Energy / Electric utilities · Deep dive

FirstEnergy Corp.

A ~6M-customer investor-owned utility across Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York ($15.1B FY2025 revenue) still trying to outrun the HB6 bribery scandal ($230M federal DPA, 2021; $250.7M Ohio PUCO order, Nov 2025) while its Northeast Ohio grid keeps failing — a July 2026 Lakewood outage complaint drew a proposed $3M PUCO fine and blocked the company's own bid to loosen reliability standards.

at risk

The moat should be a monopoly service territory, but the HB6 corruption ledger keeps growing ($230M federal DPA + $250.7M Nov 2025 PUCO order), the Northeast Ohio distribution grid is drawing city-council lawsuits and PUCO enforcement in the summer of 2026, and the Ohio regulatory environment FirstEnergy allegedly bought is now the same one holding it to account — a bad combination when peers like AEP and PSEG are converting the same data-center wave into rate base with clean records.

My take ★★ Very interesting ★ Interesting − Maybe ✗ Not interesting

Snapshot

FirstEnergy is an Akron-based investor-owned utility holding company serving ~6M electric customers across Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York, with $15.1B in FY2025 revenue and roughly $26B market cap (August 2026). It should be a boring regulated compounder. It is not: FE admitted in July 2021 to paying ~$60M in dark-money bribes to pass Ohio’s HB6 nuclear bailout, absorbed a $250.7M PUCO restitution and civil-forfeiture order in November 2025, and is spending the summer of 2026 in front of the same PUCO defending a Northeast Ohio outage record so bad the commission proposed a $3M civil forfeiture, denied FE’s own bid to loosen reliability standards (June 24, 2026), and opened a second probable-noncompliance investigation (August 7, 2026). CEO Brian Tierney, in the seat since June 2023, is trying to convert the $36B Energize365 grid plan and 6.4 GW of contracted data-center demand into the next chapter — while every summer thunderstorm re-writes the last.

Founding story

FirstEnergy is not a founder story; it is a merger story. In November 1997 Ohio Edison (Akron) combined with Centerior Energy — itself the 1986 marriage of Cleveland Electric Illuminating and Toledo Edison — in a ~$4.5B stock deal, creating a holding company for four operating utilities (Ohio Edison, Penn Power, CEI, Toledo Edison) serving 2.2M customers across northern and central Ohio and western Pennsylvania. The operating utilities themselves are older: CEI was chartered in 1892.

Two later deals defined the footprint. In November 2001 FirstEnergy bought GPU, Inc. for ~$4.5B, folding in JCP&L in NJ and Met-Ed and Penelec in PA — the same GPU whose Three Mile Island unit partially melted down in 1979. In February 2011 FE closed the ~$8.5B all-stock merger with Allegheny Energy, adding Mon Power (WV), Potomac Edison (MD/WV) and West Penn Power (PA), plus the coal-heavy generation fleet FE spent the next decade shedding.

Two dates anchor the modern story. On August 14, 2003, a high-voltage line in FE’s Ohio territory sagged into overgrown trees; an alarm-system failure at FE’s Akron control center let the fault cascade into the Northeast Blackout that darkened 55M people for up to four days. And in July 2020, the FBI arrested Ohio House Speaker Larry Householder in a $60M dark-money conspiracy traced squarely to FirstEnergy. On October 29, 2020 the board fired CEO Chuck Jones “for cause” alongside two other executives; on July 22, 2021 FE signed a $230M deferred prosecution agreement and admitted the scheme. Steve Strah ran the company from March 2021 until his abrupt December 2022 retirement; John Somerhalder was interim; on March 27, 2023 the board named Brian Tierney — a 23-year AEP executive who had jumped to Blackstone Infrastructure in 2021 — permanent CEO, effective June 1, 2023.

How it works

FirstEnergy is a rate-regulated utility holding company. State commissions in Ohio (PUCO), Pennsylvania (PaPUC), New Jersey (BPU), Maryland (PSC), West Virginia (PSC) and New York (PSC) each grant an operating utility the exclusive right to distribute (and, in some cases, transmit) electricity inside a defined franchise territory. In exchange, each utility serves everyone at commission-approved rates set on rate base (net plant in service) times an allowed ROE, plus recovery of debt costs, opex and depreciation.

FirstEnergy exited most of its competitive generation via the March 2018 Chapter 11 of FirstEnergy Solutions (rebranded Energy Harbor, later sold to Vistra in 2024). Today FE is a wires-and-poles utility with essentially no coal or nuclear on its own balance sheet and a very large transmission subsidiary (FirstEnergy Transmission, LLC) holding the FERC-regulated backbone. In Ohio, generation is procured competitively via PUCO auctions; in Pennsylvania, retail choice is well-established; in NJ, JCP&L runs BGS auctions. Every dollar of qualifying poles, wires, transformers, substations, tree-trimming, storm-hardening, grid-mod IT, EV make-ready and transmission capex becomes rate base and earns the allowed ROE thereafter.

Product and business overview

Two reporting segments post-2022 restructure: Distribution (10 operating utilities across six states — Ohio Edison, The Illuminating Company, Toledo Edison, JCP&L, Met-Ed, Penelec, Penn Power, West Penn Power, Mon Power, Potomac Edison) and Integrated / Stand-Alone Transmission (largely FirstEnergy Transmission LLC, 49.9% Brookfield-owned since March 2024). The old Regulated Generation and Corporate/Other segments were folded in as the merchant fleet went away.

The market’s focus is the $36B Energize365 2026-2030 grid-investment plan announced with Q4 2025 earnings — up ~30% from the prior $26B plan, framed as delivering ~10% CAGR rate-base growth through 2030. The mix: distribution hardening (undergrounding, tree-trimming, smart reclosers, ADMS), transmission (~30% of the plan, expanded for data-center interconnects), Ohio grid-modernization Phase II (settlement filed 2025), and EV make-ready. Behind the numbers is the demand thesis: FE told investors in Q3 2025 it expects peak load to grow ~50% by 2035, with contracted data-center demand at 6.4 GW as of Q1 2026 and a pipeline of 11.7 GW — both roughly doubled since February 2025.

Business model and pricing

There is no price list; there is a tariff. Each state commission approves per-kWh distribution charges and rider recoveries that determine what a residential, C&I or industrial customer pays for the delivery portion of the bill. Generation is a pass-through in restructured Ohio, PA and NJ; in West Virginia and Maryland, Mon Power and Potomac Edison still bundle generation.

Unit economics: allowed ROEs at FE’s operating utilities run roughly 9.4%-10.0% depending on commission and vintage. Every incremental $1B of qualifying capex, at ~52% equity and ~9.7% blended allowed ROE, produces roughly $50M of pre-tax regulated earnings once in rate base. FY2025 GAAP earnings were $1.02B ($1.77 basic EPS) on $15.1B revenue; Core EPS was $2.55 (+7.6% vs. $2.37 in 2024). FY2026 Core EPS guidance is $2.62-$2.82 (~9% growth vs. the midpoint of the original 2025 guide); long-term Core EPS CAGR targeted at 6-8% through 2030. The dividend rose 4.5% to $0.465/quarter for June 2026 (~3.9% trailing yield). S&P upgraded FE to BBB+ in December 2025; Moody’s revised the Baa3 outlook to positive in March 2026 — both signal the market believes the corruption balance sheet is nearing closure, even if operations still bleed penalty risk.

Traction over time

Market analysis

US electricity demand grew ~0% for two decades. AI has ended that. EPRI, DOE/LBNL and the IEA all put US data-center demand at 6.7%-12% of national electricity by 2028-2030, with global demand up ~130% by 2030. PJM — the RTO FirstEnergy sits inside — cleared its 2024/25 capacity auction 833% higher than the prior period, and the 2025/26 auction cleared at record capacity prices again. That is the tailwind.

The counter-tailwind for FE specifically is next-door AEP, which has become the higher-profile Ohio data-center utility (New Albany, Licking County) and has negotiated hyperscaler tariffs shielding residential ratepayers from cost-shifting. FE has no such structure, so every FE-sited data-center creates a political fight over cost allocation. Every gigawatt in FE’s 11.7 GW pipeline has to survive a PJM interconnection queue, a PUCO cost-allocation hearing and — increasingly — the temptation of hyperscalers to bypass the meter via merchant IPPs or on-site nuclear (Talen/AWS at Susquehanna is the template). The other structural force is DER and decarbonization: Ohio is a laggard (HB6 gutted its RPS), while PA and especially NJ push aggressive solar, offshore-wind and DER mandates that eat JCP&L load growth.

Competitive intel

Regulated utilities do not compete for customers; they compete for capital and regulatory goodwill. Both are exactly what FirstEnergy has spent five years struggling with.

AEP is the sharpest peer — next-door in Ohio and West Virginia, Columbus-headquartered, and Brian Tierney’s former employer of 23 years. AEP walked out of HB6 clean; FE did not. AEP negotiated an Ohio data-center tariff structure that shields residential ratepayers from cost-shifting; FE has no equivalent, so its data-center pitch draws sharper political blowback and AEP trades at a small but consistent multiple premium.

Exelon overlaps in PA (PECO vs. Met-Ed/Penelec) and Maryland (BGE, Pepco/Delmarva vs. Potomac Edison), with a cleaner post-2022-spin regulatory narrative. PSEG in New Jersey is the quieter disruptive threat — its ~2.4M-customer PSE&G is repeatedly benchmarked above JCP&L on BPU reliability metrics, and NJ ratepayer advocates periodically float franchise-rebid ideas; low-probability, but every JCP&L outage refreshes the argument. PPL is the direct PA yardstick and is generally regarded by PA PUC staff as the better-run T&D operator. Dominion and Duke are not territorial competitors but are the yardsticks investors reach for: Duke’s $103B five-year plan and 7.8 GW of signed hyperscaler ESAs, Dominion’s Virginia data-center corridor — both make FE’s $36B / 6.4 GW pitch look like the smaller cousin.

The genuinely disruptive competition is behind-the-meter and distributed — rooftop, community solar, VPPs, third-party DCFC networks, on-site fuel cells (Bloom), and hyperscaler-owned merchant deals (Talen/AWS template). Every gigawatt hyperscalers self-supply, or FERC lets them net-out, is a gigawatt that never becomes FE rate base.

History and evolution

• 1892 / 1930 — Cleveland Electric Illuminating chartered; Ohio Edison founded.
• 1979 — Three Mile Island partial meltdown (GPU, later acquired by FE).
• 1986 / 1997-11 — Centerior forms (CEI + Toledo Edison); Ohio Edison + Centerior merge to create FirstEnergy Corp.
• 2001-11 / 2011-02 — GPU acquired for ~$4.5B (JCP&L, Met-Ed, Penelec); Allegheny Energy merger closes at ~$8.5B all-stock.
• 2003-08-14 — Northeast Blackout; FE alarm-system failure a proximate cause.
• 2015-01 / 2018-03 — Chuck Jones becomes CEO; FirstEnergy Solutions files Chapter 11.
• 2019-07 — Ohio Gov. DeWine signs HB6 — ~$1B nuclear bailout for Davis-Besse and Perry.
• 2020-07 / 2020-10-29 — FBI arrests Larry Householder in $60M dark-money conspiracy; FE board fires CEO Chuck Jones and two other execs “for cause”; Moody’s/S&P cut FE debt toward junk.
• 2021-07-22 — Federal DPA — $230M penalty; company admits the ~$60M scheme.
• 2022-05 — Blackstone Infrastructure puts $1B into FE common at $41.05/share; Brookfield buys 19.9% of FirstEnergy Transmission for $2.4B.
• 2022-12 / 2023-06-01 — Steve Strah retires abruptly; Somerhalder interim; Brian Tierney becomes CEO.
• 2023-03-04 — Householder sentenced to 20 years federal prison.
• 2024-03-04 / 2024-04-09 / 2024-09 — Brookfield closes 30% more of FET ($3.5B; 49.9% total); ex-PUCO chair Sam Randazzo dies by suicide before trial; amended federal complaint indicts ex-CEO Jones and ex-SVP Dowling on bribery and racketeering.
• 2024-11 / 2025-01 — PA PUC approves ~$225M FE PA settlement; Ohio ESP6 filed.
• 2025-11-19 / 2025-12-23 — PUCO orders $250.7M penalty and customer restitution; S&P upgrades FE to BBB+.
• 2026-02 / 2026-06-24 — FY2025 results and $36B Energize365 plan announced; PUCO denies FE bid to loosen reliability standards.
• 2026-07 / 2026-08-07 — Lakewood files updated PUCO complaint after prolonged summer outages; PUCO issues second probable-noncompliance notice with $3.05M proposed civil forfeiture; North Olmsted joins.

What people say

The case for. Sell-side has generally accepted the turnaround. S&P’s December 2025 upgrade to BBB+ and Moody’s March 2026 outlook shift to positive signal the credit story is out of the ditch. The $36B Energize365 plan is arithmetically supportive: at ~52% equity and ~9.7% blended ROE, 10% CAGR rate-base growth mechanically produces high-single-digit EPS growth if executed. FE Transmission is genuinely strategic — two Brookfield tranches at a ~$12B implied enterprise value validate that. Employees on Glassdoor praise stable benefits and, in lineworker roles, meaningful pay; the November 2024 PA settlement includes a rare public commitment to 10% incremental field hiring for five years.

The complaints. They are heavier than the case. Glassdoor rates FirstEnergy 2.7/5 across 638 reviews, 26% below the utilities-industry average, with 2.5/5 for work-life balance, 2.2/5 for culture and values and 2.8/5 for career opportunities. Recurring themes: repeated layoffs (including a described ~10% IT cut in a 2024-2025 “Product Model” reorg), micromanagement, and a leadership tone one reviewer paraphrased as “if you’re unhappy, leave.” Customer-side, the Lakewood outage record has become a case study in what deferred distribution investment looks like: >18,000 customer outages in a June 30 - July 15, 2026 window, PUCO staff finding equipment (not weather) at fault, and — the detail that produced the sharpest press coverage — FE’s own staff telling investigators the Lauderdale substation was “routinely” cooled on hot days with garden-style lawn sprinklers. The June 24, 2026 PUCO denial of FE’s application to loosen its own reliability rules cited the Lakewood complaint volume. Lakewood and North Olmsted have both formally asked PUCO for enforcement; the Lakewood filing reserved the right to escalate to litigation. All of this sits on top of a corruption ledger that just added $250.7M in November 2025 to the $230M 2021 federal DPA — a nine-figure cash-out for a $1B nuclear bailout that no longer exists, at a company whose 2015-2020 CEO is under federal indictment for racketeering.

Outlook: well positioned or at risk?

At-risk. Not because the regulated-utility model is going away and not because FirstEnergy will lose its franchises — no state commission has publicly stripped a US distribution territory in living memory. FE is at-risk because it is spending regulatory capital faster than it is rebuilding it, at exactly the moment the industry is being handed a once-in-a-generation demand tailwind.

Three vulnerabilities. Ohio regulatory tone. The PUCO FE allegedly bought (via ~$4.3M to Sam Randazzo before his appointment as chairman) is now the same PUCO holding FE to account — the November 2025 $250.7M order, the June 2026 denial of loosened reliability standards, the August 2026 probable-noncompliance notice. That is a commission signalling “we cannot be seen going easy on you.” The pending Ohio distribution rate case ($481.4M gross request) will be adjudicated in that political weather, and the risk of a materially reduced revenue requirement or a below-request allowed ROE is real. Operational fragility. Northeast Ohio residents and their elected officials have moved past complaining to filing formal PUCO complaints and telegraphing litigation; Lakewood, North Olmsted and (per press coverage) Barberton are all in motion. Every additional summer storm makes it harder to argue that Energize365 should be recovered from ratepayers on schedule. Data-center competition. FE’s 6.4 GW contracted / 11.7 GW pipeline is a real book, but AEP is a better-positioned Ohio data-center utility with cleaner regulatory standing and a purpose-built hyperscaler tariff, and hyperscalers themselves are increasingly comfortable structuring behind-the-meter deals that bypass the utility.

The bull counter is Brian Tierney: an ex-AEP CFO with 23 years of regulatory muscle memory, backed by a Blackstone shareholder in at $41.05/share and a Brookfield co-investor with $5.9B into FET across two tranches. Credit-rating agencies believe him; sell-side believes him. For the bull case to work, four things have to be simultaneously true: the November 2025 $250.7M PUCO order is the last HB6 penalty; the Lakewood-shaped operational file gets contained inside a manageable capital reallocation; the Ohio rate case lands close to the ask; and the data-center pipeline converts to signed ESAs fast enough to push the 6-8% EPS guide to the top. Each is plausible in isolation. Requiring all four at once is the definition of at-risk.

How a challenger would attack it

Route the megawatts around the meter. Nobody attacks a distribution franchise head-on; the attack is to make FE’s rate base irrelevant to the only demand growth that matters. The Talen/AWS Susquehanna template is the weapon: a challenger — merchant IPP, behind-the-meter developer, or hyperscaler energy team — signs FE-territory data centers onto on-site generation, private-wire deals, and FERC-netted structures, converting FE’s 11.7 GW pipeline into someone else’s project finance. FE is uniquely exposed to this play because it lacks what AEP built: a negotiated hyperscaler tariff that shields residential ratepayers, meaning every FE-sited data center triggers a cost-allocation fight in front of a PUCO that just fined the company $250.7M and cannot be seen going easy on it. The second vector is the reliability record as sales collateral: Lakewood’s 18,000-customer outage window, equipment (not weather) found at fault, and a substation cooled with lawn sprinklers make the case for community solar, VPPs, and resilience-as-a-service in Northeast Ohio suburbs whose city councils are already filing PUCO complaints — municipal aggregation and DER developers recruit best where the incumbent’s failures are on the evening news. Third, capital: FE competes for investor dollars against Duke’s $103B plan and clean-record peers; every fresh penalty widens the HB6 discount and raises the cost of funding Energize365 itself.

Same playbook, new buyer

Sell grid capex conversion to the customers FE can’t credibly serve. FE’s actual playbook — turn reliability spending and load growth into regulated returns — is being run better by others, which points to where the openings are. The nearest one is the hyperscaler-direct model: a developer packaging powered land, on-site generation, and PJM interconnection expertise for data centers in Ohio and Pennsylvania sells exactly what FE’s 6.4 GW of contracts promise, without the political liability of an incumbent whose rate cases are adjudicated in post-HB6 weather; FE cannot follow because its only monetization path runs through the commission it must not antagonize. Second, municipal and cooperative service: JCP&L is repeatedly benchmarked below PSE&G on BPU reliability metrics, and NJ ratepayer advocates periodically float franchise re-openings — a firm selling munis and co-ops turnkey grid operations, or backing municipalization studies in Lakewood-style jurisdictions, monetizes the incumbent’s operational record directly. Third, the transmission model itself: Brookfield’s $5.9B for 49.9% of FET at a ~$12B valuation shows infrastructure capital will pay up for FERC-regulated wires without distribution’s political exposure — independent transmission developers chasing PJM data-center interconnects are running FE’s best business without FE’s baggage, and FE, having sold half of it, can’t lever that asset harder.

Sources and further reading

• FirstEnergy Names Brian X. Tierney President and CEO — FirstEnergy, March 27, 2023.
• FirstEnergy Announces 2025 Financial Results, Affirms 2026 Guidance — FirstEnergy, February 2026. $15.1B revenue, $2.55 Core EPS, $36B Energize365 plan.
• FirstEnergy Corp. 2025 Form 10-K — SEC, February 2026.
• Ohio FirstEnergy bribery scandal — Wikipedia. Full HB6 timeline.
• Ohio regulators order $250M penalty against FirstEnergy for role in bribery scandal — Ohio Capital Journal, November 21, 2025.
• PUCO orders FirstEnergy utilities pay $250 million penalty, issue customer restitution — PUCO, November 19, 2025.
• PUCO issues second probable-noncompliance notice to FirstEnergy over Lakewood outages — Spectrum News 1, August 7, 2026.
• Lakewood files updated complaint against FirstEnergy over prolonged outages — Cleveland 19, July 8, 2026.
• PUCO proposes $3M fine against FirstEnergy over Lakewood outages — News5 Cleveland, August 2026.
• FirstEnergy Closes on $3.5B FirstEnergy Transmission, LLC 30% Interest Sale — FirstEnergy, March 4, 2024.
• FirstEnergy Announces $3.4B of Equity Financings, Introduces 6-8% Long-Term Growth Rate — FirstEnergy, February 2022. Includes Blackstone $1B / $41.05.
• FirstEnergy expects peak load to grow ~50% by 2035 on data centers — Utility Dive, 2025.
• FirstEnergy Ohio rate plan seeks $400M new revenue, $2B added rate base — S&P Global Market Intelligence, June 2026.
• Northeast blackout of 2003 — Wikipedia. FE alarm-system failure.
• FirstEnergy Glassdoor reviews (638) — 2.7/5 average; culture, layoff and micromanagement themes.
• Ex-PUCO chair Sam Randazzo indicted in corruption scheme, dies by suspected suicide — WCPO, April 2024.
• FirstEnergy Company History — FE. 1997 merger, GPU 2001, Allegheny 2011.