FirstEnergy CEO says company may have to put 'money on the table' to move past scandal

FirstEnergy's CEO said in an earnings call Friday that the company “may have to put a little bit of money on the table” to move past a state criminal investigation and a civil suit related to the House Bill 6 scandal.

If that's the case, Brian X. Tierney said, he doesn't think it will be a "material" amount of money for any additional fines, settlements or damages that would arise.

Tierney said FirstEnergy has a "constructive relationship" with Ohio Attorney General Dave Yost's office.

“I think some of you saw the language that the attorney general used in the prior indictments, when he complimented the company on its cooperation with his office and viewed us a victim of the offenses that took place,” Tierney said.

As the cases progress through the legal system, the utility plans to file in May to request a base rate increase in Ohio that will be less than $100 million, K. Jon Taylor, FirstEnergy senior vice president and chief financial officer, said on the call.

FirstEnergy also plans to deploy 1.4 million smart meters across Ohio over four years at a cost of $421 million, Taylor said.

The utility awaits a decision from the Public Utilities Commission of Ohio on the company’s request for $500 million in annual investments over eight years, or $4 billion total, to improve its power grid through utility rate increases.

Customers who use 750 kWh of electricity would see a roughly 2.2% increase of their bill amounts, while the average increase could be as low as 0.5%, FirstEnergy spokeswoman Lauren Siburkis previously told the Beacon Journal.

Between its subsidiaries that serve Ohio — Ohio Edison, The Illuminating Company and Toledo Edison — FirstEnergy provides energy to more than 2 million customers, according to the utility’s website.

FirstEnergy seeking to increase base rates in other states

FirstEnergy increased West Virginia base rates by $105 million in late March, Taylor said.

It also requested a more than $500 million base rate increase in Pennsylvania in early April that the Pennsylvania Public Utility Commission voted unanimously to suspend and investigate, according to Harrisburg, Pa.-based ABC27.

FirstEnergy subsidiary Jersey Central Power & Light will increase base rates by $85 million in New Jersey starting in June, Taylor said.

FirstEnergy’s 2024 first quarter earnings

FirstEnergy reported that its earnings for the first financial quarter of 2024 were down year over year, both in terms of generally accepted accounting principles (GAAP) earnings and operating (non-GAAP) earnings.

Over that same period, the company’s revenue increased from $3.2 billion to $3.3 billion.

FirstEnergy’s 2024 first quarter GAAP earnings were $253 million compared to 2023 first quarter GAAP earnings of $292 million.

The utility’s 2024 first quarter operating earnings were 55 cents per share versus 2023 first quarter operating earnings of 60 cents per share.

Tierney also shared that FirstEnergy’s investment grade ratings with Moody’s and S&P were upgraded.

FirstEnergy stock closed at $38.13, down 44 cents or 1.14%, Friday on the New York Stock Exchange.

Patrick Williams covers growth and development for the Akron Beacon Journal. He can be reached by email at pwilliams@gannett.com or on X, formerly known as Twitter, @pwilliamsOH.