Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

With the completion of the AE merger in the first quarter of 2011, FirstEnergy reorganized its management structure, which resulted in changes to its operating segments to be consistent with the manner in which management views the business. The new structure supports the combined company's primary operations - distribution, transmission, generation and the marketing and sale of its products. The external segment reporting is consistent with the internal financial reporting used by FirstEnergy's chief executive officer (its chief operating decision maker) to regularly assess the performance of the business and allocate resources. FirstEnergy now has three reportable operating segments - Regulated Distribution, Regulated Independent Transmission and Competitive Energy Services.

Prior to the change in composition of business segments, FirstEnergy's business was comprised of two reportable operating segments. The Energy Delivery Services segment was comprised of FirstEnergy's then eight existing utility operating companies that transmit and distribute electricity to customers and purchase power to serve their POLR and default service requirements. The Competitive Energy Services segment was comprised of FES, which supplies electric power to end-use customers through retail and wholesale arrangements. The “Other/Corporate” amounts consisted of corporate items and other businesses that were below the quantifiable threshold for separate disclosure. Disclosures for FirstEnergy's operating segments for 2010 have been reclassified to conform to the current presentation.

The changes in FirstEnergy's reportable segments during 2011 consisted primarily of the following:

• Energy Delivery Services was renamed Regulated Distribution and the operations of MP, PE and WP, which were acquired as part of the merger with AE, and certain regulatory asset recovery mechanisms formerly included in the “Other” segment, were placed into this segment.

• A new Regulated Independent Transmission segment was created consisting of ATSI, and the operations of TrAIL and FirstEnergy's interest in PATH; TrAIL and PATH were acquired as part of the merger with AE. The transmission assets and operations of JCP&L, Met-Ed, Penelec, MP, PE and WP remained within the Regulated Distribution segment.

• AE Supply, an operator of generation facilities that was acquired as part of the merger with AE, was placed into the Competitive Energy Services segment.

The Regulated Distribution segment distributes electricity through FirstEnergy's ten utility distribution companies, serving approximately 6 million customers within 67,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its POLR, SOS and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This segment also includes the transmission operations of JCP&L, Met-Ed, Penelec, WP, MP and PE and the regulated electric generation facilities in West Virginia and New Jersey which MP and JCP&L, respectively, own or contractually control.

The Regulated Distribution segment's revenues are primarily derived from the delivery of electricity within FirstEnergy's service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR, SOS or default service) in its Maryland, New Jersey, Ohio and Pennsylvania franchise areas. Its results reflect the commodity costs of securing electric generation from FES and AE Supply and from non-affiliated power suppliers and the deferral and amortization of certain fuel costs.

The Regulated Independent Transmission segment transmits electricity through transmission lines and its revenues are primarily derived from a formulaic rate that recovers costs and a return on investment for capital expenditures in connection with TrAIL, PATH and other projects, revenues from providing transmission services to electric energy providers and power marketers, and revenues from operating a portion of the FirstEnergy transmission system. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.

The Competitive Energy Services segment supplies, through FES and AE Supply, electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Michigan, New Jersey and Maryland and the provision of partial POLR and default service for some utilities in Ohio and Pennsylvania. FES purchases the entire output of the 18 generating facilities which it owns and operates through its FGCO subsidiary (fossil and hydroelectric generating facilities) and owns, through its NGC subsidiary, FirstEnergy's nuclear generating facilities. FENOC, a separate subsidiary of FirstEnergy, operates and maintains NGC's nuclear generating facilities as well as the output relating to leasehold interests of OE and TE in certain of those facilities that are subject to sale and leaseback arrangements with non-affiliates, pursuant to full output, cost-of-service PSAs. AE Supply together with its consolidated subsidiary, AGC owns, operates and controls the electric generation capacity of 18 facilities. AGC owns and sells generation capacity to AE Supply and MP, which own approximately 59% and 41% of AGC, respectively. AGC's sole asset is a 40% undivided interest in the Bath County, Virginia pumped-storage hydroelectric generation facility and its connecting transmission facilities. All of AGC's revenues are derived from sales of its 1,109 MW share of generation capacity from the Bath County generation facility to AE Supply and MP.

This Competitive Energy Services segment controls approximately 17,000 MWs of capacity, excluding approximately 2,700 MWs from unregulated plants expected to be closed by September 1, 2012 (see Note 11, Impairment of Long-Lived Assets), and also purchases electricity to meet sales obligations. The segment's net income is primarily derived from electric generation sales less the related costs of electricity generation, including purchased power and net transmission (including congestion) and ancillary costs charged by PJM and MISO (prior to June 1, 2011) to deliver energy to the segment's customers.

Other/Corporate contains corporate items and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment.

Financial information for each of FirstEnergy's reportable segments is presented in the table below, which includes financial results for Allegheny beginning February 25, 2011. FES and the Utility Registrants do not have separate reportable operating segments.

As described in Note 1, Organization, Basis of Presentation and Significant Accounting Policies, FirstEnergy elected to change its method of recognizing actuarial gains and losses for its defined benefit pension and OPEB plans, and applied this change retrospectively to all periods presented.

Segment Financial Information
For the Years Ended December 31,	Regulated Distribution			Competitive Energy Services			Regulated Independent Transmission			Other			Reconciling Adjustments			Consolidated
				(In millions)
2011
External revenues	$	10,004		$	5,936		$	391		$	(114	)	$	(26	)	$	16,191
Internal revenues	—			1,237			—			—			(1,170		)	67
Total Revenues	10,004			7,173			391			(114		)	(1,196		)	16,258
Depreciation and amortization	943			415			66			26			—			1,450
Investment income	110			56			—			1			(53		)	114
Net interest charges	(573		)	(298		)	(46		)	(91		)	—			(1,008		)
Income taxes	335			222			66			(87		)	38			574
Net income	570			377			112			(149		)	(41		)	869
Total assets	27,477			16,796			2,436			617			—			47,326
Total goodwill	5,551			890			—			—			—			6,441
Property additions	1,066			927			192			93			—			2,278
2010
External revenues	$	9,571		$	3,575		$	242		$	(88	)	$	(35	)	$	13,265
Internal revenues	139			2,301			—			—			(2,366		)	74
Total Revenues	9,710			5,876			242			(88		)	(2,401		)	13,339
Depreciation and amortization	1,145			284			47			14			—			1,490
Investment income	102			51			—			(2		)	(34		)	117
Net interest charges	(500		)	(232		)	(22		)	(104		)	13			(845		)
Income taxes	338			128			32			(44		)	8			462
Net income	553			210			54			(79		)	(20		)	718
Total assets	22,160			11,320			1,064			987			—			35,531
Total goodwill	5,551			24			—			—			—			5,575
Property additions	681			1,159			64			59			—			1,963
2009
External revenues	$	10,916		$	1,928		$	223		$	(82	)	$	(29	)	$	12,956
Internal revenues	—			2,843			—			—			(2,826		)	17
Total Revenues	10,916			4,771			223			(82		)	(2,855		)	12,973
Depreciation and amortization	1,432			279			50			15			—			1,776
Investment income	141			121			—			4			(62		)	204
Net interest charges	(478		)	(174		)	(19		)	(345		)	38			(978		)
Income taxes	243			305			26			(140		)	(250		)	184
Net income	335			446			39			(209		)	245			856
Total assets	22,663			10,668			974			749			—			35,054
Total goodwill	5,551			24			—			—			—			5,575
Property additions	718			1,412			32			41			—			2,203

Reconciling adjustments to segment operating results from internal management reporting to consolidated external financial reporting primarily consist of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.

Electricity sales during the years ended 2011, 2010 and 2009, were $15,117 million, $12,523 million and $12,032 million, respectively.