Edgar Filing: CLEVELAND ELECTRIC ILLUMINATING CO

main_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission	Registrant; State of Incorporation;	I.R.S. Employer
File Number	Address; and Telephone Number	Identification No.

333-21011	FIRSTENERGY CORP.	34-1843785
	(An Ohio Corporation)
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

000-53742	FIRSTENERGY SOLUTIONS CORP.	31-1560186
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-2578	OHIO EDISON COMPANY	34-0437786
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-2323	THE CLEVELAND ELECTRIC ILLUMINATING COMPANY	34-0150020
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-3583	THE TOLEDO EDISON COMPANY	34-4375005
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-3141	JERSEY CENTRAL POWER & LIGHT COMPANY	21-0485010
	(A New Jersey Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-446	METROPOLITAN EDISON COMPANY	23-0870160
	(A Pennsylvania Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-3522	PENNSYLVANIA ELECTRIC COMPANY	25-0718085
	(A Pennsylvania Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes (X) No ( )

FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes (X) No ( )

FirstEnergy Corp.

Yes ( ) No ( )

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer (X)	FirstEnergy Corp.
Accelerated Filer ( )	N/A
Non-accelerated Filer (Do not check if a smaller reporting company) (X)	FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company

Smaller Reporting

Company

( )

N/A

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ( ) No (X)

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

	OUTSTANDING
CLASS	AS OF Novembe 6, 2009
FirstEnergy Corp., $0.10 par value	304,835, 407
FirstEnergy Solutions Corp., no par value	7
Ohio Edison Company, no par value	60
The Cleveland Electric Illuminating Company, no par value	67,930,743
The Toledo Edison Company, $5 par value	29,402,054
Jersey Central Power & Light Company, $10 par value	13,628,447
Metropolitan Edison Company, no par value	859,500
Pennsylvania Electric Company, $20 par value	4,427,577

FirstEnergy Corp. is the sole holder of FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company common stock.

This combined Form 10-Q is separately filed by FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. No registrant makes any representation as to information relating to any other registrant, except that information relating to any of the FirstEnergy subsidiary registrants is also attributed to FirstEnergy Corp.

OMISSION OF CERTAIN INFORMATION

FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) to Form 10-Q.

Forward-Looking Statements: This Form 10-Q includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management’s intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Actual results may differ materially due to:

·	The speed and nature of increased competition in the electric utility industry and legislative and regulatory changes affecting how generation rates will be determined following the expiration of existing rate plans in Pennsylvania.

·	The impact of the PUCO’s regulatory process on the Ohio Companies associated with the distribution rate case.

·	Economic or weather conditions affecting future sales and margins.

·	Changes in markets for energy services.

·	Changing energy and commodity market prices and availability.

·	Replacement power costs being higher than anticipated or inadequately hedged.

·	The continued ability of FirstEnergy’s regulated utilities to collect transition and other charges.

·	Operating and maintenance costs being higher than anticipated.

·	Other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission regulations.

·	The potential impacts of the U.S. Court of Appeals’ July 11, 2008 decision requiring revisions to the CAIR rules and the scope of any laws, rules or regulations that may ultimately take their place.

The uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the Air Quality Compliance Plan (including that such amounts could be higher than anticipated or that certain generating units may need to be shut down) or levels of emission reductions related to the Consent Decree resolving the NSR litigation or other potential regulatory initiatives or actions.

·	Adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the NRC.

·	Met-Ed’s and Penelec’s transmission service charge filings with the PPUC.

·	The continuing availability of generating units and their ability to operate at or near full capacity.

·	The ability to comply with applicable state and federal reliability standards.

·	The ability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives).

·	The ability to improve electric commodity margins and to experience growth in the distribution business.

·	The changing market conditions that could affect the value of assets held in the registrants’ nuclear decommissioning trusts, pension trusts and other trust funds, and cause FirstEnergy to make additional contributions sooner, or in amounts that are larger than currently anticipated.

·	The ability to access the public securities and other capital and credit markets in accordance with FirstEnergy’s financing plan and the cost of such capital.

·	Changes in general economic conditions affecting the registrants.

·	The state of the capital and credit markets affecting the registrants.

·	Interest rates and any actions taken by credit rating agencies that could negatively affect the registrants’ access to financing or their costs and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees.

·	The continuing decline of the national and regional economy and its impact on the registrants’ major industrial and commercial customers.

·	Issues concerning the soundness of financial institutions and counterparties with which the registrants do business.

·	The risks and other factors discussed from time to time in the registrants’ SEC filings, and other similar factors.

The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on the registrants’ business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. A security rating is not a recommendation to buy, sell or hold securities that may be subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated independently of any other rating. The registrants expressly disclaim any current intention to update any forward-looking statements contained herein as a result of new information, future events or otherwise.

TABLE OF CONTENTS

		Pages

Glossary of Terms		iii-iv

Item 1. Financial Statements

FirstEnergy Corp.

	Consolidated Statements of Income	1
	Consolidated Statements of Comprehensive Income (Loss)	2
	Consolidated Balance Sheets	3
	Consolidated Statements of Cash Flows	4

FirstEnergy Solutions Corp.

	Consolidated Statements of Income and Comprehensive Income	5
	Consolidated Balance Sheets	6
	Consolidated Statements of Cash Flows	7

Ohio Edison Company

	Consolidated Statements of Income and Comprehensive Income (Loss)	8
	Consolidated Balance Sheets	9
	Consolidated Statements of Cash Flows	10

The Cleveland Electric Illuminating Company

	Consolidated Statements of Income and Comprehensive Income (Loss)	11
	Consolidated Balance Sheets	12
	Consolidated Statements of Cash Flows	13

The Toledo Edison Company

	Consolidated Statements of Income and Comprehensive Income (Loss)	14
	Consolidated Balance Sheets	15
	Consolidated Statements of Cash Flows	16

Jersey Central Power & Light Company

	Consolidated Statements of Income and Comprehensive Income	17
	Consolidated Balance Sheets	18
	Consolidated Statements of Cash Flows	19

Metropolitan Edison Company

	Consolidated Statements of Income and Comprehensive Income (Loss)	20
	Consolidated Balance Sheets	21
	Consolidated Statements of Cash Flows	22

Pennsylvania Electric Company

	Consolidated Statements of Income and Comprehensive Income (Loss)	23
	Consolidated Balance Sheets	24
	Consolidated Statements of Cash Flows	25

TABLE OF CONTENTS (Cont'd)

		Pages

Combined Notes To Consolidated Financial Statements		26-65

Report of Independent Registered Public Accounting Firm

FirstEnergy Corp.		66
FirstEnergy Solutions Corp.		67
Ohio Edison Company		68
The Cleveland Electric Illuminating Company		69
The Toledo Edison Company		70
Jersey Central Power & Light Company		71
Metropolitan Edison Company		72
Pennsylvania Electric Company		73

Item 2. Management's Discussion and Analysis of Registrant and Subsidiaries		74-118

Management's Narrative Analysis of Results of Operations

FirstEnergy Solutions Corp.		119-121
Ohio Edison Company		122-123
The Cleveland Electric Illuminating Company		124-125
The Toledo Edison Company		126-127
Jersey Central Power & Light Company		128-129
Metropolitan Edison Company		130-131
Pennsylvania Electric Company		132-133

Item 3. Quantitative and Qualitative Disclosures About Market Risk		134

Item 4. Controls and Procedures – FirstEnergy		134

Item 4T. Controls and Procedures – FES, OE, CEI, TE, JCP&L, Met-Ed and Penelec		134

Part II. Other Information

Item 1. Legal Proceedings		135

Item 1A. Risk Factors		135

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		135

Item 5. Other Information		135

Item 6. Exhibits		136-137

GLOSSARY OF TERMS

The following abbreviations and acronyms are used in this report to identify FirstEnergy Corp. and its current and former subsidiaries:

ATSI	American Transmission Systems, Incorporated, owns and operates transmission facilities
CEI	The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary
FENOC	FirstEnergy Nuclear Operating Company, operates nuclear generating facilities
FES	FirstEnergy Solutions Corp., provides energy-related products and services
FESC	FirstEnergy Service Company, provides legal, financial and other corporate support services
FEV	FirstEnergy Ventures Corp., invests in certain unregulated enterprises and business ventures
FGCO	FirstEnergy Generation Corp., owns and operates non-nuclear generating facilities
FirstEnergy	FirstEnergy Corp., a public utility holding company
GPU	GPU, Inc., former parent of JCP&L, Met-Ed and Penelec, which merged with FirstEnergy on November 7, 2001
JCP&L	Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
JCP&L Transition Funding	JCP&L Transition Funding LLC, a Delaware limited liability company and issuer of transition bonds
JCP&L Transition Funding II	JCP&L Transition Funding II LLC, a Delaware limited liability company and issuer of transition bonds
Met-Ed	Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary
NGC	FirstEnergy Nuclear Generation Corp., owns nuclear generating facilities
OE	Ohio Edison Company, an Ohio electric utility operating subsidiary
Ohio Companies	CEI, OE and TE
Penelec	Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary
Penn	Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE
Pennsylvania Companies	Met-Ed, Penelec and Penn
PNBV	PNBV Capital Trust, a special purpose entity created by OE in 1996
Shelf Registrants	OE, CEI, TE, JCP&L, Met-Ed and Penelec
Shippingport	Shippingport Capital Trust, a special purpose entity created by CEI and TE in 1997
Signal Peak	A joint venture between FirstEnergy Ventures Corp. and Boich Companies, that owns mining and coal transportation operations near Roundup, Montana
TE	The Toledo Edison Company, an Ohio electric utility operating subsidiary
Utilities	OE, CEI, TE, Penn, JCP&L, Met-Ed and Penelec
Waverly	The Waverly Power and Light Company, a wholly owned subsidiary of Penelec

The following abbreviations and acronyms are used to identify frequently used terms in this report:

AEP	American Electric Power Company, Inc.
ALJ	Administrative Law Judge
AMP-Ohio	American Municipal Power-Ohio, Inc.
AOCL	Accumulated Other Comprehensive Loss
AQC	Air Quality Control
BGS	Basic Generation Service
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
CAMR	Clean Air Mercury Rule
CBP	Competitive Bid Process
CO2	Carbon Dioxide
CTC	Competitive Transition Charge
DOJ	United States Department of Justice
DPA	Department of the Public Advocate, Division of Rate Counsel (New Jersey)
EE&C	Energy Efficiency and Conservation
EMP	Energy Master Plan
EPA	United States Environmental Protection Agency
EPACT	Energy Policy Act of 2005
ESP	Electric Security Plan
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FMB	First Mortgage Bond
GAAP	Accounting Principles Generally Accepted in the United States
GHG	Greenhouse Gases

iii

GLOSSARY OF TERMS, Cont'd.

IRS	Internal Revenue Service
kV	Kilovolt
KWH	Kilowatt-hours
LED	Light-emitting Diode
LIBOR	London Interbank Offered Rate
LOC	Letter of Credit
MISO	Midwest Independent Transmission System Operator, Inc.
Moody's	Moody's Investors Service, Inc.
MRO	Market Rate Offer
MW	Megawatts
MWH	Megawatt-hours
NAAQS	National Ambient Air Quality Standards
NERC	North American Electric Reliability Corporation
NJBPU	New Jersey Board of Public Utilities
NOV	Notice of Violation
NOX	Nitrogen Oxide
NRC	Nuclear Regulatory Commission
NSR	New Source Review
NUG	Non-Utility Generation
NUGC	Non-Utility Generation Charge
NYMEX	New York Mercantile Exchange
OCI	Other Comprehensive Income
OPEB	Other Post-Employment Benefits
OVEC	Ohio Valley Electric Corporation
PCRB	Pollution Control Revenue Bond
PJM	PJM Interconnection L. L. C.
PLR	Provider of Last Resort; an electric utility's obligation to provide generation service to customers whose alternative supplier fails to deliver service
PPUC	Pennsylvania Public Utility Commission
PSA	Power Supply Agreement
PUCO	Public Utilities Commission of Ohio
QSPE	Qualifying Special-Purpose Entity
RCP	Rate Certainty Plan
RFP	Request for Proposal
RTC	Regulatory Transition Charge
RTO	Regional Transmission Organization
S&P	Standard & Poor's Ratings Service
SB221	Amended Substitute Senate Bill 221
SBC	Societal Benefits Charge
SEC	U.S. Securities and Exchange Commission
SECA	Seams Elimination Cost Adjustment
SIP	State Implementation Plan(s) Under the Clean Air Act
SNCR	Selective Non-Catalytic Reduction
SO2	Sulfur Dioxide
TBC	Transition Bond Charge
TMI-2	Three Mile Island Unit 2
TSC	Transmission Service Charge
VERO	Voluntary Enhanced Retirement Option
VIE	Variable Interest Entity

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2009			2008			2009			2008
	(In millions, except per share amounts)
REVENUES:
Electric utilities	$	2,940		$	3,469		$	8,751		$	9,247
Unregulated businesses		468			435			1,262			1,179
Total revenues *		3,408			3,904			10,013			10,426

EXPENSES:
Fuel		302			356			890			1,000
Purchased power		1,313			1,306			3,480			3,376
Other operating expenses		665			794			2,103			2,374
Provision for depreciation		188			168			550			500
Amortization of regulatory assets		261			291			903			795
Deferral of regulatory assets		-			(58	)		(136	)		(261	)
General taxes		192			201			587			596
Total expenses		2,921			3,058			8,377			8,380

OPERATING INCOME		487			846			1,636			2,046

OTHER INCOME (EXPENSE):
Investment income		191			40			207			73
Interest expense		(355	)		(192	)		(755	)		(559	)
Capitalized interest		35			15			96			36
Total other expense		(129	)		(137	)		(452	)		(450	)

INCOME BEFORE INCOME TAXES		358			709			1,184			1,596

INCOME TAXES		128			238			430			585

NET INCOME		230			471			754			1,011

Noncontrolling interest income (loss)		(4	)		-			(14	)		1

EARNINGS AVAILABLE TO FIRSTENERGY CORP.	$	234		$	471		$	768		$	1,010


BASIC EARNINGS PER SHARE OF COMMON STOCK	$	0.77		$	1.55		$	2.52		$	3.32


WEIGHTED AVERAGE NUMBER OF BASIC SHARES OUTSTANDING		304			304			304			304


DILUTED EARNINGS PER SHARE OF COMMON STOCK	$	0.77		$	1.54		$	2.51		$	3.29


WEIGHTED AVERAGE NUMBER OF DILUTED SHARES OUTSTANDING		306			307			306			307


DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$	1.10		$	1.10		$	1.65		$	1.65


* Includes excise tax collections of $106 million and $115 million in the three months ended September 30, 2009 and 2008, respectively,
and $310 million and $329 million in the nine months ended September 2009 and 2008, respectively.

The accompanying Notes to Consolidated Financial Statements as they relate to FirstEnergy Corp. are an integral part of these statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2009			2008			2009			2008
	(In millions)

NET INCOME	$	230		$	471		$	754		$	1,011

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and other postretirement benefits		(480	)		(20	)		24			(60	)
Unrealized gain (loss) on derivative hedges		19			26			57			21
Change in unrealized gain on available-for-sale securities		(108	)		(100	)		(76	)		(181	)
Other comprehensive income (loss)		(569	)		(94	)		5			(220	)
Income tax expense (benefit) related to other comprehensive income		(216	)		(34	)		26			(81	)
Other comprehensive income (loss), net of tax		(353	)		(60	)		(21	)		(139	)

COMPREHENSIVE INCOME (LOSS)		(123	)		411			733			872

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE
TO NONCONTROLLING INTEREST		(4	)		-			(14	)		1

COMPREHENSIVE INCOME (LOSS) AVAILABLE TO FIRSTENERGY CORP.	$	(119	)	$	411		$	747		$	871

The accompanying Notes to Consolidated Financial Statements as they relate to FirstEnergy Corp. are an integral part of
these statements.

FIRSTENERGY CORP.

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	September 30,			December 31,
	2009			2008
	(In millions)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	838		$	545
Receivables-
Customers (less accumulated provisions of $28 million for uncollectible accounts)		1,260			1,304
Other (less accumulated provisions of $9 million for uncollectible accounts)		132			167
Materials and supplies, at average cost		621			605
Prepaid taxes		585			283
Other		334			149
		3,770			3,053
PROPERTY, PLANT AND EQUIPMENT:
In service		27,526			26,482
Less - Accumulated provision for depreciation		11,267			10,821
		16,259			15,661
Construction work in progress		2,490			2,062
		18,749			17,723
INVESTMENTS:
Nuclear plant decommissioning trusts		1,856			1,708
Investments in lease obligation bonds		553			598
Other		698			711
		3,107			3,017
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill		5,575			5,575
Regulatory assets		2,543			3,140
Power purchase contract asset		220			434
Other		710			579
		9,048			9,728
	$	34,674		$	33,521
LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES:
Currently payable long-term debt	$	2,020		$	2,476
Short-term borrowings		1,653			2,397
Accounts payable		692			794
Accrued taxes		257			333
Other		1,114			1,098
		5,736			7,098
CAPITALIZATION:
Common stockholders’ equity-
Common stock, $0.10 par value, authorized 375,000,000 shares-		31			31
304,835,407 shares outstanding
Other paid-in capital		5,438			5,473
Accumulated other comprehensive loss		(1,401	)		(1,380	)
Retained earnings		4,424			4,159
Total common stockholders' equity		8,492			8,283
Noncontrolling interest		1			32
Total equity		8,493			8,315
Long-term debt and other long-term obligations		11,647			9,100
		20,140			17,415
NONCURRENT LIABILITIES:
Accumulated deferred income taxes		2,562			2,163
Asset retirement obligations		1,401			1,335
Deferred gain on sale and leaseback transaction		1,001			1,027
Power purchase contract liability		685			766
Retirement benefits		1,500			1,884
Lease market valuation liability		274			308
Other		1,375			1,525
		8,798			9,008
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9)
	$	34,674		$	33,521

The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 30
	2009			2008
	(In millions)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	754		$	1,011
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		550			500
Amortization of regulatory assets		903			795
Deferral of regulatory assets		(136	)		(261	)
Nuclear fuel and lease amortization		92			82
Deferred purchased power and other costs		(235	)		(138	)
Deferred income taxes and investment tax credits, net		421			278
Investment impairment		39			63
Deferred rents and lease market valuation liability		(20	)		(62	)
Accrued compensation and retirement benefits		20			(127	)
Stock-based compensation		(1	)		(74	)
Gain on asset sales		(12	)		(43	)
Electric service prepayment programs		(10	)		(58	)
Cash collateral, net		(85	)		21
Gain on investment securities held in trusts		(172	)		(43	)
Loss on debt redemption		142			-
Pension trust contribution		(500	)		-
Decrease (increase) in operating assets-
Receivables		78			(117	)
Materials and supplies		30			(34	)
Prepaid taxes		(332	)		(259	)
Increase (decrease) in operating liabilities-
Accounts payable		(103	)		(34	)
Accrued taxes		(97	)		(166	)
Accrued interest		121			107
Other		17			(10	)
Net cash provided from operating activities		1,464			1,431

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		4,151			631
Short-term borrowings, net		-			1,489
Redemptions and Repayments-
Long-term debt		(2,213	)		(733	)
Short-term borrowings, net		(764	)		-
Net controlled disbursement activity		(15	)		6
Common stock dividend payments		(503	)		(503	)
Other		(39	)		21
Net cash provided from financing activities		617			911

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(1,575	)		(2,177	)
Proceeds from asset sales		19			64
Sales of investment securities held in trusts		3,039			1,144
Purchases of investment securities held in trusts		(3,101	)		(1,215	)
Cash investments		(4	)		72
Restricted funds for debt redemption		(150	)		(82	)
Other		(16	)		(96	)
Net cash used for investing activities		(1,788	)		(2,290	)

Net change in cash and cash equivalents		293			52
Cash and cash equivalents at beginning of period		545			129
Cash and cash equivalents at end of period	$	838		$	181

The accompanying Notes to Consolidated Financial Statements as they relate to FirstEnergy Corp. are an integral
part of these statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2009			2008			2009			2008
	(In thousands)

REVENUES:
Electric sales to affiliates	$	616,300		$	785,681		$	2,348,741		$	2,266,271
Electric sales to non-affiliates		443,819			381,483			928,944			994,100
Other		44,453			74,440			394,145			151,627
Total revenues		1,104,572			1,241,604			3,671,830			3,411,998

EXPENSES:
Fuel		294,693			349,946			871,160			982,185
Purchased power from non-affiliates		205,200			221,493			551,155			648,556
Purchased power from affiliates		35,290			15,821			149,746			75,834
Other operating expenses		305,935			279,184			891,555			863,468
Provision for depreciation		66,041			64,633			192,962			170,535
General taxes		21,700			21,736			66,361			64,728
Total expenses		928,859			952,813			2,722,939			2,805,306

OPERATING INCOME		175,713			288,791			948,891			606,692

OTHER INCOME (EXPENSE):
Investment income (loss)		158,857			11,961			135,723			(6,332	)
Miscellaneous income		2,804			6,466			12,840			19,781
Interest expense to affiliates		(2,209	)		(8,015	)		(8,503	)		(25,953	)
Interest expense - other		(42,187	)		(32,769	)		(90,985	)		(81,809	)
Capitalized interest		17,869			12,395			41,975			29,599
Total other income (expense)		135,134			(9,962	)		91,050			(64,714	)

INCOME BEFORE INCOME TAXES		310,847			278,829			1,039,941			541,978

INCOME TAXES		111,164			93,174			372,175			198,245

NET INCOME		199,683			185,655			667,766			343,733

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and other postretirement benefits		(61,085	)		(1,821	)		13,604			(5,462	)
Unrealized gain on derivative hedges		790			27,277			26,847			15,075
Change in unrealized gain on available-for-sale securities		(89,401	)		(90,198	)		(51,374	)		(159,759	)
Other comprehensive loss		(149,696	)		(64,742	)		(10,923	)		(150,146	)
Income tax benefit related to other comprehensive loss		(58,883	)		(24,781	)		(3,549	)		(55,497	)
Other comprehensive loss, net of tax		(90,813	)		(39,961	)		(7,374	)		(94,649	)

TOTAL COMPREHENSIVE INCOME	$	108,870		$	145,694		$	660,392		$	249,084

The accompanying Notes to Consolidated Financial Statements as they related to FirstEnergy Solutions Corp. are an integral part of
these statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	September 30,			December 31,
	2009			2008
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	266,958		$	39
Receivables-
Customers (less accumulated provisions of $4,676,000 and $5,899,000,
respectively, for uncollectible accounts)		155,489			86,123
Associated companies		344,387			378,100
Other (less accumulated provisions of $6,702,000 and $6,815,000
respectively, for uncollectible accounts)		47,579			24,626
Notes receivable from associated companies		428,016			129,175
Materials and supplies, at average cost		528,278			521,761
Prepayments and other		120,362			112,535
		1,891,069			1,252,359
PROPERTY, PLANT AND EQUIPMENT:
In service		10,254,698			9,871,904
Less - Accumulated provision for depreciation		4,487,832			4,254,721
		5,766,866			5,617,183
Construction work in progress		2,195,999			1,747,435
		7,962,865			7,364,618
INVESTMENTS:
Nuclear plant decommissioning trusts		1,101,884			1,033,717
Long-term notes receivable from associated companies		8,817			62,900
Other		26,642			61,591
		1,137,343			1,158,208
DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits		38,099			267,762
Lease assignment receivable from associated companies		71,356			71,356
Goodwill		24,248			24,248
Property taxes		50,104			50,104
Unamortized sale and leaseback costs		58,350			69,932
Other		226,134			96,434
		468,291			579,836
	$	11,459,568		$	10,355,021
LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES:
Currently payable long-term debt	$	1,631,766		$	2,024,898
Short-term borrowings-
Associated companies		-			264,823
Other		100,000			1,000,000
Accounts payable-
Associated companies		387,182			472,338
Other		156,053			154,593
Accrued taxes		105,574			79,766
Other		227,788			248,439
		2,608,363			4,244,857
CAPITALIZATION:
Common stockholder's equity -
Common stock, without par value, authorized 750 shares,
7 shares outstanding		1,466,697			1,464,229
Accumulated other comprehensive loss		(99,245	)		(91,871	)
Retained earnings		2,239,831			1,572,065
Total common stockholder's equity		3,607,283			2,944,423
Long-term debt and other long-term obligations		2,640,092			571,448
		6,247,375			3,515,871
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction		1,001,298			1,026,584
Accumulated deferred investment tax credits		59,479			62,728
Asset retirement obligations		906,199			863,085
Retirement benefits		200,097			194,177
Property taxes		50,104			50,104
Lease market valuation liability		273,624			307,705
Other		113,029			89,910
		2,603,830			2,594,293
COMMITMENTS AND CONTINGENCIES (Note 9)
	$	11,459,568		$	10,355,021

The accompanying Notes to Consolidated Financial Statements as they relate to FirstEnergy Solutions Corp. are an integral part
of these statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 30
	2009			2008
	(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	667,766		$	343,733
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		192,962			170,535
Nuclear fuel and lease amortization		94,244			81,950
Deferred rents and lease market valuation liability		(40,143	)		(36,702	)
Deferred income taxes and investment tax credits, net		268,812			91,082
Investment impairment		36,169			58,173
Accrued compensation and retirement benefits		5,860			(2,110	)
Commodity derivative transactions, net		25,794			3,634
Gain on asset sales		(9,832	)		(11,319	)
Gain on investment securities held in trusts		(154,723	)		(34,032	)
Cash collateral, net		(92,618	)		(8,827	)
Decrease (increase) in operating assets:
Receivables		(55,774	)		106,574
Materials and supplies		38,543			(35,498	)
Prepayments and other current assets		(35,315	)		(10,762	)
Increase (decrease) in operating liabilities:
Accounts payable		(72,181	)		(61,035	)
Accrued taxes		23,846			(90,767	)
Accrued interest		31,770			15,420
Other		(43,369	)		(25,916	)
Net cash provided from operating activities		881,811			554,133

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		2,356,762			537,375
Equity contribution from parent		-			280,000
Short-term borrowings, net		-			747,686
Redemptions and Repayments-
Long-term debt		(618,213	)		(460,902	)
Short-term borrowings, net		(1,164,823	)		-
Common stock dividend payments		-			(43,000	)
Other		(20,006	)		-
Net cash provided from financing activities		553,720			1,061,159

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(842,600	)		(1,417,205	)
Proceeds from asset sales		16,129			15,218
Sales of investment securities held in trusts		2,152,717			596,291
Purchases of investment securities held in trusts		(2,175,135	)		(624,899	)
Loans to associated companies, net		(298,841	)		(64,142	)
Restricted funds for debt redemption		-			(81,640	)
Other		(20,882	)		(38,915	)
Net cash used for investing activities		(1,168,612	)		(1,615,292	)

Net change in cash and cash equivalents		266,919			-
Cash and cash equivalents at beginning of period		39			2
Cash and cash equivalents at end of period	$	266,958		$	2

The accompanying Notes to Consolidated Financial Statements as they related to FirstEnergy Solutions Corp. are an
integral part of these balance sheets.

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30

	2009			2008			2009			2008
	(In thousands)
STATEMENTS OF INCOME

REVENUES:
Electric sales	$	575,377		$	671,761		$	1,942,612		$	1,877,300
Excise and gross receipts tax collections		27,127			30,500			81,055			87,165
Total revenues		602,504			702,261			2,023,667			1,964,465

EXPENSES:
Purchased power from affiliates		200,506			313,912			847,712			913,647
Purchased power from non-affiliates		161,732			35,462			397,875			83,962
Other operating costs		102,463			146,048			372,231			423,993
Provision for depreciation		22,407			14,997			65,916			57,904
Amortization of regulatory assets, net		17,404			42,582			59,910			87,664
General taxes		45,164			49,255			138,187			144,097
Total expenses		549,676			602,256			1,881,831			1,711,267

OPERATING INCOME		52,828			100,005			141,836			253,198

OTHER INCOME (EXPENSE):
Investment income		20,285			19,323			39,796			45,866
Miscellaneous income (expense)		237			(938	)		2,108			(4,716	)
Interest expense		(22,961	)		(17,309	)		(67,717	)		(51,851	)
Capitalized interest		231			55			730			324
Total other income (expense)		(2,208	)		1,131			(25,083	)		(10,377	)

INCOME BEFORE INCOME TAXES		50,620			101,136			116,753			242,821

INCOME TAXES		15,885			28,501			36,742			77,122

NET INCOME		34,735			72,635			80,011			165,699

Noncontrolling interest income		140			151			429			464

EARNINGS AVAILABLE TO PARENT	$	34,595		$	72,484		$	79,582		$	165,235

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	34,735		$	72,635		$	80,011		$	165,699

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and other postretirement benefits		(49,043	)		(3,994	)		46,559			(11,982	)
Change in unrealized gain on available-for-sale securities		(7,695	)		(9,936	)		(9,676	)		(20,310	)
Other comprehensive income (loss)		(56,738	)		(13,930	)		36,883			(32,292	)
Income tax expense (benefit) related to other comprehensive income		(21,924	)		(5,105	)		15,915			(11,931	)
Other comprehensive income (loss), net of tax		(34,814	)		(8,825	)		20,968			(20,361	)

COMPREHENSIVE INCOME (LOSS)		(79	)		63,810			100,979			145,338

COMPREHENSIVE INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST		140			151			429			464

COMPREHENSIVE INCOME (LOSS) AVAILABLE TO PARENT	$	(219	)	$	63,659		$	100,550		$