FIRSTENERGY CORP

FirstEnergy Corp. and its subsidiaries are principally involved in the transmission, distribution, and generation of electricity, with its electric operating companies comprising one of the nation’s largest investor-owned electric systems, serving over six million customers in the Midwest and Mid-Atlantic regions. The company’s transmission operations include more than 24,000 miles of transmission lines and two regional transmission operation centers, and MP and AGC control 3,610 MWs of total generation capacity. The Electric Companies’ combined service areas encompass approximately 65,000 square miles in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York, providing distribution services for over six million customers in an area with a population of approximately 14 million and a total rate base of approximately $21.3 billion as of December 31, 2025 ¹.

Within FirstEnergy’s Electric Companies' distribution business, including JCP&L, there generally is no competition for electric distribution service in the Electric Companies’ respective service territories in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York. Additionally, pursuant to FERC’s Order No. 1000 and subject to state and local siting and permitting approvals, non-incumbent developers can compete for certain PJM transmission projects in the service territories of certain of FirstEnergy’s Electric Companies' providing transmission services, including JCP&L, and the Transmission Companies, which has resulted in additional competition to build transmission facilities in the respective service territories while also allowing the opportunity to seek to build facilities in non-incumbent service territories.

FirstEnergy generates revenue through the transmission, distribution, and generation of electricity across its reportable segments: Distribution, Integrated, and Stand-Alone Transmission. The Distribution segment distributes electricity through FirstEnergy’s electric operating companies in Ohio and Pennsylvania, serving approximately 4.3 million customers in Ohio and Pennsylvania across its distribution footprint and purchasing power for its default service or standard service offer requirements ². The Integrated segment includes the distribution and transmission operations of JCP&L, MP and PE, as well as MP’s regulated generation operations, distributing electricity to approximately 2 million customers in New Jersey, West Virginia and Maryland across its distribution footprint, providing transmission infrastructure in New Jersey, West Virginia, Maryland and Virginia to transmit electricity, and operating 3,610 MWs of regulated generation capacity located primarily in West Virginia and Virginia, which includes three solar generation sites, representing 30 MWs of generation capacity ³. The Stand-Alone Transmission segment consists of FE's ownership in FET and KATCo, with revenues primarily derived from forward-looking formula rates, pursuant to which the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual rate base and costs.

FirstEnergy's Distribution segment, which consists of the Ohio Companies and FE PA, representing $11.1 billion in rate base as of December 31, 2025, distributes electricity through FirstEnergy’s electric operating companies in Ohio and Pennsylvania ⁴. The segment serves approximately 4.3 million customers in Ohio and Pennsylvania across its distribution footprint and purchases power for its default service or standard service offer requirements ⁵. FirstEnergy's Integrated segment includes the distribution and transmission operations of JCP&L, MP and PE, as well as MP’s regulated generation operations, representing $10.2 billion in rate base as of December 31, 2025 ⁶. The Integrated segment distributes electricity to approximately 2 million customers in New Jersey, West Virginia and Maryland across its distribution footprint; provides transmission infrastructure in New Jersey, West Virginia, Maryland and Virginia to transmit electricity and operates 3,610 MWs of regulated generation capacity located primarily in West Virginia and Virginia, which includes three solar generation sites, representing 30 MWs of generation capacity ⁷. FirstEnergy's Stand-Alone Transmission segment, which consists of FE's ownership in FET and KATCo, representing $5.4 billion in FirstEnergy-owned rate base as of December 31, 2025, includes transmission infrastructure owned and operated by the Transmission Companies and used to transmit electricity ⁸.

JCP&L's Distribution segment, representing $3.7 billion in rate base as of December 31, 2025, distributes electricity to approximately 1.2 million customers in New Jersey across its distribution footprint ⁹. JCP&L's Transmission segment, representing $1.4 billion in rate base as of December 31, 2025, includes transmission infrastructure owned and operated by JCP&L that is used to transmit electricity ¹⁰. OE owns property and does business as an electric public utility in Ohio, providing distribution services to approximately 1.1 million customers in central and northeastern Ohio, with a rate base of $2.0 billion as of December 31, 2025 ¹¹. CEI owns property and does business as an electric public utility in Ohio, providing distribution services to approximately 0.8 million customers in northeastern Ohio, with a rate base of $1.7 billion as of December 31, 2025 ¹². TE owns property and does business as an electric public utility in Ohio, providing distribution services to approximately 0.3 million customers in northwestern Ohio, with a rate base of $0.5 billion as of December 31, 2025 ¹³. FE PA owns property and does business as an electric public utility in Pennsylvania and New York, providing distribution services to approximately 2.1 million customers in Pennsylvania and approximately 4,000 customers in Waverly, New York, with a rate base of $6.9 billion as of December 31, 2025 ¹⁴. JCP&L owns property and does business as an electric public utility in New Jersey, providing distribution services to approximately 1.2 million customers, as well as transmission services in northern, western, and east central New Jersey, with a combined rate base of $5.1 billion as of December 31, 2025 ¹⁵. PE owns property and does business as an electric public utility in Maryland, Virginia, and West Virginia, providing distribution services to approximately 0.4 million customers in Maryland and West Virginia, as well as transmission services in Maryland, West Virginia and Virginia, with a combined rate base of approximately $1.0 billion as of December 31, 2025 ¹⁶. MP owns property and does business as an electric public utility in West Virginia, providing distribution services to approximately 0.4 million customers, as well as generation and transmission services in northern West Virginia, with a combined rate base of $4.1 billion as of December 31, 2025 ¹⁷. MP owns or contractually controls 3,610 MWs of generation capacity that is supplied to its electric utility business, including 30 MWs of Solar generation and 487 MWs of pumped-storage hydroelectric generation from its 16.25% undivided interest in the Bath County facility in Virginia through its wholly owned subsidiary AGC ¹⁸.

On February 26, 2025, in response to the PJM 2024 RTEP Long-Term Proposal Window #1, PJM awarded two electric transmission projects to Valley Link estimated to be approximately $3 billion, with FET’s share estimated to be approximately $1 billion ¹⁹. On February 12, 2026, in response to the PJM 2025 RTEP Long-Term Proposal Window #1, PJM awarded a project to Grid Growth estimated to be approximately $1 billion, with FET’s share estimated to be approximately $448 million ²⁰. On July 16, 2025, FEV sold its entire 33-1/3% equity ownership in Global Holding, the holding company for a joint venture in the Signal Peak mining and coal transportation operations, at book value to WMB Marketing Ventures, LLC and Pinesdale LLC for $47.5 million ²¹. On October 1, 2025, MP and PE filed their integrated resource plan with the WVPSC proposing, among other things, the addition of 70 MWs of solar generation by 2028, and 1,200 MWs of natural gas combined cycle generation by 2031, which are expected to require an estimated capital investment of approximately $2.5 billion, as detailed in the filing ²². As of December 31, 2025, Corporate/Other had approximately $6.8 billion of external FE holding company debt ²³.

FirstEnergy reported total revenues of $13,486 million for the year ended December 31, 2025, compared to $12,841 million for the year ended December 31, 2024 ²⁴. Net income attributable to FirstEnergy Corp. was $1,541 million for the year ended December 31, 2025, compared to $1,420 million for the year ended December 31, 2024 ²⁵. Diluted earnings per share was $2.67 for the year ended December 31, 2025, compared to $2.46 for the year ended December 31, 2024 ²⁶.

FirstEnergy's growth strategy is centered on significant transmission investments, with two major projects awarded by PJM. On February 26, 2025, in response to the PJM 2024 RTEP Long-Term Proposal Window #1, PJM awarded two electric transmission projects to Valley Link estimated to be approximately $3 billion, with FET’s share estimated to be approximately $1 billion ²⁷. On February 12, 2026, in response to the PJM 2025 RTEP Long-Term Proposal Window #1, PJM awarded a project to Grid Growth estimated to be approximately $1 billion, with FET’s share estimated to be approximately $448 million ²⁸. These projects are to be developed, constructed, owned, operated and financed through Valley Link and Grid Growth, respectively, with FET holding ownership interests alongside partners DominionHV and Transource for Valley Link, and Transource for Grid Growth.

Another growth vector is the expansion of regulated generation capacity in West Virginia. On October 1, 2025, MP and PE filed their integrated resource plan with the WVPSC proposing, among other things, the addition of 70 MWs of solar generation by 2028, and 1,200 MWs of natural gas combined cycle generation by 2031, which are expected to require an estimated capital investment of approximately $2.5 billion, as detailed in the filing ²⁹. Additionally, FirstEnergy continues to invest in its distribution and transmission infrastructure through programs like Energize365 and EnergizeNJ, JCP&L's second Infrastructure Investment Program, though specific future investment amounts are not quantified in the filing.FirstEnergy continues to monitor supply chain conditions, noting that while supply lead times have not fully returned to levels prior to the COVID-19 pandemic, the company continues to implement mitigation strategies to address supply constraints and does not expect any corresponding service disruptions or any material impact on its capital investment plan. The company also notes that the situation remains fluid, and a prolonged continuation or further increase in demand, or the continuation of uncertain or adverse macroeconomic conditions, including inflationary pressures and new or increased existing tariffs, could lead to an increase in supply chain disruptions. As of December 31, 2025, FirstEnergy had 11,186 employees, all of whom were located in the United States ³⁰.

The filing does not provide specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy with exact figures for the upcoming period.

FirstEnergy faces several structural headwinds. The company notes that PJM’s recent capacity auctions have been subject to a “price collar” that has resulted from all-time high generation capacity prices in recent auction outcomes, and on January 16, 2026, the PJM board along with various federal and state officials expressed interest in extending the price collar through mid-2030. The company also identifies that data centers have substantially larger load requirements than typical residential or commercial users, and new data centers or increase in demand for existing data centers located in its service territories could increase load requirements substantially over the next several years, with a need to serve the load obligations of these data centers which could be up to 16,985 MWs through 2035 ³¹. Additionally, the company faces potential headwinds from evolving legislation and executive actions related to rates enacted by individual states, such as Ohio Senate Bill 2 of 2025 and Executive Order No. 2 of 2026 issued by the New Jersey governor on January 20, 2026.

The company identifies several regulatory and macro constraints. FERC’s policies on recovery of transmission costs continue to evolve, with ongoing proceedings to determine an appropriate ROE methodology to determine transmission ROEs, to determine whether FERC’s existing policies on transmission rate incentives should be revised, and to determine whether certain classes of network transmission upgrade costs can be recovered in transmission rates. FERC, at the instruction of the U.S. Secretary of Energy, is also considering whether to develop regulations intended to speed interconnection of AI data centers and “hybrid” data center/electric generation facilities to the transmission system, with final regulations expected in the second quarter of 2026. The company also notes that state rate regulation may delay or deny full recovery of costs, and that any denial of or delay in cost recovery could have an adverse effect on its business, results of operations, liquidity, cash flows and financial condition.

FirstEnergy faces material risks from the ongoing securities class-action litigation related to HB 6, where the company believes it is probable that FE will incur a loss, though it cannot yet reasonably estimate a loss or range of loss, and the resolution could result in substantial monetary damages ³². The company also faces risks from the execution of its growth strategy, as the success of its transmission investments depends on factors including FERC’s timely approval of rates, whether investments are included in PJM's RTEP, and FERC's evolving policies with respect to incentive rates for transmission investment assets. Additionally, the company faces risks from state rate regulation, as any denial of or delay in cost recovery could have an adverse effect on its business, results of operations, liquidity, cash flows and financial condition. The company also faces risks from the potential for significant growth in energy demand from data centers, with a need to serve load obligations that could be up to 16,985 MWs through 2035, which could adversely impact its business if additional generation resources are not available to meet increased demand ³³.

Management's message emphasizes FirstEnergy's focus on executing its strategic initiatives, including significant transmission investments awarded by PJM, such as the two Valley Link projects estimated to be approximately $3 billion with FET’s share estimated to be approximately $1 billion, and the Grid Growth project estimated to be approximately $1 billion with FET’s share estimated to be approximately $448 million ³⁴. The company also highlights its ongoing efforts to create a culture of continuous improvement to strategically reduce operating expenditures and continually reinvest in a more diverse capital program in support of its long-term strategy. Key strategic priorities include advancing transmission and distribution infrastructure investments, pursuing regulated generation expansion in West Virginia with an estimated capital investment of approximately $2.5 billion for 70 MWs of solar generation by 2028 and 1,200 MWs of natural gas combined cycle generation by 2031, and maintaining a focus on safety, employee development, and a culture of belonging ³⁵.