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Critics fear investors’ push for profits could thwart other FirstEnergy priorities

By Kathiann M. Kowalski | February 26, 2021

FirstEnergy news raises questions about grid resiliency and clean energy approaches to cope with climate change. A notorious investor’s plan to acquire a significant stake in FirstEnergy voting shares has critics worried that pressure to turn quick profits could undercut the company’s duties to ratepayers and need to invest in a cleaner and more resilient grid. In its Feb. 18 earnings call, FirstEnergy revealed it had received notice of Icahn Capital’s intent to acquire between $184 million and $920 million in voting securities. The fund would have a minority voting interest, but it might be enough to sway changes in its board of directors, company management and more. The news comes three years after affiliates of four other equity investment firms put $2.5 billion into FirstEnergy. “When you have a utility company that is increasingly being owned by private equity investors who are looking to maximize their profits and return, that’s just counter to utility finance models and long-term reliability and performance,” said Howard Learner, president and executive director of the Environmental Law & Policy Center. Utility stocks have traditionally been viewed as steady, low-risk performers, less prone to the ups and downs of cyclical market volatility. What’s happening with FirstEnergy is unusual and concerning, Leaner said, because of some of the firms’ reputation for demanding big changes for short-term financial gain.