Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 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
	June 30, 2013		December 31, 2012			June 30, 2013			December 31, 2012
	(In millions)					(In millions)
Current Assets - Derivatives					Current Liabilities - Derivatives
Commodity Contracts	$	166	$	153	Commodity Contracts	$	(133	)	$	(119	)
FTRs	7		7		FTRs	(9		)	(7		)
	173		160			(142		)	(126		)
					Noncurrent Liabilities - Adverse Power Contract Liability
					NUGs	(256		)	(290		)
Deferred Charges and Other Assets - Other					LCAAP	(158		)	(144		)
Commodity Contracts	87		99		Noncurrent Liabilities - Other
FTRs	—		1		Commodity Contracts	(35		)	(36		)
NUGs	24		36		FTRs	—			(2		)
	111		136			(449		)	(472		)
Derivative Assets	$	284	$	296	Derivative Liabilities	$	(591	)	$	(598	)

Offsetting assets and liabilities

The following tables summarize the fair value of derivative instruments on FirstEnergy’s Consolidated Balance Sheets and the effect of netting arrangements and collateral on its financial position:

				Amounts Not Offset in Consolidated Balance Sheet
June 30, 2013	Fair Value			Derivative Instruments			Cash Collateral (Received)/Pledged			Net Fair Value
	(In millions)
Derivative Assets
Commodity contracts	$	253		$	(149	)	$	(5	)	$	99
FTRs	7			(7		)	—			—
NUG contracts	24			—			—			24
	$	284		$	(156	)	$	(5	)	$	123
Derivative Liabilities
Commodity contracts	$	(168	)	$	149		$	16		$	(3	)
FTRs	(9		)	7			2			—
NUG contracts	(256		)	—			—			(256		)
LCAPP contracts	(158		)	—			—			(158		)
	$	(591	)	$	156		$	18		$	(417	)

				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
Commodity contracts	$	252		$	(142	)	$	(5	)	$	105
FTRs	8			(8		)	—			—
NUG contracts	36			—			—			36
	$	296		$	(150	)	$	(5	)	$	141
Derivative Liabilities
Commodity contracts	$	(155	)	$	142		$	12		$	(1	)
FTRs	(9		)	8			1			—
NUG contracts	(290		)	—			—			(290		)
LCAPP contracts	(144		)	—			—			(144		)
	$	(598	)	$	150		$	13		$	(435	)

Volume of First Energy's outstanding derivative transactions

The following table summarizes the volumes associated with FirstEnergy’s outstanding derivative transactions as of June 30, 2013:

	Purchases	Sales	Net		Units
	(In millions)
Power Contracts	29	38	(9	)	MWH
FTRs	70	—	70		MWH
NUGs	12	—	12		MWH
LCAPP	408	—	408		MW
Natural Gas	48	—	48		mmBTU

Effect of derivative instruments on statements of income and comprehensive income

The effect of derivative instruments not in a hedging relationship on the Consolidated Statements of Income (Loss) during the three months and six months ended June 30, 2013 and 2012, are summarized in the following tables:

	Three Months Ended June 30
	Commodity Contracts			FTRs			Interest Rate Swaps			Total
	(In millions)
2013
Unrealized Loss Recognized in:
Other Operating Expense	$	(10	)	$	(1	)	$	—		$	(11	)
Realized Gain (Loss) Reclassified to:
Revenues	$	6		$	5		$	—		$	11
Purchased Power Expense	(2		)	—			—			(2		)
Other Operating Expense	—			(9		)	—			(9		)
Fuel Expense	2			—			—			2
2012
Unrealized Gain (Loss) Recognized in:
Other Operating Expense	$	12		$	12		$	—		$	24
Interest Expense	—			—			(20		)	(20		)
Realized Gain (Loss) Reclassified to:
Revenues	$	99		$	5		$	—		$	104
Purchased Power Expense	(104		)	—			—			(104		)
Other Operating Expense	—			(18		)	—			(18		)
Fuel Expense	(1		)	—			—			(1		)

	Six Months Ended June 30
	Commodity Contracts			FTRs			Interest Rate Swaps			Total
	(In millions)
2013
Unrealized Loss Recognized in:
Other Operating Expense	$	(15	)	$	(2	)	$	—		$	(17	)
Realized Gain (Loss) Reclassified to:
Revenues	$	16		$	12		$	—		$	28
Purchased Power Expense	(13		)	—			—			(13		)
Other Operating Expense	—			(18		)	—			(18		)
Fuel Expense	2			—			—			2
2012
Unrealized Gain (Loss) Recognized in:
Other Operating Expense	$	65		$	17		$	—		$	82
Interest Expense	—			—			(20		)	(20		)
Realized Gain (Loss) Reclassified to:
Revenues	$	213		$	11		$	—		$	224
Purchased Power Expense	(221		)	—			—			(221		)
Other Operating Expense	—			(41		)	—			(41		)
Fuel Expense	(1		)	—			—			(1		)

Derivative instruments subject to regulatory accounting

The unrealized and realized gains (losses) on FirstEnergy’s derivative instruments subject to regulatory accounting during the three and six months ended June 30, 2013 and 2012, are summarized in the following tables:

	Three Months Ended June 30
Derivatives Not in a Hedging Relationship with Regulatory Offset	NUGs			LCAPP			Regulated FTRs		Total
	(In millions)
2013
Unrealized Loss on Derivative Instrument	$	(38	)	$	(12	)	$	—	$	(50	)
Realized Gain on Derivative Instrument	20			—			1		21
2012
Unrealized Loss on Derivative Instrument	$	(54	)	$	(145	)	$	—	$	(199	)
Realized Gain on Derivative Instrument	61			—			5		66

	Six Months Ended June 30
Derivatives Not in a Hedging Relationship with Regulatory Offset	NUGs			LCAPP			Regulated FTRs			Total
	(In millions)
2013
Unrealized Loss on Derivative Instrument	$	(20	)	$	(14	)	$	—		$	(34	)
Realized Gain on Derivative Instrument	43			—			—			43
2012
Unrealized Loss on Derivative Instrument	$	(133	)	$	(145	)	$	(1	)	$	(279	)
Realized Gain on Derivative Instrument	133			—			9			142

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

The following tables provide 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 six months ended June 30, 2013 and 2012:

	Three Months Ended June 30
Derivatives Not in a Hedging Relationship with Regulatory Offset	NUGs			LCAPP			Regulated FTRs			Total
	(In millions)
Outstanding net liability as of April 1, 2013	$	(213	)	$	(146	)	$	(1	)	$	(360	)
Additions/Change in value of existing contracts	(38		)	(12		)	—			(50		)
Settled contracts	20			—			1			21
Outstanding net liability as of June 30, 2013	$	(231	)	$	(158	)	$	—		$	(389	)
Outstanding net liability as of April 1, 2012	$	(300	)	$	—		$	(5	)	$	(305	)
Additions/Change in value of existing contracts	(54		)	(145		)	—			(199		)
Settled contracts	61			—			5			66
Outstanding net liability as of June 30, 2012	$	(293	)	$	(145	)	$	—		$	(438	)

	Six Months Ended June 30
Derivatives Not in a Hedging Relationship with Regulatory Offset	NUGs			LCAPP			Regulated FTRs			Total
	(In millions)
Outstanding net liability as of January 1, 2013	$	(254	)	$	(144	)	$	—		$	(398	)
Additions/Change in value of existing contracts	(20		)	(14		)	—			(34		)
Settled contracts	43			—			—			43
Outstanding net liability as of June 30, 2013	$	(231	)	$	(158	)	$	—		$	(389	)
Outstanding net liability as of January 1, 2012	$	(293	)	$	—		$	(8	)	$	(301	)
Additions/Change in value of existing contracts	(133		)	(145		)	(1		)	(279		)
Settled contracts	133			—			9			142
Outstanding net liability as of June 30, 2012	$	(293	)	$	(145	)	$	—		$	(438	)