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 March 31, 2010

[ ] 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 APRIL 30, 2010
FirstEnergy Corp., $.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.

FirstEnergy Web Site

Each of the registrants’ Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are also made available free of charge on or through FirstEnergy's internet Web site at www.firstenergycorp.com.

These reports are posted on the Web site as soon as reasonably practicable after they are electronically filed with the SEC. Additionally, the registrants routinely post important information on the Web site and recognize the Web site is a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under SEC Regulation FD. Information contained on FirstEnergy's Web site shall not be deemed incorporated into, or to be part of, this report.

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 regulatory process on the pending matters in Ohio, Pennsylvania and New Jersey.

·	Business and regulatory impacts from ATSI’s realignment into PJM.

·	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 or to recover increased transmission costs.

·	Operation 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 similar 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.

Factors that may further delay, or increase the costs associated with (including replacement power costs), the restart of the Davis-Besse Nuclear Power Station from its current refueling outage, including that the modifications to control rod drive mechanism nozzles take longer than expected or are not effective, other conditions requiring remediation are discovered during the extended outage, or the NRC takes adverse action in connection with any of the foregoing.

·	Ultimate resolution of Met-Ed’s and Penelec’s TSC 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 and energy efficiency mandates.

·	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 expected timing and likelihood of completion of the proposed merger with Allegheny Energy, Inc., including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed merger that could reduce anticipated benefits or cause the parties to abandon the merger, the diversion of management's time and attention from FirstEnergy’s ongoing business during this time period, the ability to maintain relationships with customers, employees or suppliers as well as the ability to successfully integrate the businesses and realize cost savings and any other synergies and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect.

·	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	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 (Loss) 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		26-62

Item 2. Management's Discussion and Analysis of Registrant and Subsidiaries		63-95

Management's Narrative Analysis of Results of Operations

FirstEnergy Solutions Corp.		96-98
Ohio Edison Company		99-100
The Cleveland Electric Illuminating Company		101-102
The Toledo Edison Company		103-104
Jersey Central Power & Light Company		105-106
Metropolitan Edison Company		107-108
Pennsylvania Electric Company		109-110

Item 3. Quantitative and Qualitative Disclosures About Market Risk		111

Item 4. Controls and Procedures – FirstEnergy		111

Item 4T. Controls and Procedures – FES, OE, CEI, TE, JCP&L, Met-Ed and Penelec		111

Part II. Other Information

Item 1. Legal Proceedings		112

Item 1A. Risk Factors		112

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		112

Item 5. Other Information		112

Item 6. Exhibits		112-113

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	FirstEnergy, 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
ARO	Asset Retirement Obligation
BGS	Basic Generation Service
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
CAMR	Clean Air Mercury Rule
CAVR	Clean Air Visibility Rule
CBP	Competitive Bid Process
CMEC	Capacity market Evolution Committee
CO2	Carbon dioxide
CTC	Competitive Transition Charge
DOE	United States Department of Energy
DOJ	United States Department of Justice
DCPD	Deferred Compensation Plan for Outside Directors
DPA	Department of the Public Advocate, Division of Rate Counsel (New Jersey)
ECAR	East Central Area Reliability Coordination Agreement
EDCP	Executive Deferred Compensation Plan
EE&C	Energy Efficiency and Conservation
EMP	Energy Master Plan
EPA	United States Environmental Protection Agency
EPACT	Energy Policy Act of 2005
EPRI	Electric Power Research Institute

iii

GLOSSARY OF TERMS, Cont'd.

ESOP	Employee Stock Ownership Plan
ESP	Electric Security Plan
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FMB	First Mortgage Bond
FPA	Federal Power Act
FRR	Fixed Resource Requirement
GAAP	Accounting Principles Generally Accepted in the United States
GHG	Greenhouse Gases
IBEW	International Brotherhood of Electrical Workers
IFRS	International Financial Reporting Standards
IRS	Internal Revenue Service
JCARR	Joint Committee on Agency Review
kV	Kilovolt
KWH	Kilowatt-hours
LED	Light-emitting Diode
LIBOR	London Interbank Offered Rate
LOC	Letter of Credit
LTIP	Long-Term Incentive Plan
MACT	Maximum Achievable Control Technology
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
NEIL	Nuclear Electric Insurance Limited
NERC	North American Electric Reliability Corporation
NJBPU	New Jersey Board of Public Utilities
NNSR	Non-Attainment New Source Review
NOPEC	Northeast Ohio Public Energy Council
NOV	Notice of Violation
NOX	Nitrogen Oxide
NRC	Nuclear Regulatory Commission
NSR	New Source Review
NUG	Non-Utility Generation
NUGC	Non-Utility Generation Charge
OCC	Ohio Consumers’ Counsel
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
PSD	Prevention of Significant Deterioration
PUCO	Public Utilities Commission of Ohio
QSPE	Qualifying Special-Purpose Entity
RCP	Rate Certainty Plan
RECs	Renewable Energy Credits
RFP	Request for Proposal
RPM	Reliability Pricing Model
RTEP	Regional Transmission Expansion Plan
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

GLOSSARY OF TERMS, Cont'd.

SIP	State Implementation Plan(s) Under the Clean Air Act
SNCR	Selective Non-Catalytic Reduction
SO2	Sulfur Dioxide
SRECs	Solar Renewable Energy Credits
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
	March 31
	2010			2009
	(In millions, except
	per share amounts)
REVENUES:
Electric utilities	$	2,543		$	3,020
Unregulated businesses		756			314
Total revenues*		3,299			3,334

EXPENSES:
Fuel		334			312
Purchased power		1,238			1,143
Other operating expenses		701			827
Provision for depreciation		193			177
Amortization of regulatory assets		212			411
Deferral of new regulatory assets		-			(93	)
General taxes		205			211
Total expenses		2,883			2,988

OPERATING INCOME		416			346

OTHER INCOME (EXPENSE):
Investment income (loss), net		16			(11	)
Interest expense		(213	)		(194	)
Capitalized interest		41			28
Total other expense		(156	)		(177	)

INCOME BEFORE INCOME TAXES		260			169

INCOME TAXES		111			54

NET INCOME		149			115

Noncontrolling interest loss		(6	)		(4	)

EARNINGS AVAILABLE TO FIRSTENERGY CORP.	$	155		$	119


BASIC EARNINGS PER SHARE OF COMMON STOCK	$	0.51		$	0.39

WEIGHTED AVERAGE NUMBER OF BASIC SHARES OUTSTANDING		304			304

DILUTED EARNINGS PER SHARE OF COMMON STOCK	$	0.51		$	0.39

WEIGHTED AVERAGE NUMBER OF DILUTED SHARES OUTSTANDING		306			306

DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$	0.55		$	0.55


* Includes $109 million of excise tax collections in the three months ended March 31, 2010 and 2009.

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended
	March 31
	2010			2009
	(In millions)

NET INCOME	$	149		$	115

OTHER COMPREHENSIVE INCOME:
Pension and other postretirement benefits		13			35
Unrealized gain on derivative hedges		4			15
Change in unrealized gain on available-for-sale securities		6			(5	)
Other comprehensive income		23			45
Income tax expense related to other comprehensive income		7			15
Other comprehensive income, net of tax		16			30

COMPREHENSIVE INCOME		165			145

COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST		(6	)		(4	)

COMPREHENSIVE INCOME AVAILABLE TO FIRSTENERGY CORP.	$	171		$	149

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	March 31,			December 31,
	2010			2009
	(In millions)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	310		$	874
Receivables-
Customers (less accumulated provisions of $36 million and $33 million,
respectively, for uncollectible accounts)		1,255			1,244
Other (less accumulated provisions of $7 million for uncollectible accounts)		140			153
Materials and supplies, at average cost		699			647
Prepaid taxes		236			248
Other		214			154
		2,854			3,320
PROPERTY, PLANT AND EQUIPMENT:
In service		27,980			27,826
Less - Accumulated provision for depreciation		11,554			11,397
		16,426			16,429
Construction work in progress		2,931			2,735
		19,357			19,164
INVESTMENTS:
Nuclear plant decommissioning trusts		1,882			1,859
Investments in lease obligation bonds		495			543
Other		609			621
		2,986			3,023
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill		5,575			5,575
Regulatory assets		2,398			2,356
Power purchase contract asset		148			200
Other		760			666
		8,881			8,797
	$	34,078		$	34,304
LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES:
Currently payable long-term debt	$	1,783		$	1,834
Short-term borrowings		886			1,181
Accounts payable		772			829
Accrued taxes		266			314
Other		1,179			1,130
		4,886			5,288
CAPITALIZATION:
Common stockholders’ equity-
Common stock, $0.10 par value, authorized 375,000,000 shares-
304,835,407 shares outstanding		31			31
Other paid-in capital		5,432			5,448
Accumulated other comprehensive loss		(1,399	)		(1,415	)
Retained earnings		4,482			4,495
Total common stockholders' equity		8,546			8,559
Noncontrolling interest		(11	)		(2	)
Total equity		8,535			8,557
Long-term debt and other long-term obligations		11,847			11,908
		20,382			20,465
NONCURRENT LIABILITIES:
Accumulated deferred income taxes		2,602			2,468
Asset retirement obligations		1,449			1,425
Deferred gain on sale and leaseback transaction		984			993
Power purchase contract liability		738			643
Retirement benefits		1,527			1,534
Lease market valuation liability		251			262
Other		1,259			1,226
		8,810			8,551
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 8)
	$	34,078		$	34,304

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these
financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	March 31
	2010			2009
	(In millions)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	149		$	115
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		193			177
Amortization of regulatory assets		212			411
Deferral of new regulatory assets		-			(93	)
Nuclear fuel and lease amortization		41			27
Deferred purchased power and other costs		(77	)		(62	)
Deferred income taxes and investment tax credits, net		59			(28	)
Investment impairment		10			36
Deferred rents and lease market valuation liability		(17	)		(14	)
Stock-based compensation		(15	)		(13	)
Accrued compensation and retirement benefits		(81	)		(66	)
Commodity derivative transactions, net		33			16
Cash collateral paid		(46	)		(15	)
Decrease (increase) in operating assets-
Receivables		2			46
Materials and supplies		(42	)		(7	)
Prepayments and other current assets		33			(71	)
Increase (decrease) in operating liabilities-
Accounts payable		(57	)		(90	)
Accrued taxes		7			(51	)
Accrued interest		66			118
Other		36			26
Net cash provided from operating activities		506			462

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		-			700
Redemptions and Repayments-
Long-term debt		(109	)		(444	)
Short-term borrowings, net		(295	)		-
Common stock dividend payments		(168	)		(168	)
Other		(22	)		(18	)
Net cash provided from (used for) financing activities		(594	)		70

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(508	)		(654	)
Proceeds from asset sales		114			8
Sales of investment securities held in trusts		733			567
Purchases of investment securities held in trusts		(755	)		(584	)
Customer intangibles		(101	)		-
Cash investments		49			17
Other		(8	)		(32	)
Net cash used for investing activities		(476	)		(678	)

Net change in cash and cash equivalents		(564	)		(146	)
Cash and cash equivalents at beginning of period		874			545
Cash and cash equivalents at end of period	$	310		$	399

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended
	March 31
	2010			2009
	(In thousands)


REVENUES:
Electric sales to affiliates	$	607,302		$	892,690
Electric sales to non-affiliates		668,685			279,746
Other		112,106			53,670
Total revenues		1,388,093			1,226,106

EXPENSES:
Fuel		328,221			306,158
Purchased power from affiliates		60,953			63,207
Purchased power from non-affiliates		450,216			160,342
Other operating expenses		304,510			307,356
Provision for depreciation		62,918			61,373
General taxes		26,746			23,376
Total expenses		1,233,564			921,812

OPERATING INCOME		154,529			304,294

OTHER EXPENSE:
Investment income (loss)		717			(28,874	)
Miscellaneous expense		1,310			2,511
Interest expense to affiliates		(2,305	)		(2,979	)
Interest expense - other		(49,644	)		(22,527	)
Capitalized interest		19,690			10,078
Total other expense		(30,232	)		(41,791	)

INCOME BEFORE INCOME TAXES		124,297			262,503

INCOME TAXES		44,371			91,822

NET INCOME		79,926			170,681

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and other postretirement benefits		(9,834	)		2,568
Unrealized gain on derivative hedges		1,274			11,016
Change in unrealized gain on available-for-sale securities		5,028			(1,477	)
Other comprehensive income (loss)		(3,532	)		12,107
Income tax expense (benefit) related to other comprehensive income		(1,340	)		4,709
Other comprehensive income (loss), net of tax		(2,192	)		7,398

TOTAL COMPREHENSIVE INCOME	$	77,734		$	178,079

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	March 31,			December 31,
	2010			2009
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11		$	12
Receivables-
Customers (less accumulated provisions of $13,641,000 and $12,041,000,
respectively, for uncollectible accounts)		248,994			195,107
Associated companies		360,804			318,561
Other (less accumulated provisions of $6,702,000)		81,659			51,872
Notes receivable from associated companies		483,423			805,103
Materials and supplies, at average cost		558,751			539,541
Prepayments and other		160,668			107,782
		1,894,310			2,017,978
PROPERTY, PLANT AND EQUIPMENT:
In service		10,368,007			10,357,632
Less - Accumulated provision for depreciation		4,617,864			4,531,158
		5,750,143			5,826,474
Construction work in progress		2,597,630			2,423,446
		8,347,773			8,249,920
INVESTMENTS:
Nuclear plant decommissioning trusts		1,091,114			1,088,641
Other		8,525			22,466
		1,099,639			1,111,107
DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits		66,462			86,626
Goodwill		24,248			24,248
Customer intangibles		114,567			16,566
Property taxes		50,125			50,125
Unamortized sale and leaseback costs		90,803			72,553
Other		109,494			121,665
		455,699			371,783
	$	11,797,421		$	11,750,788
LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES:
Currently payable long-term debt	$	1,601,184		$	1,550,927
Short-term borrowings-
Associated companies		-			9,237
Other		100,000			100,000
Accounts payable-
Associated companies		385,251			466,078
Other		270,457			245,363
Accrued taxes		66,585			83,158
Other		393,512			359,057
		2,816,989			2,813,820
CAPITALIZATION:
Common stockholder's equity -
Common stock, without par value, authorized 750 shares,
7 shares outstanding		1,465,698			1,468,423
Accumulated other comprehensive loss		(105,193	)		(103,001	)
Retained earnings		2,229,075			2,149,149
Total common stockholder's equity		3,589,580			3,514,571
Long-term debt and other long-term obligations		2,660,200			2,711,652
		6,249,780			6,226,223
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction		984,440			992,869
Accumulated deferred investment tax credits		57,353			58,396
Asset retirement obligations		936,453			921,448
Retirement benefits		219,174			204,035
Property taxes		50,125			50,125
Lease market valuation liability		250,871			262,200
Other		232,236			221,672
		2,730,652			2,710,745
COMMITMENTS AND CONTINGENCIES (Note 8)
	$	11,797,421		$	11,750,788

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		Three Months Ended
		March 31
		2010			2009
	(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	79,926		$	170,681
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation			62,918			61,373
Nuclear fuel and lease amortization			42,118			27,169
Deferred rents and lease market valuation liability			(40,869	)		(37,522	)
Deferred income taxes and investment tax credits, net			37,773			24,866
Investment impairment			9,606			33,535
Commodity derivative transactions, net			32,900			15,817
Cash collateral, net			(21,411	)		(5,492	)
Decrease (increase) in operating assets:
Receivables			(158,288	)		80,067
Materials and supplies			(8,700	)		(865	)
Prepayments and other current assets			13,516			(3,456	)
Increase (decrease) in operating liabilities:
Accounts payable			(41,057	)		(61,419	)
Accrued taxes			(16,300	)		39,846
Accrued interest			(14,930	)		10,338
Other			13,902			(7,071	)
Net cash provided from (used for) operating activities			(8,896	)		347,867

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt			-			100,000
Short-term borrowings, net			-			621,294
Redemptions and Repayments-
Long-term debt			(1,278	)		(335,916	)
Short-term borrowings, net			(9,237	)		-
Other			(731	)		-
Net cash provided from (used for) financing activities			(11,246	)		385,378

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions			(301,603	)		(412,805	)
Proceeds from asset sales			114,272			7,573
Sales of investment securities held in trusts			272,094			351,414
Purchases of investment securities held in trusts			(284,888	)		(356,904	)
Loans from (to) associated companies, net			321,680			(303,963	)
Customer intangibles			(100,615	)		-
Other			(799	)		(18,565	)
Net cash provided from (used for) investing activities			20,141			(733,250	)

Net change in cash and cash equivalents			(1	)		(5	)
Cash and cash equivalents at beginning of period			12			39
Cash and cash equivalents at end of period		$	11		$	34

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended
	March 31
	2010			2009
	(In thousands)
STATEMENTS OF INCOME
REVENUES:
Electric sales	$	479,925		$	720,011
Excise and gross receipts tax collections		28,475			28,980
Total revenues		508,400			748,991

EXPENSES:
Purchased power from affiliates		135,857			332,336
Purchased power from non-affiliates		112,051			137,813
Other operating costs		88,855			157,830
Provision for depreciation		21,880			21,513
Amortization of regulatory assets, net		29,345			20,211
General taxes		47,492			49,120
Total expenses		435,480			718,823

OPERATING INCOME		72,920			30,168

OTHER INCOME (EXPENSE):
Investment income		5,244			9,362
Miscellaneous expense		(292	)		(810	)
Interest expense		(22,310	)		(23,287	)
Capitalized interest		208			220
Total other expense		(17,150	)		(14,515	)

INCOME BEFORE INCOME TAXES		55,770			15,653

INCOME TAXES		19,609			4,005

NET INCOME		36,161			11,648

Noncontrolling interest income		132			146

EARNINGS AVAILABLE TO PARENT	$	36,029		$	11,502

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	36,161		$	11,648

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and other postretirement benefits		4,015			5,738
Change in unrealized gain on available-for-sale securities		291			(2,709	)
Other comprehensive income		4,306			3,029
Income tax expense related to other comprehensive income		693			529
Other comprehensive income, net of tax		3,613			2,500

COMPREHENSIVE INCOME		39,774			14,148

COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		132			146

COMPREHENSIVE INCOME AVAILABLE TO PARENT	$	39,642		$	14,002

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

OHIO EDISON COMPANY

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	March 31,			December 31,
	2010			2009
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	60,680		$	324,175
Receivables-
Customers (less accumulated provisions of $5,417,000 and $5,119,000, respectively,
for uncollectible accounts)		196,226			209,384
Associated companies		49,839			98,874
Other (less accumulated provisions of $1,000 and $18,000, respectively,
for uncollectible accounts)		18,758			14,155
Notes receivable from associated companies		104,183			118,651
Prepayments and other		37,766			15,964
		467,452			781,203
UTILITY PLANT:
In service		3,057,995			3,036,467
Less - Accumulated provision for depreciation		1,177,211			1,165,394
		1,880,784			1,871,073
Construction work in progress		35,331			31,171
		1,916,115			1,902,244
OTHER PROPERTY AND INVESTMENTS:
Investment in lease obligation bonds		216,498			216,600
Nuclear plant decommissioning trusts		120,819			120,812
Other		96,669			96,861
		433,986			434,273
DEFERRED CHARGES AND OTHER ASSETS:
Regulatory assets		432,526			465,331
Pension assets		33,128			19,881
Property taxes		67,037			67,037
Unamortized sale and leaseback costs		33,877			35,127
Other		36,454			39,881
		603,022			627,257
	$	3,420,575		$	3,744,977
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1,470		$	2,723
Short-term borrowings-
Associated companies		-			92,863
Other		807			807
Accounts payable-
Associated companies		75,374			102,763
Other		32,351			40,423
Accrued taxes		66,100			81,868
Accrued interest		25,523			25,749
Other		109,429			81,424
		311,054			428,620
CAPITALIZATION:
Common stockholder's equity-
Common stock, without par value, authorized 175,000,000 shares -
60 shares outstanding		949,735			1,154,797
Accumulated other comprehensive loss		(159,964	)		(163,577	)
Retained earnings		20,920			29,890
Total common stockholder's equity		810,691			1,021,110
Noncontrolling interest		6,574			6,442
Total equity		817,265			1,027,552
Long-term debt and other long-term obligations		1,160,250			1,160,208
		1,977,515			2,187,760
NONCURRENT LIABILITIES:
Accumulated deferred income taxes		670,758			660,114
Accumulated deferred investment tax credits		11,243			11,406
Asset retirement obligations		87,315			85,926
Retirement benefits		174,404			174,925
Other		188,286			196,226
		1,132,006			1,128,597
COMMITMENTS AND CONTINGENCIES (Note 8)
	$	3,420,575		$	3,744,977

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	March 31
	2010			2009
	(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	36,161		$	11,648
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		21,880			21,513
Amortization of regulatory assets, net		29,345			20,211
Purchased power cost recovery reconciliation		(5,908	)		2,978
Amortization of lease costs		32,934			32,934
Deferred income taxes and investment tax credits, net		(2,489	)		(7,272	)
Accrued compensation and retirement benefits		(12,160	)		(1,746	)
Accrued regulatory obligations		(623	)		18,350
Electric service prepayment programs		-			(3,944	)
Decrease (increase) in operating assets-
Receivables		65,141			1,435
Prepayments and other current assets		(21,802	)		(9,806	)
Increase (decrease) in operating liabilities-
Accounts payable		(35,461	)		11,880
Accrued taxes		(15,849	)		(26,222	)
Accrued interest		(226	)		(1,956	)
Other		10,270			6,708
Net cash provided from operating activities		101,213			76,711

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Short-term borrowings, net		-			79,810
Redemptions and Repayments-
Long-term debt		(1,363	)		(100,393	)
Short-term borrowings, net		(92,863	)
Dividend Payments-
Common stock		(250,000	)		-
Other		(113	)		(69	)
Net cash used for financing activities		(344,339	)		(20,652	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(35,680	)		(37,523	)
Sales of investment securities held in trusts		2,424			9,417
Purchases of investment securities held in trusts		(2,971	)		(10,422	)
Loan repayments from associated companies, net		14,469			146,098
Cash investments		(384	)		(243	)
Other		1,773			1,463
Net cash provided from (used for) investing activities		(20,369	)		108,790

Net change in cash and cash equivalents		(263,495	)		164,849
Cash and cash equivalents at beginning of period		324,175			146,343
Cash and cash equivalents at end of period	$	60,680		$	311,192

The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements.

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

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

	Three Months Ended
	March 31
	2010			2009
	(In thousands)
STATEMENTS OF INCOME
REVENUES:
Electric sales	$	312,497		$	431,405
Excise tax collections		17,573			18,320
Total revenues		330,070			449,725

EXPENSES:
Purchased power from affiliates		94,965			238,872
Purchased power from non-affiliates		51,826			71,746
Other operating costs		31,235			64,830
Provision for depreciation		18,111			18,280
Amortization of regulatory assets		45,139			256,737
Deferral of new regulatory assets		-			(94,816	)
General taxes		38,489			38,141
Total expenses		279,765			593,790

OPERATING INCOME (LOSS)		50,305			(144,065	)

OTHER INCOME (EXPENSE):
Investment income		7,547			8,420
Miscellaneous income		581			1,994
Interest expense		(33,621	)		(33,322	)
Capitalized interest		26			67
Total other expense		(25,467	)		(22,841	)

INCOME (LOSS) BEF