Dive Brief:

• FirstEnergy’s pipeline of potential data centers in its service area has nearly doubled to almost 3 GW by 2029 since November, company officials said Thursday. FirstEnergy’s utilities could have nearly 6 GW of data center load at the end of the decade when including existing and contracted facilities.
• FirstEnergy expects its load to grow 2.4% a year on average over the next five years, with industrial sales — which include data centers — increasing 5.1% and residential sales climbing 1.7% annually, according to an investor factbook. The Akron, Ohio-based utility company expects commercial sales will fall 0.6% a year over the five-year period.
• FirstEnergy effectively lowered its earnings per share outlook when it offered earnings guidance using a new “Core EPS” metric that excludes two volatile sources of income, Jefferies analysts said in a research note Thursday. FirstEnergy shares fell nearly 10.5% in trading on Thursday to $38.54/share.

Dive Insight:

In an effort to highlight its regulated utility and transmission operations, FirstEnergy will start using a Core EPS metric that excludes results from its 33.3% ownership in Signal Peak, a coal company, and its pension fund.

Using that metric, FirstEnergy expects its earnings will grow 5.5% this year. Drags on earnings include increased borrowing costs, the loss of a 0.5% return on equity adder for its Ohio utility for being a PJM Interconnection member and high operations and maintenance costs, the company said.

FirstEnergy expects its Core EPS will grow 6% to 8% a year over the next five years. However, its appears FirstEnergy’s revised EPS trajectory strips out more income from its previous guidance than just Signal Peak and the pension results, according to Jeffries. “Removing 2024 Signal Peak and pension impacts only bridges partway down to [FirstEnergy’s] rebased EPS trajectory,” the analysts said.

FirstEnergy increased its five-year capital investment plan 8% to $28 billion, resulting in an expected 9% compounded annual rate-based growth during the period, Brian Tierney, FirstEnergy chairman, president and CEO, said during an earnings call with analysts. FirstEnergy doesn’t expect it will need to issue equity outside its employee benefit programs to meet its funding needs, he said.

About 75% of FirstEnergy’s planned investments are in formula rate or formula-like recovery mechanisms that provide real-time returns, said Jon Taylor, FirstEnergy senior vice president, chief financial officer and strategy. Almost half of the planned investments are in assets regulated by the Federal Energy Regulatory Commission, which results in a 10% compounded annual rate base growth in the company’s transmission segment and 24% growth in transmission rate base in its utilities with transmission assets, he said.

FirstEnergy’s Monongahela Power subsidiary will likely propose building dispatchable generation as an option for meeting its resource needs when it files an integrated resource plan with West Virginia regulators later this year, according to Tierney.

FirstEnergy owns about 3 GW of coal-fired generation in West Virginia that's set to be retired between 2035 and 2040, “whether that happens or not,” Tierney said. Replacing the coal capacity with 3 GW to 4 GW of gas-fired generation could require $4 billion to $6 billion in spending, “which I think would make a lot of sense, replacing the thermal generation that we have and allowing for growth and economic development opportunities.”

FirstEnergy could be affected by Trump administration’s tariffs on imports, the company said in its annual report filed Thursday with the U.S. Securities Exchange Commission. 

“Any widespread imposition of new or increased tariffs could have an adverse effect on our results of operations, cash flow and financial condition,” FirstEnergy said. “New or increased tariffs could also negatively affect U.S. national or regional economies, which also could negatively impact our business and results of operations.”

President Trump on Thursday said he plans to impose tariffs on imports from Canada and Mexico and an additional 10% tariff on imports from China, effective March 4.

FirstEnergy also warned that growing demand for electricity in its service territory could outstrip supply. “Competitive market forces or adverse regulatory actions may require FirstEnergy to purchase capacity and energy from the market or build additional resources to meet customers’ energy needs in an expedited manner,” the company said. “If that occurs, we may see opposition to recovery of these additional costs and could experience a lag between when costs are incurred and when regulators permit recovery in rates.”

FirstEnergy’s earnings from continuing operations fell 13% in 2024 to $978 million, down from $1.1 billion the year before, partly on a $200 million charge related to increased coal-fired environmental liabilities, according to the company. Revenue increased 5% last year to $13.5 billion from $12.9 billion. 

Weather-adjusted sales by FirstEnergy’s utilities was flat in 2024 at 147.7 million MWh, according to the company’s earnings presentation. Weather-adjusted residential sales fell 0.8% to 55.9 million MWh last year from 2023, while commercial sales dipped 0.4% to 39.3 million MWh and industrial sales climbed 1.4% to 53 million MWh in the same period.

FirstEnergy’s electric utilities have about 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York.