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FirstEnergy CFO Mark Clark on the state of the utility sector and the economic uncertainties impacting the company.
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Even -- natural gas hitting new highs in the past week it is still the cheapest thing in the world of energy so.
What do you do if you're utility serving six states and still are relying pretty heavily on coal.
This claimant is in Cleveland with one such company Liz what -- -- And nuclear to I've got first energy this is a publicly traded utility operating in six states and they've got twenty count them twenty.
Coal fired electricity plants.
What's happening with the business and why have -- withdrawn 2013 guidance let's get the real story for Mark Clark is the CFO.
A FirstEnergy thank you for joining us for being here GAAP born and raised in northeastern Ohio you are -- Working at FirstEnergy.
Utility business is not an easy one is that not today know well you know today why.
Well you get low gas prices you've got a tough economy.
Our industrial sales are back to where they were in 2007.
But that took five years to get there.
Residential -- little bit off but that's more weather related but we still have a lot of growth.
The auto industry is doing well I mean you've got to Leo what's the -- Chrysler investment.
That the Chevy cruise in Youngstown Cleveland got the -- engine plant.
Then you've got huge growth teachers and health care industry I was joked that Cleveland clinic doesn't have one building they seem to add an additional block.
That's not remember your portfolio that -- you know at low gas prices that does affect what we do because.
The good portion of our business about a third of it is -- well coal fire coal fire plants off twenty of them can you convert some of them are you.
Process of considering doing.
Yes.
We actually have over -- hundred -- get twenty million megawatts of power.
Some of the fans that we have can be converted.
To probably 20% and we -- in the engineering studies now.
-- reasonable expense.
And with gas prices down around three dollars.
You can convert it does the other factor to it puts a lot of pressure -- suppliers.
It's a tough economy for them people -- power plants down.
-- a lot of leverage in terms of contracts.
As we say you -- -- about our operating at six different states New York Ohio Pennsylvania West Virginia New Jersey Maryland that you withdrew 2013 earnings guidance.
Bloody -- reaches a point where we just thought we had too many things that were uncertain and the list got to a point -- was simply too long.
We wanted to make certain that we we were comfortable when we went back to the market balance comfortable that we can explain and what we'll -- -- when he is gonna come back to our market -- what -- our target is that when we do our third quarter earnings call which is the first portion of November.
Hoped.
That will get it there we really don't want to wait till February of next year's -- I think will be able to get to -- for the quarter number.
You -- for nuclear power plants the Fukushima disaster in Tokyo a year plus ago.
You know.
Has that hurt your opportunity to continue that it's a sort -- it what's the atmosphere like for nuclear right.
We'll have made clear is that we we dispatched nuclear six dollars we dispatched gaps of 24 version of the there's a big delta there but to build a nuclear plant takes extraordinary along the great time.
It's gonna dispatch in the market at the market price so he's got to be putting up about half your balance sheet to build -- unit.
Takes a long period of time so what we've been doing with their nuclear units is -- we have an outage.
Will change something what we can -- fifteen point megawatts of new.
And speaking about -- -- you know the record has been a little tough for FirstEnergy a lot of -- Critics is -- here is that a New Jersey -- not happy it what do you want people to know about that working hard to improve that record of outages and fixing -- -- -- -- I think if you if you take outages can you put them into two separate buckets.
The things that happen -- -- normal routine day in and day out we have an excellent record it's 99.9.
8% of the time.
The real difficulty is when you have a storm or -- -- You can pre planned for -- you can -- of the you can't schedule it in and in the storms and we have the hurricanes in the big snowstorms and -- -- at 6000 crews there are people forget.
Think that's the logistics of just keeping them fed keeping them hydrated during the day get -- getting the -- equipment in the polls.
But the big issue to us -- we think it is to -- community at large safety.
Your household.
They're working -- it voltage levels that are literally thousands upon thousands of times.
They make the mistake they risk their lives so you know it is it worth fifteen minutes more per hour more to keep them safe we think most people.
Would say absolutely.
Mark Clark the chief financial officer of first -- -- you know -- -- everybody gets frustrated but in the end -- you don't want somebody.
Slipping back on us which one it's unsafe but there -- always tried 6000.
Crews at the ready for -- -- the upcoming winter season back to you.
It's amazing we have so much energy here at home it is such students in some cases such a waste not to use of all good to see -- --
