Major New Investors Shore Up FirstEnergy
EDITOR'S NOTE: The name of FirstEnergy's spokeswoman was misspelled in this story and has been corrected.
FirstEnergy just got a $2.5 billion financial boost in its struggle to transition back to a fully regulated utility. Three large investment firms are buying about a 16 percent equity stake in the Akron-based energy company.
FirstEnergy was successful as both a regulated utility and, initially, in unregulated power generation markets. Then came new natural gas-fired power plants using cheap and abundant fuel.
FirstEnergy’s older coal and nuclear plants couldn’t compete. Now the company is trying to go back solely to the regulated side where revenue is guaranteed. First Energy spokeswoman Trish Ingraham says three major new sources of capital think that’s a good idea.
“The investment supports the strategy that we already had in place to exit the competitive generation business. These investors basically said they think the strategy our management team has laid out is a sound one and the right direction for the company.”
Among other things, FirstEnergy plans to invest more than a third of the new money, about $750 million in the company’s pension plan.