FirstEnergy Awarded Projects by PJM Interconnection to Enhance Reliability and Address Rising Customer Demand

Rhea-AI Summary

FirstEnergy Transmission (FET) has secured multiple transmission projects from PJM Interconnection, representing approximately $1.25 billion in customer-focused investments, plus an additional $46 million for other FirstEnergy subsidiaries.

The key projects include:

• Through Valley Link joint venture: Building 260 miles of 765-kV transmission line and two substations between West Virginia and Maryland, plus 155 miles of transmission line in Virginia ($1 billion investment)
• In Ohio: $217 million investment rebuilding 59 miles of 138-kV transmission lines
• In Pennsylvania: $33 million investment rebuilding two 115-kV substations

These projects, approved by PJM's Board of Managers on February 26, aim to strengthen the electric grid, enhance reliability, and support regional economic growth across FirstEnergy's service territory.

Positive

• Secured $1.296 billion in new transmission projects
• Major expansion of transmission infrastructure across multiple states
• Strategic joint venture with Dominion Energy and AEP for Valley Link projects
• Projects directly address growing customer demand and grid reliability

Negative

• Significant capital expenditure requirements
• Project execution risks across multiple states
• Regulatory and environmental approval processes could delay implementation

Insights

Utility Infrastructure Analyst

FirstEnergy has secured approximately $1.25 billion in transmission project awards from PJM Interconnection, representing one of the company's most significant grid modernization investments in recent years. These projects address critical infrastructure needs in the eastern power grid while positioning FirstEnergy to expand its regulated asset base substantially.

The centerpiece of this announcement is FirstEnergy Transmission's $1 billion investment through the Valley Link joint venture to develop 415 miles of 765-kV transmission lines - the highest voltage class used in North America. These extra-high-voltage lines are particularly valuable for regional grid stability, as they can transport large amounts of electricity efficiently over long distances with minimal losses, creating a more resilient backbone for the grid.

This capital deployment aligns with two significant industry trends: 1) The urgent need for transmission expansion to accommodate growing electricity demand from data centers, manufacturing, and electrification; and 2) Utilities pivoting toward regulated transmission investments that typically offer predictable returns through FERC-approved rate mechanisms, often in the 9-11% range.

For investors, these projects represent a substantial addition to FirstEnergy's rate base that should generate steady, regulated returns for decades. The company's partnership with Brookfield Super-Core Infrastructure Partners adds financial flexibility for these capital-intensive projects while maintaining operational control.

The timing is strategic as PJM faces increasing pressure to expand transmission capacity amid unprecedented interconnection requests from new generation sources and growing electricity demand. However, investors should note that these projects face potential execution challenges including permitting delays, cost overruns, and possible community opposition to new transmission corridors.

Power Grid Specialist

PJM Interconnection's approval of FirstEnergy's $1.25 billion transmission expansion represents a strategic win for the utility in the increasingly competitive transmission development landscape. These projects address critical grid constraints that have been building across the PJM region due to shifting generation resources and accelerating demand growth.

The 765-kV transmission lines being developed through the Valley Link joint venture are particularly significant from a technical perspective. As the highest voltage class in North America, these lines create an electrical superhighway capable of moving large power volumes across regions with minimal losses - typically 30-40% more efficient than lower voltage alternatives. This extra-high-voltage backbone will create a more resilient grid architecture connecting generation-rich areas with high-demand centers.

These investments come at a pivotal moment for the eastern interconnection as PJM faces unprecedented challenges:

• Data center development in Virginia and Maryland is creating localized demand spikes that strain existing infrastructure
• Renewable generation growth requires more robust transmission to manage intermittency
• Coal plant retirements necessitate new power flow patterns across the region

From a financial perspective, transmission investments typically receive favorable regulatory treatment through FERC-approved formula rates, providing more predictable returns than distribution investments. These projects will likely contribute to FirstEnergy's earnings growth beginning around 2027-2028 as segments enter service.

The Valley Link joint venture structure with Dominion and AEP represents an interesting collaborative approach, combining the capabilities of three major utilities while sharing development risks. This approach may become more common as the scale and complexity of needed transmission projects increase.

Project awards represent approximately $1.25 billion in customer-focused investments for FirstEnergy Transmission and $46 million for other FirstEnergy subsidiaries

AKRON, Ohio, Feb. 27, 2025 /PRNewswire/ -- FirstEnergy Transmission LLC (FET), jointly owned by FirstEnergy Corp. (NYSE: FE) and Brookfield Super-Core Infrastructure Partners, has been awarded multiple transmission projects by grid operator PJM Interconnection that are designed to strengthen the electric grid and support regional economic growth. The awards include projects that FET will develop through the Valley Link Transmission Company LLC joint venture with Dominion Energy and American Electric Power Company, as well as projects that FET will develop individually within its service territory.

In total, FET will invest approximately $1.25 billion in the approved customer-focused transmission projects. In addition, FirstEnergy's Potomac Edison, JCP&L and Keystone Appalachian Transmission Company (KATCo) subsidiaries will invest $46 million upgrading equipment at substations and reconfiguring transmission lines in Maryland, New Jersey and Pennsylvania.

The projects were proposed through PJM's 2024 Regional Transmission Expansion Plan (RTEP) open window process and were approved Feb. 26 by the PJM Board of Managers. PJM is the regional transmission organization that coordinates the transportation of wholesale electricity across the 13-state region that includes FirstEnergy's service territory.

Mark Mroczynski, President, Transmission at FirstEnergy: "We are dedicated to ensuring our transmission system consistently delivers the power our customers depend on. We appreciate being selected by PJM to develop these important projects, which will enhance reliability, accommodate rising customer demand and support economic growth across the region."

The FET projects approved by PJM include the following:

• Through the Valley Link joint venture, building approximately 260 miles of 765-kilovolt (kV) transmission line and two substations between Putnam County, West Virginia, and Frederick County, Maryland, and approximately 155 miles of 765-kV transmission line and a substation between Campbell County, Virginia, and Fauquier County, Virginia. The joint venture projects represent $1 billion in customer-focused investments for FET.
• In Ohio, investing $217 million rebuilding approximately 59 miles of 138-kV transmission lines in Erie, Lorain and Ottawa counties.
• In Pennsylvania, investing $33 million rebuilding and reconfiguring two 115-kV substations in York County.

The projects are in the early stages of development. Following PJM's awards, FirstEnergy will begin advancing the development of project details, including assessing potential routes, engaging with communities and seeking stakeholder input, and conducting thorough environmental studies.

Jointly owned by FirstEnergy and Brookfield, FET is the equity investor in Valley Link and owns and operates American Transmission Systems Inc. (ATSI), Mid-Atlantic Interstate Transmission LLC (MAIT) and Trans-Allegheny Interstate Line Company (TrAILCo.)

FirstEnergy is dedicated to integrity, safety, reliability and operational excellence. Its electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company's transmission subsidiaries operate approximately 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy on X @FirstEnergyCorp or online at firstenergycorp.com. 

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changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts may negatively impact our forecasted growth rate, results of operations and may also cause us to make contributions to our pension sooner or in amounts that are larger than currently anticipated; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets, including those sites impacted by the legacy coal combustion residual rules that were finalized during 2024; changes to environmental laws and regulations, including, but not limited to, rules finalized by the Environmental Protection Agency and the SEC, including those currently stayed, related to climate change; and potential changes to such laws and regulations as a result of the new U.S. presidential administration; changes in customers' demand for power, including, but not limited to, economic conditions, the impact of climate change, emerging technology, particularly with respect to electrification and new data centers, energy storage and distributed sources of generation; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions, and the loss of our status as a well-known seasoned issuer; future actions taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; changes in assumptions regarding factors such as economic conditions within our territories, the reliability of our transmission and distribution system, generation resource planning, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; the potential of non-compliance with debt covenants in our credit facilities; the ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates; human capital management challenges, including among other things, attracting and retaining appropriately trained and qualified employees and labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, including, but not limited to, the Inflation Reduction Act of 2022, or adverse tax audit results or rulings and potential changes to such laws and regulations as a result of the new U.S. presidential administration; and the risks and other factors discussed from time to time in our SEC filings. Dividends declared from time to time on our common stock during any period may in the aggregate vary from prior periods due to circumstances considered by the FE Board at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. These forward-looking statements are also qualified by, and should be read together with, the risk factors included in FirstEnergy Corp.'s Form 10-K, Form 10-Q and in FirstEnergy's other filings with the SEC. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp.'s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy Corp. expressly disclaims any obligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.

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SOURCE FirstEnergy Corp.

FAQ

What is the total value of transmission projects awarded to FirstEnergy (FE) by PJM Interconnection?

FirstEnergy secured projects worth $1.25 billion for FET plus $46 million for other subsidiaries, totaling approximately $1.296 billion in transmission investments.

Where will FirstEnergy (FE) build new transmission lines through the Valley Link joint venture?

Valley Link will build 260 miles of 765-kV lines between Putnam County, WV, and Frederick County, MD, plus 155 miles between Campbell County and Fauquier County, VA.

How many miles of transmission lines will FirstEnergy (FE) rebuild in Ohio?

FirstEnergy will rebuild approximately 59 miles of 138-kV transmission lines in Erie, Lorain and Ottawa counties, Ohio, with a $217 million investment.

What are FirstEnergy's (FE) investment plans for Pennsylvania transmission infrastructure?

FirstEnergy will invest $33 million to rebuild and reconfigure two 115-kV substations in York County, Pennsylvania.