Steven E. Strah
President and Chief Executive Officer at FirstEnergy
Thanks, Irene, and good morning, everyone. Thank you for joining us today.
We're off to a solid start in 2022. Yesterday, we reported GAAP earnings of $0.51 per share and operating earnings of $0.60 per share, in line with the midpoint of our guidance. With our financial performance, operational momentum, portfolio of assets and robust long-term business model, we are in a strong position and I'm optimistic and excited about the future.
Today, we are reaffirming our operating earnings guidance of $2.30 to $2.50 per share for 2022 and growth of 6% to 8% thereafter, based on our five years $17 billion investment plan. And while the dividend is subject to Board approval, I can affirm that we will still expect to maintain our annual dividend rate of $1.56 per share this year, with the objective to grow the dividend within our payout ratio as earnings increase from our 2022 base.
This year, we're focused on continuing our transformation into a company with a strong foundation, and unrelenting focus on our customers and a leader in the energy transition. Over the last couple of years, we've asked a lot of our employees as we implemented a series of changes. From FE Forward initiatives to our enhanced values, numerous updates to policies and procedures and multiple training sessions across the company, our employees have accomplished a lot. And they have done this while executing at a high level across the company. I am very grateful for all of them, and incredibly appreciative of their work and strong performance over the many years, but especially over the last 18 months. I'm very proud of what they have done.
Building off this momentum, we believe that our employees and culture will be the single most important value drivers of our long-term strategy. Earlier this year, we formed a cross-functional culture transformation working group to consolidate, coordinate and streamline our numerous initiatives designed to drive culture change, with the goal of making these changes meaningful and impactful to employees. By better aligning our culture initiatives and narrowing the focus with a simpler, integrated culture change roadmap for 2022, we can help employees make meaningful steps in a few areas at a time.
The outcome of this work resulted in identifying three key focus areas for our culture transformation for 2022. Embedding our refreshed values, integrity, safety, DE&I, performance excellence and stewardship into every aspect of our culture; fostering an open, trusting environment where leaders create opportunities for two-way dialogue and employees feel valued and empowered; and improving advancement and development opportunities for our employees.
We are supporting these efforts by consistently demonstrating our values and action in communicating with employees, creating a culture champion network to support our transformation efforts, facilitating listening sessions hosted by me and other members of our senior leadership team, along with small group employee discussions and quarterly speak-up sessions that encourage open and transparent two-way dialogue, and enhancing our focus and accountability around more robust, meaningful discussions between employees and their supervisors that support career management and development. We're striving to empower employees to make their jobs more meaningful, and encourage the candor and collaboration that can make our company more innovative, customer focused, and a great place to work.
Changing a culture takes time, trust and persistent modeling, as well as alignment with our employees' personal values and needs. I'm deeply committed to this, as is our leadership team. And we view it as critically important work. By listening, being more open and transparent, we can do better and produce better results for all of our stakeholders, including our employees, customers and investors.
Taking a more open and engaged approach is also a cornerstone of our efforts to prioritize our customers and enhance the customer experience. Last month before Winter Utility Disconnection Moratoriums lifted in our areas, we launched an enhanced campaign to engage residential customers who may be facing financial hardships. We recognized that many customers in this position don't reach out for help, and they may be unaware of the various utility bill assistance programs available to them.
To reach these customers, we produced a video message featuring several members of our customer service team. They spoke passionately about their desire to assist customers. And we raised awareness of various programs and payment options that might help during these difficult times. Our goal was to reach out and invite customers to come to us for help.
At the end of March, we had more than 0.25 million customers enrolled in utility assistance programs, with $71 million in funding applied to those accounts. Compared to the first quarter of 2021, that's an increase of more than 17% in contributions directly benefiting customers enrolled in these assistance programs this year. This effort also contributed to a continued decline of past-due balances, which are now on par with pre-pandemic levels in Ohio and West Virginia, reducing the risk of bad debt. This campaign is the first step to enhance the customer experience, show customers that we care and we will help them wherever they are on their journey.
As we discussed on our fourth quarter call, FE Forward is our engine for optimizing our organization and customer-focused initiatives, including numerous projects designed to enhance communications, self-service options and provide better experiences for customers who are in need of assistance. For example, we've recently enhanced our website to make it easier for customers to understand and pay their bills. They can also use new features to easily make a payment for a family member or friend, enroll in payment plans that level out their billing, identify assistance programs and avoid service disconnection.
From an organization standpoint, now that we've aligned our utility operations into a five state model to enhance collaboration, streamline processes and maximize efficiency, we are beginning a longer-term review to consider the possible benefits of combining our Ohio entities as well as those in Pennsylvania from a legal, financial, operational and branding perspective.
And finally, FE Forward will improve productivity and our cost structure through investments in digital technologies, upgrading and integrating key systems and using data to help us make better, more efficient decisions for our customers. Through these investments, we anticipate significant productivity improvements, substantially reducing the need for high-cost external contractors that augment our workforce today. Our commitment to prioritizing customers also means providing excellent service and preparing for the grid of the future.
In Ohio, we are nearing the end of the first phase of our grid mod program, which began in 2019 and includes investments in smart meters, distribution automation and voltage regulating equipment. The program also supports our advanced distribution management system that is being installed to help automate the outage restoration process and optimize grid performance. We're excited about the benefits these investments can provide to our customers, including enhanced reliability, improved power quality and greater visibility into their electricity usage. We plan to file for a second phase of grid mod investments in Ohio in the third quarter to continue this successful program.
In New Jersey, JCP&L received approval from the BPU to begin installing smart meters on customer homes and businesses in 2023. The approved plan includes a capital investment of $421 million for the installation of more than 1.1 million smart meters over a 36-month period. Across our entire footprint, our utilities have installed more than 2.7 million smart meters since 2014, with implementation efforts nearly complete in Pennsylvania and currently underway in Ohio.
In New Jersey, we are working toward a settlement of our proposed EV Driven program. The four-year program is designed to accelerate the adoption of light-duty electric vehicles with incentives and rate structures that would support the development of an EV charging infrastructure throughout our JCP&L service territory. We are also making solid progress to complete our sale of a 19.9% stake in FET to Brookfield.
Last week, CFIUS notified FET and Brookfield that it's determined there were no unresolved national security issues and its review of the transaction was concluded. And yesterday, FERC issued its orders on the pending applications for Blackstone's designee to serve as a voting member on the FE Corp. Board and for authority to close the transaction with Brookfield.
We remain on track to close the sale of the FET minority interest in the second quarter of this year and deploy the proceeds thereafter. We also continue to make progress in resolving outstanding litigation in order to provide certainty to stakeholders and focus our attention on the future. Last week, we reached a settlement in the ratepayer civil RICO lawsuit in the amount of $37.5 million. We previously recognized the reserve for this settlement in our fourth quarter 2021 earnings.
I'm looking forward to working with our refreshed Board, including new nominees, Sean Klimczak of Blackstone and Jana Croom, who is the Chief Financial Officer for Kimball Electronics. At the same time, I'd like to express my sincere appreciation to our outgoing Board Members; Don Misheff, Mike Anderson, Julia Johnson, Tom Mitchell, Chris Pappas and Luis Reyes. I am very grateful for their expertise and guidance.
Thank you for your time today. We are committed to continue delivering financial and operational excellence as we execute our long-term business strategies and transform our company into a more innovative, resilient and industry-leading organization.
Now, I'll turn the call over to Jon for a financial update.