FirstEnergy forecasts 25 GW data center demand while reaffirming $36B 5-year plan and $2.62-$2.82 2026 core EPS (NYSE:FE)

FirstEnergy (FE) reaffirmed its $36 billion five-year capital expenditure plan and narrowed 2026 core EPS guidance to $2.62–$2.82, signaling management confidence in execution and earnings visibility. This guidance maintenance amid elevated capex commitments underscores the utility's ability to fund growth without dilution—a critical metric for regulated utility investors.

The company's forecast of 25 GW in data center demand represents a structural inflection point for FE's generation and transmission infrastructure. Data centers require continuous, reliable power with minimal downtime, creating long-term contracted revenue streams that typically command premium rates. This demand catalyzes the West Virginia generation evolution discussed, positioning FE to capture incremental load growth that utilities typically face only once per decade.

Capital intensity of $7.2 billion annually relative to earnings guidance implies a sustainably funded growth model, reducing refinancing risk and supporting dividend sustainability. Regulated utility returns on equity and cost-of-capital assumptions remain favorable in a higher-for-longer rate environment, particularly for utilities with predictable infrastructure investments tied to strategic growth vectors like AI-driven data center proliferation.

Sector implication: This announcement favors regulated utilities exposed to AI infrastructure buildout, reinforcing a two-tier utility market where data-center-adjacent networks outperform traditional load-flat peers. The intersection of energy infrastructure scarcity and data center demand creates structural tailwinds for utilities with positioned assets, contrasting sharply with mature, low-growth utility profiles.