FirstEnergy’s Ohio Utilities File Plan to Further Modernize Electric System

AKRON, Ohio, July 18, 2022 -- FirstEnergy Corp.'s (NYSE: FE) Ohio utilities – Ohio Edison, Cleveland Electric Illuminating Company and Toledo Edison – have filed a plan with the Public Utilities Commission of Ohio (PUCO) that would expand investments in smart grid technology, including equipment to help reduce the frequency and duration of power outages for customers.

"The projects we've completed under Grid Mod I have proven to be successful in reducing many power interruptions. This has laid the foundation for us to further enhance service reliability across our entire service area in Ohio," said Sam Belcher, senior vice president of FirstEnergy Operations. "While events out of our control, like severe weather or vehicle accidents, still have the potential to cause outages, the proposed plan will allow us to enhance our results from Grid Mod I and expand the work to areas of our service territory that have not yet benefited from these enhancements."

Key components of Grid Mod II include installing:

• Automated equipment on nearly 240 distribution grid sections that can automatically isolate problems, minimize the number of customers impacted by an outage and quickly restore electric service;
• Voltage regulating equipment on nearly 220 grid sections that can provide energy savings by reducing the amount of electricity that must be generated and that allows all customers served by a single power line to receive the same flow of safe, reliable power by evenly distributing electricity down the line;
• 700,000 smart meters along with the necessary supporting communications infrastructure and data management system.

The Grid Mod II smart meter program follows installation to date of approximately 704,000 smart meters as part of Grid Mod I. As the latest in metering technology, smart meters enable customers to better track their energy consumption and eliminate estimated readings. Through the "My Account" feature on www.firstenergycorp.com, customers have access to a variety of tools and information that can help them understand usage and manage electricity costs. Smart meters also can be leveraged by customers electing to enroll in programs like time-varying rates, which can provide price incentives to reduce electricity use during high demand periods throughout the day.

In addition, Grid Mod II would offer smart thermostat rebates of $50 per thermostat and customer energy management reports for residential customers that will further enable them to manage their energy usage. In the future, smart meter benefits also will include the ability to detect and locate outages more quickly and provide more accurate and timely storm restoration information.

The filing also includes several pilot programs that could provide enhanced customer benefits, such as:

• Programs designed to support the adoption of electric vehicles (EV) across the company's Ohio service territories. Central to these programs is the testing of higher capacity residential and commercial EV chargers that can charge vehicles faster, the ability to reduce costs by shifting charging demand away from peak demand periods and the use of EV chargers that permit the bidirectional flow of power so that certain EVs can both draw from and contribute power to the grid. The residential program will consist of up to 600 EV charging ports at residential customer homes, and residential customers electing to participate will receive incentives of up to $750. Two commercial programs offered as part of the pilot include incentives of up to $2,000 per EV charging port for up to 300 commercial customer locations, and incentives of up to $20,000 for up to six commercial or governmental customers with ten or more fully electric vehicles capable of bidirectional power flow.
• Installing a battery energy storage system designed to support increased EV charging load along the Ohio Turnpike and enhance grid reliability.
• Installing automated devices in neighborhoods throughout Ohio Edison and Toledo Edison's service areas, particularly in areas prone to animal- or tree-related outages. The devices work like a circuit breaker in a home that shuts off power when trouble occurs, with the added benefit of automatically reenergizing power lines within seconds for certain types of outages to keep power safely flowing to customers.

"The benefits of Grid Mod II for our Ohio customers through enhanced reliability, energy efficiency opportunities and innovative products and services are estimated to exceed the costs of the program by nearly $280 million in today's dollars," said Belcher. "We are excited to enhance the delivery of safe, reliable power through this investment while also promoting modern experiences and emerging technologies that can ultimately help lower energy bills to our customers."

If approved by the PUCO, a typical FirstEnergy Ohio utility residential customer could expect to see an average monthly charge of about $2.40 for the length of the Grid Mod II plan. The proposed plan includes protections for customers, such as caps on recovery of Grid Mod II costs, annual PUCO audits, the companies' reporting of metrics and a quarterly collaborative meeting with stakeholders.

FirstEnergy is dedicated to integrity, safety, reliability and operational excellence. Its 10 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 Twitter @FirstEnergyCorp or online at www.firstenergycorp.com.

Editor's Note: Photos of FirstEnergy utility crews completing the grid modernization work under the previously approved plan are available for download on Flickr. Video footage/B-Roll of FirstEnergy utility crews completing grid modernization work can be viewed and downloaded here.

Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "forecast," "target," "will," "intend," "believe," "project," "estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the completion of the Tender Offer; the potential liabilities, increased costs and unanticipated developments resulting from government investigations and agreements, including those associated with compliance with or failure to comply with the Deferred Prosecution Agreement entered into on July 21, 2021 with the U.S. Attorney's Office for the Southern District of Ohio; the risks and uncertainties associated with government investigations and audits regarding Ohio House Bill 6, as passed by Ohio's 133rd General Assembly (HB 6) and related matters, including potential adverse impacts on federal or state regulatory matters, including, but not limited to, matters relating to rates; the risks and uncertainties associated with litigation, arbitration, mediation, and similar proceedings, particularly regarding HB 6 related matters, including risks associated with obtaining court approval of the definitive settlement agreement in the derivative shareholder lawsuits; weather conditions, such as temperature variations and severe weather conditions, or other natural disasters affecting future operating results and associated regulatory actions or outcomes in response to such conditions; legislative and regulatory developments, including, but not limited to, matters related to rates, compliance and enforcement activity, cybersecurity, and climate change; the ability to accomplish or realize anticipated benefits from our FE Forward initiative and our other strategic and financial goals, including, but not limited to, overcoming current uncertainties and challenges associated with the ongoing government investigations, executing our transmission and distribution investment plans, greenhouse gas reduction goals, controlling costs, improving our credit metrics, growing earnings, and strengthening our balance sheet; the risks associated with cyber-attacks and other disruptions to our, or our vendors', information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets; 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 FirstEnergy, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; the extent and duration of the COVID-19 pandemic and the related impacts to our business, operations and financial condition resulting from the outbreak of COVID-19 including, but not limited to, disruption of businesses in our territories, supply chain disruptions, additional costs, workforce impacts and governmental and regulatory responses to the pandemic, such as moratoriums on utility disconnections and workforce vaccination mandates; actions that may be 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, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; changes in customers' demand for power, including, but not limited to, economic conditions, the impact of climate change, or energy efficiency and peak demand reduction mandates; changes in national and regional economic conditions, including recession and inflationary pressure, affecting FirstEnergy and/or its customers and those vendors with which FirstEnergy does business; 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; changes to environmental laws and regulations, including, but not limited to, those related to climate change; changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts, or causing FirstEnergy to make contributions sooner, or in amounts that are larger, than currently anticipated; labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, or adverse tax audit results or rulings; and the risks and other factors discussed from time to time in our Securities and Exchange Commission filings. These forward-looking statements are also qualified by, and should be read together with, the risk factors included in FirstEnergy's filings with the SEC, including, but not limited to, the most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 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'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 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.