Akron-Based FirstEnergy Is Considering a Major Restructuring, Including Selling Its Power Plants
FirstEnergy is considering moving away from its competitive-market power-generation businesses and back to being a fully regulated utility. Could such a change make the Akron-based Corporation vulnerable to a takeover?
Probably not, says Barry Abramson, a senior analyst with Saber Partners energy industry consulting firm in New York.
He says FirstEnergy’s aging power-plant technology makes it very difficult for the company to compete in ‘generating.’ So it will likely invest heavily in the distribution business, where it is already strong and where there is revenue stability due to regulation.
Abramson says that will also probably keep the company independent.
“A strategy of trying to grow the company through increased investment in low-risk assets would make the company prefer to stay independent. So they’re not likely to be bought out as a distressed company because they are taking care of their challenges to make the company better. And I think they will succeed.”
First Energy employs 15,000 people around the country and more than 1,300 at its Akron headquarters.