FirstEnergy data center contracts surge 50% in Q2, CEO says another 1.5GW to be signed within two weeks

FirstEnergy's utility companies have signed contracts to serve 6.4 GW of data center load through 2035, a 50% increase from the first quarter. Chairman, President, and CEO Brian Tierney said on Wednesday's earnings call that agreements are expected to be signed within two weeks to serve an additional 1.5 GW of data center load.

Meanwhile, according to the earnings report released by the Akron, Ohio-based utility company,FirstEnergy's total data center demand(including the potential customer pipeline) grew 30% quarter-over-quarter in the second quarter to 24.8 GW, with the Ohio service area contributing the most.

Key data at a glance

According toFirstEnergy's second-quarter earnings reportand related materials:

• 4.1 GW: West Virginia data center pipeline capacity, up 155% from 1.6 GW in the first quarter.
• 14%: Year-over-year increase in FirstEnergy's transmission rate base, higher than the 13% in the first quarter.
• 34.7M MWh: Second-quarter electricity sales, up slightly by 0.7% year-over-year.
• $288M: Second-quarter net income, up 7.5% from the same period last year.

FirstEnergy believes that serving data centers is a key component of its growth potential. According to Tierney, the company's data center contracts and its contract pipeline total about 70% of its July system peak load of 34.8 GW.

In addition to building transmission facilities for data centers, FirstEnergy is also planning power plants to support them.

Progress on the Maidsville Energy Center project

Two of FirstEnergy's utility companies—Monongahela Power (Mon Power) and Potomac Edison Co.—are seeking approval from the West Virginia Public Service Commission (PSC)to build the Maidsville Energy Center. The project includes a 1,200 MW gas-fired power plant and three solar projects totaling 70 MW.

According to the certificate of public convenience and necessity (CPCN) application filed by the two companies in mid-February, they plan to invest approximately $2.5 billion in the gas-fired power plant, which is expected to be operational by the end of 2031, and about $182 million in the solar facilities.

Although the project is primarily aimed at potential data center load, Mon Power still hopes to impose a surcharge on existing customers in the CPCN application to pay for the project's construction costs. The company estimates that the surcharge would increase average residential customer rates by about 2.3%. The two companies told the PSC that the project would bring "significant expected revenue" once operational.

FirstEnergy spokesperson Michon Ellis said in an email that if FirstEnergy later signs service agreements with data centers and receives approval from the West Virginia PSC, those data center owners would bear their proportionate share of the surcharge.

Regulatory developments and disputes

Earlier this month, FirstEnergy signed theWhite House voluntary Taxpayer Protection Pledge, which aims to protect existing customers from the grid infrastructure and power supply costs triggered by data centers.

However, a coalition of West Virginia Citizen Action Group, Solar United Neighbors, and West Virginia Energy Efficiency Association filed a motion on May 29requesting the PSC to reject the surcharge, arguing that the data center projects are too speculative. The groups noted that a 1,012 MW data center project has had its ramp-up schedule delayed by two years and will not be fully operational until 2035.

FirstEnergy CFO Jon Taylor said on the call that the full output of the gas-fired power plant could potentially be sold entirely to a single data center through a "fully bundled" service agreement, which would be submitted to the PSC for approval. He said, "The agreement is expected to provide important protections for existing West Virginia customers and bring long-term benefit sharing."

Transmission costs and market context

Tierney said the surge in contracted data center load at FirstEnergy's utilities in the second quarter reflects data center companies' desire to enter the PJM Interconnection transmission planning process early—a process seen as the main bottleneck to getting connected quickly.

FirstEnergy estimates that each GW of data center load requires approximately $250 million in transmission upgrade investments. Currently, the major transmission costs triggered by data centers in PJM are shared by all ratepayers.Last month, FirstEnergy requested federal regulatorsto allocate these transmission costs directly to data centers.

Tierney revealed that FirstEnergy is considering multiple options to support its power plant construction in West Virginia, including establishing a separate generation company. He said, "We are evaluating the right architecture to support future growth, including potential structures that would allow Mon Power or Potomac Edison West Virginia to enter into wholesale power agreements with an affiliated generation company."

Overall electricity sales

Meanwhile, overall electricity sales across FirstEnergy's service areas are growing. According to company data, total second-quarter sales increased 0.7% year-over-year to 34.7 million MWh, with industrial sales up 4.4%, offsetting declines of 1.9% in residential sales and 1.2% in commercial sales. After adjusting for mild weather, total electricity sales actually grew 0.9%.

Taylor said industrial growth was particularly strong in the metals, oil and gas, and chemical sectors, "reflecting stronger order activity and the benefits from AI and data center infrastructure buildout."

FirstEnergy's utility companies serve approximately 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York.