By Suzanne Herel
FirstEnergy last week reported fourth-quarter operating earnings of $0.58/share, compared with $0.80/share for the same period in 2014, citing greater planned operating expenses, higher tax rates and lower distribution deliveries.
Those factors were tempered by increased transmission revenue, a greater commodity margin for its competitive business and resolved rate cases in West Virginia, New Jersey and Pennsylvania, the company said.
“This year, we will continue to focus on regulated growth through our Energizing the Future transmission initiative, while strengthening our utilities business and managing risk across the company,” CEO Charles Jones said. “We also look forward to resolving our Ohio Electric Security Plan, which will shape our longer-term strategic outlook.”
On a non-adjusted basis, the Akron, Ohio, company reported a net loss for the quarter of $226 million ($0.53/share) on revenue of $3.5 billion, compared with a net loss of $306 million ($0.73/share) on equal revenue for the same quarter in 2014.
Operating earnings for the full year were $2.71/share, compared with $2.56/share for 2014.
Jones provided first-quarter 2016 guidance of 75 to 85 cents/share. He said in a call with analysts that he would not provide guidance for the full year until the Public Utilities Commission of Ohio rules on a proposed power purchase agreement proposal designed to shore up FirstEnergy’s Davis-Besse Nuclear Power Station and the Sammis Plant. He expects a decision in March. (See Next up in Ohio PPA Battle: Dynegy Weighs in.)
Peppered with questions from analysts regarding the potential effects on the company if PUCO denies the agreement, Jones and Chief Legal Officer Leila Vespoli said they were optimistic and declined to prognosticate.
“What I’ve said is we will deal with that outcome when we have it, and we will communicate at that time what our earnings guidance for 2016 is, what our future growth plans for the utilities are, what our future equity needs might be, if anything, to support that growth.” Jones said. “I’ve consistently said I think that generation, transmission and distribution are all critical assets in terms of serving customers, and right now I don’t see any strategic change there for us.”
Opponent of the plan have asked FERC to weigh in, and Vespoli said she expects the commission to do so before PJM’s Base Residual Auction in May.
FERC last week approved a separate initiative in which FirstEnergy plans to spin off the transmission assets of Jersey Central Power & Light, Metropolitan Edison and Pennsylvania Electric into a new subsidiary. (See FERC OKs FirstEnergy’s Tx Spin-off; N.J., Pa. Approval Still Needed.) The deal also needs the approval of regulators in Pennsylvania and New Jersey, which Jones said he expects by mid-year.