FE · 10-Q · 2026Q1 · Full report

Operating Expense / Purchased Power Costs

FIRSTENERGY CORP · 2026-04-28 · Importance 29 · Surprise 22

Total operating expenses increased $70 million in Q1 2026 versus Q1 2025. Purchased power costs increased by $80 million in the period due to higher sales volumes and unit costs; the company states purchased power has no material impact to earnings because many costs are passed through or recovered. Other operating expenses rose $79 million, driven primarily by $81 million of higher storm restoration expenses (of which $74 million were deferred for future recovery) and $10 million of higher energy efficiency and state-mandated program costs that were also deferred. The expense increases were partially offset by the absence of $4 million of severance and related costs and $11 million of lower other operating expenses from lower other employee benefits, increased construction support and lower maintenance work.

Key facts

• Total operating expenses for FirstEnergy increased to $3,374 million for the three months ended March 31, 2026 from $3,011 million for the three months ended March 31, 2025.
• Integrated segment purchased power costs increased $191 million in the first three months of 2026 compared with the same period of 2025, impacted by the Winter Storm Fern weather event.
• Purchased power costs increased $152 million in the Distribution segment in the first three months of 2026 compared with the same period of 2025.
• Purchased power costs increased by $80 million during the first three months of 2026 compared with the same period of 2025 and the company states these costs have no material impact to earnings.
• The decrease in net cash provided from operating activities in Q1 2026 was primarily due to higher transmission and purchased power costs, primarily from the net impacts of the Winter Storm Fern weather event in the first quarter of 2026.

Impact estimates