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In order to enhance the reliability of its services, subsidiaries of FirstEnergy Corp. FE are working consistently on vegetation management. The program will ensure better upkeep of the trees, proper maintenance of electric facilities and to this end, the company plans to spend $316.1 million.
FirstEnergy is working steadily on maintaining its infrastructure. In this direction, it employs tree contractors, annually, who work round the year to ensure proper vegetation management in the company’s electric lines. Remarkably, in 2020, the company recorded a 45% decline in tree-related outages from 2019-levels. Also, the duration of inconvenience caused to the customers due to service interruptions dropped 75%.
During the 2018-2023 forecast period, the utility anticipates investing $17.6 billion in strengthening its transmission and distribution network, and fortifying the infrastructure. In 2021, it expects to spend up to $3,015 million while in 2022 it estimates to invest up to $3,025-$3,275 million. Also, it provided the capital expenditure guidance for 2023 in the range of $2,955-$3,205 million.
With the reopening of business activities, commercial and industrial demand is slowly returning to pre-COVID levels. Also, improvement in residential demand is likely to continue. Hence, to cater to this likely hike in demand, the company needs to undergo some renovation. Effective maintenance will ensure uninterrupted power supply to the company’s customers that it serves in different states and increase the reliability of its service.
Utilities Focus on Infrastructure
To provide 24X7 supply of electricity to consumers, utilities are investing heavily in strengthening infrastructure. They are replacing old transmission and distribution lines, undergrounding distribution lines and adopting technological upgrade to increase the resilience of infrastructure for withstanding the impact of hurricanes, storms and other natural calamities.
Utilities like Xcel Energy XEL increased its investment plans to $24.3 billion from $23.5 billion in the 2021-2025 time period. NextEra Energy NEE chalked out plans to invest in the range of $50-$55 billion in different projects during the 2019-2022 time frame to modernize and strengthen its existing infrastructure. DTE Energy DTE currently expects to make capital investments of $14 billion over the 2021-2025 period, which include $5 billion for capital replacements and other projects, $7 billion for distribution infrastructure and another $2 billion for new generation.
Zacks Rank & Price Performance
In the past three months, shares of this currently Zacks Rank #4 (Sell) company have gained 15.9%, outperforming the industry’s rise of 3.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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