This paper addresses the current state of FirstEnergy Corp., including an overview of the company’s history, subsidiaries, areas of operation, stock performance, and the recent change in business strategy. The paper goes on to describe how utility companies realize profit much differently than other companies and expresses the importance of accurate financials. The paper then addresses some of the issues faced by FirstEnergy’s accrual accounting process, and analyzes the problem using an A3 – Five Why analysis template to identify the background, current conditions, goals, analysis, proposal, plan, and follow up.
Introduction FirstEnergy is a utility company that is currently facing some financial difficulties and is in the
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(About Us, 2017)
FirstEnergy engages in generation, transmission and distribution of electricity and “produces approximately 80 million megawatt-hours of electricity annually from a fleet of carbon-free nuclear, scrubbed coal, natural gas, and hydro plants” (see Appendix B) (About Us, 2017). FirstEnergy is currently implementing the first phase of its “Energizing the Future” transmission upgrade project. This long-term initiative will receive a $4.2 billion investment from 2014 to 2017 is designed to increase service reliability and accommodate increased future demands (Transmission Projects, 2015). This project includes “replacing existing equipment with advanced technologies designed to enhance system reliability, meeting projected load growth driven primarily by sale gas-related activity in our region, and reinforcing the system in light of power plant deactivations” (Transmission Projects, 2015).
Financial Struggles. Despite all of the efforts FirstEnergy is making toward improvements and technology advancements, the company has had a difficult time recovering from the 2008 financial crisis. Appendix C is a comparison of the percent of net change of FirstEnergy stock compared to competitors for the time period of 2007 – 2016 by month (Scottrade, n.d.). FirstEnergy’s stock price saw growth in 2007 and early 2008, but dropped significantly in mid to late 2008, and has never fully recovered
In 2007, Canada’s industries saved 2.1 billion U.S. dollars of energy costs (2007). All these numbers show Canada’s efforts in general public utilities.
In February 2014, SFS EF AM committed to the Borrower’s $133.0 million Senior Secured Term Loan (the “Term Loan”). The Term Loan will fully amortize over by December 2028 under the P50 exceedance based energy output. At the end of August 2016, SFS F AM’s share of the Term Loan was $27.3 million. The Analyst notes that the Term Loan will fully amortize six months before the expiry of the 20-year wind energy purchase agreement (“WEPA”) with the Oklahoma Gas & Electric Co. (“OGE”) (A-/A1/A; SFS Equivalent Rating 3).
With renewable sources and energy conservation becoming more prominent, there is a lower electricity usage. Many energy utilities are starting to take a hit because most of their income comes from customer charges. Companies have started to phase out charging customers based on electric usage and have switched to a fixed monthly fees that are at least $25 more per month. It is believed that companies should increase their fees by 1% every year to maintain the grid but since profit is decreasing, they are looking into a much higher fee. Vice President of the Edison Foundation, Lisa Wood, told the Wall Street Journal that there needs to be more money put into the electricity grid because of how complex it has
Origin Energy Limited (ORG) is an Australian listed company mainly operates in electricity and gas markets. In the following sections, several aspects of the client company will be discussed. This information is collected to help in the identification of the entity’s specific risks by following ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment. Both external market environment and internal business management factors are required to be assessed under ASA 315 (Auditing and Assurance Standards Board, 2013). However, because of the limitation of access to the company information, this report does not cover the analysis of control
Our society today is ever more dependent upon electricity in all aspects of life. Keeping the power infrastructure throughout the United States secure and functioning properly should be considered a high priority for both private sector and government. Lacking properly functioning power caused by an outage has widespread impact not just on common conveniences being unavailable but also on critical areas such as emergency services, transportation, water distribution, communication and food production and storage.
Vectren’s non-utility business growth strategy grows through reinvestment of earnings with consistent dividends growth. Vectren’s strategy is to continue harvesting energy investments as opportunities arise. Natural gas abundance and affordability will continue to be in high demand for energy. “The projected increase in demand for electricity and natural gas in the coming years will help Vectren boost its sales and strengthen its financial base” (Marketline, 2013, para. 15, SWOT section).
Besides being technology to become more accessible “Origin Energy itself is being highly accredited for using and introducing Green Power for environment friendly purposes through solar and wind energy. This company has been accredited as Australia’s
The project will be owned and operated by Northern Pass Transmission LLC, which is owned by Eversource Energy Transmission Ventures, Inc., which is one of about fifty wholly
Through the Recovery Act, the Energy Department invested more than $31 billion to support a wide range of clean energy projects across the nation -- from investing in the smart grid and developing alternative fuel vehicles
Oncor electric is a regulated distribution and transmission business of the private sector and owned by a limited number of investors. Oncors’ responsibility is to deliver reliable and safe electricity to the private sectors, so they can have the power to maintain productivity by keeping the backbone of our economy (oncor 2012). We are known as the “poles and wires” infrastructure company, we manage our business like the private sector does and our company invests in the latest technology and by putting our employees and customers first. When restoring outages due to large storms or natural disasters we respond quickly and safely to restore power to the critical infrastructure. Electric service providers are required to notify the Commission’s Emergency Management Response Team (EMRT) to be involved in the event of a major emergency and natural disaster that occurs such as hurricanes and ice storms (puc.texas.gov 2009). With the EMRT, they help to coordinate power restoration while communicating regularly with any affected electric service providers before, during, and after an event.
“When AES undertook primarily domestic contract generation projects where the risk of changes to input and output prices was minimal, a project finance framework was employed.”
As Executive Director of Clean Energy BC, which represents clean energy operators and developers, suppliers, contractors, service providers, and post-secondary institutions’ Thompson River University and BCIT, I know the dramatic impact that renewables can have on First Nations economic development.
In today’s climate it’s hard to find a company still making profits comparable to their previous financial year. Sustainable growth is hard to achieve for most global organisations, their debt’s are piling up as money is not as available as before so other means of generating profit are being thought of to try to reduce operating costs and increase profitability.
The Case Study analysis will be based on the company Meridian Energy Limited(MEL). Meridian is leading manufacturer of renewable electricity and its customers are from all over Australia and New Zealand. The company is largest electricity generator and is the major contributor to the government’s target of renewable energy generation (Meridian, 2016). The objective of the case study is to critically analyse the application conceptual framework of accounting and also the accounting standards that relate to them. The case studies focus will be on the Statement of changes in Equity. Also the focus will be on the extent of application judgement and estimates that have been made by MEL and the issues which may arise because of these estimates.
It is with great enthusiasm that I submit my application for the financial analysis and strategy associate position with NRG. Exploring through the comapny's website, I noticed that NRG provides electricity services to more than 3 million residential and commercial customers all over the country. It offers big businesses operation, maintainance, and repairing services of electricity systems for their facilities. What differentiates NRG from similar companies is the generation of power by clean and green means including solar, renewable, and carbon capture technology.