Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value of derivatives instruments

The following table summarizes the fair value and classification of derivative instruments on FirstEnergy’s Consolidated Balance Sheets:

Derivative Assets					Derivative Liabilities
	Fair Value					Fair Value
	March 31, 2013		December 31, 2012			March 31, 2013			December 31, 2012
	(In millions)					(In millions)
Current Assets - Derivatives					Current Liabilities - Derivatives
Power Contracts	$	175	$	153	Power Contracts	$	(122	)	$	(115	)
FTRs	1		7		FTRs	(4		)	(7		)
Other	7		—		Other	—			(3		)
	183		160			(126		)	(125		)
					Noncurrent Liabilities - Adverse Power Contract Liability
					NUGs	(247		)	(290		)
Deferred Charges and Other Assets - Other					LCAAP	(146		)	(144		)
Power Contracts	87		99		Noncurrent Liabilities - Other
FTRs	1		1		Power Contracts	(53		)	(36		)
NUGs	34		36		FTRs	(1		)	(2		)
	122		136			(447		)	(472		)
Derivative Assets	$	305	$	296	Derivative Liabilities	$	(573	)	$	(597	)

Offsetting assets and liabilities

				Amounts Not Offset in Consolidated Balance Sheet
March 31, 2013	Fair Value			Derivative Instruments			Cash Collateral Received			Net Fair Value
	(In millions)
Derivative Assets
Power contracts	$	262		$	(169	)	$	(4	)	$	89
FTRs	2			(2		)	—			—
NUG contracts	34			—			—			34
Other	7			—			—			7
	$	305		$	(171	)	$	(4	)	$	130
Derivative Liabilities
Power contracts	$	(175	)	$	169		$	—		$	(6	)
FTRs	(5		)	2			—			(3		)
NUG contracts	(247		)	—			—			(247		)
LCAPP contracts	(146		)	—			—			(146		)
	$	(573	)	$	171		$	—		$	(402	)

				Amounts Not Offset in Consolidated Balance Sheet
December 31, 2012	Fair Value			Derivative Instruments			Cash Collateral (Received)/Pledged			Net Fair Value
	(In millions)
Derivative Assets
Power contracts	$	252		$	(142	)	$	(5	)	$	105
FTRs	8			(8		)	—			—
NUG contracts	36			—			—			36
	$	296		$	(150	)	$	(5	)	$	141
Derivative Liabilities
Power contracts	$	(151	)	$	142		$	9		$	—
FTRs	(9		)	8			1			—
NUG contracts	(290		)	—			—			(290		)
LCAPP contracts	(144		)	—			—			(144		)
Other	(3		)	—			3			—
	$	(597	)	$	150		$	13		$	(434	)

Volume of First Energy's outstanding derivative transactions

The following table summarizes the volumes associated with FirstEnergy’s outstanding derivative transactions as of March 31, 2013:

	Purchases	Sales	Net		Units
	(In millions)
Power Contracts	27	42	(15	)	MWH
FTRs	23	—	23		MWH
NUGs	14	—	14		MWH
LCAPP	408	—	408		MW
Natural Gas	24	—	24		BTUs

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 ended March 31, 2013 and 2012, are summarized in the following tables:

	Three Months Ended March 31
Derivatives in a Hedging Relationship	Power Contracts			FTRs			Interest Rate Swaps		Other			Total
	(In millions)
2013
Gain (Loss) Recognized in AOCI	$	(3	)	$	—		$	4	$	—		$	1
2012
Gain (Loss) Recognized in AOCI	$	(5	)	$	—		$	2	$	—		$	(3	)
Derivatives Not in a Hedging Relationship
2013
Unrealized Gain (Loss) Recognized in:
Other Operating Expense	$	(15	)	$	(2	)	$	—	$	10		$	(7	)
Realized Gain (Loss) Reclassified to:
Revenues	10			7			—		—			17
Purchased Power Expense	$	(11	)	$	—		$	—	$	—		$	(11	)
Other Operating Expense	—			(9		)	—		—			(9		)
Fuel Expense	—			—			—		(1		)	(1		)
2012
Unrealized Gain (Loss) Recognized in:
Other Operating Expense	$	55		$	5		$	—	$	(2	)	$	58
Realized Gain (Loss) Reclassified to:
Revenues	114			6			—		—			120
Purchased Power Expense	$	(117	)	$	—		$	—	$	—		$	(117	)
Other Operating Expense	—			(24		)	—		—			(24		)

Derivative instruments subject to regulatory accounting

The unrealized and realized gains (losses) on FirstEnergy’s derivative instruments subject to regulatory accounting during the three months ended March 31, 2013 and 2012, are summarized in the following tables:

	Three Months Ended March 31
	NUGs			LCAPP			Regulated FTRs			Total
	(In millions)
Derivatives Not in a Hedging Relationship with Regulatory Offset
2013
Unrealized Gain (Loss) on Derivative Instrument	$	18		$	(2	)	$	—		$	16
Realized Gain (Loss) on Derivative Instrument	23			—			(1		)	22
2012
Unrealized Loss on Derivative Instrument	$	(79	)	$	—		$	(1	)	$	(80	)
Realized Gain on Derivative Instrument	72			—			4			76

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 ended March 31, 2013 and 2012:

	Three Months Ended March 31
Derivatives Not in a Hedging Relationship with Regulatory Offset(1)	NUGs			LCAPP			Regulated FTRs			Total
	(In millions)
Outstanding liability as of January 1, 2013	$	(254	)	$	(144	)	$	—		$	(398	)
Additions/Change in value of existing contracts	18			(2		)	—			16
Settled contracts	23			—			(1		)	22
Outstanding liability as of March 31, 2013	$	(213	)	$	(146	)	$	(1	)	$	(360	)
Outstanding liability as of January 1, 2012	$	(293	)	$	—		$	(8	)	$	(301	)
Additions/Change in value of existing contracts	(79		)	—			(1		)	(80		)
Settled contracts	72			—			4			76
Outstanding liability as of March 31, 2012	$	(300	)	$	—		$	(5	)	$	(305	)

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