FIRSTENERGY CORP

FirstEnergy Corp. is a public utility holding company primarily involved in the transmission, distribution, and generation of electricity. Its utility operating companies serve over six million customers in the Midwest and Mid-Atlantic regions, making it one of the largest investor-owned electric systems in the United States. The company's transmission operations include over 24,000 miles of transmission lines and two regional transmission operation centers. FirstEnergy's subsidiaries, Allegheny Energy Supply Company (AE Supply) and Allegheny Generating Company (AGC), control 3,580 MWs of total capacity. FirstEnergy's business strategy is to provide electric utility services through its regulated distribution and transmission segments. The regulated distribution segment distributes electricity through its utility operating companies in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York, and purchases power for its POLR, SOS, SSO, and default service requirements in these states. The regulated transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy's utilities to transmit electricity from generation sources to distribution facilities. The company's website is firstenergycorp.com, and its ticker symbol is "FE." FirstEnergy's reportable operating segments are the Regulated Distribution and Regulated Transmission segments. The Regulated Distribution segment distributes electricity and purchases power for its POLR, SOS, SSO, and default service requirements, while the Regulated Transmission segment provides transmission infrastructure to transmit electricity from generation sources to distribution facilities. FirstEnergy's utilities include The Cleveland Electric Illuminating Company (CEI), Jersey Central Power & Light Company (JCP&L), Metropolitan Edison Company (ME), Pennsylvania Power Company (Penn), Pennsylvania Electric Company (PN), and West Penn Power Company (WP). Its transmission subsidiaries include FirstEnergy Transmission, LLC (FET), Allegheny Transmission Systems, Incorporated (ATSI), Keystone Appalachian Transmission Company (KATCo), Mid-Atlantic Interstate Transmission, LLC (MAIT), and Trans-Allegheny Interstate Line Company (TrAIL). FET is a subsidiary of FET, which holds 80.1% of its issued and outstanding membership interests. Brookfield owns the remaining 19.9% of FET's issued and outstanding membership interests and has entered into an agreement to purchase an additional 30% equity interest in FET, increasing its ownership to 49.9%. The transaction is expected to close by the end of the first quarter of 2024. FirstEnergy's reportable segments will change in 2024 to include the Distribution Segment, Integrated Segment, and Stand-Alone Transmission Segment. The Distribution Segment will consist of the Ohio Companies and FE PA, the Integrated Segment will consist of MP, PE, and JCP&L, and the Stand-Alone Transmission Segment will consist of FE's ownership in FET and KATCo. FirstEnergy's business is capital intensive and requires significant resources to fund operating expenses, construction and other investment expenditures, scheduled debt maturities and interest payments, dividend payments, and potential contributions to its pension plan. The company has taken steps to mitigate supply chain risks and does not currently expect service disruptions or any material impact on its capital spending plan. However, a prolonged continuation or further increase in supply chain disruptions could have an adverse effect on FirstEnergy's results, including operations, cash flow, and financial condition. The maximum hourly demand for each of the utilities was as follows: | System Demand (MWs) | 2023 | 2022 | 2021 | | --- | --- | --- | --- | | CEI | 3,868 | 4,266 | 4,253 | | JCP&L | 5,731 | 6,122 | 5,902 | | ME | 2,890 | 3,021 | 2,976 | | MP | 2,051 | 2,124 | 2,114 | | OE | 5,192 | 5,652 | 5,598 | | PE | 3,103 | 3,514 | 2,905 | | Penn | 900 | 944 | 889 | | PN | 2,763 | 2,838 | 2,908 | | TE | 2,220 | 2,277 | 2,265 | | WP | 3,706 | 3,827 | 3,827 | All of FirstEnergy's facilities are located within the PJM Region and operate under the reliability oversight of a regional entity known as RFC. Within the Regulated Distribution segment, there is generally no competition for electric distribution service in the utilities' respective service territories. However, pursuant to FERC's Order No. 1000, non-incumbent developers can now compete for certain PJM transmission projects in the service territories of FirstEnergy's Regulated Transmission segment. This could result in additional competition to build transmission facilities in the Regulated Transmission segment's service territories while also allowing the Regulated Transmission segment the opportunity to seek to build facilities in non-incumbent service territories. The sale of electric power is generally a seasonal business, and weather patterns can have a material impact on FirstEnergy's Regulated Distribution segment operating results. Demand for electricity in the service territories historically peaks during the summer and winter months. Accordingly, FirstEnergy's annual results of operations and liquidity position may depend disproportionately on its operating performance during the summer and winter. Mild weather conditions may result in lower power sales and consequently lower revenue, earnings, and cash flow. FirstEnergy focuses on a number of human capital resources, measures, and objectives in managing its business, including integrity, safety, DEI, workplace flexibility, employee development, and compensation and benefits. As of December 31, 2023, FirstEnergy had 12,042 employees, all of whom were located in the United States. Approximately 45% of FirstEnergy's employees were represented by the IBEW, the UWUA, and the OPEIU unions, with 15 collective bargaining agreements between FirstEnergy's subsidiaries and its unions. In 2023, FirstEnergy's subsidiaries reached new agreements with two IBEW locals and one UWUA local and extended the agreements of two IBEW locals and five UWUA locals.