Credit: Shutterstock photoTwo affiliates of FirstEnergy Corp.FE - Mon Power and Potomac Edison - have filed a rate increase proposal with the Public Service Commission of West Virginia ("PSC") to recover investment in emission-control projects at the coal-fired Harrison and Fort Martin power stations.
The West Virginia legislature has authorized the PSC to approve coal-fired boiler modernization and improvement plans to encourage utilities to upgrade their coal-fuelled facilities to reduce emissions, while supporting West Virginia's coal industry by not transitioning away from the fuel.
Note that coal constitutes nearly 54.4% of FirstEnergy's generation mix. In the light of increasingly stringent regulatory directives on emission control, FirstEnergy is making investmentsin pollution control. Such initiatives will support long-term operation of the Harrison and Fort Martin Power plants by lowering emission levels during electricity generation, as well as by reducing costs of generation.
FIRSTENERGY CP Price
FIRSTENERGY CP Price | FIRSTENERGY CP Quote
Benefits Post Approval
Upon approval, the modernization and improvement plan will enable Harrison and Fort Martin to comply with the U.S. Environmental Protection Agency's Mercury and Air Toxics Standards (MATS) as well as the Cross-State Air Pollution Rule (CSAPR) II. To achieve this, 18 projects have been planned or are currently underway, which cover improvement of electro-static precipitators, installation of technology to control mercury and other emissions and enhancing existing flue gas desulfurization equipment among others.
The proposed rate increase will add $6.9 million to the annual revenue and result in an increase of 55 cents in residential electricity bills starting May 1, 2017.
Other Initiatives from FirstEnergy
FirstEnergy's modernization drive will boost the company's service reliability and lead to customer retention. The utility is consistently undertaking infrastructure overhaul drives at its various subsidiaries. Recently, among its other affiliates, Jersey Central Power & Light ("JCP&L") spent over $233 million of the allocated $387 million for transmission and distribution infrastructure projects, which include the construction of transmission lines, expansion of substations and upgrading voltage controls. These investments are aimed to reduce disruptions and improve service to its customer base of nearly 1.1 million in the state.
Another utility, Toledo Edison, serving over 300,000 customers in Northwest Ohio, has invested over $59 million of the allocated $115 million in the replacement of aging utility poles and circuit breakers, and the construction of transmission lines to ensure smooth, uninterrupted service.(Read more: FirstEnergy Units on Infrastructure Overhaul Drive )
Zacks Rank & Key Picks
FirstEnergy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the utility space include Korea Electric Power Corp. KEP , Spark Energy, Inc. SPKE and DTE Energy Company DTE . Both Korea Electric and Spark Energy sport a Zacks Rank #1 (Strong Buy), while DTE Energy is a Zacks Rank #2 (Buy) stock.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
KOREA ELEC PWR (KEP): Free Stock Analysis Report
FIRSTENERGY CP (FE): Free Stock Analysis Report
DTE ENERGY CO (DTE): Free Stock Analysis Report
SPARK ENERGY (SPKE): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
