FIRSTENERGY CORP Q3 FY2026 earnings call

• West Virginia Growth & Maidsville Project: Pipeline demand for data centers in West Virginia has surged ~6x to nearly 6 GW. The Maidsville energy generating facility is the first major investment to support this; turbines reserved with Siemens for 2030 delivery. An order from the WV Public Service Commission is expected in Q4.
• Additional Generation Needs: Active negotiations for an initial 3 GW of additional combined cycle turbines, with updates expected in early 2027. Exploring bridge power options (fuel cells, batteries, reciprocating engines) for near-term supply.
• Transmission Investment Expansion: Current $19 billion transmission plan expected to increase by at least 25% due to resilience needs and large load demand. Total contracted data center demand across the footprint is now 7.9 GW, with ~4 GW in active negotiation.
• Regulatory Progress:
  • New Jersey: Filed base rate case requesting $253 million increase (~$1 billion rate-based growth since Feb 2024). Proposal delays impact until 2028. Reliability improved 16% in 2025 and another 22% YoY through Sept 2026.
  • Maryland: Filed base rate case requesting $53 million revenue increase; hearings in Jan 2027, outcome expected April 2027.
  • West Virginia: Base rate case approved with $76 million inflation/investment adjustment. First increase effective Aug 1, second scheduled June 2027.
• Operational Reliability: Distribution reliability improved 11% in Pennsylvania and 40% in New Jersey since 2024. Weather-adjusted load increased 1.2% in Q3 2026, led by industrial class (+3.3%).
• Financial Discipline: Deployed $4.9 billion in investments through first nine months (up 23% YoY). Completed $2.6 billion subsidiary debt financing at 4.7% avg coupon.

The transcript does not provide a breakdown of financial performance by specific product segment or revenue contribution percentages. Financial results are reported on a consolidated basis, with Core EPS at $0.98 (vs. $0.83 YoY) and GAP EPS at $0.96 (vs. $0.76 YoY). Consolidated Return on Equity was 9.5%. Rate-based growth was 9.9%, driven by a 14% increase in transmission rate base.

• Reaffirmed 2026 Core EPS guidance range of $2.62 to $2.82 per share, expecting to be at or slightly above the midpoint.
• Maintained long-term core earnings growth target of 6% to 8% through 2030.
• No change to current five-year $36 billion investment plan, but expect significant upward revision to the transmission portion of the plan following Q4 2026 regulatory orders and updated capital plan release in February 2027.

• Regulatory Lag and Uncertainty: Delays in commission orders (e.g., Maidsville CPCN expected Q4, NJ rate case resolution late 2026/early 2027) could impact project timelines and returns.
• Execution Risk: Managing complex negotiations with large load customers regarding pricing, risk mitigation, and community benefits while protecting existing customer interests.
• Interest Rate Exposure: Although ~50% of long-term debt is supported by formula rate mechanisms, changes in interest rates remain a risk for the remaining debt portfolio.
• Project Cost Overruns: Significant capital deployment ($19B+ transmission plan plus new generation) requires strict financial discipline to maintain balance sheet strength and equity ratings.

Q: Analyst asked if future West Virginia generation beyond Maidsville would use rate-based solutions or Genco structures, and how that impacts the 35% incremental equity requirement. / A: Management stated the Genco structure remains an option to protect existing customers while serving new loads. Financing will depend on obtaining a clean commission order for Maidsville first. Discussions with off-takers show openness to surcharge-type mechanisms, which would inform the financing mix for subsequent projects.

Q: Analyst inquired about the timeline and nature of 'bridge solutions' for data centers awaiting permanent generation, specifically asking if assets like fuel cells or batteries would be permanent or disposable. / A: Bridge solutions (reciprocating engines, fuel cells, batteries) are intended to get campuses operational quickly before long-term natural gas solutions arrive in the 2031-2032 timeframe. These assets are viewed as reusable and multipurpose rather than disposable, potentially being moved or utilized for other developments once the primary long-term grid solution is established.

Q: Analyst asked for clarity on how much of the projected 25% increase in the transmission plan is tied to contracted large load versus general reliability/maintenance upgrades. / A: Management clarified that very little of the increase is directly tied to contracted demand. Instead, the majority of the additional investment is required to shore up the existing system, improve resiliency, and address reliability needs across the PJM footprint driven by broader regional load growth, not just specific customer contracts.

Q: Analyst questioned the trend of large load opportunities, noting a surge in West Virginia but slight contraction in Maryland/New Jersey, and asked about the longevity of these trends beyond 2030-2031. / A: Management emphasized that serious large-load customers (hyperscalers, developers) are planning well beyond 2031. The 2030-2031 period represents only the 'first wave' of demand. Interest is broad across the service territory, including Maryland sites like Catella, indicating sustained, long-term growth potential rather than a short-term spike.