FirstEnergy’s 0.43% Slide Reflects Data Center Gambit and Regulatory Roadblocks as $260M Volume Ranks 438th

Market Snapshot

On October 27, 2025, FirstEnergy (FE) closed with a 0.43% decline, trading at $46.64 per share. Despite a daily trading volume of $0.26 billion—ranking 438th among U.S. equities—the stock underperformed relative to its recent earnings-driven optimism. The modest decline followed a mixed session, reflecting investor caution amid ongoing debates over regulatory approvals for rate increases and the company’s strategic investments in data center infrastructure.

Key Drivers

Strategic Expansion and Regulatory Dynamics

FirstEnergy’s third-quarter 2025 earnings highlighted a strategic pivot toward data center infrastructure, with CEO Brian Tierney outlining plans to increase system peak load by 45% to 48.5 gigawatts by 2035. This expansion, driven by surging demand for data center capacity, is projected to generate $5.5 billion in capital expenditures for 2025—a 10% increase from earlier estimates. However, the utility emphasized its commitment to shielding residential and business customers from cost overruns, with Tierney stating that data center developers would bear incremental investment costs through tailored contracts.

The company’s core earnings of $0.83 per share in Q3 2025, up 9% year-over-year, underscored operational efficiency gains, particularly in Pennsylvania where a $225 million rate hike contributed to 5.3% net income growth. FirstEnergy’s $28 billion Energize365 capital plan through 2029, including $14 billion for transmission infrastructure, positions it to capitalize on PJM Interconnection’s projected 30% peak load growth by 2035. Yet, the utility faces regulatory hurdles, as its pending $7.17 monthly rate increase for Ohio Edison customers awaits approval from the Public Utilities Commission of Ohio (PUCO).

Cost Management and Market Volatility

While FirstEnergy’s transmission rate base is expected to grow at a 18% annualized rate through 2030, rising generation costs in deregulated markets have driven average utility bills up 11% over the past year. Tierney attributed this to PJM capacity auctions, which he criticized for subsidizing underdelivered projects. The CEO advocated for a two-tiered pricing model to separate existing capacity payments from new infrastructure costs, a stance reflecting broader industry concerns over sustainable cost recovery.

Simultaneously, the company’s $4 billion in year-to-date capital investments—focused on grid reliability and data center interconnections—signals confidence in long-term demand. However, industrial load growth, while projected to accelerate to mid-single-digit increases by 2026, remains contingent on data center ramp-up timelines. This uncertainty, coupled with supply chain easing but persistent equipment pricing pressures, may temper near-term earnings momentum.

Regulatory and Competitive Challenges

FirstEnergy’s dual strategy of infrastructure expansion and customer cost protection faces scrutiny from regulators and shareholders. Its request for a distribution rate increase in Ohio, if approved, would raise residential bills by 4.3%, aligning with broader efforts to modernize the grid amid climate-driven infrastructure risks. Conversely, the utility’s refusal to implement “large load” tariffs for data centers—a move that could generate incremental revenue—highlights its balancing act between profitability and customer retention.

Meanwhile, competitive pressures from AI and energy transition stocks have dampened investor enthusiasm for traditional utilities, despite FE’s 3.76% dividend yield. While the company reaffirmed its 2025 core earnings guidance of $2.50–$2.56 per share, the 0.43% intraday decline suggests skepticism over its ability to execute on growth initiatives without regulatory or cost-related setbacks. Tierney’s emphasis on “sustainable affordability” for customers underscores the narrow path FirstEnergy must navigate to maintain its dividend-paying appeal in a shifting energy landscape.