K. Jon Taylor
Senior Vice President, Chief Financial Officer and Strategy, FirstEnergy Service Company at FirstEnergy
Thank you, Brian, and good morning everyone. We had a strong quarter, which showcased our commitment to operational excellence and financial discipline. This work enabled us to offset the impact of continued unseasonably mild temperatures across our service territory and deliver operating results near the top end of our guidance. In addition, we're also making good progress on our regulatory initiatives, which I'll review in more detail in a few minutes.
Let's start with a review of our financial performance. As Brian mentioned earlier, third quarter GAAP earnings were $0.74 a share and operating earnings were $0.88 a share. This compares to 2022 third quarter GAAP earnings of $0.58 a share and operating earnings of $0.79 this year. And on a year-to-date basis, operating earnings are $1.94 a share compared to $1.91 a share in 2022 despite significant headwinds from our pension plan and lower weather-related distribution sales.
Our performance in large part is due to intense focus on our operating expenses. Lower company-wide O&M improved operating results by $0.08 a share in the third quarter and $0.21 a share on a year-to-date basis, representing a 13% reduction when compared to the first nine months of 2022. And our expectation for the full year is an O&M reduction of roughly 15% versus 2022 levels. About 50% of that is unique in nature, including spending we accelerated in 2022 with the other 50% being sustainable cost reductions that we will build upon in 2024 and beyond, primarily related to improved productivity across the entire organization, reduced use of contractors and lower spending on branding and advertising, just to name a few.
We're also running ahead of plan with capital spending in both our Transmission and Distribution businesses. Strong planning and execution across our operations and supply chain teams as well as the need to respond to more severe and capital-intensive storm events resulted in an increase to our 2023 forecasted capital investment of nearly $300 million to $3.7 billion from our original plan of $3.4 billion.
Looking now at the drivers for each of our business units for the third quarter. Results in our Distribution business benefited from the diligent focus on operating expenses, as well as our formula rate capital investment programs and rate structures. Together, these helped to offset the impact of a lower pension credit, higher financing costs, mostly associated with new debt issuances and the impact of mild weather on distribution sales.
Mild summer temperatures with cooling degree days 17% lower than the third quarter of 2022 and 6% below normal drove a 3% decrease in total customer demand and impacted earnings by $0.06 this year compared to last year. Sales to residential customers decreased nearly 4% compared to the third quarter of 2022 resulting from a 6% decrease due to the mild summer weather, partially offset by a 2% increase on a weather-adjusted basis. Year-to-date, weather-adjusted usage in this customer class is about 2% higher than our forecast and last year and about 5% higher than 2019 pre-pandemic levels.
In the commercial sector, demand decreased just over 1%, resulting from a 2% decline in the mild temperatures, but increased over 1% quarter-over-quarter on a weather-adjusted basis. Year-to-date, weather-adjusted usage is flat to last year and continues to lag pre-pandemic levels by about 5%.
Finally, sales to industrial customers were flat compared to the third quarter and year-to-date periods of 2022, and remained slightly lower than pre-pandemic levels.
Looking at our Transmission business, third quarter results increased as a result of rate base growth of 8% associated with our Energizing the Future investment program. So far this year, we deployed $1.2 billion of capital in our Transmission business, an increase of $400 million or 50% versus last year and nearly $200 million or approximately 20% above our plan.
Highlighting just a few of the many projects currently underway, in Northeast Pennsylvania we're rebuilding a 20-mile, 115 kV transmission line to enhance service reliability and improve system resiliency. In Ohio, we're rebuilding a 20-mile section of a 138 kV powerline in Belmont and Harrison counties, which is in the third phase of a larger 64-mile project to enhance service reliability, improve system resiliency and accommodate increasing customer demand. And in West Virginia, we're upgrading 4 miles of a high-voltage transmission powerline in Preston County to reinforce local transmission system against severe weather, the future energy demands of the region and enhance service reliability for 5,000 customers in the Kingwood area. For the full year, we now anticipate transmission formula rate investments of over $1.8 billion versus our original plan of just under $1.7 billion.
In our Corporate segment, our results for the third quarter largely reflect the tax benefit from the expected use of state net operating loss carry-forwards, which we discussed on the second quarter call that reduced our consolidated effective tax rate for the year.
As Brian mentioned, throughout 2023, our consistent operational and financial execution, including growth from our investment plan, significant cost control and other financing and tax benefits, has more than offset the headwinds from pension and the impact of lower weather-related distribution sales, which for the first nine months of this year impacted results by $0.18 per share versus normal. I'm proud of how all of our employees have addressed these challenges and supported our commitments.
While 2023 is not over, our 2023 debt financing plan is now complete with six long-term debt transactions at our regulated operating companies totaling $1.6 billion with an average coupon of 5.41%, slightly below our plan of 5.5%. Also earlier this year. FE Corp. issued $1.5 billion of convertible debt with a coupon of 4% that allowed the company to refinance revolver borrowings costing more than 7%, and to make a voluntary pension contribution to eliminate minimum funding requirements in 2025.
Additionally, earlier this month, we extended the maturity date on our $4.5 billion revolving credit facilities to October 2027 and added two new revolving credit facilities, including a $1 billion facility at FET LLC and $150 million facility at KATCo. Moving forward, we will have $5.65 billion of credit facilities to support our increasing capital programs.
As we look to 2024 and 2025, our debt financing plan is minimal since the majority of the FET asset sale proceeds will be received at closing with the remainder anticipated before the end of 2024. We plan to use these proceeds to repay costly revolver borrowings and, depending on the interest rate environment, will be used to redeem high-coupon HoldCo debt such as the 7.375% notes, of which $460 million remain outstanding; retire maturing utility debt and/or defer other utility debt issuances.
The funding from the FET transaction are light-debt maturity schedule, plus the decision we made to issue the low-cost convertible debt provides significant flexibility with our utility debt financing plan which other than refinancings and new money requirements at our standalone transmission companies could be as low as $2.1 billion over the next two years. And as for FE Corp's HoldCo debt, we only have $300 million that matures in 2025.
All that said, we're uniquely well-positioned for the current interest rate environment with minimal earnings sensitivity to interest rate increases over the next couple of years.
Now let's turn to an update on our rate proceedings and other regulatory activity. As we've discussed, we filed three base rate cases earlier this year, representing more than $7 billion of rate base. As Brian said, last week we received an order in the Maryland base rate case that aligns with our goal to continue meeting the energy demands of Potomac Edison's rapidly-growing population. The order authorize an equity capitalization ratio of 53% with an equity return of 9.5%, recovery of regulatory assets associated with both COVID and electric vehicle infrastructure, while also providing support to help our strategy of strong reliability and resiliency in support of the energy transition. The new rates went into effect October 19.
We're also happy with the progress on the New Jersey and West Virginia base rate cases. In New Jersey, we've entered into settlement discussions on our proposed revenue increase of $192 million. And in West Virginia, hearing is set for late January in our $207 million base rate case with new rates expected to be effective in March of next year.
Other recent regulatory updates include, in Pennsylvania, FERC approved our application to consolidate our four Pennsylvania distribution utilities in August. And the parties to the case filed a settlement agreement with the Pennsylvania Public Utility Commission on August 30. The settlement includes $650,000 in bill assistance for income-eligible customers over five years, supports unification of rates over time and includes a tracking mechanism to share certain cost savings associated with the legal entity consolidation with customers.
With the ALJ's recommended approval of the settlement, which is pending final regulatory approval, we expect the consolidation to close by early 2024. This consolidation aligns with our state operating model and is an important step to simplify our legal entity structure and increase the flexibility and efficiency of our financing strategy.
In Ohio, hearings for our Grid Mod II filing are scheduled to begin in December. This four-year $626 million capital investment plan will support our continued work delivering safe, reliable power, offering modern customer experiences and supporting emerging technologies. And in November, hearings are scheduled to begin on our fifth Ohio Electric Security Plan which supports our generation procurement process for non-shopping customers as well as investments in the distribution system, storm and vegetation management riders and energy efficiency programs. Our proposal also supports low-income customers and electric vehicle incentives. We have requested approval for the new ESP, effective June 1 of next year.
In West Virginia, we reached a unanimous settlement on our depreciation case with an agreed-upon $33 million increase in depreciation rates. Those rates will be effective upon conclusion of the West Virginia base rate case. And as Brian discussed, we received approval from the West Virginia Public Service Commission in August to move forward with construction of the first three utility-scale solar generation sites in the state. We expect the first site to be in service by the end of this year and all five sites to be completed before the end of 2025 at a total investment cost of approximately $110 million.
Just as a reminder, summaries of our key filings together with news releases and links to dockets are all available on the Regulatory Corner section of our Investor Relations website.
Looking ahead, we plan to file our New Jersey infrastructure investment program in the next few weeks. And as you know, we are preparing for an active regulatory calendar in 2024.
The performance of our team has been second to none. By focusing on what we can control and a commitment to continuous improvement, we've delivered outstanding operational and financial performance. We've overcome the impact of historic unseasonable weather and other challenges to deliver solid results through the first nine months of this year. We're on track to meet our financial commitments and we're building a strong foundation for continued growth.
Thank you for your time today. Now, let's open the call to your questions.
