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FirstEnergy to Use New Equipment at Wampum Substation

Diversified energy company FirstEnergy Corporation FE is expanding a substation in Wampum, PA. The objective of this expansion is to utilize new equipment to strengthen the regional electric system and enhance service reliability for Pennsylvania Power’s utility customers.

Pennsylvania Power is FirstEnergy’s electric distribution company, which has a presence in all or parts of Allegheny, Beaver, Butler, Crawford, Lawrence and Mercer counties in western Pennsylvania. The company serves a customer base of about 160,000.

FirstEnergy’s transmission unit, American Transmission Systems, Inc., will own and construct the substation.

Details of the Project

Estimated to cost around $48 million, the project includes the installation of specialized voltage regulating equipment that can respond to real-time electrical conditions by controlling voltage as required to maintain consistent levels on the regional transmission network. Work also includes the installation of capacitor banks, circuit breakers, transformers, communications equipment and a small control building. Work at the Hoytdale substation is scheduled to close by early June.

The advanced equipment will go a long way in ensuring reliable flow of power from one substation to another. Given the sensitivity of existing equipment to voltage fluctuations, the latest installation should be able to maintain steady voltage levels and enhance reliability across the system in a cost-effective manner.

Objectives of the Project

The latest project is part of FirstEnergy's "Energizing the Future" transmission initiative, which aims at upgrading and expanding the company’s transmission capabilities. The company remains on track to invest $4.2 billion over the 2014–2017 period in this initiative, of which nearly 81% was already done as of Dec 31, 2015.

We remind investors that FirstEnergy has invested substantially in strengthening its regulated transmission and distribution operations, and expects these operations to contribute significantly to its earnings over the long term. Moreover, large-scale reliability and enhancement investments have been enabling the company to provide steady and reliable services to its customers.

Zacks Rank & Key Picks

FirstEnergy currently carries a Zacks Rank #3 (Hold).

A couple of top-ranked peers in the same space include Atlantic Power Corporation AT and Black Hills Corporation BKH, both sporting a Zacks Rank #1 (Strong Buy). Another well-ranked stock is Calpine Corporation CPN with a Zacks Rank #2 (Buy).

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FIRSTENERGY CP (FE): Free Stock Analysis Report
 
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