By Suzanne Herel
FirstEnergy reported third-quarter operating earnings of $0.98/share, compared with $0.89/share in the same period of 2014, reflecting higher distribution sales and the impact of previously resolved rate cases, the company said in an earnings call.
Overall, it reported earnings of $395 million ($0.94/share) for the quarter, compared with $333 million ($0.79/share) last year.
The Akron, Ohio, company also raised and narrowed its guidance for the year’s operating earnings to $2.67 to $2.75/share from its previous prediction of $2.40 to $2.70.
“Our strong third-quarter results reflect a solid performance across all three of our businesses — Regulated Distribution, Regulated Transmission and Competitive Energy Services,” CEO Charles Jones said.
Jones said the company had made “tremendous progress” on three key initiatives: its cash-flow improvement project, PJM capacity market reforms and the Ohio Electric Security Plan, under which the company is seeking power purchase agreements.
He said the cash-flow improvement project, which seeks savings ideas from across the company, should generate $240 million in improvements by 2017.
Jones said he was “cautiously optimistic” about the capacity market reforms, noting that the clearing prices were in line with expectations and come closer to reflecting the true operating costs of generation.
Regarding the Electric Security Plan, he said, “We currently expect a decision by early 2016.”
Operating earnings in the Regulated Distribution business increased due to hot weather and approved rate cases. Distribution deliveries were up nearly 3% overall compared with the same time last year, also driven by hot weather along with an increase in commercial sales.
Operating earnings also increased year-over-year for the Regulated Transmission business, in part from revenues related to FirstEnergy’s Energizing the Future transmission upgrade program.
Higher capacity revenues, lower purchased power costs and lower transmission charges contributed to increased operating earnings in the Competitive Energy Services segment.