FirstEnergy (FE) Q1 FY26 earnings call: guidance and Q&A

Timing of the incremental generation spend, turbine-queue status, and how it affects the CAGR since FE already guides near the high end.

Turbines are on track for a 2031 online date; approval of the existing application is expected in H2 2026, likely early Q4. Upon approval, rate base growth would step from just over 10% to just over 11%, with the plan updated as soon as practical and focus on converting rate base into earnings growth.

“upon approval, rate base growth would increase from just over 10% to just over 11%. And obviously, we'll be very focused on translating rate base growth into earnings growth.”

asked by Shahriar Pourreza · answered by K. Taylor

What regulatory framework enables the next phase of load growth, and how FE thinks about funding/financing incremental capital.

Hyperscalers increasingly want to pay their full fair share for transmission, generation and land; FE prefers to replicate models that worked elsewhere (e.g., Michigan) rather than halt development. On funding, WV generation would be up to ~35% equity-funded (helped by AFUDC cash recovery), and FE does not expect incremental investments to exceed that equity share.

“we expect up to about 35% of that investment to be funded with new equity. And as we layer new investments into the plan, I don't anticipate it to exceed that amount.”

asked by Nicholas Campanella · answered by K. Taylor

Read-through from Shapiro's comments, a peer pulling its rate case, and FE's stay-out; plus where the WV plant's final cost lands.

Management cautioned against reading across from the peer's action; views PA as wanting investment while being affordability-conscious, and remains comfortable investing. It reaffirmed the ~$2.5B WV plant estimate (with contingencies) and argued equipment suppliers should be measured on pricing given affordability and political implications in a seller's market.

“we're still confident in our estimates of about $2.5 billion for the plant. That's what we filed. We had some contingencies in there, of course... It's a seller's market when you're talking about turbines and the like.”

asked by Steven Fleishman · answered by Brian Tierney

Scope of the transmission opportunity in the PJM open window, and whether FE's lower bills resonate with local stakeholders (esp. New Jersey).

FE cited >$5B secured over four years and an evolving, more competitive/partnered model; Jon added 80–85% of transmission capex is base-system work, implying continued core-system investment on top of regional projects. On affordability, FE emphasized lower-than-peer bills and reliability gains (PA outage duration down ~20%; NJ down ~16%/49 minutes 2024→2025) resonate with stakeholders.

“80% to 85% of it is not the competitive projects. It's just the existing work and the investments that are needed on our existing system.”

asked by Jeremy Tonet · answered by K. Taylor

Whether the ~5% YoY O&M decline (below approved rate-case levels) is structural or one-time, and its reliability implications.

Aside from some quarterly timing, the savings are described as sustainable, stemming from a continuous-improvement program since 2022 that shifted to integrated, analytical, risk-based decision-making using data/analytics, plus a business-model shift shrinking the service core and expanding business-unit presence closer to the customer. Management sees room for more.

“this is a lot of sustainable cost savings that are going to help us move into the future... a much more integrated analytical risk-based decision-making process.”

asked by Andrew Weisel · answered by K. Taylor

Decision timeline and range of outcomes on FERC matters, and FE's evolving view of PJM's backstop procurement.

Management said much is still to come, but insisted large loads should pay the utility (which earns a return on the network investment) rather than treat it as CIAC outside rate base, favoring a gas-pipeline open-season-style model. On the backstop, it questioned PJM's value as a middleman and stated FE will not sign Phase 2 contracts that impose generation/commodity risk on its wires companies.

“we are not going to sign contracts where our companies take commodity risk on generation and energy. It's not going to happen.”

asked by Ross Fowler · answered by Brian Tierney

Whether FE's state regulators/governors share its critical view of the PJM capacity market and backstop auction.

Management said regulators largely agree, pointing to Ohio's summer-2025 law reaffirming that utilities cannot own generation and that markets (not utilities) should solve the supply problem; across its deregulated states except West Virginia, legislation keeps FE out of generation ownership and in T&D services.

“Ohio just completely doubled down on that a year ago. So they're firmly an agreement with us.”

asked by Anthony Crowdell · answered by Brian Tierney

Updated thinking on when to file the next New Jersey rate case, and any Maryland Omnibus-bill regulatory risk.

On New Jersey, FE will be very thoughtful about timing given the governor's executive orders and its rate-case cycle, promising 'no surprises' and framing the case around investment for growth/reliability balanced with affordability. On Maryland, Jon said it is too early to tell; FE has historically used a historical test year and is still working through other components of the legislation.

“It's kind of too early to tell right now. I mean we've historically used a historical test year in Maryland, but other components of the legislation, we're working our way through.”

asked by Carly Davenport · answered by K. Taylor