Yahoo Finance FirstEnergy's (FE) Unit Enhances Smart Grid in Mercer County
FirstEnergy Corporation’s FE subsidiary, Penn Power, finished expanding its smart grid in Mercer County, to strengthen its power infrastructure and help avoid service interruptions, particularly during severe weather conditions.
The project is a component of Penn Power's second phase Long Term Infrastructure Improvement Plan (LTIIP II), which was approved by the Pennsylvania Public Utility Commission to help improve consumers' access to electricity. Since the implementation of the LTIIP smart grid technology in neighborhood power lines, the company has seen a 74% reduction in customer minutes of interruption associated with outages.
Benefits of the Initiative
The work involved installation of new, automated equipment and technology in the distribution substation and along the power lines that serve more than 15,000 people in the Sharon area, as well as in the Hermitage, Transfer, Greenville and West Middlesex areas.
These electrical devices are also safer and more efficient, allowing automatic resumption of services to customers rather than dispatching a crew to investigate the outage. If the device detects a serious outage, it isolates the same to a specific area and limits the number of customers affected.
In addition to avoid voltage problems, these devices could also potentially help save energy by evenly distributing power so that all customers served by one power line receive the same level of safe and reliable power. Penn Power workers placed nearly 100 new poles, specially designed to withstand extreme winter conditions.
This initiative is in addition to the system improvements that Penn Power has made over the past few years in the Mercer County service area. Apart from installing more than 200 automatic reclosing systems in rural areas with lots of trees, it has fitted interior fencing in four substations to keep out any electrical equipment that could cause a power outage.
Investment in Infrastructure is a Must
A favorable change in temperature not only increases the demand for electricity but also poses a threat to electric infrastructure. Investments are crucial in maintaining service reliability and ensuring customer satisfaction.
In order to provide reliable services to customers, utilities make systematic investments to upgrade transmission and distribution lines and develop new substations. The objective is to warrant proper supply of electricity to millions of customers across the United States.
Penn Power has invested heavily in smart grid technologies over the past few years. This has enabled the company to improve its reliability performance and experiment with new devices.
FirstEnergy has plans to invest nearly $18 billion in the 2021-2025 period to further strengthen its existing operations. FE’s Energizing the Future plan is aimed to modernize its transmission system with cutting-edge machinery and technology that will help further strengthen the power grid and reduce the frequency and duration of customer outages. Through 2022, the company has invested more than $10 billion in the Energizing the Future program.
Along with FE, other electric power companies like Xcel Energy, Inc. XEL, Exelon Corporation EXC and Duke Energy DUK also aim to invest to further strengthen their existing infrastructure.
Xcel Energy aims to spend $29.5 billion during 2023-2027, out of which it plans to invest nearly $18 billion in strengthening its electric distribution and transmission operations.
XEL’s long-term (three to five years) earnings growth rate is 6.34%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) implies a year-over-year improvement of 5.7%.
Exelon invests substantially in infrastructure projects. It plans to spend nearly $31.3 billion during 2023-2026 on regulated utility operations for grid modernization and enhancement of its infrastructure’s resilience.
EXC’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS implies a year-over-year improvement of 3.5%.
Duke Energy remains focused on expanding its scale of operations and implementing modern technologies at its facilities. Almost 85% of the company’s planned investment funds its generation fleet transition and grid modernization. This includes approximately $75 billion to modernize and strengthen its transmission and distribution infrastructure.
DUK’s long-term earnings growth rate is 6.09%. The Zacks Consensus Estimate for 2023 EPS implies a year-over-year increase of 6.3%.
Price Performance
In the past month, shares of FirstEnergy have lost 2.3% compared with the industry’s 13% decline.
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Zacks Rank
FirstEnergy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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