

and We selling West Virginia. a amounts, state significant have and customers West be of in those that there don't of Virginia about buying the our at the need to we capacity expect amount impact

traditional As we look well. forward what energy among I country progressive would as to have, the policy the in and other states, the right, we the say, among states most most

being next cycle of be also we solar has above. combined like recently. West been to able to in some see our there So added to that. And the some IRP, pro-coal, addition but I'd Virginia add I in might to West We've if traditionally all responsive in think gas Virginia

any we're states allow some then like And construct we're to invest the would in a where that capacity on to only, something basis. other in regulated that us wires looks open of

like they could NYSERDA were where Ohio, have capacity that could looked regulated that those we long-term and generators and If basis agency auction would regulated offer price a we do. for a in to regulated and looked or into us basis, return generators, to to things that could willing anyone if that might us fuel on Pennsylvania like allow auctions. it looked pass-through offer recover we'd NYPA, energy, something that state buy that a something So competitive at that, and at like are a be those allow hold a an

the on and need out start to. that. our have price that states of competitive capacity wouldn't are That's be the heavy that standpoint going generation own. are that's other recently in of. from rebuilt that be things about. our be they that the paid we're to would back benefit to going wake do things place not a other of something talking But and we we're that, we've responsive a all be sheet all could for customers We that to opportunities price balance are things, a table thing come willing The We've our our

Jeremy Tonet

there, that. generation clear. done That's Competitive it. been Got

bit to a here, wanted pivot Just a smaller question.

the those and other Just initiatives with for expect of wondering guys moves a you of expecting changing size what you're location, can impact cost initiatives timing some shrinking, kind on And if facility you we are that of of savings radar? that just optimization today? could cost stand making, the saving speak to where

K. Taylor

Thanks, Jeremy, it's Jon.

really of Akron see savings grand fairly general some productivity on minimal trying those business, are getting savings, the our things. investing office us our and in building. efforts our I cost to decision-making, scheme that with, of the we're out Where around say, data for of workforce, out drive moving taking headquarters we'll here over in really I improvement and associated better instance, decision-making. and of would But in think the to owned technology an is help continuous and focus infrastructure will faster

savings cost 'XX. that over pretty years, this $XXX targets year. cost that about About And look workforce bulk our of you cost targeting productivity with coming that get taking million can of savings make the $XX are we if in we have of we're our nice we've the aggressive savings of work last we couple we sure done the was contractors of and the pretty That's some on And where million do of fact, ourselves. so out sustainable, from. off of in job property million a $XXX

inflation and to offset So can do forward, we to going plan. we'll part continue our what of that's

Jeremy Tonet

concerned, anything all that to forgot on your earlier kind That's is at on far with I side? as it. that. question, as offshore of or mention wanted the transmission that helpful. very check Got just my to I really is wind is just radar

Brian Tierney

of up tell system is, the part. transmission enable significant part And to that we're wind of that's investments their amount dollars what in part offshore and enable and of in to making favorite New service participate territory, the shore the wind to Jersey significant to of have you that, it's a we on-land to we I'll offshore wind are want of offshore our in. our commissure, investing initiatives money hundreds of millions

Operator

Our with next Barclays. question comes from Nick Campanella

Nicholas Campanella

a on lot talk know of PJM. I

Just that given a we'll I kind is know lead if step is print I much capital? there point build to Brian, wanted is a how in guess tipping guess my any I comfortable And one need to is, have follow a And you but times the changes this my this deploy truly there that very reevaluate are another one where kind you environment, now? of question not said right in of generation. you not that, being December. the just up on signal, is change Or you to is

Brian Tierney

yesterday's I'd it. make coal interesting. canary Nick. didn't canary the you and the for Look, call in thank Look, print, the question, think I it's the mine

year, If higher they years with you happened prices over anticipating forward. of course the IPP the all in look at the the are prices what's going

at again, essentially according amount. like auction If report, auction to it auction you yesterday, was amount was so Same about right XXX the prior to look that, it nil. in cleared of in XXX generation megawatts, that PJM's the new not the the megawatts,

were to in in X yes, generation If respond would and capacity a good PJM, I to people it to baseload idea invest say, increase that planning, dispatchable of years load years build power and that be think a yesterday's before print and to procuring The is data permitting come would plant. can construction immediately we online. reality takes build it centers and and almost it's

it's think solve doesn't I indicative the problem. of certainly it but So the future,

energy need we're the is we is to going transmission. So what do to enable what do

that. continue need You last could a we're even our opening years, see the the the will to regulated this solve just that in to. our but that looked that. a investors. the with engage and lay construct the sheet our to right But to bullet. constructively like capacity going I to positive discussion. we'll have and tomorrow able customers we're silver windows. price keeps to engaged solution land viewing in that years there's That's now. the or how in that's is in generation the it for X us don't I X if PJM signals. issue sends the or fix PJM submitting will states, just proposals had we if balance open There's we grid we're that discussion going to that one, deploy do be robust regulators do And in way and We action to current significant won be a one we these that open some think don't of

Nicholas Campanella

appreciate done you the your capacity. up all the you've is, derisking on sheet we've And thing this great really balance year. a sheet job thoughts that that. brought one balance noticed And then I obviously,

kind are know you another the or update the later And capital You're on working in really this markets year. not in relying of year much either. towards I maybe fall

balance forward? CapEx forward, thinking roll about And presumably capacity where you this we of are the as roll have on you see higher? kind a no sheet a equity that continues of plan that? sizable Is how kind keeps plan to Just pressure financing

K. Taylor

Jon. is Nick, this

next investment to would So through long-term of that we'll our of tell be or listen, yet. we're spring time different the agencies, there We rating you, and work rating as BBB to balance community the flat we things. couple want at got plan not I time update a we year. do winter and a credit with

neighborhood. If you we targets their is would probably where some look planned are, our of versus at I sheet program balance say do where right CapEx are in capacity, the the thresholds have X%

CapEx we plan have capital, capital next as to program. some to I base rate to you'll the think balance things are are mix. the But years the lot have and we capital going lag? Or of all a there's would transmission be of that X formula Is regulatory going But sheet it do consider. the probably over have that but puts takes than we'll to it about that into less capacity, those XX it go peg is at X%

Operator

Sachs. from comes question Goldman Davenport Carly with Next

Carly Davenport

growth Just Strong about you going what's classes talk Could customer bit how quickly kind forward? and the commercial back you a quarter. driving both go that load like just of to to this piece. evolving little see prints and that across residential

K. Taylor

electrification our I have other electrification a with per Jersey customer all especially quarter of of New higher average or areas energy me and vehicles industries. jurisdictions, least progressive respect this saying like residential. much generally of usage Maryland, at let across to policy just start Carly, which in we're Yes, mean with more

the higher territory. We also that our part Maryland, activity service continue seeing given see some of that to growth customer in of in economic we're

quarter. the growth that's residential what's driving really for the So

some And class medium-sized We that look the for is significant a is small- what to call kind the after look commercial, have we're level customer quarters, now would a pretty usage. and at us quarter-over-quarter, of and that took of I a pandemic. If rebound. COVID you saw X been our the higher closer to pre-pandemic you And see businesses. it's X commercial hit starting X if of and last pretty getting at This drop-off. hard

those the commercial So the the residential prints for are and quarter. for drivers really what are

Operator

Next Lonegan from question Michael comes with ISI. Evercore

Michael Lonegan

the for just ultimately if wondering it's early in see you opportunity but an So Ohio case, there. rate on, a obviously, reaching settlement

You X Mod reached credits refunds House year, a in Bill the partial a with settlement this a settlement Grid few II years ago.

that the Now issues issues being the ESP some some But of state. you're there in resolving legacy said, are with V, that.

what thoughts settlement wondering just your are So about ultimating there?

Brian Tierney

interveners update much I our Michael, something stages. the later work its it's XXXX. then, cases. to we'll always and and other filing in balance way we filing very early be one the course, case our desire is rate This our parties a these settlement We'll of well think today. be into to is that as rate any with interested through engaging of reach And XXXX at of

to always in and want find. that case that always settlement, a open striving that any yes, to do So we to reach always

Michael Lonegan

Ohio going file states. secondly Pennsylvania your have is X And earlier the on obviously, ones XX%, Great. the reached more that and it. now, the recently year, you other this you'll increase settlements then regular you Got an and rate for me, expectation in big right CapEx big cases. in Obviously,

we think how should jurisdictions cases? timings about next and rate of the wondering Just your

Brian Tierney

Yes.

Look, thank for well-run should a the well, be I in that going utility So and have growing cases. rate for regular belief Michael. as that you

We a sheet. balance strong have

the regularly. with very EnergizeXXX, our have doing CapEx and plan pursuing. But that significant something have of is covered under the our riders interaction a We a I we that should amount way, is we trackers. By think capital regulators we're regular be

riders, those rates, with most max years we clearing reflected updating rates So in every trackers moving then and be X the in at going in to out forward I getting and them X base and should think jurisdictions, again.

regulators. hallmark So that be I regularly utility with your growing just think a should it's you engaging of a

Operator

comes question Glenrock from with Associates. next Our Paul Patterson

Paul Patterson

congratulations Irene. to what wanted Steve's -- I echo to

all the wondering what and receptive but or the were answered, of out all of my sort regulated questions back you your only that just idea First -- ideas central been I'm throwing territories just then think sort of of procurement than in you to jurisdictions service others. distribution more that to do have there. sort are

receptive resistant some as issues and discussion might for a any something I more bit a I about little be be more little whatever to Sometimes be your others. bit mean, -- open might would thoughts might was that might logical be thinking you, little logical just about -- bit those than a or as idea? that who more some have as reason,

Brian Tierney

Yes.

think of West be regulated I everything should need asked in the has coal like in near tool to Paul, for for engage bag term basis. to in are Virginia baseload you add So that to here able really is real us on would politically ready, we're a dispatchable question. all on the type to our and a that but the that willing generation. important Virginia, them basis. And with Look, willing is said them, West jurisdictions in fraught to we engage anyone who

circumstances, certain we could under and take Ohio legislative add Pennsylvania and there, generation Maryland a would change.

people we'd have "Oh, if that going get are again, they're to regulated to on engage to open don't to regulation. willing back basis. regulation." to type I are go be say, there and we back And And you're think to all. open you So us, that upset

markets. I think have energy still can you

have I have to you behalf where NYPA you think also think of like residents. where choice that it But constructs the I or NYSERDA on be And still have doesn't could to competition. they today. you can retail have end buy could an state's

Utilities, even all others. they in independent where participate auctions people could power And producers and have can that.

people one premise. just a other, it say don't So that's be the to has for I think that or valid the

Operator

is question Scotiabank. with Weisel next from Our Andrew

Andrew Weisel

the as year, and on I June well. A debt, incredible still joined deserve consistent morning. targeting would congratulations XX on the that to be to sort of want looking I year-end? of of very on reiterating you, sheet. of you career $XXX a equity of that know into think Or would outflows, reserves. those just but an that I to Chris, to would taken leaders Are Good you but still FET prior you've I certainly you require reach more the million of uncertain, after that be Irene does able proceeds? one-timer? million by quick XX% as guidance. some equity FFO the to you're also with up to balance maybe on cash or -- that. of year, know who I as the would be $XXX thoughts XX% Where stand congratulate turn metric see I recognize don't you're last team without equity? number to Should that couple track needs ones at per satisfy And incremental timing And new able that ultimately

K. Taylor

is this Jon. Andrew, Yes.

and we're challenged last where at of billion where improvement, we are as the coming at you that OOCIC X/XX significant FFO. our just to look [ made to going they XX%. lot of A lot if accrual. year. is the is SEC were to trailing debt the of metrics because look we've think the So improvements -- year that they're little you below do be in this XXX ] close of basis about I if higher $X levels, a hit of just points bit from time a numbers, But this

out, were XX%. to term, to be be longer those we you the we're to back would going If closer to XX%. But at XX%

Andrew Weisel

mean that Or it year? be by that... will than Okay. Does next more

Brian Tierney

year. It would next be

the a to So probably year get or level. sometime quarters like we basis, next that would XX% in of on trailing second first, probably third

Andrew Weisel

lift you Great. do or if Remind me, And just then cash follow-up. were a would Okay. a pension to noncash? out, quick that be

K. Taylor

noncash the It on be would funded fund the would it to Well, to it, that. plan has use the fund it company, plan. through to that pension would have pension the hand which be but would investments

Andrew Weisel

Right.

Okay. But require external wouldn't it financing?

K. Taylor

No, no, right. that's

did on the we pension a liability million eliminated plan. December, dollar what by in $XXX the think through $X.XX paying If we you about

no external the company. So to financing

Operator

Gregg from comes question next with Our UBS. Orrill

Gregg Orrill

Irene. appreciate it. Thank you, I

a Just timing questions. of couple

of of your type What get on settlement got just What's the be the done? agency. Just the potential II, thinking something NYSERDA of that do states? you on there? And What like partial on get sort construct to I know could any your that timing done is to there. a Grid started in earliest the Mod think then you've has

Brian Tierney

this Mod order year let Grid fourth Would the So anticipate take me settlement an we quarter of that Greg. II on proposed. in first, the

start making to right the that those I done get and So like could AMI. said, away in investments year, hope this we

it On have auction would require would the of NYSERDA, our changes process to have they to would legislation that run to And all where in happen. jurisdictions then an make do they that. a

needs entity short-term So and of its of process. then I'd would legislation on say to activation it's require do do a not it to It customers. that change behalf new what

customers. So rather on than state residents the the behalf of of

a that truly The could and actually would important do that path it's I if thing sustainable is I be forward that even think short-term than be auction I need for don't sustainable. And fix. to structural a incremental its could how a it build? procure would structure could administrations and build, state the an be we a it There auctions, auction, change could about here rather survive needs the a not like, be solution

Operator

Securities. Crowdell with Our next Anthony Mizuho question from is

Anthony Crowdell

quick one, Just Brian. one

the think you not coal this. mine, about that should -- how the we're the period, economic economic canary in growth while this -- generation, that stall it's all or growth the as incentivize it talked and You Do growth contract see struggle generation, could PJM to region? new you delay attract going or maybe in to load new they're trying to figure to a

Brian Tierney

so, use I we don't to capacity have think Anthony, still. obviously,

adding We still load. transmission serve capacity still We're capacity. serving still we're think have I people. to

to long for growth, a and it. think be think development load term, and solve economic why I that's I we problem it need could

We And about could not it's doesn't and job that's now. make our to can't think our cede we on to to regional don't because basis, And this. It I why have it's energy other forward. happen. to sure So going regions a we think happening them. serve happen need that the statewide competitiveness

Operator

We've question-and-answer teleconference reached of does our today's webcast. And session. the and ladies end conclude gentlemen,

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

FirstEnergy (FE) 31 Jul 242024 Q2 Earnings call transcript