Steven E. Strah
President and Chief Executive Officer at FirstEnergy
Thanks, Irene. Good morning, everyone. I'm glad you could join us and we have a lot of ground to cover. Over the past year, our Board, leadership team, and employees have worked together to dramatically reshape FirstEnergy. We have embraced important foundational changes to strengthen our culture and the core of our Company. We're optimizing our operations through our transformational FE Forward initiative. And we bolstered our financial position to enable long-term strategic investments to modernize the electric grid and to deliver a superior customer experience. I'm extremely proud of our progress. This important work together with our continued strong operational performance is energizing our Company. Our efforts in 2021 were the first steps on a journey to transform FirstEnergy into a more sustainable Company centered on our core values and built for the long-term.
While the Deferred Prosecution Agreement, the approved Ohio settlement, and the progress we announced yesterday in resolving outstanding litigation are all very important milestones. Most of our significant work over the past year involves the cultural changes at our Company. So I'd like to start by talking about that. We are building a culture where all of us at every level in the organization feel valued and understand the importance of doing what is right. This means doing what is in the best interest of our stakeholders, as well as the environment, working as one team across the Company and developing an inclusive and safe culture, where employees feel empowered and motivated to speak up and bring their very best every day. This culture change is the foundation, the hard, if you will, of a new FirstEnergy, and I'm deeply committed to making this change.
My vision is to be a Company that all stakeholders trust that is focused on delivering value to our customers and where employees bring an innovative and continuous improvement mindset to work every day. Fulfilling this vision starts with our people. Through all of the tribulations over the past two years, our employees have risen to every challenge and shown true character. They've delivered strong results, while demonstrating a passion for what they do and a passion for serving customers. They deeply care about the communities we serve and they have a strong sense of pride for this Company.
But we know that pride was eroded by what happened related to House Bill 6. I along with the Board and the entire management team, I'm dedicated to restoring their pride by building a Company that is grounded in an unwavering culture of compliance, ethics, integrity, and accountability at every level. People are our greatest asset, and through our employee-driven FE Forward program, we are implementing their ideas and solutions to create value for our Company, our customers, and other stakeholders.
By investing $150 million in innovation, digital tools, and technologies, we can work more safely and efficiently deliver an exceptional experience for customers and unlock opportunities for growth that are embedded in the broad energy transition. For example, our employees have determined that we can better serve our customers through a five-state operating model with centrally driven best practices and processes as opposed to separate operating company management teams, and last week we made that transition. Employees are implementing enhanced communications and self-service options to improve the experience for customers when they need our assistance. They're using data and analytics to drive better decisions around our assets, sourcing, and inventory resulting in better reliability for customers. And they're capturing productivity improvements through system integration, automation, and mobility tools that will significantly reduce day-to-day work we outsource currently.
This is important work and coupled with our investments in a more modern and sustainable grid, we expect it to completely transform our Company inside and out. We're enabling this transformation in part through an innovation center and digital factory. These functions which will be staffed by over 140 professionals are focused on enhancing the use of technology across our Company. Together, with IT and cyber, and physical security, they're now led by our new Chief Information Officer, Steve Fortune, who joined us this week. Steve was formerly Group CIO at BP, where he led a major digital transformation. We're fortunate to be able to bring him on board. We've recognized this is a journey, and I'm sure we'll face challenges along the way, but I'm confident in our team's ability to execute and meet our commitments as they did through 2021.
Now let's spend a few moments on recent developments. First, in November, we announced a $3.4 billion transformational equity financing with two premier global infrastructure funds, Blackstone Infrastructure Partners and Brookfield Super-Core Infrastructure Partners. Blackstone purchased $1 billion in FirstEnergy common stock at $39.08 per share in a transaction that closed in December. As part of that investment, Blackstone has appointed Sean Klimczak to serve as a Board observer, and we expect to nominate a Director candidate recommended by Blackstone in our 2022 Shareholder Meeting.
Brookfield is purchasing a 19.9% stake in FET, which owns our ATSI, MAIT, and TrAILCo transmission companies. With an investment of $2.4 billion, this transaction represents a historic valuation in our industry. We expect that transaction to close in the second quarter. These strategic financings address all our equity needs will strengthen our financial position and support the incremental investment opportunities in our plan focused on sustainable investments that support the energy transition. We're pleased to be a partner with these experienced and capable infrastructure investors who fully support the execution and acceleration of our current business strategy and transformation. Notably, these transactions demonstrate confidence in our business plan, our talented team, and our vision for long-term growth. They are also a key catalyst to executing our strategy for long-term 6% to 8% customer focused growth.
Also in November, we were pleased to reach a unanimous settlement with a broad range of parties on multiple Ohio proceedings that were under consideration by the Public Utilities Commission. The $306 million settlement, which was approved by the PUCO in December, benefits our Ohio customers, provides clarity around a wide range of topics and demonstrates our commitment to working openly and collaboratively with our stakeholders. We also continue to make substantial progress in resolving outstanding litigation in order to provide certainty to stakeholders and focus our attention on the future. We announced yesterday that in conjunction with the Special Litigation Committee of the Board of Directors, the Company agreed to a settlement to resolve multiple shareholder derivative lawsuits in Ohio.
Because these shareholder derivative suits brought on behalf of the Company and for the Company's benefit, the settlement includes a payment to FirstEnergy of $180 million less plaintiffs' legal fees to be paid by insurance. The settlement also stipulates a series of corporate governance enhancements, which are outlined in the press release we issued yesterday, and complement the substantial actions we have taken as a Company to strengthen our governance and compliance program over the last year and a half. Upon court approval, this settlement fully resolves the derivative actions. The settlement contains provisions for enhanced oversight and disclosure of political activities, third-party audits and action plans, and a review of the current executive team to be conducted by a Special Board Committee, and further alignment of financial incentives of senior executives with compliance measures.
Additionally, six members of the Board, who have served for a minimum of five years will not stand for re-election at the Company's 2022 Annual Shareholder Meeting. On behalf of the Company, we thank these Directors for their commitment and years of service to FirstEnergy. I'll also note, we have been evaluating various options to reduce the size of the Board following the addition of seven new Directors in 2021, with an eighth from Blackstone to be appointed at this year's Annual Meeting. The Board will continue to comprise an impressive mix of skills, focus areas, and perspectives as it guides our Company through the next phase of our growth.
Turning to other regulatory matters, there's also been progress on the Ohio expanded DCR audit, the DMR audit, and the Corporate Separation audit. The audit reports have been filed in all of these cases and we'll continue to work through the regulatory process on each. During our third quarter call in late October, we alluded to two forthcoming filings in West Virginia that support the transition to clean energy. In November, we filed with the West Virginia Public Service Commission a plan to build 50 megawatts of utility scale solar generation in the state at a total cost of approximately $100 million.
And in December, we filed a plan to comply with environmental rules and responsibly operate our two remaining fossil plants for the benefit of West Virginia customers beyond 2028. We intend to begin a broad stakeholder dialog regarding our planned operational end dates of 2035 and 2040 for Fort Martin and Harrison respectively, which further supports our climate goals. We will also begin preparing for future rate case activity, including base rate case filings in 2023 for Maryland, West Virginia, and likely New Jersey. And in 2024 for Ohio, as well as the Ohio company's filing to address the end of their current ESP which expires in May of 2024.
Also in 2022, we will continue our focus on ethics and compliance. These priorities include continuing to build a more centralized and robust compliance organization for updating and refining our processes, policies, and controls. Creating multiple channels for incident reporting and developing thorough and objective processes to investigate and address incidents of misconduct. Seeking continuous improvement by monitoring, benchmarking and obtaining an independent assessment of the program and completing the training for all employees on our new Code of Conduct and rolling out additional training on our speak-up culture and compliance.
Finally, our ongoing commitment to creating a more diverse equitable and inclusive work environment is an essential part of our overall cultural transformation taking place at our Company. I'm determined to build on our progress in this area. This is a time of historic change at FirstEnergy, change for the better. As we look to the future, I believe our Company will emerge as a premier utility and a leader in our industry. And I believe we can deliver value to our investors that mirrors the value we provide to customers. In all my years at FirstEnergy, I've never been more excited about what's to come.
Now I'll turn the call over to Jon for a financial update.
