February 20, 2014
As part of its ongoing efforts to improve the durability and flexibility of its electric system, FirstEnergy Corp. (NYSE: FE) plans to invest about $176 million in 2014 on service reliability infrastructure upgrades in its Cleveland Electric Illuminating Company (CEI) northeast Ohio service territory. This represents about a $27 million increase compared to what the company invested in reliability infrastructure in the region last year.
Major projects scheduled for 2014 include building new substations, installing voltage regulating equipment, rebuilding and upgrading circuits, and continuing tree trimming work, including a special program to remove trees endangered by the Emerald Ash Borer.
"Our goal is to build redundancy and resiliency into our system as we continue to reduce the number and duration of outages our customers might experience," said John Skory, regional president, CEI. "From building new substations to inspecting underground circuits and trimming trees - our primary objective is to enhance the reliability of our system. When combined with the dedicated work of our employees, we will continue to provide the quality service our customers in Cuyahoga, Lake, Geauga, Ashtabula and Lorain counties expect and deserve."
Of FirstEnergy's $176 million infrastructure investment in the region for 2014, more than $66 million will be for transmission-related projects built and owned by American Transmission Systems Incorporated, a FirstEnergy transmission company.
The various projects are expected to provide both localized and widespread benefits to CEI customers in northeast Ohio and include:
- Installing synchronous condenser voltage regulating equipment in Eastlake at a cost of about $25 million. The purpose of a synchronous condenser is to adjust conditions on the transmission grid by stabilizing voltage levels.
- Spending approximately $15 million to continue work on new sub-transmission circuits in downtown Cleveland as part of a large-scale project designed to handle future load growth around the Cleveland Clinic. This multi-year project began in 2013 and is scheduled to be completed by 2016.
- Building a new substation in Glenwillow at a cost of $14 million as part of a project that involves building a new 345-kilovolt transmission line from FirstEnergy's Bruce Mansfield Power Plant along the Ohio River to the Cleveland area to enhance system reliability.
- Rebuilding portions of a major substation in Northfield. The overall cost for the project is more than $7.8 million.
- Spending more than $13 million as part of CEI's ongoing tree trimming program to help maintain proper clearances to protect against tree-related storm damage. Some of the scheduled communities include Ashtabula, Berea, Cleveland, Middleburg Heights, North Royalton, Painesville, Parma, Solon, Wickliffe, Willoughby, and Willowick.
- Spending approximately $1 million in northeast Ohio to proactively remove trees affected by the Emerald Ash Borer, particularly those that could fall on CEI equipment and result in service interruptions.
- Inspecting and replacing distribution and sub-transmission poles at a cost of $8 million in northeast Ohio. This inspection process is conducted on a 10-year cycle. Inspections began in January, with replacement work scheduled to be performed throughout the year.
- Inspecting and replacing, as needed, underground circuits at a cost of $1 million.
Cleveland Electric Illuminating Company serves more than 750,000 customers across Ashtabula, Cuyahoga, Geauga, Lake and Lorain counties. Visit FirstEnergy on the web at www.firstenergycorp.com, and follow Cleveland Electric Illuminating Company on Twitter @IlluminatingCo.
FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York.
This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "will," "intend," "believe," "estimate" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular; the impact of the regulatory process on the pending matters before the Federal Energy Regulatory Commission and in the various states in which we do business including, but not limited to, matters related to rates and pending rate cases; the uncertainties of various cost recovery and cost allocation issues resulting from American Transmission Systems, Incorporated's realignment into PJM Interconnection LLC; economic or weather conditions affecting future sales and margins; regulatory outcomes associated with storm restoration, including but not limited to Hurricane Sandy, Hurricane Irene and the October snowstorm of 2011; changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil, and availability and their impact on retail margins; the continued ability of our regulated utilities to recover their costs; costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices; other legislative and regulatory changes, and revised environmental requirements, including possible greenhouse gas emission, water discharge, water intake and coal combustion residual regulations, the potential impacts of Cross-State Air Pollution Rule, Clean Air Interstate Rule (CAIR), and/or any laws, rules or regulations that ultimately replace CAIR, and the effects of the United States Environmental Protection Agency's Mercury and Air Toxics Standards rules including our estimated costs of compliance; the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including New Source Review litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to deactivate or idle certain generating units); the uncertainties associated with the deactivation of certain older regulated and competitive fossil units including the impact on vendor commitments, and the timing thereof as they relate to, among other things, Reliability Must-Run arrangements and the reliability of the transmission grid; adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the Nuclear Regulatory Commission or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant); issues arising from the indications of cracking in the shield building at Davis-Besse; the impact of future changes to the operational status or availability of our generating units; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments; replacement power costs being higher than anticipated or not fully hedged; the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates; changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates; the ability to accomplish or realize anticipated benefits from strategic and financial goals including, but not limited to, the successful implementation of our transmission plan, the ability to reduce costs and to successfully complete our announced financial plans designed to improve our credit metrics and strengthen our balance sheet, including but not limited to, the benefits from our announced dividend reduction and our proposed capital raising and debt reduction initiatives; our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins; the ability to experience growth in the Regulated Distribution and Regulated Transmission segments and to continue to successfully implement our direct retail sales strategy in the Competitive Energy Services segment; changing market conditions that could affect the measurement of liabilities and the value of assets held in our Nuclear Decommissioning Trusts, pension trusts and other trust funds, and cause us and our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated; the impact of changes to material accounting policies; the ability to access the public securities and other capital and credit markets in accordance with our announced financial plan, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries; actions that may be taken by credit rating agencies that could negatively affect us and our subsidiaries' access to financing, increase the costs thereof, and increase requirements to post additional collateral to support outstanding commodity positions, letters of credit and other financial guarantees; changes in national and regional economic conditions affecting us, our subsidiaries and our major industrial and commercial customers, and other counterparties including fuel suppliers, with which we do business; issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business; the risks and other factors discussed from time to time in our United States Securities and Exchange Commission filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.
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