February 27, 2014
As part of its ongoing efforts to strengthen the durability and flexibility of its electric system, FirstEnergy Corp. (NYSE: FE) plans to invest more than $143 million in 2014 in service reliability infrastructure upgrades in its Potomac Edison service area. This represents about an $80 million increase compared to what the company invested in reliability infrastructure projects in western Maryland and the Eastern Panhandle of West Virginia last year.
Major projects scheduled for this year include transmission enhancements, building new distribution circuits, replacing underground cables, and making system enhancements in high-growth areas experiencing new residential and commercial development.
"Many of the planned infrastructure projects are designed to enhance the reliable, day-to-day service we now provide our customers," said James A. Sears, Jr., FirstEnergy's president of Maryland Operations and vice president of Potomac Edison. "We also are taking steps to prepare our system for tomorrow's inevitable growth. Whether we are trimming trees, installing new equipment at substations or rebuilding older transmission and distribution facilities, our objective is to make a good system even better."
Of FirstEnergy's $143 million infrastructure investment in the region for 2014, about $42 million will be for transmission-related projects built and owned by Trans-Allegheny Interstate Line Company, a FirstEnergy transmission affiliate.
Potomac Edison's 2014 enhancements are expected to have both localized and widespread system benefits to customers throughout the service area. Scheduled projects include:
- Rebuilding a 500-kilovolt (kV) transmission line in Frederick County, Md., as part of a joint project with Dominion Power. Potomac Edison will invest $13 million for its part of the project which will enhance reliability of the regional electric grid.
- Investing more than $18 million to trim trees and control vegetation along 2,600 miles of distribution and high-voltage transmission lines to help reduce tree-related storm damage and lessen the duration of storm outages. Some areas scheduled for 2014 include Allegany, Berkeley, Frederick, Garrett, and Washington counties.
- Continuing improvements at the Doubs Substation in Frederick County, which includes a new control building and emergency generator, at a cost of more than $4 million. The work will enhance service reliability and ensure adequate capacity to accommodate load growth in the area for years to come.
- Upgrading equipment on about 90 distribution circuits throughout the service area at a cost of about $4.4 million. The enhancements - installing new wire, cable and fuses, as well as replacing aging equipment - are expected to enhance the electrical system and reliability for about 65,000 customers in Maryland and West Virginia.
- Replacing underground distribution cables with new equipment. Work totaling more than $4.5 million is planned in all areas of the service territory, with a focus in Frederick and Damascus, Md. Outages involving underground wires often take longer to restore than overhead outages.
- Installing new equipment at a cost of more than $2.5 million to increase capacity of the Davis Mill Substation in Montgomery County, Md., to accommodate accelerated growth in the Germantown and Clarksburg areas.
- Installing new equipment at the Corning Substation in Berkeley County, W. Va., to allow for load growth and help enhance reliability for existing customers in the Tabler and Inwood areas.
- Dividing a large distribution circuit in the South Martinsburg, W. Va., area to prepare for load expansion in this fast-growing area of new residential and commercial construction.
- Replacing equipment at the Urbana Substation to better protect existing high-voltage equipment and help reduce the risk of outages in the Urbana, Md., area.
- Completing systematic repairs and replacing equipment on a 138-kV regional transmission line spanning Hardy and Mineral counties, W. Va., to help enhance regional reliability.
- Replacing distribution lines, some dating from the 1930s, in the Sharpsburg area of Washington County, Md., to help reduce outage frequency and duration.
- Inspecting and proactively replacing distribution and sub-transmission utility poles in the Potomac Edison service area. Approximately 24,000 utility poles will be inspected in 2014, with about 300 expected to be replaced.
Potomac Edison serves about 250,000 customers in seven Maryland counties and 132,000 customers in the Eastern Panhandle of West Virginia. Visit FirstEnergy on the web at www.firstenergycorp.com, and follow Potomac Edison on Twitter @PotomacEdison.
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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