Jon Taylor
Senior Vice President & Chief Financial Officer at FirstEnergy
Thank you, Brian and good morning, everyone. Despite the extremely mild temperatures across our service territory in the second quarter, our focus on efficient operations and financial discipline allowed us to deliver operating results above the midpoint of our guidance. I'll start today with a review of our financial performance and outlook then provide an update on recent regulatory activity.
As Brian mentioned, second quarter GAAP earnings were $0.41 a share and operating earnings were $0.47 a share. This compares to 2022 2nd quarter GAAP earnings of $0.33 a share and operating earnings of $0.53 a share. Second quarter results in our distribution business benefited from our ongoing capital investment programs and our laser focus on operating expenses. Together, these helped offset the impact of lower distribution sales which largely resulted from mild temperatures as well as a lower pension credit. Mild temperatures with cooling degree days 48% below the second quarter of 2022, impacted residential demand by more than 8% and total customer demand by 4% with a year-over-year impact of $0.06 a share. Total residential sales decreased 11% from the second quarter of 2022 or 2% on a weather-adjusted basis.
On a trailing 12-month basis, weather-adjusted residential sales continue to trend about 4% higher than 2019 pre-pandemic levels. And for the June year-to-date period, they are 2% higher than last year. In the commercial sector, lower related demand drove a 6% decrease compared to the second quarter of 2022, while demand was down 3% on a weather-adjusted basis. Usage by commercial customers over the trailing 12-month period continues to trend below 2019 levels by nearly 5% on a weather-adjusted basis.
Finally, sales to industrial customers increased by just over 1% compared to the second quarter of 2022 and continue recovering toward pre-pandemic levels. As a reminder, revenue from our C&I customer classes are not as sensitive to sales volumes, as a result of rate design for these classes which is typically based off peak usage. In our transmission business, our results benefited from our Energizing the Future investment program and associated rate base growth of more than 8% compared to the second quarter of 2022. Favorable weather and accelerated material deliveries allowed us to deploy nearly $400 million of capital into our transmission investment program during the quarter, bringing our year-to-date investments to nearly $750 million which is over 20% ahead of our internal plan and $260 million or more than 50% ahead of last year.
Looking at our corporate segment, second quarter results benefited primarily from lower operating expenses and lower interest costs which helped to offset a lower earnings contribution from Signal Peak. We are very pleased with how we responded to the challenges we faced this year, especially the impact of the extremely mild temperatures on distribution sales which on a year-to-date basis is $0.18 per share below last year and $0.16 per share off plan.
The team's effort allows us to confirm our guidance range this year of $2.44 to $2.64 a share. First, our focus on our cost structure, particularly our operating expenses has been second to none. As you can see, our O&M has improved $0.13 a share year-over-year and is well ahead of our internal plan. Our focus on managing our labor costs through productivity improvements and selective hiring is paying off. In addition, in May, we announced an involuntary separation program and a voluntary early retirement program impacting approximately 550 employees. And we continue to focus on third-party and other operating costs, including corporate facility costs, branding and sponsorships and improved customer collection rates which has helped us lower our bad debt expense.
Currently, through June, our base O&M is running about 6% below plan and 11% below last year and the expectation in the second half is for that trend to improve versus last year given some of the steps we have taken to further reduce costs and the maintenance work we accelerated from '23 into '22. Second, in early May, we completed a very successful sale of $1.5 billion in convertible senior notes with a coupon rate of 4%. The initial conversion price represents a premium of approximately 20% from our closing share price on May 1. We consider this a cost-effective bridge to when we receive the full $3.5 billion from our previously announced agreement to sell a 30% interest in FirstEnergy Transmission LLC.
The use of proceeds will be EPS accretive as we repaid high-cost short-term borrowings, reduced 7 and 3/8 coupon debt at FE Corp. and made a $750 million contribution to our pension plan which had required contributions beginning in 2025. As a result, our net qualified pension obligation improved to approximately $800 million at the end of the second quarter, down from $1.7 billion at the end of last year, representing a funded status of 91% at the end of June. In addition, we don't have any minimum funding requirements through 2027. The convertible note issuance supports our ongoing work to optimize our financing plan, improve our credit metrics and our balance sheet as we target FFO to debt metrics of 14% to 15%.
Finally, we do anticipate a lower effective tax rate for the year closer to 17%, resulting from the expected use of state net operating loss carryforwards. Again, despite the extremely mild temperatures we've seen this year, the team has worked extremely hard to rise to the challenges so we can deliver on our commitments. Now let's shift gears and talk about our rate proceedings and other regulatory activity in the quarter. I'll start with the 3 base rate cases we filed earlier this year, these cases which represent over $7 billion of rate base and weighted average test year return on equity of less than 6% are progressing well through the regulatory process and consistent with our expectations.
In New Jersey, we received a procedural schedule for our proposed revenue increase of $193 million with evidentiary hearings to be held in early January of next year. In Maryland, very constructive evidence share hearings were held last month on our proposed $50 million rate case which was filed in March and supports equity returns of 10.6%. We do expect new rates to go into effect in October of this year. And in West Virginia, our Mon Power and Potomac Edison West Virginia utilities filed a base rate case in May, requesting a $207 million increase in revenue to support reliability investments, grid resiliency, our generation assets and an enhanced customer experience while providing assistance to low-income customers. Key proposals in the filing include distribution rate base of $3.2 billion and return on equity of 10.85%. A hearing has been set for January of next year and new rates are expected to be effective by the end of March.
Importantly, even with the proposed rate adjustments in each of these jurisdictions, our customers would continue to have some of the lowest residential rates among their end-state peers. Other regulatory activity also continues to progress. We filed our Ohio Electric Security Plan 5 in early April, as we discussed on our first quarter call, our proposal supports our generation procurement process for nonshopping customers, continued support for investments in the distribution system storm and vegetation management writers and energy efficiency programs. Our filing also includes proposals that support low-income customers and electric vehicle incentives. We have requested approval for the new ASP effective June 1 of next year when the ESP4 ends and hearings are scheduled for November of this year.
We also received a procedural schedule last month for the Ohio Grid my 2 filing [Phonetic] we made last summer. Under the scheduled hearings are planned for October of this year and we look forward to advancing the $626 million capital investment plan to continue our work enhancing the delivery of safe, reliable power offering modern customer experiences and supporting emerging technologies. In Pennsylvania, hearings have been set for next week to consider our application to consolidate our 4 Pennsylvania distribution utilities. As we stated, this is an important step to align with our state operating model simplify our legal entity structure and increase the flexibility and efficiency of our financing strategy and we are in settlement discussions with the parties to the case.
And in May, FirstEnergy and Brookfield submitted applications to FERC and to the Pennsylvania PUC to facilitate the FET minority interest sale that was announced in February. We have received approval for the sale from the Virginia State Corporate Commission and the transaction also requires a successful review by CFIUS. Finally, mine power is no longer reviewing the possible purchase of the Pleasants Power Station. Last week, FERC approved the sale of the plant to a subsidiary of Omnis Fuel Technologies. We will file an update with the West Virginia Public Service Commission when that sale is complete.
So all in all, several regulatory proceedings in flight but everything is progressing very well and consistent with our plan. The regulatory team and the employees that support the regulatory filings are doing a terrific job and we couldn't be happier with the progress. As a reminder, you can find summaries of our key filings together with news releases and links to the dockets on the regulatory corner section of the IR website. I'm very proud of our team's performance despite the challenges we have faced this year. We are on track with key regulatory initiatives and we're executing very well in the areas that we control, with strong capital deployment and financial discipline with our operating expenses. Thank you for your time today. Now let's open the call to your questions.
