FE · 10-Q · 2026Q1 · Full report

Distribution Operating Expense Drivers

FIRSTENERGY CORP · 2026-04-28 · Importance 35 · Surprise 48

Distribution total operating expenses increased $22 million in Q1 2026 versus Q1 2025, driven by a $152 million rise in purchased power costs (no material earnings impact) and an $89 million increase in other operating expenses. The $89 million increase in other operating expenses included $28 million of higher network transmission expenses and $72 million of higher storm restoration expenses, much of which was deferred for future recovery. Deferral of regulatory assets in Distribution increased $235 million in Q1 2026, including a $158 million increase related to amortization of a regulatory liability tied to restitution and refunds to Ohio customers. Depreciation increased $3 million due to a higher asset base and a change in depreciation rates effective March 1, 2026, and general taxes increased $13 million year-over-year.

Key facts

• Other operating expenses in the Distribution segment increased $89 million in the first three months of 2026 compared with the same period of 2025.

Impact estimates