FirstEnergy Corp (NYSE: FE) company posted better than expected earnings for the first quarter of FY 21. In FirstEnergy’s Regulated Distribution business, first quarter 2021 operating results grew on the back of higher residential usage, including a positive impact from weather compared to the same period of 2020, benefits from investment-related riders, and the implementation of the base distribution rate case in New Jersey, which was partially offset by the absence of Ohio decoupling and lost distribution revenues. Total distribution deliveries grew 3.2% compared to the first quarter of 2020.
Residential sales rose 12.8%, due to a 14% increase in heating degree days compared to the first quarter of 2020, as well as the continued impact of customers spending more time at home. Commercial deliveries fell 3.0%, while sales to industrial customers decreased 2.1%. In the Regulated Transmission business, first quarter 2021 operating results declined due to higher net financing costs associated with higher short-term borrowings, which were partially offset by the impact of transmission investments associated with the company’s ongoing Energizing the Future transmission program.
Meanwhile, the company continues to cooperate with the ongoing government investigations. The company has begun discussions with the DOJ regarding the resolution of this matter, including the possibility of entering into a deferred prosecution agreement.
Additionally, in Ohio, the company announced in March 2021, to return to Ohio utility customers all revenues, plus interest, previously collected through decoupling of ~$27M. In Pennsylvania, the company has announced plans to sell Penelec’s Waverly, New York, distribution assets, subject to regulatory approval. The company in New Jersey has closed the transaction to sell JCP&L’s 50% interest in the Yards Creek pump-storage hydro plant, which has resulted in cash proceeds of $155M.
For the second quarter ending in July, FirstEnergy expects its per-share earnings to range from 48 cents to 58 cents. The company expects full-year earnings to be in the range of $2.40 to $2.60 per share. The Street view for Q2 EPS is $0.55 and $2.51 for full-year 2021. FirstEnergy has updated its full-year 2021 GAAP earnings, expected to be in the range of $1,270 million to $1,380 million.