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FirstEnergy Announces Management Changes At FirstEnergy Solutions

Details Declining Retail Sales Volumes in Earnings Report

February 20, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

FirstEnergy Corp. announced a series of management changes at its various operating segments, and has also reported fourth-quarter and full-year earnings

At FirstEnergy Solutions (FES), Donald A. Moul, president, FirstEnergy Generation, becomes president, FES Generation Companies and chief nuclear officer. He will have expanded responsibility for nuclear operations, engineering and fleet regulatory affairs, in addition to continued oversight of the fossil fleet, fuel and unit dispatch. He will report to Donald R. Schneider, president, FES.

Kevin T. Warvell, vice president, commercial operations structuring and pricing, FES, becomes vice president, chief financial officer, treasurer and corporate secretary, FES, reporting to Schneider.

Further management changes at the corporate and utility segments are discussed below.

In reporting fourth-quarter earnings, FirstEnergy continued to report declining competitive retail sales as a result of its previously announced strategy to exit the competitive business.

FirstEnergy competitive retail sales for the fourth quarter were as follows, by customer segment/channel (reported as MWh in thousands):

Three Months Ended December 31
                2017     2016    Change
Direct (C&I)   3,653    3,920     (267) 
Aggregation    1,745    2,932   (1,187) 
Mass Market      442      519      (77) 

In total, FirstEnergy competitive retail sales decreased 1.5 million MWh, primarily as a result of a 40% reduction in governmental aggregation sales. As of December 31, 2017, FirstEnergy's total number of competitive retail customers was approximately 900,000, compared to approximately 842,000 as of September 30, 2017, and 1.1 million as of December 31, 2016.

In reporting earnings, FirstEnergy said that, during the fourth quarter of 2017, FirstEnergy recorded non-cash, pre-tax asset impairment and plant exit costs of $2.4 billion, or $3.38 per share, primarily to fully impair the carrying value of its nuclear generating assets, increase the nuclear asset retirement obligations, and reduce the carrying value of the Pleasants Power Station (which the company announced it would deactivate).

FirstEnergy Corp. also announced that Donald T. Misheff has been elected Chairman of the company's Board of Directors effective May 15, 2018, and Sandra Pianalto was elected as a new member of the Board. Misheff will succeed longtime Chairman George M. Smart, who plans to retire from the Board at the company's annual meeting on May 15. Board member William T. Cottle also plans to retire at that meeting. Smart and Cottle, both 72, are retiring in accordance with the company's mandatory retirement age policy.

Misheff, 61, has been a member of FirstEnergy's Board of Directors since 2012. He retired in 2011 as managing partner of the Northeast Ohio offices of Ernst & Young.

Pianalto, 63, retired in May 2014 as president and chief executive officer of the Federal Reserve Bank of Cleveland, a position she held since 2003.

FirstEnergy also announces various other management changes including:

In the Finance organization, James F. Pearson, currently executive vice president and chief financial officer, becomes executive vice president, Finance, reporting to Charles E. Jones, president and chief executive officer of FirstEnergy. Pearson will retain responsibility for the finance organization while focusing on his role as a member of the Restructuring Working Group and the head of FirstEnergy Tomorrow – two projects related to the company's transition to a fully regulated utility.

Steven E. Strah, currently senior vice president and president, FirstEnergy Utilities, becomes senior vice president and chief financial officer, reporting to Pearson. Strah will oversee Accounting, Corporate Risk, Internal Auditing, Investor Relations and Treasury.

Jason J. Lisowski, controller and treasurer, FirstEnergy Solutions, becomes vice president, controller and chief accounting officer, reporting to Strah. Lisowski will be responsible for the controller, tax, and accounting functions across FirstEnergy.

In FirstEnergy Utilities, Samuel L. Belcher, currently president and chief nuclear officer, FirstEnergy Nuclear Operating Company (FENOC), becomes senior vice president and president, FirstEnergy Utilities, reporting to Jones. Belcher will be responsible for FirstEnergy's 10 regulated electric utility operating companies, the company's transmission assets and investments, distribution support, customer service and compliance and regulated services.

K. Jon Taylor, vice president, controller and chief accounting officer, becomes president of Ohio Operations, including Ohio Edison, the Illuminating Company and Toledo Edison, reporting to Mark Julian, vice president, utility operations.

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