Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following tables summarize the fair value of derivative instruments in FirstEnergy’s Consolidated Balance Sheets:



Derivatives not designated as hedging instruments:
Derivative Assets					Derivative Liabilities
	Fair Value					Fair Value
	September 30, 2011		December 31, 2010			September 30, 2011		December 31, 2010
	(In millions)					(In millions)
Power Contracts					Power Contracts
Current Assets	$	157	$	96	Current Liabilities	$	190	$	209
Noncurrent Assets	68		40		Noncurrent Liabilities	67		38
FTRs					FTRs
Current Assets	4		—		Current Liabilities	13		—
Noncurrent Assets	—		—		Noncurrent Liabilities	—		—
NUGs	59		122		NUGs	542		467
Interest Rate Swaps					Interest Rate Swaps
Current Assets	—		—		Current Liabilities	—		—
Noncurrent Assets	—		—		Noncurrent Liabilities	—		—
Other					Other
Current Assets	—		10		Current Liabilities	—		—
Noncurrent Assets	—		—		Noncurrent Liabilities	—		—
Total Derivatives Assets	$	288	$	268	Total Derivatives Liabilities	$	812	$	714

Volume of First Energy's outstanding derivative transactions

The following table summarizes the volumes associated with FirstEnergy’s outstanding derivative transactions as of September 30, 2011:



	Purchases	Sales	Net		Units
	(In thousands)
Power Contracts	34,956	49,696	(14,740	)	MWH
FTRs	45,730	27	45,703		MWH
NUGs	25,442	—	25,442		MWH

Effect of derivative instruments on statements of income and comprehensive income

The effect of derivative instruments on the Consolidated Statements of Income during the three months and nine months ended September 30, 2011 and 2010, are summarized in the following tables:



	Three Months Ended September 30
	Power Contracts			FTRs			Interest Rate Swaps		Other			Total
	(In millions)
Derivatives in a Hedging Relationship
2011
Gain (Loss) Recognized in AOCL (Effective Portion)	$	—		$	—		$	—	$	—		$	—
Effective Gain (Loss) Reclassified to: ⁽¹⁾
Purchased Power Expense	—			—			—		—			—
Revenues	—			—			—		—			—
2010
Gain (Loss) Recognized in AOCL (Effective Portion)	$	(1	)	$	—		$	—	$	3		$	2
Effective Gain (Loss) Reclassified to:⁽¹⁾
Purchased Power Expense	5			—			—		—			5
Revenues	(7		)	—			—		—			(7		)
Fuel Expense	—			—			—		(4		)	(4		)

Derivatives Not in a Hedging Relationship
2011
Unrealized Gain (Loss) Recognized in:
Purchased Power Expense	$	27		$	—		$	—	$	—		$	27
Revenues	3			—			—		—			3
Other Operating Expense	(11		)	(15		)	1		—			(25		)
Realized Gain (Loss) Reclassified to:
Purchased Power Expense	(5		)	—			—		—			(5		)
Revenues	(40		)	30			—		—			(10		)
Other Operating Expense	—			(35		)	—		—			(35		)
2010
Unrealized Gain (Loss) Recognized in:
Purchased Power Expense	$	3		$	—		$	—	$	—		$	3
Realized Gain (Loss) Reclassified to:
Purchased Power Expense	(22		)	—			—		—			(22		)



	Nine Months Ended September 30
	Power Contracts			FTRs			Interest Rate Swaps		Other			Total
	(In millions)
Derivatives in a Hedging Relationship
2011
Gain (Loss) Recognized in AOCL (Effective Portion)	$	5		$	—		$	—	$	—		$	5
Effective Gain (Loss) Reclassified to: ⁽¹⁾
Purchased Power Expense	16			—			—		—			16
Revenues	(12		)	—			—		—			(12		)
2010
Gain (Loss) Recognized in AOCL (Effective Portion)	$	(3	)	$	—		$	—	$	10		$	7
Effective Gain (Loss) Reclassified to:⁽¹⁾
Purchased Power Expense	(2		)	—			—		—			(2		)
Revenues	(11		)	—			—		—			(11		)
Fuel Expense	—			—			—		(11		)	(11		)
Derivatives Not in a Hedging Relationship
2011
Unrealized Gain (Loss) Recognized in:
Purchased Power Expense	$	88		$	—		$	—	$	—		$	88
Revenues	(1		)	—			—		—			(1		)
Other Operating Expense	(65		)	(1		)	2		—			(64		)
Realized Gain (Loss) Reclassified to:
Purchased Power Expense	(41		)	—			—		—			(41		)
Revenues	(69		)	56			—		—			(13		)
Other Operating Expense	—			(122		)	—		—			(122		)
2010
Unrealized Gain (Loss) Recognized in:
Purchased Power Expense	$	42		$	—		$	—	$	—		$	42
Realized Gain (Loss) Reclassified to:
Purchased Power Expense	(71		)	—			—		—			(71		)

Derivatives not in a hedging relationship with regulatory offset



Derivatives Not in a Hedging	Nine Months Ended September 30,
Relationship with Regulatory Offset⁽²⁾	NUGs			Other			Total
	(In millions)
2011
Unrealized Gain (Loss) to Derivative Instrument:	$	(325	)	$	—		$	(325	)
Unrealized Gain (Loss) to Regulatory Assets:	325			—			325
Realized Gain (Loss) to Derivative Instrument:	187			(14		)	173
Realized Gain (Loss) to Regulatory Assets:	(187		)	14			(173		)
2010
Unrealized Gain (Loss) to Derivative Instrument:	$	(405	)	—			$	(405	)
Unrealized Gain (Loss) to Regulatory Assets:	405			—			405
Realized Gain (Loss) to Derivative Instrument:	209			(9		)	200
Realized Gain (Loss) to Regulatory Assets:	(209		)	9			(200		)


⁽¹⁾	The ineffective portion was immaterial.


⁽²⁾	Changes in the fair value of certain contracts are deferred for future recovery from (or refund to) customers.



Derivatives Not in a Hedging	Three Months Ended September 30
Relationship with Regulatory Offset⁽²⁾	NUGs			Other			Total
	(In millions)
2011
Unrealized Gain (Loss) to Derivative Instrument:	$	(89	)	$	(3	)	$	(92	)
Unrealized Gain (Loss) to Regulatory Assets:	89			3			92
Realized Gain (Loss) to Derivative Instrument:	53			(3		)	50
Realized Gain (Loss) to Regulatory Assets:	(53		)	3			(50		)
2010
Unrealized Gain (Loss) to Derivative Instrument:	$	(146	)	—			$	(146	)
Unrealized Gain (Loss) to Regulatory Assets:	146			—			146
Realized Gain (Loss) to Derivative Instrument:	63			—			63
Realized Gain (Loss) to Regulatory Assets:	(63		)	—			(63		)

Reconciliation of changes in the fair value of certain contracts that are deferred

The following table provides a reconciliation of changes in the fair value of certain contracts that are deferred for future recovery from (or credit to) customers during the three months and nine months ended September 30, 2011 and 2010:



	Three Months Ended September 30
Derivatives Not in a Hedging Relationship with Regulatory Offset⁽¹⁾	NUGs			Other			Total
	(In millions)
Outstanding net asset (liability) as of July 1, 2011	$	(447	)	$	2		$	(445	)
Additions/Change in value of existing contracts	(89		)	(3		)	(92		)
Settled contracts	53			(3		)	50
Outstanding net asset (liability) as of September 30, 2011	$	(483	)	$	(4	)	$	(487	)

Outstanding net asset (liability) as of July 1, 2010	$	(557	)	$	10		$	(547	)
Additions/Change in value of existing contracts	(146		)	—			(146		)
Settled contracts	63			—			63
Outstanding net asset (liability) as of September 30, 2010	$	(640	)	$	10		$	(630	)

	Nine Months Ended September 30
Derivatives Not in a Hedging Relationship with Regulatory Offset⁽¹⁾	NUGs			Other			Total
	(In millions)
Outstanding net asset (liability) as of January 1, 2011	$	(345	)	$	10		$	(335	)
Additions/Change in value of existing contracts	(325		)	—			(325		)
Settled contracts	187			(14		)	173
Outstanding net asset (liability) as of September 30, 2011	$	(483	)	$	(4	)	$	(487	)

Outstanding net asset (liability) as of January 1, 2010	$	(444	)	$	19		$	(425	)
Additions/Change in value of existing contracts	(405		)	—			(405		)
Settled contracts	209			(9		)	200
Outstanding net asset (liability) as of September 30, 2010	$	(640	)	$	10		$	(630	)


⁽¹⁾	Changes in the fair value of certain contracts are deferred for future recovery from (or refund to) customers.

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

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