FE · 10-Q · 2026Q1 · Full report

Integrated Operating Expense Drivers

FIRSTENERGY CORP · 2026-04-28 · Importance 78 · Surprise 74

Integrated segment total operating expenses increased $329 million in Q1 2026 versus Q1 2025, driven by a $191 million increase in purchased power costs and a $335 million increase in other operating expenses. Other operating expenses included a $221 million increase in transmission congestion charges (net of FTRs and effectively offset under ENEC for earnings), $77 million higher storm restoration expenses (with $71 million deferred for recovery), and $25 million higher network transmission expenses that are deferred for future recovery. Fuel costs increased $12 million, and deferral of regulatory assets in Integrated increased $213 million, including $71 million higher deferral of storm-related expenses and a $146 million net increase in generation and transmission deferrals. General taxes rose $3 million year-over-year primarily due to higher property taxes.

Key facts

• Integrated segment other operating expenses increased $335 million in the first three months of 2026 compared with the same period of 2025, primarily due to higher transmission congestion charges of $221 million and higher storm restoration expenses of $77 million.
• Other operating expenses increased $79 million in the first three months of 2026 compared with the same period of 2025.
• Formula rate transmission operating and maintenance expenses increased $4 million in the first three months of 2026 compared with the same period of 2025 and have no material impact to earnings.
• Other operating expenses were lower by $11 million primarily due to lower other employee benefits and increased construction support and lower maintenance work.

Impact estimates