Brian X. Tierney
President and Chief Executive Officer at FirstEnergy
Thank you, Irene. Good morning, everyone. Thank you for joining us today and for your interest in FirstEnergy. It's hard to me to believe that I've been with the company for eight months already, time has flown by as I've gotten to know the fantastic employees of this company who are dedicated to serving our customers every day. Some of you have heard me say previously that I consider myself to be a good teller of great stories. Well, our employees have given me a great story to tell for 2023, and I'll do my best to tell it well.
This morning, I'll provide an overview of our financial performance for the fourth quarter and full-year of 2023. I will discuss some regulatory milestones that we recently achieved. We are also unveiling today an exciting capital investment program focused almost entirely on our wires business. Over the next five years, we plan to invest $26 billion in our regulated system to improve reliability and the customer experience. This represents an increase of more than 44% compared to our last Five Year plan. We will maintain our vigilance on affordability as our current rates are below our in-state peers. Jon will provide more details on this later.
For the fourth quarter of 2023, FirstEnergy delivered GAAP earnings from continuing operations of $0.30 per share compared to a loss of $0.71 per share in the fourth quarter of 2022. Operating earnings for the quarter was $0.62 per share, which was above the midpoint of our quarterly guidance range and compared to $0.50 per share in the fourth quarter of 2022.
For the year 2023, the company delivered GAAP earnings from continuing operations of $1.96 per share and operating earnings of $2.56 per share, $0.02 above the midpoint of our guidance range. Employees worked diligently throughout the year to overcome significant headwinds. The impact of market conditions, on our pension plan creating an earnings drag of $0.30 per share, and unusually mild weather impacted earnings by $0.28 cents per share.
Through our continuous improvement program, employees were able to drive base O&M down over $200 million or 14% versus 2022. Half of those savings are sustainable and this tremendous effort buoyed our full-year results by $0.32 per share, allowing us to meet our operating earnings targets.
In 2023, the company for $3.7 billion of capex to work to improve reliability in the customer experience. This was 16% more than was invested in 2022 and 9% more than budget, 93% of the 2022 through capex was invested directly into our wires businesses. Our projects and construction organizations were able to take advantage of the improving supply-chain environment and the mild weather to put the incremental dollars to work.
2023 was a game-changing year for the company in terms of strengthening its balance sheet to enable future investment in growth and our mostly wires-regulated business. In February 2023, the company announced a second transaction with Brookfield to sell 30% of FET for $3.5 billion. With the successful completion of our Pennsylvania consolidation and the anticipated order approving the filed settlement of the transaction, we are on-track to close on this asset sale by the end of March. At that time, we will receive the majority of the proceeds in cash with the balance to be paid before the end of the year.
In May, we successfully executed a $1.5 billion convertible debt issuance at a 4% coupon. We use these proceeds to pay down debt and make a $750 million contribution to our pension assets. In late December, we executed a $700 million pension lift out, representing over 8% of our total pension liability and reducing volatility in our pension plan by 10%. Our improved financial condition gave the Board the confidence to raise the targeted dividend payout ratio to 60% to 70% of operating earnings.
In September, the Board had the confidence to raise the quarterly dividend for the first time in more than three years. Of course, subject to Board approval, our 2024 plan includes dividend declarations of $1.70 per share versus $1.60 per share in 2023, this represents a 6.25% increase. Going forward, we anticipate growing our dividend with operating earnings growth. The significant improvement in our balance sheet puts FirstEnergy in a growth and investment mode. The fact that we do not expect incremental equity to fund our capex growth beyond our employee benefit programs differentiates FirstEnergy for many of our peers.
We are introducing the a $26 billion five year capital investment program to improve reliability and our customers' experience. We are branding this program Energized365 and John will provide more details in his remarks. These investments should enable 9% average annual growth in rate base over the period. We are guiding to $4.3 billion of investment in 2024, an increase of 15% over 2023. Energized365 represents a significant increase in our investments and rate base with improved earnings quality.
We expect to maintain a strong customer affordability position versus our in-state peers. We are reaffirming our 6% to 8% long-term annual operating earnings growth rate. FirstEnergy plans to execute on our long-term growth rate, year by year. This is why we are announcing a 2024 operating earnings guidance range of $2.61 per share to $2.81 per share. The midpoint is 7% above 2023's operating earnings guidance midpoint.
Turning to slide six, let's take a look at our regulatory calendar. One of the questions investors have asked is how we know that FirstEnergy can obtain fair and reasonable regulatory outcomes. The answer that we have given is to look for milestones in our near-term results. In 2023 and early 2024, we have achieved several milestones demonstrating constructive regulatory outcomes.
Let me highlight a few, as we mentioned in our last call, we received a reasonable outcome in our Maryland distribution rate case. The commission their approved to $29 million revenue increase that supports equity returns of 9.5% and an equity ratio of 53%. We are pleased to serve and invest in Maryland to provide reliable and affordable electricity to our customers.
In West Virginia, we filed a settlement in our ALEC case with staff and broad intervenor support for recovery of $255 million over three years with a carrying cost after year one. The settlement has no disallowances. In January of this year, we filed a settlement in our base rate case with staff and brought in leader support for $105 million rate adjustments based on the 9.8% allowed ROE and a 49.6% equity ratio. This settlement reflects the $700 million increase in rate base since our last -- base rate case in 2014. Of course, we did not get everything we asked for, but the settlement is fair and constructive and it demonstrates West Virginia as an attractive place to invest for our customers.
In New Jersey, JCP&L filed a base rate case settlement last Friday with staff and broad intervenor support that reflects an $85 million rate adjustment based on an ROE of 9.6% and a 52% equity ratio. The settlement reflects the $400 million increase in rate base since our last base rate case in 2021. The settlement will have a modest 3.4% increase in the average residential bill and JCP&L's rates will be 26% below our in-state peers. If approved, the settlement would be a fair and reasonable outcome that will incentivize JCP&L to make investments to improve customer reliability.
In Pennsylvania, we received an order in December, approving the consolidation of our Pennsylvania operating companies and improving the transfer of West Penn Power transmission assets to KATCo. Both transactions were executed on January first of this year. We are awaiting commission approval of the filed settlements for the FET minority interest sale, which is anticipated soon.
We anticipate filing a base rate case in Pennsylvania, by April. For investors looking for milestones of FirstEnergy's ability to receive reasonable and constructive regulatory outcomes, these recent examples provide convincing evidence.
In Ohio, we are actively working our way through SP5 in grid mod two cases. We are fully engaged in the regulatory process with staff and interveners and expect constructive outcomes in both cases. We plan to file a base rate case in May.
Turning to slide seven, I want to briefly review the new segment reporting that FirstEnergy will adopt in 2024 to reflect how we are managing the company. Individual companies will not be split among the segments leading to simplicity and transparency in reporting as well as accountability and management.
Our distribution segment what Ohio and Pennsylvania pure play distribution only companies. Our Pennsylvania consolidation and the transfer of the West Penn Power transmission assets to KATCo make this segment transparent and clean This segment will represent about $10.9 billion in rate base, so $4.2 million customers and account for about 45% of forecasted 2024 operating earnings. A Senior Executive when we reach our FE, Pennsylvania, and Ohio.
Our integrated business segment, we'll report on JCP&L, Potomac Edison, and Mon Power. Our companies with combinations of distribution, transmission, and generation. This segment will represent about $8.7 billion in rate base sort 2 million customers and account for about 35% of forecasted 2024 operating earnings. A Senior Executive will lead JCP&L and another would be Man Power and Potomac Edison.
Our last major business segment will be standalone transmission and it will house our pure-play transmission-only companies, consisting of our ownership interest in FET as well as KATCo. This segment will represent about $7.7 billion in consolidated rate base and an account for about 20% of forecasted 2024 operating earnings. One executive will be responsible for these business.
Finally, the Corporate and Other segment will be similar to the current segment with that may. It will report holding company interest, legacy investments, former subsidiaries, and Pension and OPEB. A recast of 2023 into the new segments is available in our fact book and we will provide quarterly and year-to-date reconciliations throughout 2024.
Let me provide some key updates on slide eight. In regard to the Ohio organized crime investigations commission, there is nothing new to report. We continue to cooperate with the commission and answer any questions they ask. The deferred prosecution agreement with the DOJ details FirstEnergy's involvement and there's nothing new with respect to the company.
In the updated Climate Strategy published to our corporate responsibility website yesterday. We are providing an update to our greenhouse gas emissions goals. In 2020, we set a goal of achieving net carbon neutrality by 2050 with an interim goal of reducing our scope on greenhouse gas emissions by 30% by 2030. Achieving the 2030 interim goal was predicated on meaningful emissions reductions at our Fort Martin and Harrison Power Plants in West Virginia, which account for approximately 99% for greenhouse gas emissions.
We've identified several challenges to our ability to meet that interim goal, including resource adequacy concerns in the PJM region and state energy policy initiatives. Given these challenges, we have decided to remove our 2030 interim goal. Through regulatory filings in West Virginia, we are forecasting the end-of-the useful life of Fort Martin in 2035 and for Harrison in 2040.
We remain focused on achieving our aspirational goal of net carbon neutrality by 2050. In the fourth quarter of last year, we made two key additions to our leadership team. In November, we announced our hiring of Toby Thomas as Chief Operating Officer, Toby joined us from American Electric Power where he spent more than two decades in various leadership positions, including growing and managing one of the largest wires businesses in the country.
He is responsible for System Planning and Protection Transmission and Substation and Engineering, Project and Construction Management and System Operations. Wade Smith joined the company in December as the President of FirstEnergy Utilities. He was previously the Chief Operating Officer of Puget Sound Energy. Wade brings more than three decades of experience running large-scale multi-state transmission and distribution companies. The President of our five operating businesses, we will report to him Ohio, Pennsylvania, JCP&L are standalone transmission business and Mon Power and Potomac Edison.
We are actively reviewing internal and external candidates to run these businesses, and expect to make hiring announcements in the coming months. Wade and Toby, are key additions to the leadership team that will grow and transform this company into a premier electric utility. In 2023 and continuing into 2024, we have made transformational strides to improve the financial strength of FirstEnergy. We have organized our company with a singular focus on growing our five regulated mostly wires companies. We are making the investments needed to improve reliability and the customer experience. Our strong balance sheet and organic investment opportunities differentiate FirstEnergy from many of our peers.
With that. I will turn the call over to Jon.
