FE - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to FirstEnergy Corp. Fourth Quarter 2024 Earnings Conference Call.

As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Karen [indiscernible], Vice President of Investor Relations. Please go ahead, Karen.

Unknown Executive

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

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

earnings of related information our non-GAAP are and statements on slides financial are of discussion will subject and firstenergycorp.com. discussion of on and the measures and which and statement read website measures cautionary at Today's presentation uncertainties. to include release, available Our financial financial presentation. our the Please X risks use forward-looking non-GAAP Slides X

forward-looking discussed in today's presentation The supplemental and cause call filings, appendix information Factors conference include could reconciliation the along measures. earnings these today's our financial actual during differ of statements. today's our to non-GAAP SEC release, of in results with news from materially

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

Brian Tierney

Thank interest today Good us you morning, joining you, FirstEnergy. Thank in everyone. Karen. for your for and

I Relations. This Karen would become member management Investor hope first has what of calls us. Head Karen's will She of [indiscernible] as I our valued with like team. quickly to many is of earnings FirstEnergy a to be the welcome

a level and a of investors. of change driving extraordinary and together was for We XXXX year leaders a of on for I'm our who performance focused high what derisked business team structural perspectives customers, from put regulatory and company, our proud are significantly accomplished. we've of employees financial and

a investments our continuous recover to operations. We efficiently people, our safely electric on also in infrastructure improvement, invest with our model incurred operate regulated and business prudently powerful and and our finance activated a focus

I'll outlook XXXX X energizing the and positive XXXX review today's discuss milestones employees our these we start I financial our past impact engaging and a objectives. value performance call for sustainable our for making and our Together, long-term a with the year. at shareholders. proposition million growth will are look customers, our and supporting key and beyond efforts over offer

earnings per share. of GAAP the We $X.XX $X.XX delivered forecasted earnings were Operating within per XXXX guidance range. share

investments Earnings headwinds Our from on volumes, conditions discipline. lower partially of mild due impacted XXXX experienced results our of an summer, weather by were amount O&M deferral. also our rates regulated the normal versus the execution also plan sales capital In in year. These for and to several new storm businesses, much meet didn't throughout activity we throughout included year. that regulatory benefited requirements unusual and the the

electric year, bit these navigating to company. a making is results will below In can more Employees Ohio accountability of company second V and our headwinds. focus the more across half in performance team a our with detail working culture our consistent improvement. We're order, primary ensuring A plan our strong with plan excellence drive were premier new later. the our leadership we our organization being processes, revenues of due great drive job consistent did build I resilient, a of the and potential. and includes are the a performance the ESP realize so This continuous discuss which company's of to

the have achieved been the milestones underlying in instrumental executing in strengthened and The launched last over we our XXXX regulatory business. profile strategy. XXXX of couple our foundation we The significant regulatory of has the financial and years risk reduced of program and our to success

and cases XX XXXX, fourth over completed rate quarter X the and the Jersey states more have necessary rate $XXX reliable of investments. us since reviews when revenue the our of in million Approved a We X and net past of rate approximately increase Maryland, Virginia, base have of make allows formula's stronger a XX% in West including resulted New grid. derisking our in to now months Pennsylvania investments transmission annual rate for

million to settlement in on our reliability November, outcome, approved Pennsylvania this base rate recent Commission which We case were pleased reach the made with service in January constructive years. enhancements new recently, builds Most $XXX X, rates XXXX. effective

additional Pennsylvania We approved and next approximately also X third will capital in as targeted XXXX LTIP modernization years. resolved investment reliability X to investment in This infrastructure grid December. long-term track several proceedings The costs. at of billion our $X.X over Pennsylvania specific the facilitate known and recover in Commission program plans our plan

to and This million includes to customer $XXX improve deploy other overhead outage investments equipment reduce times. in XXXX planned replace devices of circuits, and sectionalizing approximately reclosers

Commission. our $XXX approved investments over million all settlement Grid Also program to to X-year a in technology Mod This was that II meter our smart of Ohio bring just Ohio December, is capital by customers. the of includes

XXXX authorized In an in on approved million save electric X.X% customers on through XXXX which of New Jersey, Energy program BPU JCP&L's the their and Total Conservation Efficiency return January help investments. will Plan program with costs June $XXX November, of of from bills.

investment-grade in plan. Turning to our sale FirstEnergy phase than we ratings balance Completing agencies. upgrades March upgrades transformative and XX and final a and of $X billion U.S. improve the our equity utility was XX% closing Across our the return effort of incremental X XXXX, interest marked Transmission's sheet. sheet milestone of transaction to sector the last multiyear the our for achieved the rating XXXX. double subsidiaries, a our for Successfully status our of in entire all total was electric balance the number fuel of company company. our the in holding catalyst investment credit to more It

Today, companies position We more stronger all are maintaining to in years, XX our committed have grade, than all put of these substantially and ratings are highest of power metrics. we behind and our of to billion FirstEnergy our their surpassing increase more XXXX, an compared comprehensive the investment subsidiaries In through our $X.X by reliable invested a XX% plan XXXX. X% forge than more our smarter, system program, this capital EnergizeXXX and to investment we in grid. financial plan, original

the based This new experience constructive members excellence, as and Vice at senior our other employees We internal of accountability, work. levels, level organization we're that the customers financial placed then transformed a decision-making forward. have highest talent is an recruited key presidents, team includes we to closer external model and leadership and as discipline the the high-performance above. unit This and at we and well X our our roles President and lead moves their regulatory individuals operational team, XX doing advanced applying candidates our to total, leadership operating including into roles. business companies In To performing critical outcomes. ensure building achieving implemented culture the on deep leadership

in proceedings, the our us resolving future. legacy Ohio was XXXX to milestone certain Another focus allowing vision on

share, the to Finally, declared strengthen our foundation future. for and an XXXX of shareholders vision X% dividend versus totaling those $X.XX increase declarations with we XXXX. our delivered per just in in support The successes company's over a we XXXX solid achieved bright

to let's regulatory of Turning XX% overview, our which base. quick X, give Slide Ohio, a rate starting with represents

issues issues has filing the of rate in case. commission's case proceedings base near auditor's traditional several this forward long-awaited Friday. Ohio maintained term. many know, Commission on been was the our was our in made auditor's the rate report report legacy response from As look and constructive you last in in to We separating and The has that diligent public believe diligence

focused The on a rate request. mainly auditor's report

to electric withdraw in overhang plan, approved commission companies be remain ESP in in interactions close IV our with of the to the reverted not should revenue In December. have our when capital recovery distribution commission. experienced security We case without place effective. IV V The which increases for VI the ESP ESP back rider. to but February the X, expected effect regulatory rate goes in is to base ESP into is regards Ohio until our on time

align Like proposes on reliability, VI focuses filing. and addressed our and coming defines provisions update Ohio the weeks, pending will reliability the with ESP base increases appropriately investments. rate to performance are tied in-state the better companies distribution ESP significant now to in support DCR our to term our case V, that ESP the for the stewardship. remove ESP VI VI affordability to and ESP peers capital full of riders In proposal

continue investments EnergizeNJ, substation working program New towards settlement a investment to includes infrastructure we system modernization. and our In resiliency which targeting Jersey, related

file In resource integrated serve customers to Virginia Ten-year load updated this support our forecast include we will our required generation and development. plan needs economic plan. West year, around future will and options provide

to building our this energy investment the state. explore incremental Given needs it in Virginia, plan new we to the plan. dispatchable in be would be approved, West generation Should

X. to Slide Turning

assessing of items. earnings last core business, segments, few Signal of core noncore assist pension remarkable which earnings core this investors growth excluding the operating years, clearly and stand-alone our did are our through Over and growth not integrated, but regulated components from introducing to of in the because we come corporate our earnings, performance transmission the in Today, mine we Peak earnings. in distribution, are and special contribution earnings, the our had

to XXXX by earnings grown XXXX, core From XX%. have high-quality

and During the management's control, Peak, from outside pension volatile period, often same and by are noncore which of Signal decreased earnings XX%.

performance past, seek and better of that the the an we ownership core necessary position. regulated of company. believe in have As from earnings We functions will true exit we we the continue reflect our the manage Peak to Signal the corporate utilities

growth periods, core Beginning we guidance earnings core in future will for XXXX provide for and and earnings rates.

the XXXX $X.XX. share of This of X% a $X.XX of For to guidance, core adjusted guidance $X.XX share of X.X% share or earnings FET XXXX, when core transaction. we compares XXXX per for At represent per the in introducing per to would of earnings this are effect midpoint the XXXX. growth dilutive range

includes regulated guidance XXXX continued in operations. from investments Our solid growth our

quarter higher for XX guidance of since of and DCR order consistent new were rates. The May higher-than-anticipated point January, ESP and developed XXXX These costs third December by with consistent incentive our in basis which ATSI Circuit commission's that factors February. from frozen the Appeals transmission include financing with the the unanticipated including of accounts a Court the call. removal caps, in IV levels, rates, revenue significantly Our impact several to at X decision return also interest U.S. Ohio our

reliability-related in our our would reductions not total XXXX. that and In regulatory inclusive base financial all in O&M not spend so would addition, incremental in baseline of rates. be we Initially, on flat the new the fully ultimately, in be and maintenance company. and O&M, concluded doing that so activities, operating, rate of which sustainable segments Pennsylvania recovered support our in calls long-term the the to objectives would for included is settlement increase of XXXX Pennsylvania, plan

being Our core targeted by program new led reflects XXXX for the a financial discipline earnings from management guidance team.

on organizational be to exception flat O&M XXXX and well to O&M leadership With In call. program, this This the and detail more with focused of decision-making operating in and developed provide our was Pennsylvania discipline later the related increases. design of new customer, includes programs with expect program to employee model, staffing. in is as will changes closer Jon XXXX the on the approach companies. contractor procurement regulator. the as The XXXX, we this

made consistent jurisdiction. will each in We invest regulatory and commitments with outcomes to operate our customers and we the have

$X regulated investing activity. billion an over the of is rate XXXX. recent increase anticipate our This by We in XX% approximately during properties enabled year, investment

share planning Board per XXXX to period. of $X.XX to earnings anticipate over we of Subject XX% XX% ratio a approval, the core and annual payout declarations totaling dividend in

X-year increase base core For of a XXXX. the program, from EnergizeXXX, This our to growth X% XXXX and X% rate earnings annual period. previous investment forecasted represents an extending providing horizon, are investment the compounded rate We're growth X% our through compounded through results billion in annual during $XX X%. plan XXXX we

investment ongoing programs. benefit needs do our our not incremental beyond equity we For plan, employee base anticipate

investment a we our to incremental investment-grade opportunities, financing ratings. as of And consider operations. broad committed credit are will we We range have

solid CapEx to flexibility to and plan Our projects. is has changes handle the individual

of We believe total investment with proposition risk, to represents investors, reasonable attractive opportunity XX%. low an XX% a that return to FirstEnergy return

that, the me Jon for more call over turn let With detail. Jon? to

K. Taylor

the and detail Good Thanks, matters discuss 'XX Thank for everyone. outlook our XXXX on additional you Brian. and our provide beyond. Today, I review joining call. morning, for regulatory performance, will briefly

reconciliations including IR our strategic for website highlights can posted more to earnings and in on the afternoon. document we detail core You results, find yesterday our financial

As operations our impact Brian earnings results plan. our going mentioned, earnings, we and excluding holding of which using the regulated the core company Signal reflects forward, activity, Peak the of from our pension report and mark-to-market will results

of This these was quite we income result two streams as the the very and frankly, volatility control. a decision, that, in don't thoughtful

since seen Peak the we've volatility the to and Signal addition in example, was XXXX, For earnings of in a pension $X.XX share. XXXX, contribution

pension expectation our of contributions QX remain improved decreased, Our as a initial commodity significantly, negatively the profitability coal increased Peak XXXX little the significantly expectation interest and prices, share, as rates that low Peak. outlook $X.XX but for these prices south impacting In for Signal Signal and impacting for interest was the of have of end would stable. of a on rates commodity were QX,

The of results contribution of core reason from for the significantly relative volatility earnings. on our expectation, sustainable to not items and close is you two this operating change to I'll we To declined these provided our out have XXXX, on guidance reporting through the earnings. and the walk type

$X.XX Operating share earnings for $X.XX demand, a a nonregulated in to in and to temperatures and Signal in earnings. in range Peak to end periodic $X.XX our part our comprised guidance XXXX income share investment due to XX% a XXXX XXXX. from which decreased lower earnings about the XXXX Results XXXX pension in of operating due unanticipated of are share, QX. of $X.XX impact at XX% share milder of the customer a The net combined are compares our revised legacy impact lower

our results new businesses integrated year rates improvement resulted a programs, in XXXX. to full which benefited our across compared significant as regulated in business from base investment growth and formula transmission Our rate distribution from and

costs. segment, non-deferred impact negatively weather-related higher year-over-year, by as the In of impacted revenues sales, ESP a was lower distribution the offset from Ohio share, increased higher higher results primarily disc earnings the and as Ohio This rate our $X.XX which partially Distribution V Pennsylvania $X.XX associated by order, well storm program. credits with

new in income rates partially Jersey, sales, The returns of in effective equity cases at jurisdictions with this to these the a end improvement New base. $X.XX XXXX of rate X.X% a offset primarily Maryland the in on portion and distribution base In from higher ROEs due our rate. share, in X.X% and increased higher Virginia West base segment weather-related earnings to significant resulted a ranging rate segment, in Integrated the by X tax

declined earnings business, transmission $X.XX a stand-alone share. the In

earnings more by Our investment versus increased XX% share XXXX. programs than or $X.XX a

FET, growth more However, March represents was billion the owned of which base closed this XX% than end in which by from was business year-over-year of at XXXX, sale this XX%. of dilution $X.X the the offset in XXXX. FE interest rate of

expense, a offset Finally, in as was of of due reflecting recognized our million by lower largely the Corporate year-over-year, $X.XX proceeds FET segment, from redemptions transaction. losses at $XXX of absence to benefit the in use increased state in a partially share tax part the This Holdco XXXX. interest planned debt FE

Turning sheet. to the balance

billion quarter, with plan All JCP&L. As XXXX securities part issued of included totaling rate our financing debt Xx plan, X.X%, during spread in was $XXX XXXX $X.X rights at weighted of of financing basis a coupon in, a The issuance representing fourth we of by XX a points. five with registration the bond transactions interest with X.X%. average million oversubscribed our

XX% billion balance and generation we gross combination out XXXX, from mitigate In a with pension related lift obligation to the continue subsidiaries risk the January, associated generation former in we with at company's former sheet, completed plan. representing our million we our $X.X Additionally, risk December par. obligations of the pension $XXX lift out to with approximately of In of removed have the subsidiaries. funding associated

storm at our as the historic settlement to FFO metrics, well payments, a OOCIC last impacted debt Looking and Cleveland credit August. in total by event was SEC as

by to remains strong metrics basis A to debt XXX negatively XX% total in paramount was XXXX. the unique these payments, strategy. sheet which Excluding impacted points. our FFO balance

core compounded about XXXX. and afternoon to materials X% including our earnings outlook, our growth, rate XXXX. for supports and X-year rate our growth updated base The included base expectations capital period posted to our of talk let's annual which targeted X% plan website gears, Shifting through XXXX yesterday planning our through financial

period. billion Our X-year $XX in capital EnergizeXXX X-year from growth billion increasing $X.X in the in base XXXX of investment expanded program XXXX, the X% $X includes capital investments resulting annual rate compounded billion through of annual of end to

billion, which be cash X is financed will these at This debt and issued a internally debt companies. planning billion capital of year's approximating financing $X of XXXX, operating currently $X.X money requirements. combination For of new investments transactions, our flow consists with generated

or are provide real-time compounded in assets XX% in resulted formula transmission the the annual XX% rate total FERC-regulated transmission of of mechanisms business. nearly which and in growth rate base -- planned resulted growth a base recovery half formula-like Approximately our investments in And investments are that integrated returns. which XX% in stand-alone our in segment in rate

X.X% XXXX. return equity XXXX to a X.X% consolidated for results financial of rate Our of a base on in resulted $XX.X in which billion, on compares

last we've actual on our fair plan. consolidated the operating focus the targeting outcomes Our Capital years, financial deployment, over to on efforts continued financial regulatory allowed our on pillars and upon plan basis. returns with made our that returns few our a with investments, expenses, to improves support returns enhance consistent returns discipline

Additionally, we aligning the more our in such as largely our with and equity, our and as income in improvement differences and limited adjustments interest being core through materials recovery the have traditional to recent benefits cases, or earnings, regulatory base rate with nonoperating disclosed items retirement returns synchronization. made significant of AFUDC

gigawatts Our are of center our in to $XXX that Through seeing includes well-positioned contracted we attractive be developers. through center period, and data just an which XXXX, footprint capital data our result plan growth pipeline continues million is center base to active X.X to of demand that program. in gigawatts incremental or data very over same our X.X would

even seen X greater data gigawatts and studies year. past a influx over includes we've over potential steady the center of pipeline with the XXXX, activity load Beyond of

the from 'XX increase data the class become forecast forecast, annual compounded addition from 'XX. This pipeline to 'XX in contracted current an demand which 'XX to industrial includes transmission term, X.X% X% opportunities. investment only providing growth sales would center incremental in projects in and includes near as to Our of contracted for

Turning XXXX. to our plan financial for

our As related costs, of our as outcomes the earnings ATSI since 'XX revenues planned, points Brian of in on than been Brian call, ROE were most increasing developments rates, and versus slightly October. and there lowered is financing mentioned, reduction forecast base recent as withdrawal the mainly higher interest that XXX have as yield to less since on a first some have QX which for increased point the our higher including XX-year Regulatory basis to flat borrowings DCR V that core O&M of treasury part about earlier. attributable expectation, basis specifically Ohio discussed being part the XX well ESP held the the that decision comprised

We midpoint, are share share a core earnings XXXX earnings of a $X.XX core range a representing to off with $X.XX. providing guidance of growth X.X% per $X.XX $X.XX XXXX of

this XXXX of an resulted segment, cost outcome in case X beginning Distribution by million as additional storm Pennsylvania of of as enhanced cost and program recovery. in annual our deferred $XXX rate management a and maintenance other operational base includes such vegetation January well is the net and increase primarily year driven which expenses work, for of recovery revenue approved the as

full positively formula first integrated formula by of new New is the programs. segment West Jersey growth year our impacted and in rate Additionally, and investment the rates Virginia continued and in like

long-term discussed, enable electric success experience. across are This As and investments FirstEnergy the improve driving changes way customer a Brian work as we our requires the company. premier modernize we to meaningful to

as can. commitments we are we our meeting While doing effectively and focused efficiently we and on balance, a work this for regulatory as strive

supports this work our foundational to achieve plan vision. Our

to is O&M our For the XXXX in flat enhanced to an our management increased base increases, scope recovered which in XXXX Absent in levels. XXXX reliability includes revenue vegetation higher approved program. through and improvements, fully through XXXX Pennsylvania, is planned expenses rate example, consistent with case mostly Pennsylvania, our O&M drive O&M

across business, and focus We a augmentation including reducing that are be throughout entire team. the reliance chain driving financial discipline work focused efficiencies important of extremely contractors optimization, continued the This on the management and is on supply is will staff and organization.

company, experience. the made and the derisk enhance progress We the the to execute in and tremendous invest of electric have our businesses on system, across resiliency business our reliability to opportunities customer the model, improve

have also to place stakeholders. in a team and to structure leadership commitments new We on our organizational our deliver

With forward momentum our the excited on and a future focus electric and a building concrete business, our to about look company. premier delivering as core value on we are

Now to the let's open call Q&A.

Operator

is [Operator Instructions] Shar first Partners. Pourreza from Our question Guggenheim with

Shahriar Pourreza

Can you guys hear me?

Operator

you. hear can we Yes,

Shahriar Pourreza

Great.

of the bit diving which just Brian, a reset. So guide, 'XX obviously is into a

of assuming interest Just a lower is to the on PA 'XX that the just, I off get sense could you're timing are tail much X% what tailwind? rates, base the highlighting are how within related? risks where so What we know become And of pressure you today? guess, a related? How on trying much the you're X% assuming O&M to now

Operator

patience difficulties. believe I till with for thank lines. for out we're Thank we you difficulty slight having deal difficulties. a Once Difficulty] while by speaker with the you these standing again, [Technical our figure your we technical technical

Brian Tierney

you can us? hear Shar,

Shahriar Pourreza

Yes, much better now.

Brian Tierney

Sorry about that. Maybe a far. little we cut too O&M

Shahriar Pourreza

I still question. my enamored thought you were by

complimenting kind were of myself I speechless. there. You was

Brian Tierney

It was a great question.

We do range go to me me something, it. 'XX the X% range that know. and Let about. through let I And that X% in to talked we've for if being answering beginning anticipate full missed 'XX about

management will we team, a that end of the range. in upper don't disappointed if As end be we

all can rate we I settlement. be call, described the received O&M talked as As about change much Pennsylvania of change, the of the base O&M in and increase the that case Jon during the

at As that dollars other team, demonstrate flat a spend it to discipline. holding important to we X we operating and was the to in agreed O&M management felt we're units the Pennsylvania, that spend

reducing place procurement We about program in augmentation, design do efforts, have efforts. organizational some staff a that's talking

focused on that but O&M are needed felt dollars that we we spend spending to in discipline committed So the we to incredibly Pennsylvania.

and we investment upper weren't 'XX 'XX the talked that of we the again, and 'XX about, through to 'XX in be if horizon we'll beginning range. the range, the through in said, I like So end whole disappointed

Shahriar Pourreza

equity Obviously, requirement the they goodwill I how report a just relevant then the rate And report. play No ratio numbers was aren't the of Perfect. on kind touching But but audit reflect as into the as ROE, of Okay. a could findings pieces ESP V. treatment. few the revenue there, mention lower flat. VI. quickly base mean suggested moving ESP

the You the air have state. in of in lot balls a

So want filings? if a read-throughs in your to I just get any there's sense upcoming

Brian Tierney

So for you that, thank Shar.

from reconcile we that rate So They that to the doing recommended things we shortly things and of need think move will couple an do we and to equity. did XX% those, base upcoming on there it's the filing. I anticipate focus and and about are previously. talked ESP that. that back in case significant they of a forth, But a capital structure

real current proposed of what goodwill have Our our that capital They've structure XX%. an the in in proposed versus consistent X.XX% is other of but gotten mention No discussion. also Ohio. X.XX% ROE companies is XX.X%, with

We're these equity actual higher ROE, the XX addressing the those again, issues that The going is to here We, structure, to the we'll and next in think the days. right address our response our view issues. report one. be audit in

Operator

with is Davenport question Carly Sachs. Goldman next Our from

Carly Davenport

on X sheet. balance quick a just the Maybe

onetime in in FFO each some to is XX% more sort actual Or highlighted 'XX something there's planning that sustainable of to about items there? the the I at You of Can variability period? the target debt for you XX.X%. you that view see as year that back we towards planning getting the path talk there. could the recognize some period? And just

K. Taylor

Yes. Carly, it's Jon.

for plan we where about think out XXXX. items of you if just for XXXX, you that some in kind were our strip those of So aren't unique

$XXX made the of some storm with you that's Cleveland, new significant to cash January close effective be Pennsylvania of SEC strip that we payment to flow add Then going XXXX. you and in OOCIC, that for the just the rate to X. case instance, the in out rates So the the and generated XX% impact on million you're

slightly year forward. for is we going above sustainable that's Our XX%, and plan this believe

Carly Davenport

And maybe That's Great. then on helpful. just transmission. one

to on by part reflected the For assumptions part and that scope JV of the planning those the of are the of you period? as you're with of outside the projects those projects yesterday AEP, Or in or are there plan? expect Dominion PJM current that would were fall selected current any

Brian Tierney

We So financing of going Carly, and let going in million of remainder projects I'll $XXX let about companies. share that talk is $XXX me About that million. anticipate Jon FET it. our and the is about start, be those of an be that our the to will be to about operating owned of

financing, us, So this for as Jon. are being I'll a give around unique JV it we then to but there some items view significant opportunity

K. Taylor

Carly. Yes,

that in CapEx will our by sheet. The the JV is first be companies be off is the financed So energy plan. to balance going

yesterday it we be would have venture in joint plan. investment an else make to to will we've our have that financed capital balance it. But and financial capitalize contribution JV to we'll awarded be So be everything equity off an that that sheet necessarily CapEx wouldn't in in that is were that our and But plan.

Operator

question Our next is from Nick Barclays. Campanella with

Nicholas Campanella

order and report quick on and distance a a just you a And just case that able of follow-up with is staff? Bridge these maybe about out just settle there, marker rate being to question wanted issues some eventually? an this Blue you to be now just going thoughts to Shar's the the are make kind are Ohio taking your to that full of I have on Or possible? what

Brian Tierney

X. been like always able open Gribbon regulatory they to fortunately adjudicated in settle been cases that be we to of settle have do We opportunity have Nick. going where our but going to cases The doing were to that. thanks, through this overhang, We there's to case. have So settlements. recently, course, been way the And we'll no

don't the said, any and we given the I I see regulatory think anticipate be of nature, complexity, adjudicated. the overhang. the That time this like, one, being length this fully one will

anticipate it it, the outcome It on about of the I next XX they'll too it have the to currently And that much to matters towards and a got attitude been straight think anticipate we'll as The business-as-usual case rate case and be we the these what moving through didn't The I that in days, commission we're I rate want has make Blue entirely was in seemed the Ridge constructive based but almost to anticipate this say don't response planned. report factual. adjudicating, -- the be middle case. cases, of seemed a forward to down similar that end and handling [indiscernible]. do we this, I road, in our

Nicholas Campanella

would it. the higher why I guess handicapping of are you're the about isn't to X% the X% in X% more your back kind appreciate CAGR? or guess just to comments this going at in if X% -- I being And what to -- be kind that definitely I the of kind going to X% range, range. a If just the lower watching higher what's at you of you level? put in

Brian Tierney

Yes.

and contracted of not that things but plan, don't about the you outcomes, have expect, end recovery have we're We're traditional see grows, that pipeline not right? take to focusing which will you them Things impacts range. on we've earnings, get We've as yet similar our that significant data expect putting the that Regulatory billion would $X.X data traditional last like. of the because core the gotten we're people load that in we would to putting the to those how there. center in things the ability plan -- all I years, into is competitive our the come aren't would transmission why continue earnings. we impact awards. us a centers as those we So utilities upper could load to got anticipate

awarded. in can't think and able through go competitive pipeline are tailwinds those or we more contracted are we're that them data to contracted, from but there have I they being more have headwinds, if pipeline of the comes put either until transmission opportunities if than to the them center there we plan we So secure,

Operator

Our Michael with is question next ISI. Evercore from Lonegan

Michael Lonegan

think the level earned of to to X.X% XX%, So the your what in assuming projecting ROE that this X% as earned about targeted you from X% is EPS we consolidated Ohio forecast are core you're And contribution period? in CAGR? ROE also,

K. Taylor

Yes, Michael, this Jon. is

X.X% consolidated and holdco. period, so earn holding a FET FEHoldco, XX% somewhere forecast assuming activity, the that that company we we're in going excluding basis, So the on to are to that's in

the that case, which before. rate we're return, allowed think in we'll that XX.X% coming which case, way Ohio, what to Ohio. earn And to our talked that's have For we're through would rate X.X% for of we assuming about but is we've work going be that assume to range, close we out to the our whatever

Michael Lonegan

I capital enter million, equity? Great. And Virginia. transmission if from size you then that generation capital of about opportunity? of incremental center could about data this talk in then investment all When that what And could West portion to with with $XXX opportunity the along demand talked could dispatchable the funded be that, you plan? wonder your

Brian Tierney

Yes.

West So let about Virginia me first talk component. the

generation be coal-fired -- planned to XXXX of have not, that about X,XXX We or retired be retired, it's between that's XXXX. going whether to happens megawatts and

the coming So and in if we beyond continuing today eventuality, to were extending X for years the plan or I could that that start the for in, XXXX XXXXs. and of spend period see building X our throughout

to that spend second you X,XXX question. XX-year cycle, you're of at think $X I billion have billion which megawatts -- a period, economic generation $X say over part allowing XX- opportunities. the sense, If talking to billion that development look to to replacing the potential lot the combined I I'd $X I X,XXX thermal for think would can't remember make of growth and and we of

Michael Lonegan

be incremental equity? What funded of this with all could capital portion

Brian Tierney

I have from flow assume we that forward from think operations. you'd fund would things going cash to

of use instruments. we I equity-like a equity and think would we use would combination and debt also

that that traditional that ways would are utility investment finance you for we the have. use what we and everything would So else

Operator

Tonet next JPMorgan. from Our is Jeremy with question

Jeremy Tonet

outcome, message in equity the issuance mean, the happens, that? just Just bump anything think the And no I could kind anything case what wanted possibly if guess, want change related rate about the I I could cushion to of the like if of guess, there, come to wondering this see just I back we legislative in here. in goes against boundaries if or night to to ESPs session the the expectations?

K. Taylor

this Jeremy, is Jon. Yes,

forecast basis point So metrics. of we're targeting our plus a that in the cushion XXX supports And today.

today, have I that about to that we options. think I capital incremental Brian base we with as think mentioned, as range think this of different a plan would finance we

our could at in But to something that's So have equity. becomes contracted. center the with That that that's be at. CapEx $XXX if portion an you a be as data pipeline, take of that of funded million demand look a we'll that look incremental would

there's where on our depends is into also take of CapEx lot transmission rate it things we so about it plan would that consideration think formula a financing think I that related, forward. it forward-looking And is, is have we related, to as going

Jeremy Tonet

it. well. the helpful bill Jersey post your New recent I auction there thoughts and And could. there. Got And PJM That's if latest headroom, just as come want to post to back you

Just share bill you anything could how right now? with see headroom you

Brian Tierney

peers. X% terms to wallet our than share than We equal bill look lower it's are represents, or at in our in-state either less When of what you of jurisdictions. our our across

activity we're spending doing to a we're aware to position of of in affordable. and to So the affordability. customer authorization think we're very in of All impact basis we trying Pennsylvania, are relative everything But flat a basis, have we for it, maintain and O&M comparative can we keep strength. obviously from have that we only terms recovery share on we taking mindful the bills of affordability do O&M, like where on and it a come but of wallet

Operator

Our next question Wolfe Fleishman from with Research. is Steve

Steven Fleishman

when pension on funded just kind you So us that the of I Could like give pension? be just of ended I should of helpful, update go where the year you status guess funding. actually rates up, an on think.

K. Taylor

Yes.

about we XX% So year the ended at funded.

from probably the maybe so year. flat to down last And slightly

asset year with liability which the interest we the expected, lower performance than than that offset this just in is of associated more the was Some lower had plan higher rates.

Steven Fleishman

Okay. question. Totally separate

to schedule? in at think, is rest schedule Brian, there just to rate respond you Just on of I case days Is or the you're said to overall, the any it. just that going case consultant Or point? the this just the other XX the report Ohio

Brian Tierney

Yes.

you, thank which report it days the to we a So was respond Steve. when XX last case, in need to issued, We don't schedule have yet from Friday. the was procedural and

heavy respond. So it, done of was and now course. the analysis A work that lot commenting it's And on report. people that forth, and back the timely, with that audit last about people order we'll when getting lifting of track of doing be by Blue in Ridge week. views an report the as think did the to of when do we'll by on of it we're get year filed talking their But I all it end we

Steven Fleishman

okay, question, in new just guess since not one, I'm not going changes don't -- any I happen already -- Okay. your what's guess, that and case bills I to And would affect you've Ohio that pending curious then whether I think ESPs might backward? I know filed will prospective, last the of a since be with the -- be

Brian Tierney

Yes.

thank invest for or -- that. our trackers we on And keep would important think base you way So in you more are in that people that a filed to in proceedings whether get that, the that the case. in the timely we get are think ESPs, an what recovery going rate for state through We in comments Steve. ESPs utilities than are not you

So if the $X at FirstEnergy Ohio. state of around look annually invest you in just companies, the we billion

or of would and the form doesn't sense. FERC, it allow really base rate mainstream For out recovery like. some for the put of And wait formula us who base other case make states investment a to tracker Ohio rate the of to of for that

formula-based tracking the important of is state it So rate an having a or Ohio. a incentivizing in ESP, incredibly whether you call investment mechanism to

see go advantage and lose states And have competitive Ohio other that a Ohio make mistake and for hate I'd to to development. on investment economic have that a

Operator

question with Andrew Scotiabank. next is from Weisel Our

Andrew Weisel

please particularly was the you and a are than full little bit You residential included, bit? talk a where of trends segments. know were expected. centers lower trends? That's couple a right? you a commercial I and you even underlying times was pointed year demand on sales overall and which on that that give in to down mentioned details the weather, flat the little but Any weak about basis, weather-adjusted data can commercial class, Can

K. Taylor

Andrew, think, centers, the company maybe in other I companies. than This Data sector. industrial in our different, are you at is see

just saw on the program probably usage. be energy Pennsylvania Here's what that deployed say they residential, some million sector we I there. to to in energy to They've efficient load efficiency relative towards residential $XXX would close their more have with trends an

started of that, some fourth started to to see quarter. and it to really in So fruition we come the

really one as don't look trend. necessarily we a at But quarter

-- well. in a don't And But out I what that bit there two, as this at so have see but or a return we we're quarter to of next that to There be plays at the that we're of looking over good really point little could And going was saw. office how sense time. that. there's

that fourth If there I some just were trend of customers the look quarter you the off. kind industrial think at were in that steel alone, the off-line sector, threw

going Ohio with that's we're think given we what in to nicely data seeing, But center specifically fairly and activity. Maryland, rebound

Andrew Weisel

to a Okay. to a Great. thoughts Then forward how core the but the targeted on should the growth I earnings it's to on XX% the dividend little ratio, range. decision, the dividend, think going XX% end Any relative know with of above you're high about we payout X% as Board X% a outlook earnings? rebased bit to

Brian Tierney

Yes.

well bit as were a we ahead in XXXX. little So

anticipate that going darn forward. or we're to to stay we're that think inside range, and going to range I close I that close

want earnings. anticipate may with think have, I it the we're I that Board in that to likely we coming advantage in they full the in, has in 'XX. past, but where 'XX the of as full range dividend But will comfortable with core coming grow are at and anticipate take where

Operator

Securities. Crowdell next Our with Anthony from question is Mizuho

Anthony Crowdell

Steve's I just had question. to a quick follow-up

past, you're if move think ESP summarizing your going to to happen I back general the related things Ohio case true you you particularly ESP the filing. items general I'm move legislation that spoke to the the prepared spoke are about rate incorrectly, up you to maybe going have I to does you and and have in if the remarks, it do was Ohio in and through talked maybe about rate But into I'm benefits and collect apologize you -- wondering legislation ESPs to the them. were if some in ability you the that that case? to looking you about

Brian Tierney

It's a good question, Andy.

We think I recovered. be And we we something of. there recovery law that being an a became formula-based we And if continue federal that aren't at There to to reflected out paid course, would never or Like components timely do recovered for. change rates eventuality. be would never we the want places Of would sure try other in to in being course, that want are will aren't we try that things that hung move things would like make level. be do that that. get to of to that

change, formula instance, to we to for be fairly the rate So if base federal taxes able through recovered annual certain those would quickly were get mechanism.

Anthony Crowdell

the Have the don't following ESP? to you I looking in how you here. put offline, through And guys guys much I mind weeds quantified wasn't you collect revenue

K. Taylor

no, No, no.

give to it. sense of you a Just

we has held collect million rider. For right DCR probably flat less the AMI And then million. revenue XXXX, $XXX on $XX at the than grid mod now

through in thing the Anthony, rates, base base will from is, X but the all case. will naturally to rate programs that collapsed say base case move would like will It the proceeding. happen the be I rate to only that rider

Brian Tierney

base that in the going making. lot in X what's putting case. base cases, rate point base important really resetting so a in A is and that's on is to it of rate So Jon riders rate case the

significantly way, will that be in riders receive through the the ESP. we component we So either derisking

Anthony Crowdell

not I to mean I ESP So should think it reset not gets you collect -- XXXX but to it's because then it double XX in dip don't X. that's the in 'XX,

K. Taylor

Yes.

significant the on a and year in see riders they reset increase rate of would to then X again collect since the restart the base capital you'll base So case. deployed to rates, you've test

Operator

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

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

FirstEnergy (FE) 27 Feb 252024 Q4 Earnings call transcript