FirstEnergy Corp. (FE): Coal Power Generation Is Being Cut. Will Natural Gas Be Next?

That is what’s interesting about FirstEnergy Corp. (NYSE:FE)’s decision not to join the party. Natural gas generation has been an expansive growth area for the industry; many utilities are making huge shifts toward gas. For example, Duke Energy Corp (NYSE:DUK)‘s  generation portfolio has gone from just 5% natural gas in 2005 to an estimated 24% by 2015. Meanwhile, coal will shrink from 55% of its generation capacity to 38% over that same time frame. That has helped Duke Energy Corp (NYSE:DUK) generate compound annual earnings growth of about 6% per share while also enabling the company to boost its dividend by about 2% per share annually.

FirstEnergy Corp. (NYSE:FE)’s dividend on the other hand has been stuck in neutral for the past couple years. That doesn’t make it a bad company or a bad stock. The company has simply been forced to spend a lot of capital over the years to clean up its coal plants. That’s enabled it to be in the position to have a portfolio filled with non- or low-emitting generation units. In fact, by 2020, its carbon dioxide emissions will be nearly 30% below 1990 levels. That’s not bad for a company whose portfolio is still 56% coal-powered even after these latest two plants have been closed.

The article Coal Power Generation Is Being Cut. Will Natural Gas Be Next? originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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