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Derivative Instruments (Tables)
 12 Months Ended
Dec. 31, 2014
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
 
December 31,
2014
 
December 31,
2013
 
 
December 31,
2014
 
December 31,
2013
 
(In millions)
 
 
(In millions)
Current Assets - Derivatives
 
 
 
 
Current Liabilities - Derivatives
 
 
 
Commodity Contracts
$
121

 
$
162

 
    Commodity Contracts
$
(154
)
 
$
(102
)
FTRs
38

 
4

 
FTRs
(13
)
 
(9
)
 
159

 
166

 
 
(167
)
 
(111
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncurrent Liabilities - Adverse Power Contract Liability
 
 
 
Deferred Charges and Other Assets - Other
 
 
 
 
    NUGs
(153
)
 
(222
)
Commodity Contracts
51

 
53

 
Noncurrent Liabilities - Other
 
 
 
FTRs
1

 
—

 
    Commodity Contracts
(13
)
 
(11
)
NUGs
2

 
20

 
FTRs
(1
)
 
(3
)
 
54

 
73

 
 
(167
)
 
(236
)
Derivative Assets
$
213

 
$
239

 
Derivative Liabilities
$
(334
)
 
$
(347
)
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
 
 
December 31, 2014
 
Fair Value
 
Derivative Instruments
 
Cash Collateral (Received)/Pledged
 
Net Fair Value
 
 
(In millions)
Derivative Assets
 
 
 
 
 
 
 
 
Commodity contracts
 
$
172

 
$
(126
)
 
$
—

 
$
46

FTRs
 
39

 
(14
)
 
—

 
25

NUG contracts
 
2

 
—

 
—

 
2

 
 
$
213

 
$
(140
)
 
$
—

 
$
73

 
 
 
 
 
 
 
 
 
Derivative Liabilities 
 
 
 
 
 
 
 
 
Commodity contracts
 
$
(167
)
 
$
126

 
$
35

 
$
(6
)
FTRs
 
(14
)
 
14

 
—

 
—

NUG contracts
 
(153
)
 
—

 
—

 
(153
)
 
 
$
(334
)
 
$
140

 
$
35

 
$
(159
)
 
 
 
 
 
 
 
 
 


 
 
 
 
Amounts Not Offset in Consolidated Balance Sheet
 
 
December 31, 2013
 
Fair Value
 
Derivative Instruments
 
Cash Collateral (Received)/Pledged
 
Net Fair Value
 
 
(In millions)
Derivative Assets
 
 
 
 
 
 
 
 
Commodity contracts
 
$
215

 
$
(106
)
 
$
(9
)
 
$
100

FTRs
 
4

 
(4
)
 
—

 
—

NUG contracts
 
20

 
—

 
—

 
20

 
 
$
239

 
$
(110
)
 
$
(9
)
 
$
120

 
 
 
 
 
 
 
 
 
Derivative Liabilities
 
 
 
 
 
 
 
 
Commodity contracts
 
$
(113
)
 
$
106

 
$
7

 
$
—

FTRs
 
(12
)
 
4

 
5

 
(3
)
NUG contracts
 
(222
)
 
—

 
—

 
(222
)
 
 
$
(347
)
 
$
110

 
$
12

 
$
(225
)
Volume of First Energy's outstanding derivative transactions
The following table summarizes the volumes associated with FirstEnergy’s outstanding derivative transactions as of December 31, 2014:

 
Purchases
 
Sales
 
Net
 
Units
 
(In millions)
Power Contracts
21

 
33

 
(12
)
 
MWH
FTRs
43

 
—

 
43

 
MWH
NUGs
6

 
—

 
6

 
MWH
Natural Gas
40

 
—

 
40

 
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 during 2014 and 2013 are summarized in the following tables:

 
Year Ended December 31
 
Commodity
Contracts
 
FTRs
 
Interest Rate Swaps
 
Total
 
(In millions)
2014
 

 
 

 
 
 
 

Unrealized Gain (Loss) Recognized in:
 

 
 

 
 
 
 

Other Operating Expense(1)
$
(86
)
 
$
22

 
$
—

 
$
(64
)
 
 
 
 
 
 
 


Realized Gain (Loss) Reclassified to:
 

 
 

 
 
 
 

Revenues(2)
$
(6
)
 
$
68

 
$
—

 
$
62

Purchased Power Expense(3)
365

 
—

 
—

 
365

Other Operating Expense(4)
—

 
(44
)
 
—

 
(44
)
Fuel Expense
(6
)
 
—

 
—

 
(6
)
Interest Expense
—

 
—

 
14

 
14

 
 
 
 
 
 
 
 
(1) Includes ($86) million for commodity contracts and $21 million for FTRs associated with FES.
(2) Represents losses on structured financial contracts. Includes ($6) million for commodity contracts and $67 million for FTRs associated with FES.
(3) Realized losses on financially settled wholesale sales contracts of $252 million resulting from higher market prices were netted in purchased power. Includes $365 million for commodity contracts associated with FES.
(4) Includes ($43) million for FTRs associated with FES.
 
 
 
 
 
 
 
 
 
Year Ended December 31
 
Commodity
Contracts
 
FTRs
 
 
 
Total
 
(In millions)
2013
 

 
 

 
 
 
 

Unrealized Gain (Loss) Recognized in:
 

 
 

 
 
 
 

Other Operating Expense(5)
$
11

 
$
(8
)
 
 
 
$
3

 
 
 
 
 
 
 
 
Realized Gain (Loss) Reclassified to:
 

 
 

 
 
 
 

Revenues(6)
$
46

 
$
21

 
 
 
$
67

Purchased Power Expense(7)
(38
)
 
—

 
 
 
(38
)
Other Operating Expense(8)
—

 
(36
)
 
 
 
(36
)
Fuel Expense
(2
)
 
—

 
 
 
(2
)
 
 
 
 
 
 
 
 
(5) Includes $11 million for commodity contracts and ($8) million for FTRs associated with FES.
(6) Includes $46 million for commodity contracts and $19 million for FTRs associated with FES.
(7) Includes ($38) million for commodity contracts associated with FES.
(8) Includes ($33) million for FTRs associated with FES.
 
 
 
 
 
 
 
 
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 FirstEnergy's derivative instruments subject to regulatory accounting during 2014 and 2013. Changes in the value of these contracts are deferred for future recovery from (or credit to) customers:

 
 
Year Ended December 31
Derivatives Not in a Hedging Relationship with Regulatory Offset
 
NUGs
 
LCAPP(1)
 
Regulated FTRs
 
Total
 
 
(In millions)
Outstanding net liability as of January 1, 2014
 
$
(202
)
 
$
—

 
$
—

 
$
(202
)
Unrealized gain (loss)
 
(1
)
 
—

 
13

 
12

Purchases
 
—

 
—

 
11

 
11

Settlements
 
52

 
—

 
(13
)
 
39

Outstanding net asset (liability) as of December 31, 2014
 
$
(151
)
 
$
—

 
$
11

 
$
(140
)
 
 
 
 
 
 
 
 
 
Outstanding net liability as of January 1, 2013
 
$
(254
)
 
$
(144
)
 
$
—

 
$
(398
)
Unrealized gain (loss)
 
(23
)
 
(22
)
 
4

 
(41
)
Purchases
 
—

 
—

 
(3
)
 
(3
)
Terminations
 
—

 
166

 
—

 
166

Settlements
 
75

 
—

 
(1
)
 
74

Outstanding net liability as of December 31, 2013
 
$
(202
)
 
$
—

 
$
—

 
$
(202
)


(1) 
LCAPP contracts are financially settled agreements associated with capacity in New Jersey. During the fourth quarter of 2013, all LCAPP contracts were terminated after being declared unconstitutional by the U.S. District Court for the District of New Jersey.