During his address following today's (5/16) Annual Meeting of Shareholders, President and Chief Executive Officer Charles E. Jones said FirstEnergy Corp. (NYSE: FE) is making significant progress toward its goal of transitioning into a more fully regulated company that is better positioned to meet the energy needs of its customers, support its communities, and deliver greater value to shareholders.
"I've been in this business for nearly 40 years, and the most important thing I've learned over the past four decades is that if you take care of the customer, everything else will take care of itself. In other words, strong customer-focused businesses tend to be the most successful businesses," he said.
Jones said the company's ongoing investments in the electric system support that philosophy. He pointed to new rates now in place in eight of the company's ten electric utilities, which support continued investments in service reliability and recovery of the company's costs, as well as FirstEnergy's ongoing investment in its transmission network.
"We recently completed phase one of our Energizing the Future transmission investment program - and will spend an additional $4.2 to $5.8 billion through 2021 on projects that will help ensure our customers continue to benefit from a highly reliable, more resilient and more secure grid," he said.
Jones said FirstEnergy's focus on customers is also reflected in its new advertising campaign. Called "You First," the campaign promotes the company's range of smart products and services that place the customer first - from energy efficiency programs that can save customers energy and money, to warranty programs that protect the home's major appliances.
While FirstEnergy continues to focus on its transition to a more fully regulated business, Jones said the company strongly supports national and state-level efforts to preserve essential energy resources.
"We're encouraged by the recently announced U.S. Department of Energy study to examine the full value that baseload generation plants fueled by coal and nuclear provide to our nation's grid, economy and energy security," he said. "Among other issues, the study will focus on the reasons why these plants are prematurely closing, the risk to national and economic security if these closures continue, and what can be done to prevent further loss."
At the same time, Jones said the company also supports Ohio's Zero-Emissions Nuclear Resource, or ZEN, legislation, which would compensate nuclear plants on a per-megawatt basis for the unique benefits they bring to Ohio's environment, fuel diversity, energy security and resiliency.
"Our Davis-Besse, Perry and Beaver Valley nuclear plants have the ability to operate 24/7 - generating enough electricity to power more than 4 million homes, around the clock. In fact, nuclear facilities produce more than 90 percent of the carbon-free power in Ohio and Pennsylvania," he said.
These nuclear plants directly employ approximately 2,300 people, support thousands of additional jobs, and contribute $29 million each year in state and local tax revenues, Jones said. Yet he noted that nuclear facilities across the nation are closing prematurely, including four nuclear facilities in Wisconsin, Vermont and Nebraska that have already shut down, and at least seven others across the region that are in danger of closing.
"We simply cannot allow this to happen in Ohio and Pennsylvania - so if you share our concerns and live in either state, I encourage you to reach out to your local senator or representative," Jones said.
In closing, Jones said he is proud of FirstEnergy employees, and their role in providing customers with the safe, reliable, clean and affordable service they expect and deserve.
"I'm confident that the dedicated efforts of our employees will make the difference as we complete our transition to a more fully regulated company - one that is better positioned to meet the energy needs of our customers, provide strong support to our communities and deliver greater value to our shareholders in the years ahead," he said.
A transcript of Jones' prepared remarks can be found here.
Preliminary Voting Results
FirstEnergy also announced preliminary voting results from its 2017 Annual Meeting. Shareholders reelected each of the 13 nominees to the company's Board of Directors and ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm. On an advisory basis, shareholders also approved named executive officer compensation and voted to hold such advisory votes every year.
Based on preliminary results, a management proposal to amend the company's governing documents to increase the number of shares of authorized common stock received the requisite vote, while management proposals to amend the company's governing documents to replace existing supermajority voting requirements with a majority voting power threshold, implement majority voting for uncontested director elections and implement proxy access, failed to receive the requisite vote.
Non-binding shareholder proposals related to lobbying, climate change and simple majority voting received the support of less than 50 percent of votes cast, based on preliminary results.
All preliminary voting results are subject to final certification.
The following directors were elected to one-year terms:
- Paul T. Addison, retired managing director of Salomon Smith Barney (Citigroup)
- Michael J. Anderson, chairman and retired chief executive officer of The Andersons, Inc.
- William T. Cottle, retired chairman, president and chief executive officer of STP Nuclear Operating Company
- Steven J. Demetriou, chairman and chief executive officer of Jacobs Engineering Group Inc.
- Julia L. Johnson, president of NetCommunications, LLC
- Charles E. Jones, president and chief executive officer of FirstEnergy Corp.
- Donald T. Misheff, retired managing partner of the Northeast Ohio offices of Ernst & Young LLP
- Thomas N. Mitchell, retired president, chief executive officer and director of Ontario Power Generation Inc.
- James F. O'Neil III, Partner, Western Commerce Group
- Christopher D. Pappas, president, chief executive officer and director of Trinseo S.A.
- Luis A. Reyes, retired regional administrator of the U.S. Nuclear Regulatory Commission
- George M. Smart, non-executive chairman of the FirstEnergy Corp. Board of Directors and retired president of Sonoco-Phoenix, Inc., and
- Dr. Jerry Sue Thornton, chief executive officer of Dream Catcher Educational Consulting, retired president and president emeritus of Cuyahoga Community College.
FirstEnergy is 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. The company's transmission subsidiaries operate more than 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy on Twitter @FirstEnergyCorp or online at www.firstenergycorp.com.
Forward-Looking Statements: 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," "forecast," "target," "will," "intend," "believe," "project," "estimate," "plan" 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, which may include the following: the ability to experience growth in the Regulated Distribution and Regulated Transmission segments and the effectiveness of our strategy to transition to a fully regulated business profile; the accomplishment of our regulatory and operational goals in connection with our transmission investment plan, including, but not limited to, our planned transition to forward-looking formula rates; changes in assumptions regarding economic conditions within our territories, assessment of the reliability of our transmission system, or the availability of capital or other resources supporting identified transmission investment opportunities; the ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, the ability to continue to reduce costs and to successfully execute our financial plans designed to improve our credit metrics and strengthen our balance sheet through, among other actions, our cash flow improvement plan and other proposed capital raising initiatives; success of legislative and regulatory solutions for generation assets that recognize their environmental or energy security benefits; the risks and uncertainties associated with the lack of viable alternative strategies regarding the Competitive Energy Services (CES) segment, thereby causing FirstEnergy Solutions Corp. (FES), and possibly FirstEnergy Nuclear Operating Company (FENOC), to restructure its debt and other financial obligations with its creditors or seek protection under United States bankruptcy laws and the losses, liabilities and claims arising from such bankruptcy proceeding, including any obligations at FirstEnergy Corp.; the risks and uncertainties at the CES segment, including FES and its subsidiaries and FENOC, related to continued depressed wholesale energy and capacity markets, and the viability and/or success of strategic business alternatives, such as pending and potential CES generating unit asset sales, the potential conversion of the remaining generation fleet from competitive operations to a regulated or regulated-like construct or the potential need to deactivate additional generating units; the substantial uncertainty as to FES' ability to continue as a going concern and substantial risk that it may be necessary for FES, and possibly FENOC, to seek protection under United States bankruptcy laws; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments, such as long-term fuel and transportation agreements; the uncertainties associated with the deactivation of older regulated and competitive units, including the impact on vendor commitments, such as long-term fuel and transportation agreements, and as it relates to the reliability of the transmission grid, the timing thereof; the impact of other future changes to the operational status or availability of our generating units and any capacity performance charges associated with unit unavailability; changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil prices, and their availability and impact on margins; costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices; replacement power costs being higher than anticipated or not fully hedged; 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 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 initiatives or rulemakings could result in our decision to deactivate or idle certain generating units); 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; economic or weather conditions affecting future sales and margins such as a polar vortex or other significant weather events, and all associated regulatory events or actions; changes in national and regional economic conditions affecting us, our subsidiaries and/or our major industrial and commercial customers, and other counterparties with which we do business, including fuel suppliers; the impact of labor disruptions by our unionized workforce; the risks associated with cyber-attacks and other disruptions to our information technology system that may compromise our generation, transmission and/or distribution services and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information regarding our business, employees, shareholders, customers, suppliers, business partners and other individuals in our data centers and on our networks; the impact of the regulatory process and resulting outcomes on the matters at the federal level and in the various states in which we do business including, but not limited to, matters related to rates; the impact of the federal regulatory process on Federal Energy Regulatory Commission (FERC)-regulated entities and transactions, in particular FERC regulation of wholesale energy and capacity markets, including PJM Interconnection, L.L.C. (PJM) markets and FERC-jurisdictional wholesale transactions; FERC regulation of cost-of-service rates; and FERC's compliance and enforcement activity, including compliance and enforcement activity related to North American Electric Reliability Corporation's mandatory reliability standards; the uncertainties of various cost recovery and cost allocation issues resulting from American Transmission Systems, Incorporated 's realignment into PJM; the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates; other legislative and regulatory changes, including the new federal administration's required review and potential revision of environmental requirements, including, but not limited to, the effects of the United States Environmental Protection Agency's Clean Power Plan, Coal Combustion Residuals regulations, Cross-State Air Pollution Rule and Mercury and Air Toxics Standards programs, including our estimated costs of compliance, Clean Water Act (CWA) waste water effluent limitations for power plants, and CWA 316(b) water intake regulation; 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; changing market conditions that could affect the measurement of certain liabilities and the value of assets held in our Nuclear Decommissioning Trusts, pension trusts and other trust funds, and cause us and/or our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated; the impact of changes to significant accounting policies; the impact of any changes in tax laws or regulations or adverse tax audit results or rulings; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries; further actions that may be taken by credit rating agencies that could negatively affect us and/or our subsidiaries' access to financing, increase the costs thereof, increase requirements to post additional collateral to support, or accelerate payments under outstanding commodity positions, letters of credit and other financial guarantees, and the impact of these events on the financial condition and liquidity of FirstEnergy Corp. and/or its subsidiaries, specifically FES and its subsidiaries; issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business; and the risks and other factors discussed from time to time in our United States Securities and Exchange Commission (SEC) filings, and other similar factors. Dividends declared from time to time on FirstEnergy Corp.'s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.'s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. These forward-looking statements are also qualified by, and should be read in conjunction with the other cautionary statements and risks that are included in our filings with the SEC, including but not limited to the most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. The foregoing review of factors also 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 our 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. We expressly disclaim 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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