With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

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Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500 2021-294-First Energy

The electric utility corporation's subsidiaries and affiliates are involved in the distribution, transmission, and generation of electricity.

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FirstEnergy owns 10 energy companies that generate and supply energy to customers across the Mid-Atlantic and Midwest.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

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This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

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FirstEnergy was formed in 1997 through the merger of Ohio Edison and Centerior Energy. Together with its subsidiaries, FirstEnergy is engaged in the transmission, distribution, and generation of electricity in the U.S., serving customers across Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York. It operates through three business segments: distribution, integrated, and stand-alone transmission.

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FirstEnergy (FE): Company Profile, Stock Price, News, Rankings

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FirstEnergy

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Hello, and welcome to FirstEnergy Corp. Fourth Quarter twenty twenty four Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Karen Saget, Vice President of Investor Relations. Please go ahead, Karen.

Thank you. Good morning, everyone, and welcome to FirstEnergy's fourth quarter twenty twenty four earnings review. Our Chair, President and Chief Executive Officer, Brian Tierney, will lead our call today, and he will be joined by John Taylor, our Senior Vice President and Chief Financial Officer. Our earnings release, presentation slides and related financial information are available on our website at firstenergycorp.com. Today's discussion will include the use of non GAAP financial measures and forward looking statements, which are subject to risks and uncertainties.

Please read our cautionary statement and discussion of non GAAP financial measures on Slides two and three of the presentation. Factors discussed in today's earnings news release, during today's conference call and in our SEC filings could cause our actual results to differ materially from these forward looking statements. The appendix of today's presentation includes supplemental information along with the reconciliation of non GAAP financial measures. Now it's my pleasure to turn the call over to Brian.

Thank you, Karen. Good morning, everyone. Thank you for joining us today and for your interest in FirstEnergy. I would like to welcome Karen Saget to FirstEnergy as our Head of Investor Relations. This is Karen's first of what I hope will be many earnings calls with us.

She has quickly become a valued member of the management team. Twenty twenty four was a year of extraordinary structural change for our company, and I'm proud of what we've accomplished. We significantly derisked our business from financial and regulatory perspectives and put together a team of leaders who are focused on driving a high level of performance for customers, employees and investors. We also activated a powerful business model to invest in our electric infrastructure and our people, operate safely and efficiently with a focus on continuous improvement, recover our prudently incurred investments and finance our regulated operations. Together, these efforts are making a positive impact for our 6,000,000 customers, energizing and engaging our employees and supporting our sustainable long term growth objectives.

I'll start today's call with a look at our 2024 financial performance and key milestones over the past year. I will discuss our outlook for 2025 and beyond and review the value proposition we offer shareholders. We delivered 2024 GAAP earnings of $1.7 per share. Operating earnings were $2.63 per share within the forecasted guidance range. Our 2024 results benefited from new rates and investments in our regulated businesses, execution on our capital plan and O and M discipline.

Earnings were also impacted by several headwinds throughout the year. These included lower sales volumes, partially due to mild weather conditions versus normal throughout much of the year. In the summer, we also experienced an unusual amount of storm activity that didn't meet the regulatory requirements for deferral. In the second half of the year, our Ohio revenues were below our plan due to the ESP five order, which I will discuss in more detail a bit later. Employees did a great job of navigating these headwinds.

A primary focus of our new leadership team is making the company more resilient so we can drive results consistent with our plan and realize our company's potential. We're working across the organization to drive performance excellence and build a strong culture of continuous improvement. This includes ensuring our processes, performance and accountability are consistent with being a premier electric company. The financial and regulatory milestones we achieved in 2024 and over the last couple of years have strengthened our foundation and reduced the risk profile of our underlying business. The success of the significant regulatory program we launched in 2023 has been instrumental to executing our strategy.

We have now completed rate reviews in four of our five states since the fourth quarter of twenty twenty three, de risking 83% of our rate base when including transmission formula rate investments. Approved rate cases over the past eighteen months in Maryland, West Virginia, New Jersey and Pennsylvania have resulted in a net annual revenue increase of approximately $450,000,000 and allow us to make the necessary investments for a stronger and more reliable grid. Most recently, in November, the Pennsylvania Commission approved our $225,000,000 base rate case settlement with new rates effective 01/01/2025. We were pleased to reach this constructive outcome, which builds on service reliability enhancements made in recent years. We also resolved several additional proceedings in 2024 to facilitate our investment plans and recover specific costs.

The Pennsylvania Commission approved our third long term infrastructure investment plan known as LTIP III in December. This program will track approximately $1,600,000,000 of capital targeted at grid modernization and reliability in Pennsylvania over the next five years. This includes planned investments of approximately $300,000,000 in 2025 to improve circuits, deploy reclosers and other sectionalizing devices and replace overhead equipment to reduce customer outage times. Also in December, our GRIDMOD II settlement was approved by the Ohio Commission. This is a four year program that includes capital investments of just over $400,000,000 to bring smart meter technology to all of our Ohio customers.

In New Jersey, the BPU approved JCP and L's Energy Efficiency and Conservation Plan in November, which will help customers save on their electric bills. Total program costs of $817,000,000 from January 2025 through June of twenty twenty seven with an authorized return of 9.6% on program investments. Turning to our balance sheet. Completing the sale last March of the incremental 30% of FirstEnergy Transmission's equity interest was a transformative milestone for our company. It marked the final phase of our $7,000,000,000 multiyear effort to improve our balance sheet and fuel our investment plan.

Successfully closing the transaction was the catalyst for our return to investment grade status and all three credit rating agencies. Across our holding company and subsidiaries, we achieved a total of 40 ratings upgrades in 2024, more than double the number of upgrades in The entire U. S. Electric utility sector in 2023. Today, all FirstEnergy subsidiaries are investment grade and substantially all of our companies have their highest ratings in more than twenty years.

And we are committed to maintaining these metrics. We put the power of our stronger financial position behind our comprehensive capital investment program, Energize three sixty five, to forge a smarter, more reliable grid. In 2024, we invested $4,500,000,000 in our system through this plan, surpassing our original plan by 5% and an increase of more than 20% compared to 2023. To ensure we're performing at the highest levels, we transformed our organization and implemented an operating model that moves decision making closer to our customers and the employees doing the work. We then recruited external candidates and advanced internal talent to lead our companies forward.

In total, we have placed 24 individuals into critical roles at the vice president level and above. This includes nine members of the senior leadership team, including our business unit presidents, as well as other key leadership roles. This new leadership team is applying their deep experience and building a high performance culture based on accountability, operational excellence, financial discipline and achieving constructive regulatory outcomes. Another milestone in 2024 was resolving certain Ohio legacy proceedings, allowing us to focus our vision on the future. Finally, we delivered to shareholders a solid dividend with twenty twenty four declarations totaling $1.7 per share, an increase of just over 6% versus those declared in 2023.

The successes we achieved in 2024 strengthen our foundation and support our vision for the company's bright future. Turning to Slide seven, let's begin a quick regulatory overview, starting with Ohio, which represents 17% of our rate base. As many of you know, the commission's long awaited auditors report and our base rate case was made public last Friday. We believe the auditors report was constructive on several issues and look forward to filing our response in the near term. The Ohio Commission has been diligent in separating legacy issues from traditional rate proceedings and has maintained that diligence in this case.

The auditors report focused mainly on a rate request. We have not experienced regulatory overhang in our interactions with the commission. In regards to the electric security plan, the commission approved our withdraw of ESP5 in December. The Ohio companies reverted back to ESP4 on February 1, but without revenue increases for our distribution capital recovery rider. ESP4 should remain in place until ESP6 goes into effect, which is expected to be close in time to when the base rate case is effective.

Like ESP5, our ESP6 proposal focuses on reliability, affordability and stewardship. ESP6 defines distribution riders for the full term of the ESP and proposes increases to the DCR tied to reliability performance to better align with in state peers and support significant capital investments. In the coming weeks, our Ohio companies will update the pending base rate case to remove provisions that are now appropriately addressed in our ESP six filing. In New Jersey, we continue working toward a settlement related to our infrastructure investment program, Energize New Jersey, which includes investments targeting system resiliency and substation modernization. In West Virginia this year, we will file our required integrated resource plan.

The ten year plan will include updated load forecasts and provide options around future generation needs to serve our customers and support economic development. Given the energy needs in West Virginia, we plan to explore building new dispatchable generation in the state. Should this be approved, it would be incremental to our investment plan. Turning to slide eight. Over the last few years, we had remarkable growth in our core regulated earnings, but this growth did not come through clearly because of non core components of operating earnings.

Today, to assist investors in assessing our performance in our core business, we are introducing core earnings, which are the earnings of our distribution, integrated, stand alone transmission and corporate segments, excluding the earnings contribution from pension and the Signal Peak mine and special items. From 2022 to 2024, high quality core earnings have grown by 33%. During the same period, non core earnings from pension signal peak, which are volatile and often outside of management's control, decreased by 59%. As we have in the past, we will continue to seek an exit from our signal peak ownership position. We believe that core earnings better reflect the true performance of the regulated utilities we manage and the necessary corporate functions of the company.

Beginning in 2025 and for future periods, we will provide guidance for core earnings and core earnings growth rates. For 2025, we are introducing a core earnings per share guidance range of 2.4 per share to $2.6 This compares to core earnings of $2.37 per share in 2024. At the midpoint of 2025 guidance, this would represent growth of 5.5% or 7% when adjusted for the dilutive effect of the 2024 FET transaction. Our 2025 guidance includes continued solid growth from investments in our regulated operations. Our new guidance also accounts for several unanticipated factors that developed since our third quarter call.

These include the impact of higher than anticipated financing costs, including significantly higher interest rates the removal of a 50 basis point incentive from ATSI transmission rates consistent with the decision by the U. S. Sixth Circuit Court of Appeals in January and Ohio DCR revenue caps which were frozen at May 2024 levels consistent with the Commission's December order and our return to ESP4 in February. In addition, the settlement in the Pennsylvania rate base calls for incremental spend on reliability related maintenance activities, which is fully recovered in new rates. Initially, our plan included reductions in O and M in all of our segments so that total baseline O and M inclusive of the increase in Pennsylvania would be flat to 2023 and 2024.

Ultimately, we concluded that doing so would not be sustainable and would not support the long term operating, regulatory and financial objectives of our company. Our core earnings guidance for 2025 reflects financial discipline from a targeted program being led by the new management team. The program includes organizational design changes as well as programs focused on procurement and contractor staffing. With this program, we expect O and M in 2025 to be flat to 2023 and 2024 with the exception of the Pennsylvania related increases. John will provide more detail on O and M discipline later in the call.

This approach was developed with the new leadership of our operating companies. In this model, decision making is closer to the customer, employee and regulator. We will operate and invest consistent with the regulatory outcomes and commitments we have made to our customers in each jurisdiction. We anticipate investing $5,000,000,000 in our regulated properties during the year, an increase of approximately 11% over 2024. This investment is enabled by recent rate activity.

Subject to Board approval, we anticipate annual dividend declarations totaling $1.78 per share in 2025 and a payout ratio of 60% to 70% of core earnings over the planning period. For the 2025 through 2029 investment horizon, we are providing forecasted core earnings compounded annual growth rate of 6% to 8%. We're extending our energized $365 28,000,000,000 investment program through 2029. This represents an 8% increase from our previous five year plan and results in a 9% compounded annual rate base growth during the period. For our base investment plan, we do not anticipate incremental equity needs beyond our ongoing employee benefit programs.

We are committed to our investment grade credit ratings. And as we have incremental investment opportunities, we will consider a broad range of financing operations. Our CapEx plan is solid and has the flexibility to handle changes to individual projects. We believe that FirstEnergy represents a low risk, reasonable return investment proposition to investors with an attractive total return opportunity of 10% to 12. With that, let me turn the call over to John for more detail.

Thanks, Brian. Good morning, everyone. Thank you for joining the call. Today, I will briefly review our 2024 performance, provide additional detail on regulatory matters and discuss our outlook for 'twenty five and beyond. You can find more detail on our results, including reconciliations for core earnings in the strategic and financial highlights document we posted to our IR website yesterday afternoon.

As Brian mentioned, going forward, we will report our results using core earnings, which reflects the results of our regulated operations and holding company activity, excluding the earnings from signal peak and the mark to market impact of our pension plan. This was a very thoughtful decision and is the result of the volatility in these two income streams that quite frankly we don't control. For example, in addition to the volatility we've seen since 2022, in 2024, the earnings contribution of signal peak intention was $0.26 a share. Our initial expectation for these contributions for 2025 was a little south of $0.2 a share, but that outlook improved as of the end of Q3 as our expectation for interest rates would remain low and commodity prices on Signal Peak coal were stable. In Q4, interest rates increased significantly, negatively impacting the pension and commodity prices have significantly decreased, impacting the profitability of Signal Peak.

The contribution of these two items have declined significantly from our expectation, and this type of volatility is not sustainable and the reason for the change to reporting on core earnings. To close out 2024, I'll walk you through our results relative to the guidance we provided on operating earnings. Operating earnings for 2024 are $2.63 a share, which compares to $2.56 a share in 2023. Results are at the lower end of our revised earnings guidance range due to the impact of unanticipated lower customer demand in part due to milder temperatures in Q4. The combined impact of our legacy non regulated signal peak investment and net periodic pension income decreased 30% from $0.36 a share in 2023 to $0.26 a share in 2024 and comprised about 10% of our 2024 operating earnings.

Our full year results benefited from new base rates in our integrated business and growth from formula rate transmission and distribution investment programs, which resulted in a significant improvement across our regulated businesses as compared to 2023. In our Distribution segment, earnings increased $0.04 year over year, primarily from higher weather related distribution sales, lower Ohio rate credits and higher revenues associated with the Pennsylvania DISC program. This was partially offset by the impact of the Ohio ESP5 order, which negatively impacted results by $0.04 a share as well as higher non deferred storm costs. In our Integrated segment, earnings increased $0.29 a share primarily due to new base rates in New Jersey, West Virginia and Maryland and higher weather related distribution sales, partially offset by a higher effective income tax rate. The three base rate cases in this segment resulted in a significant improvement in the returns in these jurisdictions with ROEs at the end of twenty twenty four ranging from 8.3% to 9.3% on the equity portion of rate base.

In the stand alone transmission business, earnings declined $0.12 a share. Our investment programs increased earnings by $0.07 a share or more than 10% versus 2023. However, this was more than offset by the dilution from the 30% interest sale of FET, which closed in March of twenty twenty four. FET owned rate base in this business was $5,300,000,000 at the end of twenty twenty four, which represents year over year growth of 10%. Finally, in our corporate segment, losses increased $0.04 a share year over year largely due to the absence of a state tax benefit recognized in 2023.

This was partially offset by lower interest expense reflecting $460,000,000 in debt redemptions at FE HoldCo as part of the planned use of proceeds from the Turning to the balance sheet. As part of our 2024 financing plan, during the fourth quarter, we issued $700,000,000 in debt securities with registration rights at JCP and L. The bond issuance was oversubscribed by 8x with a coupon of 5.1%, representing a spread of 95 basis points. All in our 2024 financing plan included five transactions totaling $2,100,000,000 with a weighted average interest rate of 5.1%. Additionally, we continue to mitigate risk associated with our pension plan.

In January, we completed a $650,000,000 lift out associated with the company's former generation subsidiaries at 99% of par. In combination with the lift out in December of twenty twenty three, we have removed approximately $1,400,000,000 of gross pension obligations from the balance sheet, representing the obligation and funding risk related to our former generation subsidiaries. Looking at our credit metrics, FFO to total debt was impacted by the SEC and OOCIC settlement payments as well as a historic storm event in Cleveland Last August. Excluding these unique payments, which negatively impacted the metrics by 150 basis points, FFO to total debt was 14% in 2024. A strong balance sheet remains paramount to our strategy.

Shifting gears, let's talk about our expectations for 2025 and our five year planning period through 2029. The materials posted to our website yesterday afternoon included updated financial outlook, including our base capital plan and rate based growth, which supports our targeted core earnings compounded annual growth rate of 6% to 8% through 2029. Our expanded five year Energized three sixty five capital investment program of $28,000,000,000 includes increasing annual capital investments from $5,000,000,000 in 2025 to $6,400,000,000 in 2029, resulting in compounded annual rate base growth of 9% through the end of the five year period. For 2025, these capital investments will be financed with a combination of internally generated cash flow and debt issued at our operating companies. This year's debt financing planning currently consists of eight transactions, approximating $3,600,000,000 of which $2,000,000,000 is new money requirements.

Approximately 75% of the planned investments are in formula rate or formula like recovery mechanisms that provide real time returns. And nearly half of the total investments are in FERC regulated assets, which resulted in a 10% compounded annual rate base growth in our stand alone transmission segment and 24% growth in transmission rate base in our integrated business. Our financial results for 2024 resulted in a consolidated return on equity of 9.4% on rate base of $25,900,000,000 which compares to 8.8 percent in 2023. Our financial plan improves upon the efforts we've made to enhance our returns over the last few years, targeting actual returns consistent with allowed returns on a consolidated basis. Capital deployment, continued focus on financial discipline with operating expenses and regulatory outcomes that support fair returns on our investments are pillars to our plan.

Additionally, through the recent base rate cases, we have made significant improvement in aligning our regulatory returns as disclosed in our materials with our core earnings, with adjustments or differences being more traditional and largely limited to AFUDC equity, the recovery of retirement benefits and items such as non operating income and interest synchronization. Our well positioned footprint continues to be very attractive to data center developers. Through 2029, our plan includes 2.6 gigawatts of data center demand that is active or contracted, and we are seeing data center growth in our pipeline of just over 5.5 gigawatts through that same period, which would result in an incremental $350,000,000 to our base capital program. Beyond 2029, the pipeline includes over six gigawatts of data center activity and even greater potential with the steady influx of load studies we've seen over the past year. Our current forecast, which only includes contracted data center demand, includes compounded annual sales growth for our industrial class of 5% from 25% to 29% and in the near term 8.5 from 25% to 27%.

This forecast would increase as projects in the pipeline become contracted in addition to providing incremental transmission investment opportunities. Turning to our financial plan for 2025. As Brian mentioned, since our Q3 call, there have been some developments that have lowered our core earnings forecast for 2025 versus our most recent expectation, including higher financing costs, which is comprised of increased borrowings and higher interest rates, mainly attributable to the yield on the ten year treasury increasing about 100 basis points since the first part of October regulatory outcomes that were slightly less than planned, specifically related to Ohio DCR revenues being held flat as part of the ESP V withdrawal and the 50 basis point reduction in the ATTC ROE as well as a decision on base O and M that Brian discussed earlier. We are providing a 2025 core earnings guidance range of $2.4 to $2.6 a share with a $2.5 per share midpoint, representing 5.5% growth off of 2024 core earnings of $2.37.20 25 is primarily driven by the outcome of the approved Pennsylvania based rate case in our distribution segment, which resulted in a net annual revenue increase of $225,000,000 beginning January one of this year and includes recovery of expenses for additional operational and maintenance work, such as an enhanced vegetation management program as well as storm cost and other deferred cost recovery.

Additionally, the Integrated segment is positively impacted by the first full year of new rates in West Virginia and New Jersey and continued growth in our formula like and formula rate investment programs. As Brian discussed, we are driving meaningful changes across FirstEnergy to enable our long term success as a premier electric company. This requires investments to modernize the way we work and improve the customer experience. While we strive for a balance, we are focused on meeting our regulatory commitments and doing this work as effectively and efficiently as we can. Our plan supports this foundational work to achieve our vision.

For example, consistent with our approved base rate case in Pennsylvania, our O and M expenses in 2025 includes increased scope to drive reliability improvements, mostly through an enhanced vegetation management program. Absent the higher O and M in Pennsylvania, which is fully recovered through revenue increases, our 2025 planned O and M is flat to 2024 and '20 '20 '3 levels. We are focused on financial discipline across the business, including supply chain optimization, reducing reliance on contractors and staff augmentation and driving efficiencies throughout the entire organization. This is work that is extremely important and will be a continued focus of the management team. We have made tremendous progress to execute on our business model, de risk the company and invest in the opportunities across our businesses to improve the reliability and resiliency of the electric system and enhance the customer experience.

We also have a new organizational structure and leadership team in place to deliver on our commitments to our stakeholders. With a concrete focus on our core business, we are excited about the future and look forward to building on our momentum and delivering value as a premier electric company. Now let's open the call to Q and A.

Thank you. We will now be conducting a question and answer session. You. Our first question is from Shahriar Pourreza with Guggenheim Partners. Please proceed.

Great. So Brian, just diving into the 25 guide, which is obviously a bit of a reset. Just trying to get a sense on how much of the tail risks you're highlighting are timing related, what you're now assuming on interest rates, so could that become a tailwind? How much of the O and M pressure is PA related? And just, I guess, were you within the 6% to 8% off the lower 25% base assuming what we know today?

I believe we're having slight difficulty with the speaker line.

Ladies and gentlemen, we thank you for your patience. Please remain on the line. The event will resume momentarily.

Yes, much better now. Hey, Brian. Good morning.

Good morning. Sorry about that. Maybe we cut O and M a little too far.

I thought you were so enamored by my question. You were kind of speechless. So I was complimenting myself there.

It was a great question. Let me go about answering it and if I miss something let me know. We do anticipate being in that 6% to 8% range beginning 25% through 20% to 26% and for the full range that we've talked about. As a management team, we will be disappointed if we don't end in the upper end of that range. As John and I talked about during the call, much of the O and M change all of the O and M change can be described as the increase that we received in the Pennsylvania base rate case settlement.

As a management team, we felt it was important to spend the dollars that we agreed to spend in Pennsylvania and were holding O and M flat at the other four operating units to demonstrate that discipline. We do have a program in place that's talking about reducing staff augmentation, procurement efforts, some organizational design efforts. So we are incredibly focused on O and M discipline, but felt that we needed to spend the dollars that we committed to spending in Pennsylvania. So like I said, in the range beginning $25,000,000 to $26,000,000 and through the whole investment horizon that we talked about $25,000,000 through $29,000,000 and again we'll be disappointed if we weren't in the upper end of the range.

Okay, perfect. And then just quickly touching on the audit report, I mean, a few moving pieces there, but the report kind of suggested a lower revenue requirement rate base, ROE, the equity ratio was flat. No mention of goodwill treatment. Obviously, the numbers aren't as relevant as they reflect ESP5. But how could the findings play into ESP6?

You have a lot of balls in the air in the state. So just want to get a sense if there's any read throughs in your upcoming filing. Thanks.

So thank you for that chart. So there are things that will move from the base rate case to the ESP and back and forth and we need to reconcile those and we anticipate doing that shortly in an upcoming filing. But I do think it's significant that they did focus on a couple of things that we talked about previously. They recommended a capital structure of 51% equity. Our current capital structure is 55%.

No real mention of goodwill in that discussion. They've also proposed an ROE of 9.63% versus our proposed 10.8%. But the 9.63 is consistent with what other companies have gotten in Ohio. We're going to address these issues. We again think that our view is the right one, the actual equity structure, the higher ROE and we'll be addressing those issues in our response to the audit report here in the next thirty days.

Okay, perfect. I appreciate it, Brian. Thanks so much. I'll pass it to someone else. Thank you.

Our next question is from Carly Davenport with Goldman Sachs. Please proceed.

Hey, good morning. Thanks so much for taking the questions. Maybe just a quick one on the balance sheet, you highlighted the actual 24% FFO to debt at 12.5%, recognize there's some more one time items in there. Can you just talk about the path to getting that back towards the 14% target for the planning period? And is that something that you view as sustainable sort of in each year of the planning period?

Hey, Carly, it's John. Yes, so if you think about where we were for 2024, you just kind of of strip out some of those unique items that aren't in our plan for 2025. So for instance, the $120,000,000 payment we made to the SEC and OOCIC that significant storm in Cleveland, you just strip some of that out. You're close to the 14% in 2025. Then you add on the impact of the Pennsylvania rate case and the cash flow that's going to be generated with new rates effective January 1.

Our plan for this year is slightly above 14% and we believe that's sustainable going forward.

Great. That's helpful. Thank you. And then maybe just one on transmission for the projects that were selected by PJM yesterday as part of the JV that you're part of with Dominion and AAP. Are there any assumptions on those projects that are reflected in the current plan?

Or would you expect those to fall outside of the scope of the current planning period?

So Carly, let me start and I'll let John talk about the financing of it. We anticipate that our share of those projects will be about $675,000,000 About $625,000,000 of that is going to be in FET and the remainder of that is going to be in our owned operating company. So we view this JV as being a significant opportunity for us, but there are some unique items around financing that I'll give to John.

Yes, Carly. So the CapEx that will be financed by the first energy companies is in our plan. The JV is going to be off balance sheet. So it will be an investment that we have in that JV. And we'll have to make an equity contribution to that joint venture to capitalize it.

But that CapEx would be financed off balance sheet and wouldn't necessarily be in our capital plan. But everything else that we were awarded yesterday is in our financial plan.

Got it. Great. Thanks so much for the color.

Our next question is from Nick Campanella with Barclays. Please proceed.

Hey, thanks. Good morning. I wanted to just make

a quick follow-up on Shar's question about the Blue Ridge report and the Ohio rate case. And just now that you kind of have a marker out there,

are your thoughts on just being able to maybe settle some of these issues with staff? And is that possible? Or are you just going to be taking this a full distance to an order eventually? Thank you.

So thanks, Nick. We always like to settle cases where we have the opportunity to do that. Of course, we'll be open to doing that in this case. The way our cases have been going recently, there's been no regulatory overhang, but they have been going through to adjudicated settlements. We were fortunately able to settle Grid Mod two.

I think this one given the complexity, the nature, the length of time, and the like, I anticipate this one will be fully adjudicated. That being said, we don't see any regulatory overhang. The Blue Ridge report was it didn't have attitude towards it. It seemed to be factual. It seemed to be based on the matters almost entirely in the rate case.

And I think I don't want to say too much about a case that we're currently adjudicating, but we'll make our response in the next thirty days. And I anticipate this case moving forward as planned. The commission has been handling these business as usual rate cases straight down the middle of the road and I anticipate that they'll do that through the end of this and we anticipate a constructive outcome similar to what we got in GridMatu.

Hey, thanks for those comments. I definitely appreciate it.

the six to eight and your comments about being higher in the range, if you're going to be higher in the range, I guess, why isn't this a seven to eight CAGR? And what's kind of what are you kind of handicapping or watching that would kind of put you lower at the more at the 6% level? Thanks.

Yes. So the traditional things that you would expect that would impact utilities earnings, right? Regulatory outcomes, ability to get recovery, load, all the traditional things that you would expect, which is why we're focusing people on the core earnings. Things that could take us to the upper end of the range, we've gotten in the last two point five years, we've gotten about $2,500,000,000 of competitive transmission awards. I anticipate those will continue to come.

As load grows, as we see data center impacts and the like, we're not putting those in our plan yet because we don't have them similar to how we're not putting data centers that aren't contracted into our plan, but we have a significant pipeline there. So if the data center pipeline comes through and they go from being pipeline to contracted, if we have more of those competitive transmission opportunities that we're able to secure, I think there are more tailwinds than there are headwinds, but we can't put them in the plan until we have them either contracted or awarded.

Our next question is from Michael Lonergan with Evercore ISI. Please proceed.

Hi, good morning. Thanks for taking my questions. So as we think about your targeted consolidated earned ROE of 9.5 to 10%, is that the level you're assuming in this 6% to 8% core EPS CAGR? And also what earned ROE contribution are you projecting from Ohio in the forecast period?

Yes, Michael, this is John. So in the forecast period, we are assuming that we're going to earn on a consolidated basis somewhere in that 9.5% to 10% and that's excluding the holding company activity. So, FE holdco, FET holdco. For Ohio, we're going to assume that we earn close to our allowed return whatever that is coming out of the rate case which we think would be in that 9.5% to 10.5% range which we talked about before. And we'll have to work our way through the rate case, but that's what we're assuming for Ohio.

Great. Thank you. And then you talked about dispatchable generation opportunity in West Virginia. I wonder if you could talk about the size of that investment opportunity, when that could enter your plan? And then that along with the incremental transmission capital from data center demand, the $350,000,000 what portion of all this capital could be funded with equity?

Yes. So let me first talk about the West Virginia component. We have about 3,000 megawatts of coal fired generation that's going to be retired. It's planned to be retired whether that happens or not between 02/1935 and 02/1940. So if we were to start building for that eventuality, I could see the spend for that coming in years four or five of our plan today and continuing beyond the 2029 period and extending throughout the 2030s.

If you look at March to April megawatts of combined cycle, I think you're talking a $3,000,000,000 to I'd say $4,000,000,000 to $6,000,000,000 potential spend over that twelve to fifteen year period, which I think would make a lot of sense, replacing the thermal generation that we have and allowing for growth and economic development opportunities. I can't remember the second part of the question.

What portion of all this incremental capital could be funded with equity?

I think you'd have to assume going forward that we would fund things from cash flow from operations. I think we would use debt and we would also use a combination of equity and equity like instruments. So the traditional ways that you would finance utility investment are what we would use for that and everything else that we have.

Our next question is from Jeremy Tonet with JPMorgan. Please proceed.

Hi, good morning. Good morning, Jeremy. How are you?

FirstEnergy (FE) Q4 2024 Earnings Call Transcript

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