Commission | Registrant; State of Incorporation; | I.R.S. Employer | |||||||||||||||||||||
File Number | Address; and Telephone Number | Identification No. | |||||||||||||||||||||
(An | Corporation) | ||||||||||||||||||||||
| |||||||||||||||||||||||
Telephone | |||||||||||||||||||||||
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
☑ | No | ☐ |
☑ | No | ☐ |
☑ | |||||
Accelerated Filer | ☐ | ||||
Non-accelerated Filer | ☐ | ||||
Smaller Reporting Company | |||||
Emerging Growth Company |
Yes | No | ☑ |
OUTSTANDING | ||||||||
CLASS | AS OF SEPTEMBER 30, 2020 | |||||||
Common Stock, $0.10 par value | ||||||||
Page | |||||
Part I. Financial Information | |||||
Consolidated Statements of Stockholders’ Equity | |||||
AE Supply | Allegheny Energy Supply Company, LLC, an unregulated generation subsidiary | ||||
AGC | Allegheny Generating Company, a generation subsidiary of MP | ||||
ATSI | American Transmission Systems, Incorporated, a subsidiary of FET, which owns and operates transmission facilities | ||||
CEI | The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary | ||||
FE | FirstEnergy Corp., a public utility holding company | ||||
FENOC | Energy Harbor Nuclear Corp. (formerly known as FirstEnergy Nuclear Operating Company), a subsidiary of EH, which operates NG’s nuclear generating facilities | ||||
FES | Energy Harbor LLC. (formerly known as FirstEnergy Solutions Corp.), a subsidiary of EH, which provides energy-related products and services | ||||
FES Debtors | FES, FENOC, FG, NG, FE Aircraft Leasing Corp., Norton Energy Storage LLC, and FGMUC | ||||
FESC | FirstEnergy Service Company, which provides legal, financial and other corporate support services | ||||
FET | FirstEnergy Transmission, LLC, the parent company of ATSI, MAIT and TrAIL, and has a joint venture in PATH | ||||
FEV | FirstEnergy Ventures Corp., which invests in certain unregulated enterprises and business ventures | ||||
FG | Energy Harbor Generation LLC (formerly known as FirstEnergy Generation, LLC), a subsidiary of EH, which owns and operates fossil generating facilities | ||||
FGMUC | FirstEnergy Generation Mansfield Unit 1 Corp., a subsidiary of FG | ||||
FirstEnergy | FirstEnergy Corp., together with its consolidated subsidiaries | ||||
Global Holding | Global Mining Holding Company, LLC, a joint venture between FEV, WMB Marketing Ventures, LLC and Pinesdale LLC | ||||
Global Rail | Global Rail Group, LLC, a subsidiary of Global Holding that owns coal transportation operations near Roundup, Montana | ||||
GPUN | GPU Nuclear, Inc., a subsidiary of FE, which operates TMI-2 | ||||
JCP&L | Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary | ||||
KATCo | Keystone Appalachian Transmission Company | ||||
MAIT | Mid-Atlantic Interstate Transmission, LLC, a subsidiary of FET, which owns and operates transmission facilities | ||||
ME | Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary | ||||
MP | Monongahela Power Company, a West Virginia electric utility operating subsidiary | ||||
NG | Energy Harbor Nuclear Generation LLC (formerly known as FirstEnergy Nuclear Generation, LLC), a subsidiary of EH, which owns nuclear generating facilities | ||||
OE | Ohio Edison Company, an Ohio electric utility operating subsidiary | ||||
Ohio Companies | CEI, OE and TE | ||||
PATH | Potomac-Appalachian Transmission Highline, LLC, a joint venture between FE and a subsidiary of AEP | ||||
PE | The Potomac Edison Company, a Maryland and West Virginia electric utility operating subsidiary | ||||
Penn | Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE | ||||
Pennsylvania Companies | ME, PN, Penn and WP | ||||
PN | Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary | ||||
Signal Peak | Signal Peak Energy, LLC, an indirect subsidiary of Global Holding that owns mining operations near Roundup, Montana | ||||
TE | The Toledo Edison Company, an Ohio electric utility operating subsidiary | ||||
TrAIL | Trans-Allegheny Interstate Line Company, a subsidiary of FET, which owns and operates transmission facilities | ||||
Transmission Companies | ATSI, MAIT and TrAIL | ||||
Utilities | OE, CEI, TE, Penn, JCP&L, ME, PN, MP, PE and WP | ||||
WP | West Penn Power Company, a Pennsylvania electric utility operating subsidiary | ||||
The following abbreviations and acronyms are used to identify frequently used terms in this report: | ||||||||||||||
ACE | Affordable Clean Energy | ERO | Electric Reliability Organization | |||||||||||
ADIT | Accumulated Deferred Income Taxes | ESP IV | Electric Security Plan IV | |||||||||||
AEP | American Electric Power Company, Inc. | Facebook® | Facebook is a registered trademark of Facebook, Inc. | |||||||||||
AFS | Available-for-sale | FASB | Financial Accounting Standards Board | |||||||||||
AFUDC | Allowance for Funds Used During Construction | FERC | Federal Energy Regulatory Commission | |||||||||||
AMI | Advance Metering Infrastructure | FES Bankruptcy | FES Debtors’ voluntary petitions for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code with the Bankruptcy Court | |||||||||||
AMT | Alternative Minimum Tax | Fitch | Fitch Ratings Service | |||||||||||
AOCI | Accumulated Other Comprehensive Income (Loss) | FPA | Federal Power Act | |||||||||||
ARO | Asset Retirement Obligation | FTR | Financial Transmission Right | |||||||||||
ARP | Alternative Revenue Program | GAAP | Accounting Principles Generally Accepted in the United States of America | |||||||||||
ASC | Accounting Standard Codification | GHG | Greenhouse Gases | |||||||||||
ASU | Accounting Standards Update | HB 6 | House Bill 6, as passed by Ohio's 133rd General Assembly | |||||||||||
Bankruptcy Court | U.S. Bankruptcy Court in the Northern District of Ohio in Akron | IIP | Infrastructure Investment Program | |||||||||||
BGS | Basic Generation Service | kW | Kilowatt | |||||||||||
CAA | Clean Air Act | LIBOR | London Inter-Bank Offered Rate | |||||||||||
CARES Act | Coronavirus Aid, Relief and Economic Security Act of 2020 | LOC | Letter of Credit | |||||||||||
CCR | Coal Combustion Residuals | LTIIPs | Long-Term Infrastructure Improvement Plans | |||||||||||
CERCLA | Comprehensive Environmental Response, Compensation, and Liability Act of 1980 | MDPSC | Maryland Public Service Commission | |||||||||||
CFR | Code of Federal Regulations | MGP | Manufactured Gas Plants | |||||||||||
CO2 | Carbon Dioxide | MISO | Midcontinent Independent System Operator, Inc. | |||||||||||
COVID-19 | Coronavirus disease 2019 | mmBTU | One Million British Thermal Units | |||||||||||
CPP | EPA’s Clean Power Plan | Moody’s | Moody’s Investors Service, Inc. | |||||||||||
CSAPR | Cross-State Air Pollution Rule | MW | Megawatt | |||||||||||
CTA | Consolidated Tax Adjustment | MWH | Megawatt-hour | |||||||||||
CWA | Clean Water Act | NAAQS | National Ambient Air Quality Standards | |||||||||||
D.C. Circuit | United States Court of Appeals for the District of Columbia Circuit | NDT | Nuclear Decommissioning Trust | |||||||||||
DCR | Delivery Capital Recovery | NERC | North American Electric Reliability Corporation | |||||||||||
DMR | Distribution Modernization Rider | NJBPU | New Jersey Board of Public Utilities | |||||||||||
DSIC | Distribution System Improvement Charge | NOI | Notice of Inquiry | |||||||||||
DSP | Default Service Plan | NOL | Net Operating Loss | |||||||||||
E&P | Earnings and Profits | NOx | Nitrogen Oxide | |||||||||||
EDC | Electric Distribution Company | NPDES | National Pollutant Discharge Elimination System | |||||||||||
EDIS | Electric Distribution Investment Surcharge | NRC | Nuclear Regulatory Commission | |||||||||||
EE&C | Energy Efficiency and Conservation | NUG | Non-Utility Generation | |||||||||||
EGS | Electric Generation Supplier | NYPSC | New York State Public Service Commission | |||||||||||
EGU | Electric Generation Units | OCA | Office of Consumer Advocate | |||||||||||
EH | Energy Harbor Corp. | OCC | Ohio Consumers’ Counsel | |||||||||||
EmPOWER Maryland | EmPOWER Maryland Energy Efficiency Act | OH AG | Ohio Attorney General | |||||||||||
ENEC | Expanded Net Energy Cost | OPEB | Other Post-Employment Benefits | |||||||||||
EPA | United States Environmental Protection Agency | OPIC | Other Paid-in Capital | |||||||||||
EPS | Earnings per Share | OVEC | Ohio Valley Electric Corporation | |||||||||||
PA DEP | Pennsylvania Department of Environmental Protection | SBC | Societal Benefits Charge | |||||||||||
PJM | PJM Interconnection, LLC | SCOH | Supreme Court of Ohio | |||||||||||
PJM Tariff | PJM Open Access Transmission Tariff | SCR | Selective Catalytic Reduction | |||||||||||
POLR | Provider of Last Resort | SEC | United States Securities and Exchange Commission | |||||||||||
POR | Purchase of Receivables | SEET | Significantly Excessive Earnings Test | |||||||||||
PPA | Purchase Power Agreement | SIP | State Implementation Plan(s) Under the Clean Air Act | |||||||||||
PPB | Parts per Billion | SNCR | Selective Non-Catalytic Reduction | |||||||||||
PPUC | Pennsylvania Public Utility Commission | SO2 | Sulfur Dioxide | |||||||||||
PUCO | Public Utilities Commission of Ohio | SOS | Standard Offer Service | |||||||||||
PURPA | Public Utility Regulatory Policies Act of 1978 | SREC | Solar Renewable Energy Credit | |||||||||||
RCRA | Resource Conservation and Recovery Act | SSO | Standard Service Offer | |||||||||||
Regulation FD | Regulation Fair Disclosure promulgated by the SEC | Tax Act | Tax Cuts and Jobs Act adopted December 22, 2017 | |||||||||||
RFC | ReliabilityFirst Corporation | TMI-2 | Three Mile Island Unit 2 | |||||||||||
RFP | Request for Proposal | Twitter® | Twitter is a registered trademark of Twitter, Inc. | |||||||||||
RGGI | Regional Greenhouse Gas Initiative | UCC | Official committee of unsecured creditors appointed in connection with the FES Bankruptcy | |||||||||||
ROE | Return on Equity | VIE | Variable Interest Entity | |||||||||||
RTO | Regional Transmission Organization | VSCC | Virginia State Corporation Commission | |||||||||||
S&P | Standard & Poor’s Ratings Service | WVPSC | Public Service Commission of West Virginia | |||||||||||
S.D. Ohio | Southern District of Ohio | ZEC | Zero Emissions Certificate | |||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
(In millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||
Distribution services and retail generation | $ | $ | $ | $ | ||||||||||||||||||||||
Transmission | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues(1) | ||||||||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||||
Fuel | ||||||||||||||||||||||||||
Purchased power | ||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||
Provision for depreciation | ||||||||||||||||||||||||||
Amortization (deferral) of regulatory assets, net | ( | ( | ||||||||||||||||||||||||
General taxes | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
OPERATING INCOME | ||||||||||||||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||||||||
Miscellaneous income, net | ||||||||||||||||||||||||||
Pension and OPEB mark-to-market adjustment (Note 5) | ( | |||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Capitalized financing costs | ||||||||||||||||||||||||||
Total other expense | ( | ( | ( | ( | ||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | ||||||||||||||||||||||||||
INCOME TAXES | ||||||||||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | ||||||||||||||||||||||||||
Discontinued operations (Note 3)(2) | ( | ( | ||||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | ||||||||||||||||||||||
INCOME ALLOCATED TO PREFERRED STOCKHOLDERS (Note 4) | ||||||||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | $ | $ | $ | ||||||||||||||||||||||
EARNINGS PER SHARE OF COMMON STOCK (Note 4): | ||||||||||||||||||||||||||
Basic - Continuing Operations | $ | $ | $ | $ | ||||||||||||||||||||||
Basic - Discontinued Operations | ( | ( | ||||||||||||||||||||||||
Basic - Net Income Attributable to Common Stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted - Continuing Operations | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted - Discontinued Operations | ( | ( | ||||||||||||||||||||||||
Diluted - Net Income Attributable to Common Stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||||||||||||
Pension and OPEB prior service costs | ( | ( | ( | ( | |||||||||||||||||||||||||
Amortized losses on derivative hedges | |||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||
Income tax benefits on other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||||||||
COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||||||||||||||
(In millions, except share amounts) | September 30, 2020 | December 31, 2019 | ||||||||||||
ASSETS | ||||||||||||||
CURRENT ASSETS: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Receivables- | ||||||||||||||
Customers | ||||||||||||||
Less — Allowance for uncollectible customer receivables | ||||||||||||||
Affiliated companies, net of allowance for uncollectible accounts of $ | ||||||||||||||
Other, net of allowance for uncollectible accounts of $ | ||||||||||||||
Materials and supplies, at average cost | ||||||||||||||
Prepaid taxes and other | ||||||||||||||
Current assets - discontinued operations | ||||||||||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||||||||
In service | ||||||||||||||
Less — Accumulated provision for depreciation | ||||||||||||||
Construction work in progress | ||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET - HELD FOR SALE (NOTE 9) | ||||||||||||||
INVESTMENTS: | ||||||||||||||
Nuclear fuel disposal trust | ||||||||||||||
Other | ||||||||||||||
Investments - held for sale (Note 10) | ||||||||||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||||||||
Goodwill | ||||||||||||||
Regulatory assets | ||||||||||||||
Other | ||||||||||||||
$ | $ | |||||||||||||
LIABILITIES AND CAPITALIZATION | ||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||
Currently payable long-term debt | $ | $ | ||||||||||||
Short-term borrowings | ||||||||||||||
Accounts payable | ||||||||||||||
Accounts payable - affiliated companies | ||||||||||||||
Accrued interest | ||||||||||||||
Accrued taxes | ||||||||||||||
Accrued compensation and benefits | ||||||||||||||
Other | ||||||||||||||
CAPITALIZATION: | ||||||||||||||
Stockholders’ equity- | ||||||||||||||
Common stock, $ | ||||||||||||||
Other paid-in capital | ||||||||||||||
Accumulated other comprehensive income (loss) | ( | |||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Long-term debt and other long-term obligations | ||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||
Accumulated deferred income taxes | ||||||||||||||
Retirement benefits | ||||||||||||||
Regulatory liabilities | ||||||||||||||
Asset retirement obligations | ||||||||||||||
Adverse power contract liability | ||||||||||||||
Other | ||||||||||||||
Noncurrent liabilities - held for sale (Note 10) | ||||||||||||||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 10) | ||||||||||||||
$ | $ |
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
Common Stock | OPIC | AOCI | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
(In millions) | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock Investment Plan and share-based benefit plans | ( | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock Investment Plan and share-based benefit plans | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock Investment Plan and share-based benefit plans | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Convertible Preferred Stock | Common Stock | OPIC | AOCI | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock Investment Plan and share-based benefit plans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on preferred stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series A Convertible Preferred Stock to Common Stock | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2019 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock Investment Plan and share-based benefit plans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock Investment Plan and share-based benefit plans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series A Convertible Preferred Stock to Common Stock | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | $ | ( | $ |
For the Nine Months Ended September 30, | ||||||||||||||
(In millions) | 2020 | 2019 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||||||||
Loss (gain) on disposal, net of tax (Note 3) | ( | |||||||||||||
Depreciation and amortization | ||||||||||||||
Deferred income taxes and investment tax credits, net | ||||||||||||||
Retirement benefits, net of payments | ( | ( | ||||||||||||
Pension trust contributions | ( | |||||||||||||
Pension and OPEB mark-to-market adjustment | ||||||||||||||
Settlement agreement and tax sharing payments to the FES Debtors | ( | |||||||||||||
Changes in current assets and liabilities- | ||||||||||||||
Receivables | ( | |||||||||||||
Materials and supplies | ( | ( | ||||||||||||
Prepaid taxes and other | ( | ( | ||||||||||||
Accounts payable | ( | ( | ||||||||||||
Accrued taxes | ( | |||||||||||||
Accrued interest | ||||||||||||||
Accrued compensation and benefits | ( | |||||||||||||
Other current liabilities | ( | |||||||||||||
Other | ||||||||||||||
Net cash provided from operating activities | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
New financing- | ||||||||||||||
Long-term debt | ||||||||||||||
Redemptions and repayments- | ||||||||||||||
Long-term debt | ( | ( | ||||||||||||
Short-term borrowings, net | ( | |||||||||||||
Preferred stock dividend payments | ( | |||||||||||||
Common stock dividend payments | ( | ( | ||||||||||||
Other | ( | ( | ||||||||||||
Net cash provided from financing activities | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
Property additions | ( | ( | ||||||||||||
Sales of investment securities held in trusts | ||||||||||||||
Purchases of investment securities held in trusts | ( | ( | ||||||||||||
Asset removal costs | ( | ( | ||||||||||||
Other | ||||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
Net change in cash, cash equivalents, and restricted cash | ( | |||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||||||||
Note Number | Page Number | |||||||
8 | ||||||||
9 | ||||||||
10 | ||||||||
11 | ||||||||
Residential | Non-Residential | |||||||||||||
Ohio | 10/5/2020 | 10/5/2020 | ||||||||||||
Pennsylvania | 11/9/2020 | 11/9/2020 | ||||||||||||
New Jersey | 3/15/2021 | 10/15/2020 | ||||||||||||
Maryland | 11/15/2020 | 10/1/2020 | ||||||||||||
West Virginia | 11/4/2020 | 9/15/2020 | ||||||||||||
New York | 11/4/2020 | 11/4/2020 |
(In millions) | ||||||||
Balance, January 1, 2019 | $ | |||||||
Charged to income (1) | ||||||||
Charged to other accounts (2) | ||||||||
Write-offs | ( | |||||||
Balance, December 31, 2019 | $ | |||||||
Charged to income (3) | ||||||||
Charged to other accounts (2) | ||||||||
Write-offs | ( | |||||||
Balance, September 30, 2020 | $ |
For the Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Revenues by Type of Service | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments (1) | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Distribution services (2) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Retail generation | ( | |||||||||||||||||||||||||
Wholesale sales | ||||||||||||||||||||||||||
Transmission (2) | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues from contracts with customers | $ | $ | $ | ( | $ | |||||||||||||||||||||
ARP (3) | ||||||||||||||||||||||||||
Other non-customer revenue | ( | |||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
For the Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||
Revenues by Type of Service | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments (1) | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Distribution services (2) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Retail generation | ( | |||||||||||||||||||||||||
Wholesale sales | ||||||||||||||||||||||||||
Transmission (2) | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues from contracts with customers | $ | $ | $ | ( | $ | |||||||||||||||||||||
ARP (3) | ||||||||||||||||||||||||||
Other non-customer revenue | ( | |||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
For the Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Revenues by Type of Service | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments (1) | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Distribution services (2) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Retail generation | ( | |||||||||||||||||||||||||
Wholesale sales | ||||||||||||||||||||||||||
Transmission (2) | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues from contracts with customers | $ | $ | $ | ( | $ | |||||||||||||||||||||
ARP (3) | ||||||||||||||||||||||||||
Other non-customer revenue | ( | |||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
For the Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||
Revenues by Type of Service | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments (1) | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Distribution services (2) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Retail generation | ( | |||||||||||||||||||||||||
Wholesale sales | ||||||||||||||||||||||||||
Transmission (2) | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total revenues from contracts with customers | $ | $ | $ | ( | $ | |||||||||||||||||||||
ARP (3) | ||||||||||||||||||||||||||
Other non-customer revenue | ( | |||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
Revenues by Customer Class | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
Transmission Owner | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
ATSI | $ | $ | $ | $ | ||||||||||||||||||||||
TrAIL | ||||||||||||||||||||||||||
MAIT | ||||||||||||||||||||||||||
JCP&L | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Fuel | ( | ( | ( | |||||||||||||||||||||||
Other operating expenses | ( | ( | ( | |||||||||||||||||||||||
General taxes | ( | ( | ||||||||||||||||||||||||
Other income | ||||||||||||||||||||||||||
Loss from discontinued operations, before tax | ( | ( | ||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | ( | ( | ||||||||||||||||||||||||
Settlement Consideration | ( | ( | ||||||||||||||||||||||||
Accelerated net pension and OPEB prior service credits | ||||||||||||||||||||||||||
Gain (loss) on Disposal of FES and FENOC, before tax | ( | |||||||||||||||||||||||||
Income tax expense (benefit) including worthless stock deduction | ( | ( | ||||||||||||||||||||||||
Gain (loss) on disposal of FES and FENOC, net of tax | ( | ( | ||||||||||||||||||||||||
Income (loss) from discontinued operations | $ | ( | $ | $ | $ | ( |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
Reconciliation of Basic and Diluted EPS of Common Stock | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||||
EPS of Common Stock | ||||||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
Less: Preferred dividends | ( | |||||||||||||||||||||||||
Less: Undistributed earnings allocated to preferred stockholders | ( | |||||||||||||||||||||||||
Income from continuing operations available to common stockholders | ||||||||||||||||||||||||||
Discontinued operations, net of tax | ( | ( | ||||||||||||||||||||||||
Less: Undistributed earnings allocated to preferred stockholders | ||||||||||||||||||||||||||
Income (loss) from discontinued operations available to common stockholders | ( | ( | ||||||||||||||||||||||||
Income available to common stockholders, basic | $ | $ | $ | $ | ||||||||||||||||||||||
Income allocated to preferred shareholders, preferred dilutive | ( | |||||||||||||||||||||||||
Income available to common stockholders, dilutive | $ | $ | $ | $ | ||||||||||||||||||||||
Share Count information: | ||||||||||||||||||||||||||
Weighted average number of basic shares outstanding | ||||||||||||||||||||||||||
Assumed exercise of dilutive stock options and awards | ||||||||||||||||||||||||||
Assumed conversion of preferred stock | ||||||||||||||||||||||||||
Weighted average number of diluted shares outstanding | ||||||||||||||||||||||||||
Income available to common stockholders, per common share: | ||||||||||||||||||||||||||
Income from continuing operations, basic | $ | $ | $ | $ | ||||||||||||||||||||||
Discontinued operations, basic | ( | ( | ||||||||||||||||||||||||
Income available to common stockholders, basic | $ | $ | $ | $ | ||||||||||||||||||||||
Income from continuing operations, diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Discontinued operations, diluted | ( | ( | ||||||||||||||||||||||||
Income available to common stockholders, diluted | $ | $ | $ | $ |
Components of Net Periodic Benefit Costs (Credits) | Pension | OPEB | ||||||||||||||||||||||||
For the Three Months Ended September 30, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Service costs | $ | $ | $ | $ | ||||||||||||||||||||||
Interest costs | ||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
Amortization of prior service costs (credits) | ( | ( | ||||||||||||||||||||||||
Net periodic costs (credits), including amounts capitalized | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Net periodic credits, recognized in earnings | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Components of Net Periodic Benefit Costs (Credits) | Pension | OPEB | ||||||||||||||||||||||||
For the Nine Months Ended September 30, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Service costs | $ | $ | $ | $ | ||||||||||||||||||||||
Interest costs | ||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
Special termination costs (1) | — | |||||||||||||||||||||||||
Amortization of prior service costs (credits) (2) | ( | ( | ||||||||||||||||||||||||
One-time termination benefit (3) | ||||||||||||||||||||||||||
Pension and OPEB mark-to-market adjustment | ||||||||||||||||||||||||||
Net periodic costs (credits), including amounts capitalized | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
Net periodic costs (credits), recognized in earnings | $ | $ | ( | $ | ( | $ | ( |
Gains & Losses on Cash Flow Hedges (1) | Defined Benefit Pension & OPEB Plans | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
AOCI Balance, July 1, 2020 | $ | ( | $ | $ | ||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||
Income tax benefits on other comprehensive loss | ( | ( | ||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ||||||||||||||||||
AOCI Balance, September 30, 2020 | $ | ( | $ | $ | ( | |||||||||||||||
AOCI Balance, July 1, 2019 | $ | ( | $ | $ | ||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||
Income tax benefits on other comprehensive loss | ( | ( | ||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | ||||||||||||||||||
AOCI Balance, September 30, 2019 | $ | ( | $ | $ | ||||||||||||||||
Gains & Losses on Cash Flow Hedges (1) | Defined Benefit Pension & OPEB Plans | Total | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
AOCI Balance, January 1, 2020 | $ | ( | $ | $ | ||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Income tax benefits on other comprehensive loss | ( | ( | ||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | ||||||||||||||||||
AOCI Balance, September 30, 2020 | $ | ( | $ | $ | ( | |||||||||||||||
AOCI Balance, January 1, 2019 | $ | ( | $ | $ | ||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Income tax benefits on other comprehensive loss | ( | ( | ||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | ||||||||||||||||||
AOCI Balance, September 30, 2019 | $ | ( | $ | $ | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | Affected Line Item in Consolidated Statements of Income | ||||||||||||||||||||||||||||||
Reclassifications from AOCI(1) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Gains & losses on cash flow hedges | ||||||||||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | Interest expense | |||||||||||||||||||||||||||
$ | $ | $ | $ | Net of tax | ||||||||||||||||||||||||||||
Defined benefit pension and OPEB plans | ||||||||||||||||||||||||||||||||
Prior-service costs | $ | ( | $ | ( | $ | ( | $ | ( | (2) | |||||||||||||||||||||||
Income taxes | ||||||||||||||||||||||||||||||||
$ | ( | $ | ( | $ | ( | $ | ( | Net of tax | ||||||||||||||||||||||||
(1) Amounts in parenthesis represent credits to the Consolidated Statements of Income from AOCI. | ||||||||||||||||||||||||||||||||
(2) Prior-service costs are reported within Miscellaneous income, net, within Other Income (Expense) on FirstEnergy’s Consolidated Statements of Income. Components are included in the computation of net periodic costs (credits), see Note 5, “Pension and Other Post-Employment Benefits.” |
Level 1 | - | Quoted prices for identical instruments in active market. | ||||||
Level 2 | - | Quoted prices for similar instruments in active market. | ||||||
- | Quoted prices for identical or similar instruments in markets that are not active. | |||||||
- | Model-derived valuations for which all significant inputs are observable market data. |
Level 3 | - | Valuation inputs are unobservable and significant to the fair value measurement. |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
Assets | (In millions) | ||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Derivative assets FTRs(1) | |||||||||||||||||||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. state debt securities | |||||||||||||||||||||||||||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities FTRs(1) | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||
Derivative liabilities NUG contracts(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||
Net assets (liabilities)(3) | $ | $ | $ | $ | $ | $ | $ | ( | $ |
NUG Contracts(1) | FTRs(1) | ||||||||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | Net | Derivative Assets | Derivative Liabilities | Net | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
January 1, 2019 Balance | $ | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||
Unrealized loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Purchases | ( | ||||||||||||||||||||||||||||||||||
Settlements | ( | ( | |||||||||||||||||||||||||||||||||
December 31, 2019 Balance | $ | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||
Unrealized loss | ( | ( | |||||||||||||||||||||||||||||||||
Purchases | ( | ||||||||||||||||||||||||||||||||||
Settlements | ( | ( | |||||||||||||||||||||||||||||||||
September 30, 2020 Balance | $ | $ | $ | $ | $ | $ |
Fair Value, Net (In millions) | Valuation Technique | Significant Input | Range | Weighted Average | Units | |||||||||||||||||||||||||||||||||||||||
FTRs | $ | Model | RTO auction clearing prices | $ | to | $ | $ | Dollars/MWH | ||||||||||||||||||||||||||||||||||||
September 30, 2020(1) | December 31, 2019(2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value (3) | Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value (3) | |||||||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Sale proceeds | $ | $ | $ | $ | ||||||||||||||||||||||
Realized gains | ||||||||||||||||||||||||||
Realized losses | ( | ( | ( | |||||||||||||||||||||||
Interest and dividend income |
September 30, 2020 | December 31, 2019 | ||||||||||
(In millions) | |||||||||||
Carrying value (1) | $ | $ | |||||||||
Fair value | $ | $ |
Potential Collateral Obligations | Utilities and FET | FE | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Contractual Obligations for Additional Collateral | |||||||||||||||||||||||
Upon Further Downgrade (1) | $ | $ | $ | ||||||||||||||||||||
Surety Bonds (Collateralized Amount) (2) | |||||||||||||||||||||||
Total Exposure from Contractual Obligations | $ | $ | $ |
For the Three Months Ended | Regulated Distribution | Regulated Transmission | Corporate/ Other | Reconciling Adjustments | FirstEnergy Consolidated | |||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||
External revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Internal revenues | ( | |||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||||||
Amortization of regulatory assets, net | ( | ( | ||||||||||||||||||||||||||||||
Miscellaneous income (expense), net | ( | |||||||||||||||||||||||||||||||
Interest expense | ( | |||||||||||||||||||||||||||||||
Income taxes (benefits) | ( | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations | ( | |||||||||||||||||||||||||||||||
Property additions | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
September 30, 2019 | ||||||||||||||||||||||||||||||||
External revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Internal revenues | ( | |||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||||||
Amortization of regulatory assets, net | ||||||||||||||||||||||||||||||||
Miscellaneous income (expense), net | ( | |||||||||||||||||||||||||||||||
Interest expense | ( | |||||||||||||||||||||||||||||||
Income taxes (benefits) | ( | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations | ( | |||||||||||||||||||||||||||||||
Property additions | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
For the Nine Months Ended | ||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||
External revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Internal revenues | ( | |||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||||||
Amortization of regulatory assets, net | ( | ( | ||||||||||||||||||||||||||||||
Miscellaneous income (expense), net | ( | |||||||||||||||||||||||||||||||
Interest expense | ( | |||||||||||||||||||||||||||||||
Income taxes (benefits) | ( | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations | ( | |||||||||||||||||||||||||||||||
Property additions | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
September 30, 2019 | ||||||||||||||||||||||||||||||||
External revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Internal revenues | ( | |||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||||||
Amortization of regulatory assets, net | ||||||||||||||||||||||||||||||||
Miscellaneous income (expense), net | ( | |||||||||||||||||||||||||||||||
Interest expense | ( | |||||||||||||||||||||||||||||||
Income taxes (benefits) | ( | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations | ( | |||||||||||||||||||||||||||||||
Property additions | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total goodwill | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total goodwill | $ | $ | $ | $ | $ |
(In millions) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 3,022 | $ | 2,963 | $ | 59 | 2 | % | $ | 8,253 | $ | 8,362 | $ | (109) | (1) | % | ||||||||||||||||||||||||||||||||||
Operating expenses | 2,301 | 2,282 | 19 | 1 | % | 6,485 | 6,467 | 18 | — | % | ||||||||||||||||||||||||||||||||||||||||
Operating income | 721 | 681 | 40 | 6 | % | 1,768 | 1,895 | (127) | (7) | % | ||||||||||||||||||||||||||||||||||||||||
Other expenses, net | (145) | (185) | 40 | 22 | % | (855) | (529) | (326) | (62) | % | ||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 576 | 496 | 80 | 16 | % | 913 | 1,366 | (453) | (33) | % | ||||||||||||||||||||||||||||||||||||||||
Income taxes | 116 | 107 | 9 | 8 | % | 122 | 281 | (159) | (57) | % | ||||||||||||||||||||||||||||||||||||||||
Income from continuing operations | 460 | 389 | 71 | 18 | % | 791 | 1,085 | (294) | (27) | % | ||||||||||||||||||||||||||||||||||||||||
Discontinued operations, net of tax | (6) | 2 | (8) | NM | 46 | (62) | 108 | NM | ||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 454 | $ | 391 | $ | 63 | 16 | % | $ | 837 | $ | 1,023 | $ | (186) | (18) | % | ||||||||||||||||||||||||||||||||||
Third Quarter 2020 Financial Results | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments | FirstEnergy Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Electric | $ | 2,600 | $ | 408 | $ | (35) | $ | 2,973 | ||||||||||||||||||
Other | 61 | 5 | (17) | 49 | ||||||||||||||||||||||
Total Revenues | 2,661 | 413 | (52) | 3,022 | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Fuel | 101 | — | — | 101 | ||||||||||||||||||||||
Purchased power | 762 | — | 4 | 766 | ||||||||||||||||||||||
Other operating expenses | 913 | 86 | (62) | 937 | ||||||||||||||||||||||
Provision for depreciation | 223 | 79 | 14 | 316 | ||||||||||||||||||||||
Deferral of regulatory assets, net | (91) | — | — | (91) | ||||||||||||||||||||||
General taxes | 199 | 59 | 14 | 272 | ||||||||||||||||||||||
Total Operating Expenses | 2,107 | 224 | (30) | 2,301 | ||||||||||||||||||||||
Operating Income (Loss) | 554 | 189 | (22) | 721 | ||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||
Miscellaneous income, net | 81 | 7 | 12 | 100 | ||||||||||||||||||||||
Interest expense | (124) | (55) | (87) | (266) | ||||||||||||||||||||||
Capitalized financing costs | 11 | 9 | 1 | 21 | ||||||||||||||||||||||
Total Other Expense | (32) | (39) | (74) | (145) | ||||||||||||||||||||||
Income (Loss) Before Income Taxes (Benefits) | 522 | 150 | (96) | 576 | ||||||||||||||||||||||
Income taxes (benefits) | 109 | 35 | (28) | 116 | ||||||||||||||||||||||
Income (Loss) From Continuing Operations | 413 | 115 | (68) | 460 | ||||||||||||||||||||||
Discontinued operations, net of tax | — | — | (6) | (6) | ||||||||||||||||||||||
Net Income (Loss) | $ | 413 | $ | 115 | $ | (74) | $ | 454 | ||||||||||||||||||
Third Quarter 2019 Financial Results | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments | FirstEnergy Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Electric | $ | 2,571 | $ | 371 | $ | (33) | $ | 2,909 | ||||||||||||||||||
Other | 65 | 4 | (15) | 54 | ||||||||||||||||||||||
Total Revenues | 2,636 | 375 | (48) | 2,963 | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Fuel | 122 | — | — | 122 | ||||||||||||||||||||||
Purchased power | 794 | — | 4 | 798 | ||||||||||||||||||||||
Other operating expenses | 715 | 75 | (32) | 758 | ||||||||||||||||||||||
Provision for depreciation | 215 | 71 | 18 | 304 | ||||||||||||||||||||||
Amortization of regulatory assets, net | 42 | 1 | — | 43 | ||||||||||||||||||||||
General taxes | 197 | 53 | 7 | 257 | ||||||||||||||||||||||
Total Operating Expenses | 2,085 | 200 | (3) | 2,282 | ||||||||||||||||||||||
Operating Income (Loss) | 551 | 175 | (45) | 681 | ||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||
Miscellaneous income, net | 36 | 4 | 17 | 57 | ||||||||||||||||||||||
Interest expense | (124) | (49) | (88) | (261) | ||||||||||||||||||||||
Capitalized financing costs | 10 | 9 | — | 19 | ||||||||||||||||||||||
Total Other Expense | (78) | (36) | (71) | (185) | ||||||||||||||||||||||
Income (Loss) Before Income Taxes (Benefits) | 473 | 139 | (116) | 496 | ||||||||||||||||||||||
Income taxes (benefits) | 103 | 26 | (22) | 107 | ||||||||||||||||||||||
Income (Loss) From Continuing Operations | 370 | 113 | (94) | 389 | ||||||||||||||||||||||
Discontinued operations, net of tax | — | — | 2 | 2 | ||||||||||||||||||||||
Net Income (Loss) | $ | 370 | $ | 113 | $ | (92) | $ | 391 | ||||||||||||||||||
Changes Between Third Quarter 2020 and Third Quarter 2019 Financial Results | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments | FirstEnergy Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Electric | $ | 29 | $ | 37 | $ | (2) | $ | 64 | ||||||||||||||||||
Other | (4) | 1 | (2) | (5) | ||||||||||||||||||||||
Total Revenues | 25 | 38 | (4) | 59 | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Fuel | (21) | — | — | (21) | ||||||||||||||||||||||
Purchased power | (32) | — | — | (32) | ||||||||||||||||||||||
Other operating expenses | 198 | 11 | (30) | 179 | ||||||||||||||||||||||
Provision for depreciation | 8 | 8 | (4) | 12 | ||||||||||||||||||||||
Amortization (deferral) of regulatory assets, net | (133) | (1) | — | (134) | ||||||||||||||||||||||
General taxes | 2 | 6 | 7 | 15 | ||||||||||||||||||||||
Total Operating Expenses | 22 | 24 | (27) | 19 | ||||||||||||||||||||||
Operating Income (Loss) | 3 | 14 | 23 | 40 | ||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||
Miscellaneous income, net | 45 | 3 | (5) | 43 | ||||||||||||||||||||||
Interest expense | — | (6) | 1 | (5) | ||||||||||||||||||||||
Capitalized financing costs | 1 | — | 1 | 2 | ||||||||||||||||||||||
Total Other Expense | 46 | (3) | (3) | 40 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes (Benefits) | 49 | 11 | 20 | 80 | ||||||||||||||||||||||
Income taxes (benefits) | 6 | 9 | (6) | 9 | ||||||||||||||||||||||
Income (Loss) From Continuing Operations | 43 | 2 | 26 | 71 | ||||||||||||||||||||||
Discontinued operations, net of tax | — | — | (8) | (8) | ||||||||||||||||||||||
Net Income (Loss) | $ | 43 | $ | 2 | $ | 18 | $ | 63 | ||||||||||||||||||
For the Three Months Ended September 30, | ||||||||||||||||||||
Revenues by Type of Service | 2020 | 2019 | Increase (Decrease) | |||||||||||||||||
(In millions) | ||||||||||||||||||||
Distribution(1) | $ | 1,528 | $ | 1,482 | $ | 46 | ||||||||||||||
Generation sales: | ||||||||||||||||||||
Retail | 1,005 | 989 | 16 | |||||||||||||||||
Wholesale | 67 | 100 | (33) | |||||||||||||||||
Total generation sales | 1,072 | 1,089 | (17) | |||||||||||||||||
Other | 61 | 65 | (4) | |||||||||||||||||
Total Revenues | $ | 2,661 | $ | 2,636 | $ | 25 |
For the Three Months Ended September 30, | |||||||||||||||||||||||
Electric Distribution MWH Deliveries | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Residential | 16,091 | 15,306 | 5.1 | % | |||||||||||||||||||
Commercial(1) | 9,589 | 10,148 | (5.5) | % | |||||||||||||||||||
Industrial | 13,560 | 14,477 | (6.3) | % | |||||||||||||||||||
Total Electric Distribution MWH Deliveries | 39,240 | 39,931 | (1.7) | % |
Source of Change in Generation Revenues | Increase (Decrease) | |||||||
(In millions) | ||||||||
Retail: | ||||||||
Change in sales volumes | $ | 30 | ||||||
Change in prices | (14) | |||||||
16 | ||||||||
Wholesale: | ||||||||
Change in sales volumes | (21) | |||||||
Change in prices | (1) | |||||||
Capacity revenue | (11) | |||||||
(33) | ||||||||
Decrease in Generation Revenues | $ | (17) |
Source of Change in Purchased Power | Increase (Decrease) | |||||||
(In millions) | ||||||||
Purchases | ||||||||
Change due to unit costs | $ | (40) | ||||||
Change due to volumes | 13 | |||||||
(27) | ||||||||
Capacity expense | (5) | |||||||
Decrease in Purchased Power Costs | $ | (32) |
For the Three Months Ended September 30, | Increase | |||||||||||||||||||
Revenues by Transmission Asset Owner | 2020 | 2019 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
ATSI | $ | 203 | $ | 185 | $ | 18 | ||||||||||||||
TrAIL | 63 | 57 | 6 | |||||||||||||||||
MAIT | 70 | 59 | 11 | |||||||||||||||||
JCP&L | 43 | 40 | 3 | |||||||||||||||||
Other | 34 | 34 | — | |||||||||||||||||
Total Revenues | $ | 413 | $ | 375 | $ | 38 |
First Nine Months 2020 Financial Results | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments | FirstEnergy Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Electric | $ | 7,031 | $ | 1,185 | $ | (105) | $ | 8,111 | ||||||||||||||||||
Other | 176 | 13 | (47) | 142 | ||||||||||||||||||||||
Total Revenues | 7,207 | 1,198 | (152) | 8,253 | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Fuel | 276 | — | — | 276 | ||||||||||||||||||||||
Purchased power | 2,062 | — | 11 | 2,073 | ||||||||||||||||||||||
Other operating expenses | 2,345 | 201 | (130) | 2,416 | ||||||||||||||||||||||
Provision for depreciation | 672 | 233 | 49 | 954 | ||||||||||||||||||||||
Amortization (deferral) of regulatory assets, net | (32) | 6 | — | (26) | ||||||||||||||||||||||
General taxes | 583 | 177 | 32 | 792 | ||||||||||||||||||||||
Total Operating Expenses | 5,906 | 617 | (38) | 6,485 | ||||||||||||||||||||||
Operating Income (Loss) | 1,301 | 581 | (114) | 1,768 | ||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||
Miscellaneous income, net | 246 | 21 | 36 | 303 | ||||||||||||||||||||||
Pension and OPEB mark-to-market adjustment | (257) | (19) | (147) | (423) | ||||||||||||||||||||||
Interest expense | (374) | (162) | (256) | (792) | ||||||||||||||||||||||
Capitalized financing costs | 28 | 28 | 1 | 57 | ||||||||||||||||||||||
Total Other Expense | (357) | (132) | (366) | (855) | ||||||||||||||||||||||
Income (Loss) Before Income Taxes (Benefits) | 944 | 449 | (480) | 913 | ||||||||||||||||||||||
Income taxes (benefits) | 144 | 103 | (125) | 122 | ||||||||||||||||||||||
Income (Loss) From Continuing Operations | 800 | 346 | (355) | 791 | ||||||||||||||||||||||
Discontinued operations, net of tax | — | — | 46 | 46 | ||||||||||||||||||||||
Net Income (Loss) | $ | 800 | $ | 346 | $ | (309) | $ | 837 | ||||||||||||||||||
First Nine Months 2019 Financial Results | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments | FirstEnergy Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Electric | $ | 7,214 | $ | 1,090 | $ | (96) | $ | 8,208 | ||||||||||||||||||
Other | 187 | 13 | (46) | 154 | ||||||||||||||||||||||
Total Revenues | 7,401 | 1,103 | (142) | 8,362 | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Fuel | 382 | — | — | 382 | ||||||||||||||||||||||
Purchased power | 2,177 | — | 13 | 2,190 | ||||||||||||||||||||||
Other operating expenses | 2,116 | 205 | (178) | 2,143 | ||||||||||||||||||||||
Provision for depreciation | 644 | 211 | 55 | 910 | ||||||||||||||||||||||
Amortization of regulatory assets, net | 79 | 6 | — | 85 | ||||||||||||||||||||||
General taxes | 572 | 156 | 29 | 757 | ||||||||||||||||||||||
Total Operating Expenses | 5,970 | 578 | (81) | 6,467 | ||||||||||||||||||||||
Operating Income (Loss) | 1,431 | 525 | (61) | 1,895 | ||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||
Miscellaneous income, net | 128 | 12 | 51 | 191 | ||||||||||||||||||||||
Pension and OPEB mark-to-market adjustment | — | — | — | — | ||||||||||||||||||||||
Interest expense | (370) | (142) | (261) | (773) | ||||||||||||||||||||||
Capitalized financing costs | 27 | 25 | 1 | 53 | ||||||||||||||||||||||
Total Other Expense | (215) | (105) | (209) | (529) | ||||||||||||||||||||||
Income (Loss) Before Income Taxes (Benefits) | 1,216 | 420 | (270) | 1,366 | ||||||||||||||||||||||
Income taxes (benefits) | 259 | 87 | (65) | 281 | ||||||||||||||||||||||
Income (Loss) From Continuing Operations | 957 | 333 | (205) | 1,085 | ||||||||||||||||||||||
Discontinued operations, net of tax | — | — | (62) | (62) | ||||||||||||||||||||||
Net Income (Loss) | $ | 957 | $ | 333 | $ | (267) | $ | 1,023 | ||||||||||||||||||
Changes Between First Nine Months 2020 and First Nine Months 2019 Financial Results | Regulated Distribution | Regulated Transmission | Corporate/Other and Reconciling Adjustments | FirstEnergy Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Electric | $ | (183) | $ | 95 | $ | (9) | $ | (97) | ||||||||||||||||||
Other | (11) | — | (1) | (12) | ||||||||||||||||||||||
Total Revenues | (194) | 95 | (10) | (109) | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Fuel | (106) | — | — | (106) | ||||||||||||||||||||||
Purchased power | (115) | — | (2) | (117) | ||||||||||||||||||||||
Other operating expenses | 229 | (4) | 48 | 273 | ||||||||||||||||||||||
Provision for depreciation | 28 | 22 | (6) | 44 | ||||||||||||||||||||||
Amortization (deferral) of regulatory assets, net | (111) | — | — | (111) | ||||||||||||||||||||||
General taxes | 11 | 21 | 3 | 35 | ||||||||||||||||||||||
Total Operating Expenses | (64) | 39 | 43 | 18 | ||||||||||||||||||||||
Operating Income (Loss) | (130) | 56 | (53) | (127) | ||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||
Miscellaneous income (expense), net | 118 | 9 | (15) | 112 | ||||||||||||||||||||||
Pension and OPEB mark-to-market adjustment | (257) | (19) | (147) | (423) | ||||||||||||||||||||||
Interest expense | (4) | (20) | 5 | (19) | ||||||||||||||||||||||
Capitalized financing costs | 1 | 3 | — | 4 | ||||||||||||||||||||||
Total Other Expense | (142) | (27) | (157) | (326) | ||||||||||||||||||||||
Income (Loss) Before Income Taxes (Benefits) | (272) | 29 | (210) | (453) | ||||||||||||||||||||||
Income taxes (benefits) | (115) | 16 | (60) | (159) | ||||||||||||||||||||||
Income (Loss) From Continuing Operations | (157) | 13 | (150) | (294) | ||||||||||||||||||||||
Discontinued operations, net of tax | — | — | 108 | 108 | ||||||||||||||||||||||
Net Income (Loss) | $ | (157) | $ | 13 | $ | (42) | $ | (186) | ||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||
Revenues by Type of Service | 2020 | 2019 | Increase (Decrease) | |||||||||||||||||
(In millions) | ||||||||||||||||||||
Distribution services(1) | $ | 4,108 | $ | 4,045 | $ | 63 | ||||||||||||||
Generation sales: | ||||||||||||||||||||
Retail | 2,735 | 2,853 | (118) | |||||||||||||||||
Wholesale | 188 | 316 | (128) | |||||||||||||||||
Total generation sales | 2,923 | 3,169 | (246) | |||||||||||||||||
Other | 176 | 187 | (11) | |||||||||||||||||
Total Revenues | $ | 7,207 | $ | 7,401 | $ | (194) |
For the Nine Months Ended September 30, | |||||||||||||||||||||||
Electric Distribution MWH Deliveries | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Residential | 42,059 | 41,311 | 1.8 | % | |||||||||||||||||||
Commercial(1) | 26,316 | 28,909 | (9.0) | % | |||||||||||||||||||
Industrial | 39,118 | 42,032 | (6.9) | % | |||||||||||||||||||
Total Electric Distribution MWH Deliveries | 107,493 | 112,252 | (4.2) | % |
Source of Change in Generation Revenues | Decrease | |||||||
(In millions) | ||||||||
Retail: | ||||||||
Change in sales volumes | $ | (46) | ||||||
Change in prices | (72) | |||||||
(118) | ||||||||
Wholesale: | ||||||||
Change in sales volumes | (69) | |||||||
Change in prices | (5) | |||||||
Capacity revenue | (54) | |||||||
(128) | ||||||||
Decrease in Generation Revenues | $ | (246) |
Source of Change in Purchased Power | Decrease | |||||||
(In millions) | ||||||||
Purchases: | ||||||||
Change due to unit costs | $ | (39) | ||||||
Change due to volumes | (19) | |||||||
(58) | ||||||||
Capacity | (57) | |||||||
Decrease in Purchased Power Costs | $ | (115) |
For the Nine Months Ended September 30, | ||||||||||||||||||||
Revenues by Transmission Asset Owner | 2020 | 2019 | Increase (Decrease) | |||||||||||||||||
(In millions) | ||||||||||||||||||||
ATSI | $ | 601 | $ | 545 | $ | 56 | ||||||||||||||
TrAIL | 188 | 178 | 10 | |||||||||||||||||
MAIT | 187 | 160 | 27 | |||||||||||||||||
JCP&L | 122 | 120 | 2 | |||||||||||||||||
Other | 100 | 100 | — | |||||||||||||||||
Total Revenues | $ | 1,198 | $ | 1,103 | $ | 95 |
Net Regulatory Assets (Liabilities) by Source | September 30, 2020 | December 31, 2019 | Change | |||||||||||||||||
(In millions) | ||||||||||||||||||||
Customer payables for future income taxes | $ | (2,456) | $ | (2,605) | $ | 149 | ||||||||||||||
Nuclear decommissioning and spent fuel disposal costs | (185) | (197) | 12 | |||||||||||||||||
Asset removal costs | (730) | (756) | 26 | |||||||||||||||||
Deferred transmission costs | 280 | 298 | (18) | |||||||||||||||||
Deferred generation costs | 122 | 214 | (92) | |||||||||||||||||
Deferred distribution costs | 232 | 155 | 77 | |||||||||||||||||
Contract valuations | 37 | 51 | (14) | |||||||||||||||||
Storm-related costs | 721 | 551 | 170 | |||||||||||||||||
Uncollectible and COVID-19 related costs | 62 | 3 | 59 | |||||||||||||||||
Other | (55) | 25 | (80) | |||||||||||||||||
Net Regulatory Liabilities included on the Consolidated Balance Sheets | $ | (1,972) | $ | (2,261) | $ | 289 |
Regulatory Assets by Source Not Earning a Current Return | September 30, 2020 | December 31, 2019 | Change | |||||||||||||||||
(In millions) | ||||||||||||||||||||
Deferred transmission costs | $ | 31 | $ | 27 | $ | 4 | ||||||||||||||
Deferred generation costs | 6 | 15 | (9) | |||||||||||||||||
Storm-related costs | 645 | 471 | 174 | |||||||||||||||||
COVID-19 related costs | 29 | — | 29 | |||||||||||||||||
Other | 31 | 32 | (1) | |||||||||||||||||
Regulatory Assets Not Earning a Current Return | $ | 742 | $ | 545 | $ | 197 |
Borrower(s) | Type | Maturity | Commitment | Available Liquidity | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
FirstEnergy(1) | Revolving | December 2022 | $ | 2,500 | $ | 2,246 | ||||||||||||||||||||
FET(2) | Revolving | December 2022 | 1,000 | 1,000 | ||||||||||||||||||||||
Subtotal | $ | 3,500 | $ | 3,246 | ||||||||||||||||||||||
Cash and cash equivalents(3) | — | 286 | ||||||||||||||||||||||||
Total | $ | 3,500 | $ | 3,532 |
Borrower | FirstEnergy Revolving Credit Facility Sublimit | FET Revolving Credit Facility Sublimit | Regulatory and Other Short-Term Debt Limitations | ||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
FE | $ | 2,500 | $ | — | $ | — | (1) | ||||||||||||||||||||||||||||
FET | — | 1,000 | — | (1) | |||||||||||||||||||||||||||||||
OE | 500 | — | 500 | (2) | |||||||||||||||||||||||||||||||
CEI | 500 | — | 500 | (2) | |||||||||||||||||||||||||||||||
TE | 300 | — | 300 | (2) | |||||||||||||||||||||||||||||||
JCP&L | 500 | — | 500 | (2) | |||||||||||||||||||||||||||||||
ME | 500 | — | 500 | (2) | |||||||||||||||||||||||||||||||
PN | 300 | — | 300 | (2) | |||||||||||||||||||||||||||||||
WP | 200 | — | 200 | (2) | |||||||||||||||||||||||||||||||
MP | 500 | — | 500 | (2) | |||||||||||||||||||||||||||||||
PE | 150 | — | 150 | (2) | |||||||||||||||||||||||||||||||
ATSI | — | 500 | 500 | (2) | |||||||||||||||||||||||||||||||
Penn | 100 | — | 100 | (2) | |||||||||||||||||||||||||||||||
TrAIL | — | 400 | 400 | (2) | |||||||||||||||||||||||||||||||
MAIT | — | 400 | 400 | (2) | |||||||||||||||||||||||||||||||
Corporate Credit Rating | Senior Secured | Senior Unsecured | Outlook/Watch (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuer | S&P | Moody’s | Fitch | S&P | Moody’s | Fitch | S&P | Moody’s | Fitch | S&P | Moody’s | Fitch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FE | BB+ | Baa3 | BBB- | — | — | — | BB+ | Baa3 | BBB- | CW-N | N | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGC | BB | Baa2 | BBB | — | — | — | — | — | — | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ATSI | BB+ | A3 | BBB | — | — | — | BBB- | A3 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CEI | BB+ | Baa2 | BBB | BBB+ | A3 | A- | BBB- | Baa2 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FET | BB+ | Baa2 | BBB- | — | — | — | BB+ | Baa2 | BBB- | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
JCP&L | BB+ | A3 | BBB | — | — | — | BBB- | A3 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ME | BB+ | A3 | BBB | — | — | — | BBB- | A3 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MAIT | BB+ | A3 | BBB | — | — | — | BBB- | A3 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MP | BB+ | Baa2 | BBB | BBB+ | A3 | A- | BBB- | Baa2 | — | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OE | BB+ | A3 | BBB | BBB+ | A1 | A- | BBB- | A3 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PN | BB+ | Baa1 | BBB | — | — | — | BBB- | Baa1 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Penn | BB+ | A3 | BBB | — | A1 | A- | — | — | — | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PE | BB+ | Baa2 | BBB | — | — | A- | — | — | — | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TE | BB+ | Baa1 | BBB | BBB+ | A2 | A- | — | — | — | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TrAIL | BB+ | A3 | BBB | — | — | — | BBB- | A3 | BBB+ | CW-N | S | N | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WP | BB+ | A3 | BBB | — | — | A- | — | — | — | CW-N | S | N |
For the Nine Months Ended September 30, | ||||||||||||||
Securities Issued or Redeemed / Repaid | 2020 | 2019 | ||||||||||||
(In millions) | ||||||||||||||
New Issues | ||||||||||||||
Unsecured notes | $ | 3,250 | $ | 1,850 | ||||||||||
FMBs | 175 | 250 | ||||||||||||
$ | 3,425 | $ | 2,100 | |||||||||||
Redemptions / Repayments | ||||||||||||||
Term loan | $ | (750) | $ | — | ||||||||||
Unsecured notes | (250) | (725) | ||||||||||||
FMBs | (50) | — | ||||||||||||
Senior secured notes | (60) | (59) | ||||||||||||
$ | (1,110) | $ | (784) | |||||||||||
Short-term borrowings, net | $ | (700) | $ | — | ||||||||||
Preferred stock dividend payments | $ | — | $ | (6) | ||||||||||
Common stock dividend payments | $ | (634) | $ | (609) |
For the Nine Months Ended September 30, | Increase | |||||||||||||||||||
Cash Used for Investing Activities | 2020 | 2019 | (Decrease) | |||||||||||||||||
(In millions) | ||||||||||||||||||||
Property Additions: | ||||||||||||||||||||
Regulated Distribution | $ | 1,115 | $ | 1,037 | $ | 78 | ||||||||||||||
Regulated Transmission | 817 | 835 | (18) | |||||||||||||||||
Corporate / Other | 47 | 40 | 7 | |||||||||||||||||
Investments | 18 | 30 | (12) | |||||||||||||||||
Asset removal costs | 175 | 158 | 17 | |||||||||||||||||
Other | (1) | (19) | 18 | |||||||||||||||||
$ | 2,171 | $ | 2,081 | $ | 90 | |||||||||||||||
Guarantees and Other Assurances | Maximum Exposure | |||||||
(In millions) | ||||||||
FE’s Guarantees on Behalf of its Consolidated Subsidiaries | ||||||||
AE Supply asset sales(1) | $ | 570 | ||||||
Deferred compensation arrangements | 467 | |||||||
Fuel related contracts and other | 4 | |||||||
1,041 | ||||||||
FE’s Guarantees on Other Assurances | ||||||||
Global holding facility | 114 | |||||||
Deferred compensation arrangements | 147 | |||||||
Surety Bonds | 339 | |||||||
LOCs and other | 16 | |||||||
616 | ||||||||
Total Guarantees and Other Assurances | $ | 1,657 |
Potential Collateral Obligations | Utilities and FET | FE | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Contractual Obligations for Additional Collateral | |||||||||||||||||||||||
Upon further downgrade (1) | $ | 40 | $ | — | $ | 40 | |||||||||||||||||
Surety Bonds (collateralized amount)(2) | 66 | 257 | 323 | ||||||||||||||||||||
Total Exposure from Contractual Obligations | $ | 106 | $ | 257 | $ | 363 |
Exhibit Number | Description | ||||||||||
(A) | 10.1 | ||||||||||
(A) | 10.2 | Waiver and Amendment No. 2 to Credit Agreement, dated as of November 17, 2020, to Credit Agreement, among FirstEnergy Transmission, LLC, American Transmission Systems, Incorporated, Mid-Atlantic Interstate Transmission, LLC and Trans-Allegheny Interstate Line Company, as borrowers, and PNC Bank, National Association, as administrative agent, and the lenders identified therein. | |||||||||
(A) | 31.1 | ||||||||||
(A) | 31.2 | ||||||||||
(A) | 32 | ||||||||||
101 | The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Corp. for the period ended September 30, 2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements and (v) document and entity information. | ||||||||||
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101). |
FIRSTENERGY CORP. | |||||
Registrant | |||||
/s/ Jason J. Lisowski | |||||
Jason J. Lisowski | |||||
Vice President, Controller and Chief Accounting Officer |
and THE SWING LINE LENDERS NAMED HEREIN, as Swing Line Lenders |
BASIS FOR PRICING | LEVEL 1 Reference Ratings at least A- by S&P or A3 by Moody’s. | LEVEL 2 Reference Ratings lower than Level 1 but at least BBB+ by S&P or Baa1 by Moody’s. | LEVEL 3 Reference Ratings lower than Level 2 but at least BBB by S&P or Baa2 by Moody’s. | LEVEL 4 Reference Ratings lower than Level 3 but at least BBB- by S&P or Baa3 by Moody’s. | LEVEL 5 Reference Ratings lower than Level 4 but at least BB+ by S&P or Ba1 by Moody’s. | LEVEL 6 Reference Ratings lower than BB+ by S&P and Ba1 by Moody’s, or no Reference Ratings. | ||||||||||||||
Applicable Margin for Eurodollar Rate Advances | 1.125% | 1.25% | 1.50% | 2.00% | 2.25% | 2.75% in the case of FE 2.50% in the case of each Borrower other than FE | ||||||||||||||
Applicable Margin for Alternate Base Rate Advances | 0.125% | 0.25% | 0.50% | 1.00% | 1.25% | 1.75% in the case of FE 1.50% in the case of each Borrower other than FE |
Borrower | Borrower Sublimit | ||||
FE | $1,500,000,000 | ||||
CEI | $500,000,000 | ||||
Met-Ed | $500,000,000 | ||||
OE | $500,000,000 | ||||
Penn | $100,000,000 | ||||
TE | $300,000,000 | ||||
JCP&L | $500,000,000 | ||||
MP | $500,000,000 | ||||
Penelec | $300,000,000 | ||||
PE | $150,000,000 | ||||
West-Penn | $200,000,000 |
BASIS FOR PRICING | LEVEL 1 Reference Ratings at least A- by S&P or A3 by Moody’s. | LEVEL 2 Reference Ratings lower than Level 1 but at least BBB+ by S&P or Baa1 by Moody’s. | LEVEL 3 Reference Ratings lower than Level 2 but at least BBB by S&P or Baa2 by Moody’s. | LEVEL 4 Reference Ratings lower than Level 3 but at least BBB- by S&P or Baa3 by Moody’s. | LEVEL 5 Reference Ratings lower than Level 4 but at least BB+ by S&P or Ba1 by Moody’s. | LEVEL 6 Reference Ratings lower than BB+ by S&P and Ba1 by Moody’s, or no Reference Ratings. | ||||||||||||||
Applicable Margin for Eurodollar Rate Advances | 1.125% | 1.250% | 1.500% | 2.000% | 2.250% | 2.750% in the case of FET 2.500% in the case of each Borrower other than FET | ||||||||||||||
Applicable Margin for Alternate Base Rate Advances | 0.125% | 0.250% | 0.500% | 1.000% | 1.250% | 1.750% in the case of FET 1.500% in the case of each Borrower other than FET |
/s/ Steven E. Strah | ||||||||
Steven E. Strah | ||||||||
President and Acting Chief Executive Officer |
/s/ K. Jon Taylor | ||||||||
K. Jon Taylor | ||||||||
Senior Vice President and Chief Financial Officer |
/s/ Steven E. Strah | ||||||||
Steven E. Strah | ||||||||
President and Acting Chief Executive Officer | ||||||||
/s/ K. Jon Taylor | ||||||||
K. Jon Taylor | ||||||||
Senior Vice President and Chief Financial Officer |
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||||||
REVENUES: | ||||||||||
Total revenues | $ 3,022 | [1] | $ 2,963 | [1] | $ 8,253 | $ 8,362 | ||||
OPERATING EXPENSES: | ||||||||||
Fuel | 101 | 122 | 276 | 382 | ||||||
Purchased power | 766 | 798 | 2,073 | 2,190 | ||||||
Other operating expenses | 937 | 758 | 2,416 | 2,143 | ||||||
Provision for depreciation | 316 | 304 | 954 | 910 | ||||||
Amortization (deferral) of regulatory assets, net | (91) | 43 | (26) | 85 | ||||||
General taxes | 272 | 257 | 792 | 757 | ||||||
Total operating expenses | 2,301 | 2,282 | 6,485 | 6,467 | ||||||
OPERATING INCOME | 721 | 681 | 1,768 | 1,895 | ||||||
OTHER INCOME (EXPENSE): | ||||||||||
Miscellaneous income, net | 100 | 57 | 303 | 191 | ||||||
Pension and OPEB mark-to-market adjustment (Note 5) | 0 | 0 | (423) | 0 | ||||||
Interest expense | (266) | (261) | (792) | (773) | ||||||
Capitalized financing costs | 21 | 19 | 57 | 53 | ||||||
Total other expense | (145) | (185) | (855) | (529) | ||||||
INCOME BEFORE INCOME TAXES | 576 | 496 | 913 | 1,366 | ||||||
INCOME TAXES | 116 | 107 | 122 | 281 | ||||||
INCOME FROM CONTINUING OPERATIONS | 460 | 389 | 791 | 1,085 | ||||||
Discontinued operations (Note 3) | (6) | [2] | 2 | [2] | 46 | (62) | ||||
NET INCOME | 454 | 391 | 837 | 1,023 | ||||||
INCOME ALLOCATED TO PREFERRED STOCKHOLDERS (Note 4) | 0 | 0 | 0 | 7 | ||||||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 454 | $ 391 | $ 837 | $ 1,016 | ||||||
EARNINGS PER SHARE OF COMMON STOCK (Note 4): | ||||||||||
Basic - Continuing Operations (in dollars per share) | $ 0.85 | $ 0.72 | $ 1.46 | $ 2.02 | ||||||
Basic - Discontinued Operations (in dollars per share) | (0.01) | 0.01 | 0.08 | (0.12) | ||||||
Basic - Net Income Attributable to Common Stockholders (in dollars per share) | 0.84 | 0.73 | 1.54 | 1.90 | ||||||
Diluted - Continuing Operations (in dollars per share) | 0.85 | 0.72 | 1.46 | 2.00 | ||||||
Diluted - Discontinued Operations (in dollars per share) | (0.01) | 0 | 0.08 | (0.11) | ||||||
Diluted - Net Income Attributable to Common Stockholders (in dollars per share) | $ 0.84 | $ 0.72 | $ 1.54 | $ 1.89 | ||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||||||||||
Basic, in shares | 542 | 538 | 542 | 533 | ||||||
Diluted, in shares | 543 | 542 | 543 | 541 | ||||||
Distribution Services and Retail Generation | ||||||||||
REVENUES: | ||||||||||
Total revenues | $ 2,470 | $ 2,411 | $ 6,624 | $ 6,651 | ||||||
Transmission | ||||||||||
REVENUES: | ||||||||||
Total revenues | 408 | 371 | 1,185 | 1,090 | ||||||
Other | ||||||||||
REVENUES: | ||||||||||
Total revenues | $ 144 | $ 181 | $ 444 | $ 621 | ||||||
|
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Statement [Abstract] | ||||
Excise taxes collected | $ 100 | $ 100 | $ 276 | $ 283 |
Income tax expense | $ 6 | $ 2 | $ (29) | $ 46 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 454 | $ 391 | $ 837 | $ 1,023 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Pension and OPEB prior service costs | (3) | (7) | (30) | (21) |
Amortized losses on derivative hedges | 0 | 0 | 1 | 1 |
Other comprehensive loss | (3) | (7) | (29) | (20) |
Income tax benefits on other comprehensive loss | (1) | (3) | (7) | (6) |
Other comprehensive loss, net of tax | (2) | (4) | (22) | (14) |
COMPREHENSIVE INCOME | $ 452 | $ 387 | $ 815 | $ 1,009 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Stockholders’ equity- | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares outstanding (in shares) | 542,590,202 | 540,652,222 |
Other | ||
Receivables- | ||
Allowance for uncollectible accounts | $ 24 | $ 21 |
Affiliated Companies | ||
Receivables- | ||
Allowance for uncollectible accounts | $ 1,063 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Dividends declared (in dollars per share) | $ 0.39 | $ 0.39 | $ 0.38 |
Preferred stock dividends declared (in usd per share) | $ 0.38 |
Accumulated Other Comprehensive Income |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The following tables show the changes in AOCI for the three and nine months ended September 30, 2020 and 2019:
(1) Relates to previous cash flow hedges used to hedge fixed rate long-term debt securities prior to their issuance. The following amounts were reclassified from AOCI in the three and nine months ended September 30, 2020 and 2019:
|
Organization and Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Unless otherwise indicated, defined terms and abbreviations used herein have the meanings set forth in the accompanying Glossary of Terms. FE was incorporated under Ohio law in 1996. FE’s principal business is the holding, directly or indirectly, of all of the outstanding equity of its principal subsidiaries: OE, CEI, TE, Penn (a wholly owned subsidiary of OE), JCP&L, ME, PN, FESC, AE Supply, MP, AGC (a wholly owned subsidiary of MP), PE, WP, and FET and its principal subsidiaries (ATSI, MAIT and TrAIL). In addition, FE holds all of the outstanding equity of other direct subsidiaries including: AESC, FirstEnergy Properties, Inc., FEV, FELHC, Inc., GPUN, Allegheny Ventures, Inc., and Suvon, LLC doing business as both FirstEnergy Home and FirstEnergy Advisors. FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity. FirstEnergy’s ten utility operating companies comprise one of the nation’s largest investor-owned electric systems, based on serving over six million customers in the Midwest and Mid-Atlantic regions. FirstEnergy’s transmission operations include approximately 24,500 miles of lines and two regional transmission operation centers. AGC, JCP&L and MP control 3,790 MWs of total capacity, 210 MWs of which is related to the Yards Creek generating plant that is being sold pursuant to an asset purchase agreement as further discussed below. These interim financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2019. FE and its subsidiaries follow GAAP and comply with the related regulations, orders, policies and practices prescribed by the SEC, FERC, and, as applicable, the NRC, the PUCO, the PPUC, the MDPSC, the NYPSC, the WVPSC, the VSCC and the NJBPU. The accompanying interim financial statements are unaudited, but reflect all adjustments, consisting of normal recurring adjustments, that, in the opinion of management, are necessary for a fair statement of the financial statements. The preparation of financial statements in conformity with GAAP requires management to make periodic estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from these estimates. The reported results of operations are not necessarily indicative of results of operations for any future period. FE and its subsidiaries have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. FE and its subsidiaries consolidate all majority-owned subsidiaries over which they exercise control and, when applicable, entities for which they have a controlling financial interest. Intercompany transactions and balances are eliminated in consolidation as appropriate and permitted pursuant to GAAP. FE and its subsidiaries consolidate a VIE when it is determined that it is the primary beneficiary. Investments in affiliates over which FE and its subsidiaries have the ability to exercise significant influence, but do not have a controlling financial interest, follow the equity method of accounting. Under the equity method, the interest in the entity is reported as an investment in the Consolidated Balance Sheets and the percentage of FE’s ownership share of the entity’s earnings is reported in the Consolidated Statements of Income and Comprehensive Income. Certain prior year amounts have been reclassified to conform to the current year presentation. Capitalized Financing Costs For each of the three months ended September 30, 2020 and 2019, capitalized financing costs on FirstEnergy’s Consolidated Statements of Income include $13 million and $12 million, respectively, of allowance for equity funds used during construction and $8 million and $7 million, respectively, of capitalized interest. For each of the nine months ended September 30, 2020 and 2019, capitalized financing costs on FirstEnergy’s Consolidated Statements of Income include $36 million and $34 million, respectively, of allowance for equity funds used during construction and $21 million and $19 million, respectively, of capitalized interest. COVID-19 The outbreak of COVID-19 is a global pandemic. FirstEnergy is continuously evaluating the global pandemic and taking steps to mitigate known risks. FirstEnergy is actively monitoring the continued impact COVID-19 is having on its customers’ receivable balances, which include increasing arrears balances since the pandemic has begun. FirstEnergy has incurred, and it is expected to incur for the foreseeable future, incremental uncollectible and other COVID-19 pandemic related expenses. COVID-19 related expenses consist of additional costs that FirstEnergy is incurring to protect its employees, contractors and customers, and to support social distancing requirements resulting from the COVID-19 pandemic. These costs include, but are not limited to, new or added benefits provided to employees, the purchase of additional personal protection equipment and disinfecting supplies, additional facility cleaning services, initiated programs and communications to customers on utility response, and increased technology expenses to support remote working, where possible. The full impact on FirstEnergy’s business from the COVID-19 pandemic, including the governmental and regulatory responses, is unknown at this time and difficult to predict. FirstEnergy provides a critical and essential service to its customers and the health and safety of its employees, contractors and customers is its first priority. FirstEnergy is continuously monitoring its supply chain and is working closely with essential vendors to understand the continued impact the COVID-19 pandemic is having on its business, however, FirstEnergy does not currently expect disruptions in its ability to deliver service to customers or any material impact on its capital spending plan. FirstEnergy continues to effectively manage operations during the pandemic in order to provide critical service to customers and believes it is well positioned to manage through the economic slowdown. FirstEnergy Distribution and Transmission revenues benefit from geographic and economic diversity across a five-state service territory, which also allows for flexibility with capital investments and measures to maintain sufficient liquidity over the next twelve months. However, the situation remains fluid and future impacts to FirstEnergy that are presently unknown or unanticipated may occur. Furthermore, the likelihood of an impact to FirstEnergy, and the severity of any impact that does occur, could increase the longer the global pandemic persists. Customer Receivables Receivables from customers include distribution services and retail generation sales to residential, commercial and industrial customers of the Utilities. The allowance for uncollectible customer receivables is based on historical loss information comprised of a rolling 36-month average net write-off percentage of revenues, in conjunction with a qualitative assessment of elements that impact the collectability of receivables to determine if allowances for uncollectible accounts should be further adjusted in accordance with the accounting guidance for credit losses. Management contemplates available current information such as changes in economic factors, regulatory matters, industry trends, customer credit factors, payment options and programs available to customers, and the methods that the Utilities are able to utilize to ensure payment. FirstEnergy reviews its allowance for uncollectible customer receivables utilizing a quantitative and qualitative assessment, which includes consideration of the outbreak of COVID-19 and the impact on customer receivable balances outstanding and the ability of customers to continue payment since the pandemic began. Beginning March 13, 2020, FirstEnergy temporarily suspended customer disconnections for nonpayment and ceased collection activities as a result of the ongoing pandemic and in accordance with state regulatory requirements. The following table summarizes when customer disconnections and collection activities have or are expected to resume based upon current state guidelines subject to applicable regulations to winter moratoriums for residential customers, which begin as early as November 1, 2020, and are in effect until April 15, 2021. However, see Note 9, “Regulatory Matters,” for further discussion on applicable regulations that may alter residential customer disconnection and collection activity, such as winter moratoriums.
The impact of COVID-19 on customers’ ability to pay for service, along with the actions FirstEnergy has taken in response to the pandemic, is expected to result in an increase in customer receivable write-offs as compared to historically incurred losses. In order to estimate the additional losses and impacts expected, FirstEnergy analyzed the likelihood of loss based on increases in customer accounts in arrears since the pandemic began in mid-March 2020 as well as what collection methods are or were suspended, and that have historically been utilized to ensure payment. Based on this assessment, and consideration of other qualitative factors described above, FirstEnergy recognized incremental uncollectible expense of $63 million in the first nine months of 2020 ($20 million in the third quarter of 2020), of which approximately $40 million ($13 million in the third quarter of 2020) is not currently being collected through rates and as a result was deferred for future recovery under regulatory mechanisms described below. The Ohio Companies and JCP&L had existing regulatory mechanisms in place prior to the outbreak of COVID-19, where incremental uncollectible expenses are able to be recovered through riders with no material impact to earnings. Additionally, in response to the COVID-19 pandemic, the MDPSC, NJBPU and WVPSC issued orders allowing PE, JCP&L and MP, respectively, to track and create a regulatory asset for future recovery of incremental costs, including uncollectible expenses and waived late payment charges, incurred as a result of the pandemic. In Pennsylvania, the PPUC has authorized the Pennsylvania Companies to track all prudently incurred incremental costs arising from COVID-19, and to create a regulatory asset for future recovery of incremental uncollectible expenses incurred as a result of COVID-19 above what is included in the Pennsylvania Companies existing rates. On October 13, 2020, the PPUC entered an order that permits the Pennsylvania Companies to create a regulatory asset for incremental expenses associated with lifting the service termination moratorium, as further discussed below. Receivables from customers also include PJM receivables resulting from transmission and wholesale sales. FirstEnergy’s credit risk on PJM receivables is reduced due to the nature of PJM’s settlement process whereby members of PJM legally agree to share the cost of defaults and as a result there is no allowance for doubtful accounts. Activity in the allowance for uncollectible accounts on customer receivables for the nine months ended September 30, 2020 and for the year ended December 31, 2019 are as follows:
(1) $25 million of which was deferred for future recovery in the twelve months ended December 31, 2019. (2) Represents recoveries and reinstatements of accounts written off for uncollectible accounts. (3) $54 million of which was deferred for future recovery in the first nine months of 2020. Goodwill FirstEnergy evaluates goodwill for impairment annually on July 31 and more frequently if indicators of impairment arise. For 2020, FirstEnergy performed a qualitative assessment of the Regulated Distribution and Regulated Transmission reporting units' goodwill, assessing economic, industry and market considerations in addition to the reporting units' overall financial performance. Key factors used in the assessment include: growth rates, interest rates, expected capital expenditures, utility sector market performance, regulatory and legal developments and other market considerations. It was determined that the fair value of these reporting units was, more likely than not, greater than their carrying value and a quantitative analysis was not necessary. Restricted Cash Restricted cash primarily relates to cash collected from JCP&L, MP, PE and the Ohio Companies’ customers that is specifically used to service debt of their respective funding companies. New Accounting Pronouncements Recently Adopted Pronouncements ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (Issued June 2016 and subsequently updated): ASU 2016-13 removes all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. Prior to adoption, FirstEnergy analyzed its financial instruments within the scope of this guidance, primarily trade receivables and AFS debt securities. The adoption of this standard upon January 1, 2020 did not have a material impact to FirstEnergy’s financial statements and required additional disclosures in these Notes to the Consolidated Financial Statements. Please see above for additional information on FirstEnergy’s allowance for uncollectible customer receivables. ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (Issued August 2018): ASU 2018-15 allows implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customers in a software licensing arrangement. FirstEnergy adopted this standard as of January 1, 2020, with no material impact to its financial statements. ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (Issued March 2020): ASU 2020-04 provides temporary optional expedients and exceptions to the current guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. FirstEnergy’s $3.5 billion Revolving Credit Facility bears interest at fluctuating interest rates based on LIBOR and contains provisions (requiring an amendment) in the event that LIBOR can no longer be used. As of September 30, 2020, FirstEnergy has not utilized any of the expedients discussed within this ASU. Recently Issued Pronouncements - The following new authoritative accounting guidance issued by the FASB has not yet been adopted. Unless otherwise indicated, FirstEnergy is currently assessing the impact such guidance may have on its financial statements and disclosures, as well as the potential to early adopt where applicable. FirstEnergy has assessed other FASB issuances of new standards not described below based upon the current expectation that such new standards will not significantly impact FirstEnergy's financial reporting. ASU 2019-12, "Simplifying the Accounting for Income Taxes" (Issued in December 2019): ASU 2019-12 enhances and simplifies various aspects of the income tax accounting guidance including the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. FirstEnergy continues to evaluate the new guidance, but currently does not expect a material impact upon adopting this standard.
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Revenue | REVENUE FirstEnergy accounts for revenues from contracts with customers under ASC 606, “Revenue from Contracts with Customers.” Revenue from leases, financial instruments, other contractual rights or obligations and other revenues that are not from contracts with customers are outside the scope of the standard and accounted for under other existing GAAP. FirstEnergy has elected to exclude sales taxes and other similar taxes collected on behalf of third parties from revenue as prescribed in the standard. As a result, tax collections and remittances are excluded from recognition in the income statement and instead recorded through the balance sheet. Excise and gross receipts taxes that are assessed on FirstEnergy are not subject to the election and are included in revenue. FirstEnergy has elected the optional invoice practical expedient for most of its revenues and utilizes the optional short-term contract exemption for transmission revenues due to the annual establishment of revenue requirements, which eliminates the need to provide certain revenue disclosures regarding unsatisfied performance obligations. FirstEnergy’s revenues are primarily derived from electric service provided by the Utilities and Transmission Companies. The following tables represent a disaggregation of revenue from contracts with customers for the three months ended September 30, 2020 and 2019, by type of service from each reportable segment:
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($1 million at Regulated Distribution and $3 million at Regulated Transmission). (3) ARP revenue for the three months ended September 30, 2020, is primarily related to the reconciliation of Ohio decoupling rates that became effective on February 1, 2020.
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($4 million at Regulated Distribution and $4 million at Regulated Transmission) and Rider DMR as discussed in Note 9, “Regulatory Matters” (approximately $31 million at Regulated Distribution). (3) ARP revenue for the three months ended September 30, 2019, includes DMR revenue, lost distribution and shared savings revenue in Ohio. Other non-customer revenue includes revenue from late payment charges of $6 million and $9 million for the three months ended September 30, 2020 and 2019, respectively. Starting in mid-March 2020, and continuing through the third quarter, certain late payment charges began to be waived in response to the COVID-19 pandemic, and as a result, FirstEnergy stopped recognizing these revenues. See Note 1, “Organization and Basis of Presentation,” for further discussion on the COVID-19 pandemic. Other non-customer revenue also includes revenue from derivatives of $8 million and $2 million for the three months ended September 30, 2020 and 2019, respectively. The following tables represent a disaggregation of revenue from contracts with customers for the nine months ended September 30, 2020 and 2019, by type of service from each reportable segment:
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($2 million at Regulated Distribution and $6 million at Regulated Transmission). (3) ARP revenue for the nine months ended September 30, 2020, is primarily related to the reconciliation of Ohio decoupling rates that became effective on February 1, 2020.
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($31 million at Regulated Distribution and $11 million at Regulated Transmission) and Rider DMR as discussed in Note 9, “Regulatory Matters” (approximately $31 million at Regulated Distribution). (3) ARP revenue for the nine months ended September 30, 2019, includes DMR revenue, and lost distribution and shared savings revenue in Ohio. Other non-customer revenue includes revenue from late payment charges of $22 million and $29 million for the nine months ended September 30, 2020 and 2019, respectively, that FirstEnergy expects are collectible. Other non-customer revenue also includes revenue from derivatives of $14 million and $7 million for the nine months ended September 30, 2020 and 2019, respectively. Regulated Distribution The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies and also controls 3,790 MWs of regulated electric generation capacity located primarily in West Virginia, Virginia and New Jersey, 210 MWs of which are related to the Yards Creek generating plant that is being sold pursuant to an asset purchase agreement as further discussed below. Each of the Utilities earns revenue from state-regulated rate tariffs under which it provides distribution services to residential, commercial and industrial customers in its service territory. The Utilities are obligated under the regulated construct to deliver power to customers reliably, as it is needed, which creates an implied monthly contract with the end-use customer. See Note 9, “Regulatory Matters,” for additional information on rate recovery mechanisms. Distribution and electric revenues are recognized over time as electricity is distributed and delivered to the customer and the customers consume the electricity immediately as delivery occurs. Retail generation sales relate to POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland, as well as generation sales in West Virginia that are regulated by the WVPSC. Certain of the Utilities have default service obligations to provide power to non-shopping customers who have elected to continue to receive service under regulated retail tariffs. The volume of these sales varies depending on the level of shopping that occurs. Supply plans vary by state and by service territory. Default service for the Ohio Companies, Pennsylvania Companies, JCP&L and PE’s Maryland jurisdiction are provided through a competitive procurement process approved by each state’s respective commission. Retail generation revenues are recognized over time as electricity is delivered and consumed immediately by the customer. The following table represents a disaggregation of the Regulated Distribution segment revenue from contracts with distribution service and retail generation customers for the three and nine months ended September 30, 2020 and 2019, by class:
Wholesale sales primarily consist of generation and capacity sales into the PJM market from FirstEnergy’s regulated electric generation capacity and NUGs. Certain of the Utilities may also purchase power in the PJM markets to supply power to their customers. Generally, these power sales from generation and purchases to serve load are netted hourly and reported as either revenues or purchased power on the Consolidated Statements of Income based on whether the entity was a net seller or buyer each hour. Capacity revenues are recognized ratably over the PJM planning year at prices cleared in the annual PJM Reliability Pricing Model Base Residual Auction and Incremental Auctions. Capacity purchases and sales through PJM capacity auctions are reported within revenues on the Consolidated Statements of Income. Certain capacity income (bonuses) and charges (penalties) related to the availability of units that have cleared in the auctions are unknown and not recorded in revenue until, and unless, they occur. The Utilities’ distribution customers are metered on a cycle basis. An estimate of unbilled revenues is calculated to recognize electric service provided from the last meter reading through the end of the month. This estimate includes many factors, among which are historical customer usage, load profiles, estimated weather impacts, customer shopping activity and prices in effect for each class of customer. In each accounting period, the Utilities accrue the estimated unbilled amount as revenue and reverse the related prior period estimate. Customer payments vary by state but are generally due within 30 days. ASC 606 excludes industry-specific accounting guidance for recognizing revenue from ARPs as these programs represent contracts between the utility and its regulators, as opposed to customers. Therefore, revenue from these programs are not within the scope of ASC 606 and regulated utilities are permitted to continue to recognize such revenues in accordance with existing practice but are presented separately from revenue arising from contracts with customers. FirstEnergy currently has ARPs in Ohio, primarily under the DMR, lost distribution and shared savings revenue in 2019, and decoupling revenue in 2020. Please see Note 9, “Regulatory Matters,” for further discussion on decoupling revenues in Ohio. Regulated Transmission The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy's utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment's revenues are primarily derived from forward-looking formula rates at the Transmission Companies, as well as stated transmission rates at MP, PE and WP, although as further discussed in Note 9, “Regulatory Matters,” MP, PE and WP filed with FERC on October 29, 2020, to convert their existing stated transmission rates to forward-looking formula rates, effective January 1, 2021. JCP&L had stated rates in 2019, but moved to forward-looking formula rates, subject to a refund, effective January 1, 2020, as further discussed in Note 9, “Regulatory Matters.” Both the forward-looking formula and stated rates recover costs that the regulatory agencies determine are permitted to be recovered and provide a return on transmission capital investment. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual costs. Revenue requirements under stated rates are calculated annually by multiplying the highest one-hour peak load in each respective transmission zone by the approved, stated rate in that zone. Revenues and cash receipts for the stand-ready obligation of providing transmission service are recognized ratably over time. The following table represents a disaggregation of revenue from contracts with regulated transmission customers for the three and nine months ended September 30, 2020 and 2019, by transmission owner:
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | DISCONTINUED OPERATIONS FES and FENOC Chapter 11 Bankruptcy Filing On March 31, 2018, the FES Debtors announced that, in order to facilitate an orderly financial restructuring, they filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code with the Bankruptcy Court. In September 2018, the Bankruptcy Court approved a FES Bankruptcy settlement agreement by and among FirstEnergy, two groups of key FES creditors (collectively, the FES Key Creditor Groups), the FES Debtors and the UCC. The FES Bankruptcy settlement agreement resolved certain claims by FirstEnergy against the FES Debtors, all claims by the FES Debtors and the FES Key Creditor Groups against FirstEnergy, as well as releases from third parties who voted in favor of the FES Debtors' plan of reorganization, in return for among other things, a cash payment of $853 million upon emergence. The FES Bankruptcy settlement was conditioned on the FES Debtors confirming and effectuating a plan of reorganization acceptable to FirstEnergy. On February 18, 2020, the FES Debtors and FirstEnergy entered into an IT Access Agreement that provided IT support to enable the FES Debtors to emerge from bankruptcy prior to full IT separation by the FES Debtors. As part of the IT Access Agreement, the FES Debtors and FirstEnergy resolved, among other things, the on-going reconciliation of outstanding tax sharing payments for tax years 2018, 2019 and 2020 for a total of $125 million. On February 25, 2020, the Bankruptcy Court approved the IT Access Agreement. On February 27, 2020, the FES Debtors effectuated their plan, emerged from bankruptcy and FirstEnergy tendered the settlement payments totaling $853 million and the $125 million tax sharing payment to the FES Debtors, with no material impact to net income in 2020. By eliminating a significant portion of its competitive generation fleet with the deconsolidation of the FES Debtors, FirstEnergy has concluded the FES Debtors meet the criteria for discontinued operations, as this represents a significant event in management’s strategic review to exit commodity-exposed generation and transition to a fully regulated company. Services Agreement Pursuant to the FES Bankruptcy settlement agreement, FirstEnergy entered into an amended and restated shared services agreement with the FES Debtors to extend the availability of shared services until June 30, 2020, subject to reductions in services if requested by the FES Debtors, and extensions of time, subject to FirstEnergy’s approval. Under the amended shared services agreement, and consistent with the prior shared services agreements, costs are directly billed or assigned at no more than cost. As of June 30, 2020, FirstEnergy had substantially ceased providing post-emergence services to FES Debtors under the terms of the amended and restated shared services agreement. In connection with the FES Debtors emergence from bankruptcy, FirstEnergy entered into an amended separation agreement with the FES Debtors to implement the separation of FES Debtors and their businesses from FirstEnergy. Income Taxes For U.S. federal income taxes, the FES Debtors were included in FirstEnergy’s consolidated tax return until emergence from bankruptcy on February 27, 2020. As a result of the FES Debtors’ deconsolidation, FirstEnergy recognized a worthless stock deduction for the remaining tax basis in the FES Debtors of approximately $4.9 billion, net of unrecognized tax benefits of $316 million. Tax-effected, the worthless stock deduction is approximately $1 billion, net of valuation allowances recorded against the state tax benefit ($83 million) and the aforementioned unrecognized tax benefits ($72 million). Additionally, the Tax Act amended Section 163(j) of the Internal Revenue Code, limiting interest expense deductions for corporations but with exemption for certain regulated utilities. Based on interpretation of subsequently issued proposed regulations, FirstEnergy estimated the amount of deductible interest for its consolidated group in 2018 and 2019, with nondeductible portions being carried forward with an indefinite life and for which deferred tax assets were recorded. However, full valuation allowances were recorded against the deferred tax assets related to the carryforward of nondeductible interest as future utilization of the carryforwards requires taxable income from sources other than regulated utility businesses. Final regulations under Section 163(j) were issued in July 2020 but do not materially change these results. All tax expense related to nondeductible interest in 2018 and 2019 was recorded in discontinued operations as it was entirely attributed to the inclusion of the FES Debtors in FirstEnergy's consolidated tax group. Pursuant to certain safe harbor rules in the final regulations under Section 163(j), and due to the FES Debtors’ emergence from bankruptcy on February 27, 2020, FirstEnergy expects all interest expense for 2020 to be fully deductible. See Note 7, “Income Taxes” for further information Upon emergence, FirstEnergy paid the FES Debtors $125 million to settle all reconciliations under the Intercompany Tax Allocation Agreement for 2018, 2019 and 2020 tax years, including all issues regarding nondeductible interest. In September 2020, FirstEnergy filed its 2019 federal income tax return with the IRS and recognized a $6 million charge to discontinued operations in the third quarter of 2020, resulting from final adjustments to intercompany tax sharing related to the FES Debtors. Competitive Generation Asset Sales As contemplated under the FES Bankruptcy settlement agreement, AE Supply entered into an agreement on December 31, 2018, to transfer the 1,300 MW Pleasants Power Station and related assets to FG, while retaining certain specified liabilities. Under the terms of the agreement, FG acquired the economic interests in Pleasants as of January 1, 2019, and AE Supply operated Pleasants until ownership was transferred on January 30, 2020. AE Supply will continue to provide access to the McElroy's Run CCR Impoundment Facility, which was not transferred, and FE will provide guarantees for certain retained environmental liabilities of AE Supply, including the McElroy’s Run CCR Impoundment Facility. During the first quarter of 2020, FG paid AE Supply approximately $65 million of cash for related materials and supplies (at book value) and the settlement of FG’s economic interest in Pleasants. Summarized Results of Discontinued Operations Summarized results of discontinued operations for the three and nine months ended September 30, 2020 and 2019, were as follows:
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Earnings Per Share Of Common Stock |
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EARNINGS PER SHARE OF COMMON STOCK | EARNINGS PER SHARE OF COMMON STOCKBasic EPS available to common stockholders is computed using the weighted average number of common shares outstanding during the relevant period as the denominator. The denominator for diluted EPS of common stock reflects the weighted average of common shares outstanding plus the potential additional common shares that could result if dilutive securities and other agreements to issue common stock were exercised. During 2019, EPS was computed using the two-class method required for participating securities. The convertible preferred stock issued in January 2018 were considered participating securities since the shares participated in dividends on common stock on an “as-converted” basis. All convertible preferred stock was converted to common stock during 2019. The two-class method uses an earnings allocation formula that treats participating securities as having rights to earnings that otherwise would have been available only to common stockholders. Under the two-class method, net income attributable to common stockholders is derived by subtracting the following from income from continuing operations: •preferred stock dividends, •deemed dividends for the amortization of the beneficial conversion feature recognized at issuance of the preferred stock (if any), and •an allocation of undistributed earnings between the common stock and the participating securities (convertible preferred stock) based on their respective rights to receive dividends. Net losses were not allocated to the convertible preferred stock as they did not have a contractual obligation to share in the losses of FirstEnergy. FirstEnergy allocated undistributed earnings based upon income from continuing operations. Diluted EPS reflects the dilutive effect of potential common shares from share-based awards and convertible shares of preferred stock. The dilutive effect of outstanding share-based awards was computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of the award would be used to purchase common stock at the average market price for the period. The dilutive effect of the convertible preferred stock was computed using the if-converted method, which assumes conversion of the convertible preferred stock at the beginning of the period, giving income recognition for the add-back of the preferred stock dividends, amortization of beneficial conversion feature, and undistributed earnings allocated to preferred stockholders. The following table reconciles basic and diluted EPS of common stock:
For the three months ended September 30, 2020, approximately 80 thousand shares from stock options and awards were excluded from the calculation of diluted shares outstanding, as their inclusion would be anti-dilutive. For the three and nine months ended September 30, 2019, no shares from stock options and awards were excluded from the calculation of diluted shares outstanding.
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Pension and Other Post-Employment Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS | PENSION AND OTHER POST-EMPLOYMENT BENEFITS The components of the consolidated net periodic costs (credits) for pension and OPEB were as follows:
(1) Subject to a cap, FirstEnergy agreed to fund a pension enhancement through its pension plan, for voluntary enhanced retirement packages offered to certain FES employees, as well as offer certain other employee benefits. The costs are a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income. (2) 2020 includes the acceleration of $18 million in net credits as a result of the FES Debtors’ emergence during the first quarter of 2020 and is a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income. (3) Costs represent additional benefits provided to FES and FENOC employees under the approved settlement agreement and are a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income. FirstEnergy recognizes a pension and OPEB mark-to-market adjustment for the change in fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for remeasurement. Under the approved bankruptcy settlement agreement discussed above, upon emergence, FES and FENOC employees ceased earning years of service under the FirstEnergy pension and OPEB plans. The emergence on February 27, 2020, triggered a remeasurement of the affected pension and OPEB plans and as a result, FirstEnergy recognized a non-cash, pre-tax pension and OPEB mark-to-market adjustment of approximately $423 million in the first quarter of 2020. The pension and OPEB mark-to-market adjustment primarily reflects a 38 bps decrease in the discount rate used to measure benefit obligations from December 31, 2019, partially offset by a slightly higher than expected return on assets. On February 1, 2019, FirstEnergy made a $500 million voluntary cash contribution to the qualified pension plan. FirstEnergy expects no required contributions through 2021. Service costs, net of capitalization, are reported within Other operating expenses on FirstEnergy’s Consolidated Statements of Income. Non-service costs, other than the pension and OPEB mark-to-market adjustment, which is separately shown, are reported within Miscellaneous income, net, within Other Income (Expense) on FirstEnergy’s Consolidated Statements of Income.
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Income Taxes |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES FirstEnergy’s interim effective tax rates reflect the estimated annual effective tax rates for 2020 and 2019. These tax rates are affected by estimated annual permanent items, such as AFUDC equity and other flow-through items, as well as discrete items that may occur in any given period but are not consistent from period to period. FirstEnergy’s effective tax rate on continuing operations for the three months ended September 30, 2020 and 2019, was 20.1% and 21.6%, respectively. The change in the effective tax rate was primarily due to various state flow-through items such as the tax treatment of allowance for equity funds used during construction, as well as the amortization of net excess deferred income taxes. FirstEnergy’s effective tax rate on continuing operations for the nine months ended September 30, 2020 and 2019, was 13.4% and 20.6%, respectively. The change in effective tax rate was primarily due to a $52 million reduction in valuation allowances from the recognition of deferred gains on prior intercompany generation asset transfers triggered by the FES Debtors’ emergence from bankruptcy and deconsolidation from FirstEnergy’s consolidated federal income tax group in the first quarter of 2020, and a $10 million benefit from accelerated amortization of certain investment tax credits in the second quarter of 2020. See Note 3, “Discontinued Operations,” for other tax matters relating to the FES Bankruptcy that were recognized in discontinued operations. During the nine months ended September 30, 2020, FirstEnergy remeasured its reserve for uncertain tax positions for federal and state tax benefits related to the worthless stock deduction, resulting in a net decrease to the reserve of approximately $28 million, none of which had an impact on the effective tax rate. As of September 30, 2020, it is reasonably possible that within the next twelve months FirstEnergy could record a net decrease of approximately $57 million to its reserve for uncertain tax positions due to the expiration of the statute of limitations or resolution with taxing authorities, of which approximately $55 million would impact FirstEnergy’s effective tax rate. On March 27, 2020, the President signed into law the CARES Act, an economic stimulus package in response to the COVID-19 pandemic. The CARES Act contains several corporate income tax provisions, including making remaining AMT credits immediately refundable; providing a 5-year carryback of NOLs generated in tax years 2018, 2019, and 2020, and removing the 80% taxable income limitation on utilization of those NOLs if carried back to prior tax years or utilized in tax years beginning before 2021; and temporarily liberalizing the interest deductibility rules under Section 163(j) of the Tax Act, by raising the adjusted taxable income limitation from 30% to 50% for tax years 2019 and 2020 and giving taxpayers the election of using 2019 adjusted taxable income for purposes of computing 2020 interest deductibility. FirstEnergy has approximately $18 million of refundable AMT credits that will be fully refundable through the CARES Act, however, does not expect to generate additional income tax refunds from the NOL carryback provision and expects interest to be fully deductible starting in 2020. FirstEnergy does not currently expect the other provisions of the CARES Act to have a material effect on current income tax expense or the realizability of deferred income tax assets. On July 28, 2020, the IRS issued final regulations implementing interest expense deduction limitation rules under section 163(j) of the Internal Revenue Code. The final regulations changed certain rules on the computation of interest expense and limitation amount, as well as rules relevant to status as a regulated utility business and the allocation of consolidated group interest expense between utility and non-utility businesses. After reviewing the final regulations, FirstEnergy recorded a true-up to prior years’ reserve estimates during the quarter, which did not have a material impact to FirstEnergy’s income statement.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS RECURRING FAIR VALUE MEASUREMENTS Authoritative accounting guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy gives the highest priority to Level 1 measurements and the lowest priority to Level 3 measurements. The three levels of the fair value hierarchy and a description of the valuation techniques are as follows:
Models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.
FirstEnergy produces a long-term power and capacity price forecast annually with periodic updates as market conditions change. When underlying prices are not observable, prices from the long-term price forecast are used to measure fair value. FTRs are financial instruments that entitle the holder to a stream of revenues (or charges) based on the hourly day-ahead congestion price differences across transmission paths. FTRs are acquired by FirstEnergy in the annual, monthly and long-term PJM auctions and are initially recorded using the auction clearing price less cost. After initial recognition, FTRs’ carrying values are periodically adjusted to fair value using a mark-to-model methodology, which approximates market. The primary inputs into the model, which are generally less observable than objective sources, are the most recent PJM auction clearing prices and the FTRs’ remaining hours. The model calculates the fair value by multiplying the most recent auction clearing price by the remaining FTR hours less the prorated FTR cost. Significant increases or decreases in inputs in isolation may have resulted in a higher or lower fair value measurement. NUG contracts represent PPAs with third-party non-utility generators that are transacted to satisfy certain obligations under PURPA. NUG contract carrying values are recorded at fair value and adjusted periodically using a mark-to-model methodology, which approximates market. The primary unobservable inputs into the model are regional power prices and generation MWH. Pricing for the NUG contracts is a combination of market prices for the current year and next two years based on observable data and internal models using historical trends and market data for the remaining years under contract. The internal models use forecasted energy purchase prices as an input when prices are not defined by the contract. Forecasted market prices are based on Intercontinental Exchange, Inc. quotes and management assumptions. Generation MWH reflects data provided by contractual arrangements and historical trends. The model calculates the fair value by multiplying the prices by the generation MWH. Significant increases or decreases in inputs in isolation may have resulted in a higher or lower fair value measurement. FirstEnergy primarily applies the market approach for recurring fair value measurements using the best information available. Accordingly, FirstEnergy maximizes the use of observable inputs and minimizes the use of unobservable inputs. There were no changes in valuation methodologies used as of September 30, 2020, from those used as of December 31, 2019. The determination of the fair value measures takes into consideration various factors, including but not limited to, nonperformance risk, counterparty credit risk and the impact of credit enhancements (such as cash deposits, LOCs and priority interests). The impact of these forms of risk was not significant to the fair value measurements. The following tables set forth the recurring assets and liabilities that are accounted for at fair value by level within the fair value hierarchy:
(1)Contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings. (2)Primarily consists of short-term cash investments. (3)Excludes $2 million and $(16) million as of September 30, 2020 and December 31, 2019, respectively, of net receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table. Rollforward of Level 3 Measurements The following table provides a reconciliation of changes in the fair value of NUG contracts and FTRs that are classified as Level 3 in the fair value hierarchy for the periods ended September 30, 2020, and December 31, 2019:
(1)Contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings. Level 3 Quantitative Information The following table provides quantitative information for the FTRs contracts that are classified as Level 3 in the fair value hierarchy for the period ended September 30, 2020:
INVESTMENTS All temporary cash investments purchased with an initial maturity of three months or less are reported as cash equivalents on the Consolidated Balance Sheets at cost, which approximates their fair market value. Investments other than cash and cash equivalents include equity securities, AFS debt securities and other investments. FirstEnergy has no debt securities held for trading purposes. Generally, unrealized gains and losses on equity securities are recognized in income whereas unrealized gains and losses on AFS debt securities are recognized in AOCI. However, the NDTs and nuclear fuel disposal trusts of JCP&L, ME and PN are subject to regulatory accounting with all gains and losses on equity and AFS debt securities offset against regulatory assets. The investment policy for the NDT funds restricts or limits the trusts’ ability to hold certain types of assets including private or direct placements, warrants, securities of FirstEnergy, investments in companies owning nuclear power plants, financial derivatives, securities convertible into common stock and securities of the trust funds’ custodian or managers and their parents or subsidiaries. Nuclear Decommissioning and Nuclear Fuel Disposal Trusts JCP&L, ME and PN hold debt and equity securities within their respective NDT and nuclear fuel disposal trusts. The debt securities are classified as AFS securities, recognized at fair market value. As further discussed in Note 10, "Commitments, Guarantees and Contingencies", assets and liabilities held for sale on FirstEnergy’s Consolidated Balance Sheets associated with the TMI-2 transaction consist of an ARO of $718 million, NDTs of $881 million, as well as property, plant and equipment with a net book value of zero, which are included in the regulated distribution segment. The following table summarizes the amortized cost basis, unrealized gains, unrealized losses and fair values of investments held in NDT and nuclear fuel disposal trusts as of September 30, 2020, and December 31, 2019:
(1) Excludes short-term cash investments of $753 million, of which $746 million is classified as held for sale. (2) Excludes short-term cash investments of $751 million, of which $747 million is classified as held for sale. (3) Includes $135 million classified as held for sale as of September 30, 2020 and December 31, 2019. Proceeds from the sale of investments in equity and AFS debt securities, realized gains and losses on those sales and interest and dividend income for the three and nine months ended September 30, 2020 and 2019, were as follows:
Other Investments Other investments include employee benefit trusts, which are primarily invested in corporate-owned life insurance policies and equity method investments. Other investments were $301 million and $299 million as of September 30, 2020, and December 31, 2019, respectively, and are excluded from the amounts reported above. LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS All borrowings with initial maturities of less than one year are defined as short-term financial instruments under GAAP and are reported as Short-term borrowings on the Consolidated Balance Sheets at cost. Since these borrowings are short-term in nature, FirstEnergy believes that their costs approximate their fair market value. The following table provides the approximate fair value and related carrying amounts of long-term debt, which excludes finance lease obligations and net unamortized debt issuance costs, premiums and discounts as of September 30, 2020 and December 31, 2019:
(1) The carrying value as of September 30, 2020, includes $3,425 million of debt issuances and $1,110 million of redemptions that occurred in 2020. The fair values of long-term debt and other long-term obligations reflect the present value of the cash outflows relating to those securities based on the current call price, the yield to maturity or the yield to call, as deemed appropriate at the end of each respective period. The yields assumed were based on securities with similar characteristics offered by corporations with credit ratings similar to those of FirstEnergy. FirstEnergy classified short-term borrowings, long-term debt and other long-term obligations as Level 2 in the fair value hierarchy as of September 30, 2020, and December 31, 2019.
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Regulatory Matters |
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Sep. 30, 2020 | |
Regulated Operations [Abstract] | |
REGULATORY MATTERS | REGULATORY MATTERS STATE REGULATION Each of the Utilities’ retail rates, conditions of service, issuance of securities and other matters are subject to regulation in the states in which it operates - in Maryland by the MDPSC, in New Jersey by the NJBPU, in Ohio by the PUCO, in Pennsylvania by the PPUC, in West Virginia by the WVPSC and in New York by the NYPSC. The transmission operations of PE in Virginia are subject to certain regulations of the VSCC. In addition, under Ohio law, municipalities may regulate rates of a public utility, subject to appeal to the PUCO if not acceptable to the utility. Further, if any of the FirstEnergy affiliates were to engage in the construction of significant new transmission facilities, depending on the state, they may be required to obtain state regulatory authorization to site, construct and operate the new transmission facility. MARYLAND PE operates under MDPSC approved base rates that were effective as of March 23, 2019. PE also provides SOS pursuant to a combination of settlement agreements, MDPSC orders and regulations, and statutory provisions. SOS supply is competitively procured in the form of rolling contracts of varying lengths through periodic auctions that are overseen by the MDPSC and a third-party monitor. Although settlements with respect to SOS supply for PE customers have expired, service continues in the same manner until changed by order of the MDPSC. PE recovers its costs plus a return for providing SOS. The EmPOWER Maryland program requires each electric utility to file a plan to reduce electric consumption and demand 0.2% per year, up to the ultimate goal of 2% annual savings, for the duration of the 2018-2020 and 2021-2023 EmPOWER Maryland program cycles, to the extent the MDPSC determines that cost-effective programs and services are available. PE’s approved 2018-2020 EmPOWER Maryland plan continues and expands upon prior years’ programs, and adds new programs, for a projected total cost of $116 million over the three-year period. PE recovers program costs subject to a five-year amortization. Maryland law only allows for the utility to recover lost distribution revenue attributable to energy efficiency or demand reduction programs through a base rate case proceeding, and to date, such recovery has not been sought or obtained by PE. On September 1, 2020, PE filed its proposed plan for the 2021-2023 EmPOWER Maryland program cycle. The new plan largely continues PE’s existing programs and is estimated to cost approximately $148 million over the three-year period. The MDPSC had a hearing on the proposed plan in October 2020. On January 19, 2018, PE filed a joint petition along with other utility companies, work group stakeholders and the MDPSC electric vehicle work group leader to implement a statewide electric vehicle portfolio in connection with a 2016 MDPSC proceeding to consider an array of issues relating to electric distribution system design, including matters relating to electric vehicles, distributed energy resources, advanced metering infrastructure, energy storage, system planning, rate design, and impacts on low-income customers. PE proposed an electric vehicle charging infrastructure program at a projected total cost of $12 million, to be recovered over a five-year amortization. On January 14, 2019, the MDPSC approved the petition subject to certain reductions in the scope of the program. The MDPSC approved PE’s compliance filing, which implements the pilot program, with minor modifications, on July 3, 2019. On August 24, 2018, PE filed a base rate case with the MDPSC, which it supplemented on October 22, 2018, to update the partially forecasted test year with a full twelve months of actual data. The rate case requested an annual increase in base distribution rates of $19.7 million, plus creation of an EDIS to fund four enhanced service reliability programs. In responding to discovery, PE revised its request for an annual increase in base rates to $17.6 million. The proposed rate increase reflected $7.3 million in annual savings for customers resulting from the recent federal tax law changes. On March 22, 2019, the MDPSC issued a final order that approved a rate increase of $6.2 million, approved three of the four EDIS programs for four years, directed PE to file a new depreciation study within 18 months, and ordered the filing of a new base rate case in four years to correspond to the ending of the approved EDIS programs. On September 22, 2020, PE filed its depreciation study that indicated a slight increase in depreciation, and as a result, is seeking that the difference in depreciation be deferred for future recovery in PE’s next base rate case. The MDPSC has set the matter for hearing and delegated it to a public utility law judge. On November 6, 2020, an order was issued scheduling evidentiary hearings in April 2021. Maryland’s Governor issued an order on March 16, 2020, forbidding utilities from terminating residential service or charging late fees for non-payment for the duration of the COVID-19 pandemic. On April 9, 2020, the MDPSC issued an order allowing utilities to track and create a regulatory asset for future recovery of all prudently incurred incremental costs arising from the COVID-19 pandemic, including incremental uncollectible expense, incurred from the date of the Governor’s order (or earlier if the utility could show that the expenses related to suspension of service terminations). On July 8, 2020, the MDPSC issued a notice opening a public conference to collect information from utilities and other stakeholders about the impacts of the COVID-19 pandemic on the utilities and their customers. The MDPSC subsequently issued orders allowing Maryland electric and gas utilities to resume residential service terminations for non-payment on November 15, 2020, subject to various restrictions, and clarifying that utilities could resume charging late fees on October 1, 2020. NEW JERSEY JCP&L operates under NJBPU approved rates that were effective as of January 1, 2017. JCP&L provides BGS for retail customers who do not choose a third-party EGS and for customers of third-party EGSs that fail to provide the contracted service. All New Jersey EDCs participate in this competitive BGS procurement process and recover BGS costs directly from customers as a charge separate from base rates. On April 18, 2019, pursuant to the May 2018 New Jersey enacted legislation establishing a ZEC program to provide ratepayer funded subsidies of New Jersey nuclear energy supply, the NJBPU approved the implementation of a non-bypassable, irrevocable ZEC charge for all New Jersey electric utility customers, including JCP&L’s customers. Once collected from customers by JCP&L, these funds will be remitted to eligible nuclear energy generators. In December 2017, the NJBPU issued proposed rules to modify its current CTA policy in base rate cases to: (i) calculate savings using a five-year look back from the beginning of the test year; (ii) allocate savings with 75% retained by the company and 25% allocated to ratepayers; and (iii) exclude transmission assets of electric distribution companies in the savings calculation, which were published in the NJ Register in the first quarter of 2018. JCP&L filed comments supporting the proposed rulemaking. On January 17, 2019, the NJBPU approved the proposed CTA rules with no changes. On May 17, 2019, the Rate Counsel filed an appeal with the Appellate Division of the Superior Court of New Jersey. JCP&L is contesting this appeal but is unable to predict the outcome of this matter. Also in December 2017, the NJBPU approved its IIP rulemaking. The IIP creates a financial incentive for utilities to accelerate the level of investment needed to promote the timely rehabilitation and replacement of certain non-revenue producing components that enhance reliability, resiliency, and/or safety. On May 8, 2019, the NJBPU approved a Stipulation of Settlement submitted by JCP&L, Rate Counsel, NJBPU Staff and New Jersey Large Energy Users Coalition to implement JCP&L’s infrastructure plan, JCP&L Reliability Plus. The plan provides that JCP&L will invest up to approximately $97 million in capital investments beginning on June 1, 2019 through December 31, 2020, to enhance the reliability and resiliency of JCP&L’s distribution system and reduce the frequency and duration of power outages. JCP&L shall seek recovery of the capital investment through an accelerated cost recovery mechanism, provided for in the rules, that includes a revenue adjustment calculation and a process for two rate adjustments. The NJBPU approved adjusted rates that took effect on March 1, 2020. As further discussed below, JCP&L will recover the IIP capital investments as part of its distribution base rate case. On February 18, 2020, JCP&L submitted a filing with the NJBPU requesting a distribution base rate increase of $186.9 million on an annual basis, which represents an overall average increase in JCP&L rates of 7.8%. The filing seeks to recover certain costs associated with providing safe and reliable electric service to JCP&L customers, along with recovery of previously incurred storm costs. JCP&L proposed a rate effective date of March 19, 2020. The NJBPU issued orders suspending JCP&L’s proposed rates until November 19, 2020. JCP&L filed updates to the requested distribution base rate in both June and July 2020, resulting in JCP&L seeking a total annual distribution base rate increase of approximately $185 million. On October 16, 2020, the parties submitted a stipulation of settlement to the administrative law judge, providing for, among other things, a $94 million annual base distribution revenues increase for JCP&L based on an ROE of 9.6%, which will become effective for customers on November 1, 2021. Until the rates become effective, and starting on January 1, 2021, JCP&L will be permitted to amortize an existing regulatory liability totaling approximately $86 million to offset the base rate increase that otherwise would have occurred in this period. The parties also agreed that the actual net gain from the sale of JCP&L’s interest in the Yards Creek pumped-storage hydro generation facility in New Jersey (210 MWs), as further discussed below, shall be applied to reduce JCP&L’s existing regulatory asset for previously deferred storm costs. On October 22, 2020, the administrative law judge entered an initial decision adopting the settlement. On October 28, 2020, the NJBPU approved the settlement and ordered an upcoming management audit for JCP&L. On April 6, 2020, JCP&L signed an asset purchase agreement with Yards Creek Energy, LLC, a subsidiary of LS Power to sell its 50% interest in the Yards Creek pumped-storage hydro generation facility. Subject to terms and conditions of the agreement, the base purchase price is $155 million. Completion of the transaction is subject to several closing conditions, including approval by the NJBPU and FERC. On July 31, 2020, FERC approved the transfer of JCP&L’s interest in the hydroelectric operating license. On October 8, 2020, FERC issued an order authorizing the transfer of JCP&L’s ownership interest in the hydroelectric facilities. There can be no assurance that all closing conditions will be satisfied or that the transaction will be consummated. JCP&L currently anticipates closing of the transaction to occur in the next few months. Assets held for sale on FirstEnergy’s Consolidated Balance Sheets associated with the transaction consist of property, plant and equipment of $44 million, which is included in the regulated distribution segment. On October 28, 2020, the NJBPU approved the sale of Yards Creek. On August 27, 2020, JCP&L filed an AMI Program with the NJBPU, which proposes the deployment of approximately 1.2 million advanced meters over a three-year period beginning on January 1, 2023, at a total cost of approximately $418 million, including the pre-deployment phase. The 3-year deployment is part of the 20 year AMI Program that is expected to cost a total of approximately $732 million and proposes a cost recovery mechanism through a separate AMI tariff rider. On June 10, 2020, the NJBPU issued an order establishing a framework for the filing of utility-run energy efficiency and peak demand reduction programs in accordance with the New Jersey Clean Energy Act. Under the established framework, JCP&L will recover its program investments over a ten year amortization period and its operations and maintenance expenses on an annual basis, be eligible to receive lost revenues on energy savings that resulted from its programs and be eligible for incentives or subject to penalties based on its annual program performance, beginning in the fifth year of its program offerings. On September 25, 2020, JCP&L filed its energy efficiency and peak demand reduction program. JCP&L’s program consists of 11 energy efficiency and peak demand reduction programs and subprograms to be run from July 1, 2021 through June 30, 2024. The program also seeks approval of cost recovery totaling approximately $230 million as well as lost revenues associated with the energy savings resulting from the programs. On July 2, 2020, the NJBPU issued an order allowing New Jersey utilities to track and create a regulatory asset for future recovery of all prudently incurred incremental costs arising from the COVID-19 pandemic beginning March 9, 2020 through September 30, 2021, or until the Governor issues an order stating that the COVID-19 pandemic is no longer in effect. New Jersey utilities can request recovery of such regulatory asset in a stand-alone COVID-19 regulatory asset filing or future base rate case. On August 21, 2020, the Governor of New Jersey issued a press release announcing that the New Jersey utilities agreed to extend their voluntary moratorium preventing shutoffs to both residential and commercial customers during the COVID-19 pandemic until October 15, 2020. On October 15, 2020, the Governor issued an Executive Order prohibiting utilities from terminating service to any residential gas, electric, public and private water customer, through March 15, 2021, requiring the reconnection of certain customers, and disallowing the charging of late payment charges or reconnection fees during the public health emergency. On October 28, 2020, the NJBPU issued an order expanding the scope of the proceeding to examine all pandemic issues, including recovery of the COVID-19 regulatory assets, by way of a generic proceeding. Comments are due by November 30, 2020. The recent credit rating actions taken on October 28, 2020, by S&P and Fitch triggered a requirement from various NJBPU orders that JCP&L file a mitigation plan, which was filed on November 5, 2020, to demonstrate that JCP&L has sufficient liquidity to meet its BGS obligations. On November 18, 2020, the NJBPU scheduled a public hearing on the mitigation plan for December 11, 2020. OHIO The Ohio Companies operate under base distribution rates approved by the PUCO effective in 2009. The Ohio Companies’ residential and commercial base distribution revenues are decoupled, through a mechanism that took effect on February 1, 2020, to the base distribution revenue and lost distribution revenue associated with energy efficiency and peak demand reduction programs recovered as of the twelve-month period ending on December 31, 2018. The Ohio Companies currently operate under ESP IV effective June 1, 2016, and continuing through May 31, 2024, that continues the supply of power to non-shopping customers at a market-based price set through an auction process. ESP IV also continues the DCR rider, which supports continued investment related to the distribution system for the benefit of customers, with increased revenue caps of $20 million per year from June 1, 2019 through May 31, 2022; and $15 million per year from June 1, 2022 through May 31, 2024. In addition, ESP IV includes: (1) continuation of a base distribution rate freeze through May 31, 2024; (2) the collection of lost distribution revenues associated with energy efficiency and peak demand reduction programs; (3) a goal across FirstEnergy to reduce CO2 emissions by 90% below 2005 levels by 2045; and (4) contributions, totaling $51 million to: (a) fund energy conservation programs, economic development and job retention in the Ohio Companies’ service territories; (b) establish a fuel-fund in each of the Ohio Companies’ service territories to assist low-income customers; and (c) establish a Customer Advisory Council to ensure preservation and growth of the competitive market in Ohio. ESP IV further provided for the Ohio Companies to collect through the DMR $132.5 million annually for three years beginning in 2017, grossed up for federal income taxes, resulting in an approved amount of approximately $168 million annually in 2018 and 2019. On appeal, the SCOH, on June 19, 2019, reversed the PUCO’s determination that the DMR is lawful, and remanded the matter to the PUCO with instructions to remove the DMR from ESP IV. On August 20, 2019, the SCOH denied the Ohio Companies’ motion for reconsideration. The PUCO entered an order directing the Ohio Companies to cease further collection through the DMR, credit back to customers a refund of the DMR funds collected since July 2, 2019, and remove the DMR from ESP IV. On July 15, 2019, OCC filed a Notice of Appeal with the SCOH, challenging the PUCO’s exclusion of the DMR revenues from the determination of the existence of significantly excessive earnings under ESP IV for calendar year 2017 and claiming a $42 million refund is due to OE customers. The Ohio Companies are contesting this appeal but are unable to predict the outcome of this matter. The SCOH heard the argument on this matter on May 12, 2020. On July 23, 2019, Ohio enacted legislation establishing support for nuclear energy supply in Ohio. In addition to the provisions supporting nuclear energy, the legislation included a provision implementing a decoupling mechanism for Ohio electric utilities and ending current energy efficiency program mandates on December 31, 2020, provided that statewide energy efficiency mandates are achieved as determined by the PUCO. On February 26, 2020, the PUCO ordered that a wind-down of statutorily required energy efficiency programs shall commence on September 30, 2020, and the programs shall terminate on December 31, 2020, and that the Ohio Companies’ existing portfolio plans are extended through 2020 without changes. On November 21, 2019, the Ohio Companies applied to the PUCO for approval of a decoupling mechanism, which would set residential and commercial base distribution related revenues at the levels collected in 2018. As such, those base distribution revenues would no longer be based on electric consumption, which allows continued support of energy efficiency initiatives while also providing revenue certainty to the Ohio Companies. On January 15, 2020, the PUCO approved the Ohio Companies’ decoupling application, and the decoupling mechanism took effect on February 1, 2020. Various Ohio House and Senate Bills were introduced in the third quarter of 2020 to, among other things, repeal HB 6, the legislation that established support for nuclear energy supply in Ohio, provided for a decoupling mechanism for Ohio electric utilities, and provided for the ending of current energy efficiency program mandates. FirstEnergy is unable to predict the outcome of the legislative activity in response to the investigation of HB 6, however, a repeal of the decoupling provision of HB 6 is reasonably possible. As of September 30, 2020, the uncollected amount recognized as a regulatory asset on FirstEnergy’s Consolidated Balance Sheet from the decoupling mechanism was approximately $100 million. However, absent the decoupling mechanism and other provisions of HB 6, it is expected that the Ohio Companies would have collected lost distribution revenues estimated at approximately $63 million for the nine months ended September 30, 2020, for a pre-tax net impact of approximately $37 million. Furthermore, as FirstEnergy would not have financially benefited from the zero nuclear credit included in HB 6, there is no expected impact to FirstEnergy due to the repeal of that provision in HB 6. On November 2, 2020, the Ohio Companies filed their annual update to the Ohio decoupling rider with an estimated annual revenue requirement of approximately $113 million with a proposed effective date of January 1, 2021, unless otherwise ordered by the PUCO. On July 17, 2019, the PUCO approved, with no material modifications, a settlement agreement that provides for the implementation of the Ohio Companies’ first phase of grid modernization plans, including the investment of $516 million over three years to modernize the Ohio Companies’ electric distribution system, and for all tax savings associated with the Tax Act to flow back to customers. The settlement had broad support, including PUCO Staff, the OCC, representatives of industrial and commercial customers, a low-income advocate, environmental advocates, hospitals, competitive generation suppliers and other parties. In March 2020, the PUCO issued entries directing utilities to review their service disconnection and restoration policies and suspend, for the duration of the COVID-19 pandemic, otherwise applicable requirements that may impose a service continuity hardship or service restoration hardship on customers. The Ohio Companies are utilizing their existing approved cost recovery mechanisms where applicable to address the financial impacts of these directives. On July 31, 2020, the Ohio Companies filed with the PUCO their transition plan and requests for waivers to allow for the safe resumption of normal business operations, including service disconnections for non-payment, on or after September 15, 2020. On September 23, 2020, the PUCO approved the Ohio Companies’ transition plan, including approval of the resumption of service disconnections for non-payment, which the Ohio Companies began on October 5, 2020. On July 29, 2020, the PUCO consolidated the Ohio Companies’ Applications for determination of the existence of significantly excessive earnings, or SEET, under ESP IV for calendar years 2018 and 2019, which had been previously filed on July 15, 2019, and May 15, 2020, respectively, and set a procedural schedule with evidentiary hearings scheduled for October 29, 2020. The calculations included in the Ohio Companies’ SEET filings for calendar years 2018 and 2019 demonstrate that the Ohio Companies did not have significantly excessive earnings, however, FirstEnergy and the Ohio Companies are unable to predict the PUCO’s ultimate determination of the applications. On August 3, 2020, the OCC filed an interlocutory appeal asking the PUCO to stay the SEET proceeding until the SCOH determines whether DMR should be excluded from the SEET, as further discussed above. Furthermore, on July 29, 2020, Ohio House Bill 740 was introduced, which would repeal legislation passed last year that permitted the Ohio Companies to file their SEET results on a consolidated basis instead of on an individual company basis. On September 4, 2020, the PUCO opened its quadrennial review of ESP IV, consolidated it with the Ohio Companies’ 2018 and 2019 SEET Applications, and set a procedural schedule for the consolidated matters. On October 29, 2020, the PUCO issued an entry extending the deadline for the Ohio Companies to file quadrennial review of ESP IV testimony to March 1, 2021, with the evidentiary hearings to commence no sooner than May 3, 2021. On September 8, 2020, the OCC filed motions in the Ohio Companies’ Corporate Separation Audit and Rider DMR Audit dockets, requesting the PUCO to open an investigation and management audit, hire an independent auditor, and require FirstEnergy to show it did not improperly use money collected from consumers or violate any utility regulatory laws, rules or orders in its activities regarding HB 6. The Ohio Companies’ filed a response in opposition to the OCC’s motions on September 23, 2020. On September 15, 2020, the PUCO opened a new proceeding to review the political and charitable spending by the Ohio Companies in support of HB 6 and the subsequent referendum effort, directing the Ohio Companies to show cause, demonstrating that the costs of any political or charitable spending in support of HB 6, or the subsequent referendum effort, were not included, directly or indirectly, in any rates or charges paid by ratepayers. The Ohio Companies filed a response on September 30, 2020, stating that any political and charitable spending in support of HB 6 or the subsequent referendum were not included in rates or charges paid for by its customers. Several parties requested that the PUCO broaden the scope of the review of political and charitable spending. In connection with an on-going audit of the Ohio Companies’ policies and procedures relating to the code of conduct rules between affiliates, on November 4, 2020, the PUCO initiated an additional corporate separation audit as a result of the FirstEnergy leadership transition announcement made on October 29, 2020, further discussed below. The additional audit is to ensure compliance by the Ohio Companies and their affiliates with corporate separation laws and the Ohio Companies’ Corporate Separation Plan. The additional audit is for the period from November 2016 through October 2020, and the PUCO intends to select an auditor by December 2, 2020, with a final audit report to be filed in April 2021. See Note 10, "Commitments, Guarantees and Contingencies" for additional details on the government investigation and subsequent litigation surrounding the investigation of HB 6. PENNSYLVANIA The Pennsylvania Companies operate under rates approved by the PPUC, effective as of January 27, 2017. These rates were adjusted for the net impact of the Tax Act, effective March 15, 2018. The net impact of the Tax Act for the period January 1, 2018 through March 14, 2018 was separately tracked and its treatment will be addressed in a future rate proceeding. The Pennsylvania Companies operate under DSPs for the June 1, 2019 through May 31, 2023 delivery period, which provide for the competitive procurement of generation supply for customers who do not choose an alternative EGS or for customers of alternative EGSs that fail to provide the contracted service. Under the 2019-2023 DSPs, supply will be provided by wholesale suppliers through a mix of 3, 12 and 24-month energy contracts, as well as two RFPs for 2-year SREC contracts for ME, PN and Penn. Pursuant to Pennsylvania Act 129 of 2008 and PPUC orders, Pennsylvania EDCs implement energy efficiency and peak demand reduction programs. The Pennsylvania Companies’ Phase III EE&C plans for the June 2016 through May 2021 period, which were approved in March 2016, with expected costs up to $390 million, are designed to achieve the targets established in the PPUC’s Phase III Final Implementation Order with full recovery through the reconcilable EE&C riders. On June 18, 2020, the PPUC entered a Final Implementation Order for a Phase IV EE&C Plan, operating from June 2021 through May 2026. The Final Implementation Order set demand reduction targets, relative to 2007 to 2008 peak demands, at 2.9% MW for ME, 3.3% MW for PN, 2.0% MW for Penn, and 2.5% MW for WP; and energy consumption reduction targets, as a percentage of the Pennsylvania Companies’ historic 2009 to 2010 reference load at 3.1% MWH for ME, 3.0% MWH for PN, 2.7% MWH for Penn, and 2.4% MWH for WP. Phase IV plans must be filed by November 30, 2020. Pennsylvania EDCs may file with the PPUC for approval of an LTIIP for infrastructure improvements and costs related to highway relocation projects, after which a DSIC may be approved to recover LTIIP costs. On August 30, 2019, the Pennsylvania Companies filed Petitions for approval of new LTIIPs for the five-year period beginning January 1, 2020 and ending December 31, 2024 for a total capital investment of approximately $572 million for certain infrastructure improvement initiatives. On January 16, 2020, the PPUC approved the LTIIPs without modification. The Pennsylvania Companies’ approved DSIC riders for quarterly cost recovery went into effect July 1, 2016. On August 30, 2019, Penn filed a Petition seeking approval of a waiver of the statutory DSIC cap of 5% of distribution rate revenue and approval to increase the maximum allowable DSIC to 11.81% of distribution rate revenue for the five-year period of its proposed LTIIP. On March 12, 2020, an order was entered approving a settlement by all parties to that case which provides for a temporary increase in the recoverability cap from 5% to 7.5%, to expire on the earlier of the effective date of new base rates following Penn’s next base rate case or the expiration of its LTIIP II program. Following the Pennsylvania Companies’ 2016 base rate proceedings, the PPUC ruled in a separate proceeding related to the DSIC mechanisms that the Pennsylvania Companies were not required to reflect federal and state income tax deductions related to DSIC-eligible property in DSIC rates, which decision was appealed by the Pennsylvania OCA to the Pennsylvania Commonwealth Court. The Commonwealth Court reversed the PPUC’s decision and remanded the matter to require the Pennsylvania Companies to revise their tariffs and DSIC calculations to include ADIT and state income taxes. On April 7, 2020, the Pennsylvania Supreme Court issued an order granting Petitions for Allowance of Appeal by both the PPUC and the Pennsylvania Companies of the Commonwealth Court’s Opinion and Order. Briefs and Reply Briefs of the parties were filed, and oral argument before the Supreme Court was held on October 21, 2020. An adverse ruling by the Pennsylvania Supreme Court is not expected to result in a material impact to FirstEnergy. The PPUC issued an order on March 13, 2020, forbidding utilities from terminating service for non-payment for the duration of the COVID-19 pandemic. On May 13, 2020, the PPUC issued a Secretarial letter directing utilities to track all prudently incurred incremental costs arising from the COVID-19 pandemic, and to create a regulatory asset for future recovery of incremental uncollectibles incurred as a result of the COVID-19 pandemic and termination moratorium. On October 13, 2020, the PPUC entered an order lifting the service termination moratorium effective November 9, 2020 subject to certain additional notification, payment procedures and exceptions, and permits the Pennsylvania Companies to create a regulatory asset for all incremental expenses associated with their compliance with the order. Customers with income levels at 300% of federal poverty income guidelines and below are not subject to termination through March 31, 2021 as long as they apply for assistance programs and payment arrangements. Utilities may create a regulatory asset for all incremental expenses associated with their compliance with the order. On October 27, 2020, several stakeholders filed a joint petition for clarification of the order. Answers to the joint petition for clarification were due on November 6, 2020. WEST VIRGINIA MP and PE provide electric service to all customers through traditional cost-based, regulated utility ratemaking and operate under rates approved by the WVPSC effective February 2015. MP and PE recover net power supply costs, including fuel costs, purchased power costs and related expenses, net of related market sales revenue through the ENEC. MP’s and PE’s ENEC rate is updated annually. On March 13, 2020, the WVPSC urged all utilities to suspend utility service terminations except where necessary as a matter of safety or where requested by the customer. On May 15, 2020, the WVPSC issued an order to authorize MP and PE to record a deferral of additional, extraordinary costs directly related to complying with the various COVID-19 government shut-down orders and operational precautions, including impacts on uncollectible expense and cash flow related to temporary discontinuance of service terminations for non-payment and any credits to minimum demand charges associated with business customers adversely impacted by shut-downs or temporary closures related to the pandemic. MP and PE resumed disconnection activity for commercial and industrial customers on September 15, 2020, and for residential customers on November 4, 2020. On August 28, 2020, MP and PE filed with the WVPSC their annual ENEC case requesting a decrease in ENEC rates of $55 million beginning January 1, 2021, representing a 4% decrease in rates compared to those in effect on August 28, 2020. The decrease in the ENEC rates is net of recovering approximately $10.5 million in previously deferred, incremental uncollectible and other related costs resulting from the COVID-19 pandemic. A hearing is set to begin on December 2, 2020, and an order is expected in December 2020. Also on August 28, 2020, MP and PE filed with the WVPSC for recovery of costs associated with modernization and improvement program for their coal-fired boilers. The proposed annual revenue increase for these environmental compliance projects is $5 million beginning January 1, 2021. A hearing is set to begin on December 2, 2020. FERC REGULATORY MATTERS Under the FPA, FERC regulates rates for interstate wholesale sales, transmission of electric power, accounting and other matters, including construction and operation of hydroelectric projects. With respect to their wholesale services and rates, the Utilities, AE Supply and the Transmission Companies are subject to regulation by FERC. FERC regulations require JCP&L, MP, PE, WP and the Transmission Companies to provide open access transmission service at FERC-approved rates, terms and conditions. Transmission facilities of JCP&L, MP, PE, WP and the Transmission Companies are subject to functional control by PJM and transmission service using their transmission facilities is provided by PJM under the PJM Tariff. FERC regulates the sale of power for resale in interstate commerce in part by granting authority to public utilities to sell wholesale power at market-based rates upon showing that the seller cannot exert market power in generation or transmission or erect barriers to entry into markets. The Utilities and AE Supply each have been authorized by FERC to sell wholesale power in interstate commerce at market-based rates and have a market-based rate tariff on file with FERC, although in the case of the Utilities major wholesale purchases remain subject to review and regulation by the relevant state commissions. Federally enforceable mandatory reliability standards apply to the bulk electric system and impose certain operating, record-keeping and reporting requirements on the Utilities, AE Supply, and the Transmission Companies. NERC is the ERO designated by FERC to establish and enforce these reliability standards, although NERC has delegated day-to-day implementation and enforcement of these reliability standards to six regional entities, including RFC. All of the facilities that FirstEnergy operates are located within the RFC region. FirstEnergy actively participates in the NERC and RFC stakeholder processes, and otherwise monitors and manages its companies in response to the ongoing development, implementation and enforcement of the reliability standards implemented and enforced by RFC. FirstEnergy believes that it is in material compliance with all currently effective and enforceable reliability standards. Nevertheless, in the course of operating its extensive electric utility systems and facilities, FirstEnergy occasionally learns of isolated facts or circumstances that could be interpreted as excursions from the reliability standards. If and when such occurrences are found, FirstEnergy develops information about the occurrence and develops a remedial response to the specific circumstances, including in appropriate cases “self-reporting” an occurrence to RFC. Moreover, it is clear that NERC, RFC and FERC will continue to refine existing reliability standards as well as to develop and adopt new reliability standards. Any inability on FirstEnergy’s part to comply with the reliability standards for its bulk electric system could result in the imposition of financial penalties, or obligations to upgrade or build transmission facilities, that could have a material adverse effect on its financial condition, results of operations and cash flows. ATSI Transmission Formula Rate On May 1, 2020, ATSI filed amendments to its formula rate to recover regulatory assets for certain costs that ATSI incurred as a result of its 2011 move from MISO to PJM, certain costs allocated to ATSI by FERC for transmission projects that were constructed by other MISO transmission owners, certain income tax-related adjustments, including, but not limited to impacts from the Tax Act discussed further below, and certain costs for transmission-related vegetation management programs. The amount on FirstEnergy’s Consolidated Balance Sheet for these regulatory assets was approximately $76 million and $73 million, as of September 30, 2020 and December 31, 2019, respectively. Per prior FERC orders, ATSI included a “cost-benefit study” to support recovery of ATSI’s costs to move to PJM, and the MISO transmission project costs that were allocated to ATSI. Certain intervenors filed protests of the formula rate amendments on May 29, 2020, and ATSI filed a reply on June 15, 2020. On June 30, 2020, FERC issued an initial order accepting the tariff amendments subject to refund, suspending the effective date for five months to be effective December 1, 2020, and setting the matter for hearing and settlement proceedings. ATSI is engaged in settlement negotiations with the other parties. FERC Actions on Tax Act On March 15, 2018, FERC initiated proceedings on the question of how to address possible changes to ADIT and bonus depreciation as a result of the Tax Act. Such possible changes could impact FERC-jurisdictional rates, including transmission rates. On November 21, 2019, FERC issued a final rule (Order No. 864). Order No. 864 requires utilities with transmission formula rates to update their formula rate templates to include mechanisms to (i) deduct any excess ADIT from or add any deficient ADIT to their rate base; (ii) raise or lower their income tax allowances by any amortized excess or deficient ADIT; and (iii) incorporate a new permanent worksheet into their rates that will annually track information related to excess or deficient ADIT. Per FERC directives, ATSI submitted its compliance filing on May 1, 2020. MAIT submitted its compliance filing on June 1, 2020. Certain intervenors filed protests of the compliance filings, to which ATSI and MAIT responded. On October 28, 2020, FERC Staff requested additional information about ATSI’s proposed rate base adjustment mechanism. ATSI has 30 days to respond in writing to FERC Staff’s request. On May 15, 2020, TrAIL submitted its compliance filing and on June 1, 2020, PATH submitted its required compliance filing. These compliance filings each remain pending before FERC. MP, WP and PE (as holders of a “stated” transmission rate) are addressing these requirements in the transmission formula rates amendments that were filed on October 29, 2020. JCP&L is addressing these requirements as part of its pending transmission formula rate case. Transmission ROE Methodology FERC’s methodology for calculating electric transmission utility ROE has been in transition as a result of an April 14, 2017 ruling by the D.C. Circuit that vacated FERC’s then-effective methodology. On October 16, 2018, FERC issued an order in which it proposed a revised ROE methodology. FERC proposed that, for complaint proceedings alleging that an existing ROE is not just and reasonable, FERC will rely on three financial models - discounted cash flow, capital-asset pricing, and expected earnings - to establish a composite zone of reasonableness to identify a range of just and reasonable ROEs. FERC then will utilize the transmission utility’s risk relative to other utilities within that zone of reasonableness to assign the transmission utility to one of three quartiles within the zone. FERC would take no further action (i.e., dismiss the complaint) if the existing ROE falls within the identified quartile. However, if the replacement ROE falls outside the quartile, FERC would deem the existing ROE presumptively unjust and unreasonable and would determine the replacement ROE. FERC would add a fourth financial model risk premium to the analysis to calculate a ROE based on the average point of central tendency for each of the four financial models. On March 21, 2019, FERC established NOIs to collect industry and stakeholder comments on the revised ROE methodology that is described in the October 16, 2018 decision, and also whether to make changes to FERC’s existing policies and practices for awarding transmission rates incentives. On November 21, 2019, FERC announced in a complaint proceeding involving MISO utilities that FERC would rely on the discounted cash flow and capital-asset pricing models as the basis for establishing ROE. Certain parties, including the Utilities, sought rehearing of FERC’s decision in the MISO utilities proceeding and, on May 21, 2020, FERC issued Opinion No. 569-A that changed FERC’s ROE methodology. Under this methodology FERC established an ROE that is based on three financial models – discounted cash flow, capital-asset pricing, and risk premium – to calculate a composite zone of reasonableness. FERC noted that utilities could, in utility-specific proceedings, ask to have the expected earnings methodology included in calculating the utility’s authorized ROE. FERC also noted that, going forward, it will divide that zone into three equal parts, to be used for high risk, normal risk, and low risk utilities. A given utility will be assigned to one of these three parts of the zone of reasonableness, and its ROE will be set at the median or midpoint of the other utilities that are in the applicable third of the zone. FirstEnergy filed a request for rehearing, which FERC denied on July 22, 2020. FirstEnergy also initiated appellate proceedings of FERC’s Opinion Nos. 569 and 569-A, as did a number of other parties. These proceedings are pending before the United States Court of Appeals for the District of Columbia Circuit. Any changes to FERC’s transmission rate ROE and incentive policies would be applied on a prospective basis. On March 20, 2020, FERC initiated a rulemaking proceeding on the transmission rate incentives provisions of Section 219 of the 2005 Energy Policy Act. Initial comments were submitted July 1, 2020, and reply comments were filed on July 16, 2020. FirstEnergy participated through EEI and through a consortium of PJM Transmission Owners. This proceeding is pending before FERC. JCP&L Transmission Formula Rate On October 30, 2019, JCP&L filed tariff amendments with FERC to convert JCP&L’s existing stated transmission rate to a forward-looking formula transmission rate. JCP&L requested that the tariff amendments become effective January 1, 2020. On December 19, 2019, FERC issued its initial order in the case, allowing JCP&L to transition to a forward-looking formula rate as of January 1, 2020 as requested, subject to refund, pending further hearing and settlement proceedings. JCP&L and the parties to the FERC proceeding are engaged in settlement negotiations.
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COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES GUARANTEES AND OTHER ASSURANCES FirstEnergy has various financial and performance guarantees and indemnifications which are issued in the normal course of business. These contracts include performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. FirstEnergy enters into these arrangements to facilitate commercial transactions with third parties by enhancing the value of the transaction to the third party. As of September 30, 2020, outstanding guarantees and other assurances aggregated approximately $1.7 billion, consisting of parental guarantees on behalf of its consolidated subsidiaries ($1.0 billion), other guarantees ($114 million) and other assurances ($502 million). COLLATERAL AND CONTINGENT-RELATED FEATURES In the normal course of business, FE and its subsidiaries may enter into physical or financially settled contracts for the sale and purchase of electric capacity, energy, fuel and emission allowances. Certain agreements contain provisions that require FE or its subsidiaries to post collateral. This collateral may be posted in the form of cash or credit support with thresholds contingent upon FE’s or its subsidiaries’ credit rating from each of the major credit rating agencies. The collateral and credit support requirements vary by contract and by counterparty. Certain agreements entered into by FE and its subsidiaries have margining provisions that require posting of collateral. As of September 30, 2020, $1 million of collateral has been posted by FE or its subsidiaries. These credit-risk-related contingent features stipulate that if the subsidiary were to be downgraded or lose its investment grade credit rating (based on its senior unsecured debt rating), it would be required to provide additional collateral. The following table discloses the potential additional credit rating contingent contractual collateral obligations as of September 30, 2020:
(1)As a result of certain credit rating downgrades in October 2020, FirstEnergy may be required to provide $4.5 million in collateral. (2)Surety Bonds are not tied to a credit rating. Surety Bonds’ impact assumes maximum contractual obligations (typical obligations require 30 days to cure). OTHER COMMITMENTS AND CONTINGENCIES FE is a guarantor under a $120 million syndicated senior secured term loan facility due November 12, 2024, under which Global Holding’s outstanding principal balance is $114 million as of September 30, 2020. In addition to FE, Signal Peak, Global Rail, Global Mining Group, LLC and Global Coal Sales Group, LLC, each being a direct or indirect subsidiary of Global Holding, continue to provide their joint and several guaranties of the obligations of Global Holding under the facility. In connection with the facility, 69.99% of Global Holding’s direct and indirect membership interests in Signal Peak, Global Rail and their affiliates along with FEV’s and WMB Marketing Ventures, LLC’s respective 33-1/3% membership interests in Global Holding, are pledged to the lenders under the current facility as collateral. ENVIRONMENTAL MATTERS Various federal, state and local authorities regulate FirstEnergy with regard to air and water quality, hazardous and solid waste disposal, and other environmental matters. While FirstEnergy’s environmental policies and procedures are designed to achieve compliance with applicable environmental laws and regulations, such laws and regulations are subject to periodic review and potential revision by the implementing agencies. FirstEnergy cannot predict the timing or ultimate outcome of any of these reviews or how any future actions taken as a result thereof may materially impact its business, results of operations, cash flows and financial condition. Clean Air Act FirstEnergy complies with SO2 and NOx emission reduction requirements under the CAA and SIP(s) by burning lower-sulfur fuel, utilizing combustion controls and post-combustion controls and/or using emission allowances. CSAPR requires reductions of NOx and SO2 emissions in two phases (2015 and 2017), ultimately capping SO2 emissions in affected states to 2.4 million tons annually and NOx emissions to 1.2 million tons annually. CSAPR allows trading of NOx and SO2 emission allowances between power plants located in the same state and interstate trading of NOx and SO2 emission allowances with some restrictions. The D.C. Circuit ordered the EPA on July 28, 2015, to reconsider the CSAPR caps on NOx and SO2 emissions from power plants in 13 states, including Ohio, Pennsylvania and West Virginia. This follows the 2014 U.S. Supreme Court ruling generally upholding the EPA’s regulatory approach under CSAPR, but questioning whether the EPA required upwind states to reduce emissions by more than their contribution to air pollution in downwind states. The EPA issued a CSAPR update rule on September 7, 2016, reducing summertime NOx emissions from power plants in 22 states in the eastern U.S., including Ohio, Pennsylvania and West Virginia, beginning in 2017. Various states and other stakeholders appealed the CSAPR update rule to the D.C. Circuit in November and December 2016. On September 13, 2019, the D.C. Circuit remanded the CSAPR update rule to the EPA citing that the rule did not eliminate upwind states’ significant contributions to downwind states’ air quality attainment requirements within applicable attainment deadlines. Depending on the outcome of the appeals, the EPA’s reconsideration of the CSAPR update rule and how the EPA and the states ultimately implement CSAPR, the future cost of compliance may materially impact FirstEnergy’s operations, cash flows and financial condition. In February 2019, the EPA announced its final decision to retain without changes the NAAQS for SO2, specifically retaining the 2010 primary (health-based) 1-hour standard of 75 PPB. As of September 30, 2020, FirstEnergy has no power plants operating in areas designated as non-attainment by the EPA. In March 2018, the State of New York filed a CAA Section 126 petition with the EPA alleging that NOx emissions from nine states (including West Virginia) significantly contribute to New York’s inability to attain the ozone NAAQS. The petition seeks suitable emission rate limits for large stationary sources that are affecting New York’s air quality within the three years allowed by CAA Section 126. On September 20, 2019, the EPA denied New York’s CAA Section 126 petition. On October 29, 2019, the State of New York appealed the denial of its petition to the D.C. Circuit. On July 14, 2020, the D.C. Circuit reversed and remanded the New York petition to the EPA for further consideration. FirstEnergy is unable to predict the outcome of these matters or estimate the loss or range of loss. Climate Change There are a number of initiatives to reduce GHG emissions at the state, federal and international level. Certain northeastern states are participating in the RGGI and western states led by California, have implemented programs, primarily cap and trade mechanisms, to control emissions of certain GHGs. Additional policies reducing GHG emissions, such as demand reduction programs, renewable portfolio standards and renewable subsidies have been implemented across the nation. At the international level, the United Nations Framework Convention on Climate Change resulted in the Kyoto Protocol requiring participating countries, which does not include the U.S., to reduce GHGs commencing in 2008 and has been extended through 2020. The Obama Administration submitted in March 2015, a formal pledge for the U.S. to reduce its economy-wide GHG emissions by 26 to 28 percent below 2005 levels by 2025. In 2015, FirstEnergy set a goal of reducing company-wide CO2 emissions by at least 90 percent below 2005 levels by 2045. As of December 31, 2018, FirstEnergy has reduced its CO2 emissions by approximately 62 percent. In September 2016, the U.S. joined in adopting the agreement reached on December 12, 2015, at the United Nations Framework Convention on Climate Change meetings in Paris. The Paris Agreement’s non-binding obligations to limit global warming to below two degrees Celsius became effective on November 4, 2016. On June 1, 2017, the Trump Administration announced that the U.S. would cease all participation in the Paris Agreement. FirstEnergy cannot currently estimate the financial impact of climate change policies, although potential legislative or regulatory programs restricting CO2 emissions, or litigation alleging damages from GHG emissions, could require material capital and other expenditures or result in changes to its operations. In December 2009, the EPA released its final “Endangerment and Cause or Contribute Findings for GHG under the Clean Air Act” concluding that concentrations of several key GHGs constitutes an “endangerment” and may be regulated as “air pollutants” under the CAA and mandated measurement and reporting of GHG emissions from certain sources, including electric generating plants. The EPA released its final CPP regulations in August 2015 to reduce CO2 emissions from existing fossil fuel-fired EGUs and finalized separate regulations imposing CO2 emission limits for new, modified, and reconstructed fossil fuel fired EGUs. Numerous states and private parties filed appeals and motions to stay the CPP with the D.C. Circuit in October 2015. On February 9, 2016, the U.S. Supreme Court stayed the rule during the pendency of the challenges to the D.C. Circuit and U.S. Supreme Court. On March 28, 2017, an executive order, entitled “Promoting Energy Independence and Economic Growth,” instructed the EPA to review the CPP and related rules addressing GHG emissions and suspend, revise or rescind the rules if appropriate. On October 16, 2017, the EPA issued a proposed rule to repeal the CPP. On June 19, 2019, the EPA repealed the CPP and replaced it with the ACE rule that establishes guidelines for states to develop standards of performance to address GHG emissions from existing coal-fired power plants. Depending on the outcomes of further appeals and how any final rules are ultimately implemented, the future cost of compliance may be material. Clean Water Act Various water quality regulations, the majority of which are the result of the federal CWA and its amendments, apply to FirstEnergy’s facilities. In addition, the states in which FirstEnergy operates have water quality standards applicable to FirstEnergy’s operations. The EPA finalized CWA Section 316(b) regulations in May 2014, requiring cooling water intake structures with an intake velocity greater than 0.5 feet per second to reduce fish impingement when aquatic organisms are pinned against screens or other parts of a cooling water intake system to a 12% annual average and requiring cooling water intake structures exceeding 125 million gallons per day to conduct studies to determine site-specific controls, if any, to reduce entrainment, which occurs when aquatic life is drawn into a facility’s cooling water system. Depending on any final action taken by the states with respect to impingement and entrainment, the future capital costs of compliance with these standards may be material. On September 30, 2015, the EPA finalized new, more stringent effluent limits for the Steam Electric Power Generating category (40 CFR Part 423) for arsenic, mercury, selenium and nitrogen for wastewater from wet scrubber systems and zero discharge of pollutants in ash transport water. The treatment obligations were to phase-in as permits are renewed on a five-year cycle from 2018 to 2023. However, on April 13, 2017, EPA granted a Petition for Reconsideration and on September 18, 2017, EPA postponed certain compliance deadlines for two years. On August 31, 2020, EPA issued a final rule revising the effluent limits for discharges from wet scrubber systems, retaining the zero-discharge standard for ash transport water, (with some limited discharge allowances), and extending the deadline for compliance to December 31, 2025 for both. In addition, the EPA allows for less stringent limits for sub-categories of generating units based on capacity utilization, flow volume from the scrubber system, and unit retirement date. Depending on the outcome of appeals, how final rules are ultimately implemented and the compliance options MP elects to take with the new rules, the compliance with these standards, which could include capital expenditures at Ft. Martin and Harrison power stations, may be substantial and changes to MP’s operations at those power stations may also result. On September 29, 2016, FirstEnergy received a request from the EPA for information pursuant to CWA Section 308(a) for information concerning boron exceedances of effluent limitations established in the NPDES Permit for the former Mitchell Power Station’s Mingo landfill, owned by WP. On November 1, 2016, WP provided an initial response that contained information related to a similar boron issue at the former Springdale Power Station’s landfill. The EPA requested additional information regarding the Springdale landfill and on November 15, 2016, WP provided a response and intends to fully comply with the Section 308(a) information request. On March 3, 2017, WP proposed to the PA DEP a re-route of its wastewater discharge to eliminate potential boron exceedances at the Springdale landfill. On January 29, 2018, WP submitted an NPDES permit renewal application to PA DEP proposing to re-route its wastewater discharge to eliminate potential boron exceedances at the Mingo landfill. On February 20, 2018, the DOJ issued a letter and tolling agreement on behalf of EPA alleging violations of the CWA at the Mingo landfill while seeking to enter settlement negotiations in lieu of filing a complaint. The EPA has proposed a penalty of $900,000 to settle alleged past boron exceedances at the Mingo and Springdale landfills. Negotiations are continuing and WP is unable to predict the outcome of this matter. Regulation of Waste Disposal Federal and state hazardous waste regulations have been promulgated as a result of the RCRA, as amended, and the Toxic Substances Control Act. Certain CCRs, such as coal ash, were exempted from hazardous waste disposal requirements pending the EPA’s evaluation of the need for future regulation. In April 2015, the EPA finalized regulations for the disposal of CCRs (non-hazardous), establishing national standards for landfill design, structural integrity design and assessment criteria for surface impoundments, groundwater monitoring and protection procedures and other operational and reporting procedures to assure the safe disposal of CCRs from electric generating plants. On September 13, 2017, the EPA announced that it would reconsider certain provisions of the final regulations. On July 17, 2018, the EPA Administrator signed a final rule extending the deadline for certain CCR facilities to cease disposal and commence closure activities, as well as, establishing less stringent groundwater monitoring and protection requirements. On August 21, 2018, the D.C. Circuit remanded sections of the CCR Rule to the EPA to provide additional safeguards for unlined CCR impoundments that are more protective of human health and the environment. On December 2, 2019, the EPA published a proposed rule accelerating the date that certain CCR impoundments must cease accepting waste and initiate closure to August 31, 2020. The proposed rule allows for an extension of the closure deadline based on meeting proscribed site-specific criteria. On July 29, 2020, the EPA published a final rule revising the date that certain CCR impoundments must cease accepting waste and initiate closure to April 11, 2021. The final rule allows for an extension of the closure deadline based on meeting proscribed site-specific criteria. FE or its subsidiaries have been named as potentially responsible parties at waste disposal sites, which may require cleanup under the CERCLA. Allegations of disposal of hazardous substances at historical sites and the liability involved are often unsubstantiated and subject to dispute; however, federal law provides that all potentially responsible parties for a particular site may be liable on a joint and several basis. Environmental liabilities that are considered probable have been recognized on FirstEnergy’s Consolidated Balance Sheets as of September 30, 2020, based on estimates of the total costs of cleanup, FirstEnergy’s proportionate responsibility for such costs and the financial ability of other unaffiliated entities to pay. Total liabilities of approximately $104 million have been accrued through September 30, 2020. Included in the total are accrued liabilities of approximately $68 million for environmental remediation of former MGP and gas holder facilities in New Jersey, which are being recovered by JCP&L through a non-bypassable SBC. FE or its subsidiaries could be found potentially responsible for additional amounts or additional sites, but the loss or range of losses cannot be determined or reasonably estimated at this time. OTHER LEGAL PROCEEDINGS United States v. Larry Householder, et al. On July 21, 2020, a complaint and supporting affidavit containing federal criminal allegations were unsealed against the now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Mr. Householder. Also, on July 21, 2020, and in connection with the investigation, FirstEnergy received subpoenas for records from the U.S. Attorney’s Office for the S.D. Ohio. FirstEnergy was not aware of the criminal allegations, affidavit or subpoenas before July 21, 2020. No contingency has been reflected in FirstEnergy’s consolidated financial statements as a loss is neither probable, nor is a loss or range of a loss reasonably estimable. Legal Proceedings Relating to United States v. Larry Householder, et al. In addition to the subpoenas referenced above under “—United States v. Larry Householder, et. al.”, certain FE stockholders and FirstEnergy customers filed several lawsuits against FirstEnergy and certain current and former directors, officers and other employees, and the complaints in each of these suits is related to allegations in the complaint and supporting affidavit relating to HB 6 and the now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Mr. Householder. •Gendrich v. Anderson, et al. and Sloan v. Anderson, et al. (Common Pleas Court, Summit County, OH); on July 26, 2020 and July 31, 2020, respectively, purported stockholders of FE filed shareholder derivative action lawsuits against certain FE directors and officers, alleging, among other things, breaches of fiduciary duty. •Smith v. FirstEnergy Corp. et al., Buldas v. FirstEnergy Corp. et al., and Hudock and Cameo Countertops, Inc. v. FirstEnergy Corp. et al. (Federal District Court, S.D. Ohio); on July 27, 2020, July 31, 2020, and August 5, 2020, respectively, purported customers of FirstEnergy filed putative class action lawsuits against FE and FESC, as well as certain current and former FirstEnergy officers, alleging civil Racketeer Influenced and Corrupt Organizations Act violations and related state law claims. These actions have been consolidated. •Owens v. FirstEnergy Corp. et al. and Frand v. FirstEnergy Corp. et al. (Federal District Court, S.D. Ohio); on July 28, 2020 and August 21, 2020, purported stockholders of FE filed putative class action lawsuits against FE and certain FE officers, purportedly on behalf of all purchasers of FE common stock from February 21, 2017 through July 21, 2020, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, alleging misrepresentations or omissions by FirstEnergy concerning its business and results of operations. •Emmons v. FirstEnergy Corp. et al. (Common Pleas Court, Cuyahoga County, OH); on August 4, 2020, a purported customer of FirstEnergy filed a putative class action lawsuit against FE, FESC, OE, TE and CEI, along with FES, alleging several causes of action, including negligence and/or gross negligence, breach of contract, unjust enrichment, and unfair or deceptive consumer acts or practices. On October 1, 2020, plaintiffs filed a First Amended Complaint, adding as a plaintiff a purported customer of FirstEnergy and alleging a civil violation of the Ohio Corrupt Activity Act and civil conspiracy against FE, FESC and FES. •Miller v. Anderson, et al. (Federal District Court, N.D. Ohio); Bloom, et al. v. Anderson, et al.; Employees Retirement System of the City of St. Louis v. Jones, et al.; Beck v. Anderson et al.; Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Anderson et al.; Massachusetts Laborers Pension Fund v. Anderson et al.; The City of Philadelphia Board of Pensions and Retirement v. Anderson et al.; Atherton v. Dowling et al; Behar v. Anderson, et al. (U.S. District Court, S.D. Ohio); beginning on August 7, 2020, purported stockholders of FE filed shareholder derivative actions alleging the board and officers breached their fiduciary duties and committed violations of Section 14(a) of the Securities Exchange Act of 1934. •State of Ohio ex rel. Dave Yost, Ohio Attorney General v. FirstEnergy Corp., et al. (Common Pleas Court, Franklin County, OH); on September 23, 2020, the OH AG filed a complaint against several parties including FE and FESC, alleging, one cause of action, a civil violation of the Ohio Corrupt Activity Act in connection with the passage of HB 6. The OH AG sought a preliminary injunction to prevent each of the defendants, including FE and FESC, through the end of 2020, from: (i) contributing to any groups whose purpose is to keep or modify HB 6; (ii) making any public statements for or against any repeal or modification legislation concerning HB 6; (iii) lobbying, consulting, or advising on these matters; or (iv) contributing to any Ohio legislative candidates. The court denied the OH AG’s request for preliminary injunctive relief on October 2, 2020. •City of Cincinnati and City of Columbus v. FirstEnergy Corp. (Common Pleas Court, Franklin County, OH); on October 27, 2020, the Cities of Cincinnati and Columbus filed a complaint against several parties including FE, alleging a civil violation of the Ohio Corrupt Activity Act and seeking to enjoin the collection of the zero nuclear credit included in HB 6. •Mitchell v. FirstEnergy Corp. et al. (Common Pleas Court, Fairfield County, OH); on October 6, 2020, an unsuccessful candidate for the Ohio legislature filed an amended complaint adding FirstEnergy Corp. to a previously filed Ohio Corrupt Activity Act civil lawsuit against now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Mr. Householder. The amended complaint sought an amount in excess of $875,000, plus treble damages and other relief. On November 2, 2020, the plaintiff moved to voluntarily dismiss the claims without prejudice. The plaintiffs in each of the above cases, seek, among other things, to recover an unspecified amount of damages (unless otherwise noted). In addition, on August 10, 2020, the SEC, through its Division of Enforcement, issued an order directing an investigation of possible securities laws violations by FE, and on September 1, 2020, issued subpoenas to FE and certain FE officers. The outcome of any of these lawsuits and investigations are uncertain and could have a material adverse effect on FE’s or its subsidiaries’ financial condition, results of operations and cash flows. No contingency has been reflected in FirstEnergy’s consolidated financial statements as a loss is neither probable, nor is a loss or range of a loss reasonably estimable. Internal Investigation Relating to United States v. Larry Householder, et al. As previously disclosed, a committee of independent members of the Board of Directors is directing an internal investigation related to ongoing government investigations. In connection with FirstEnergy’s internal investigation, such committee determined on October 29, 2020, to terminate FirstEnergy’s Chief Executive Officer, Charles E. Jones, together with two other executives: Dennis M. Chack, Senior Vice President of Product Development, Marketing, and Branding; and Michael J. Dowling, Senior Vice President of External Affairs. Each of these terminated executives violated certain FirstEnergy policies and its code of conduct. These executives were terminated as of October 29, 2020. Such former members of senior management did not maintain and promote a control environment with an appropriate tone of compliance in certain areas of FirstEnergy’s business, nor sufficiently promote, monitor or enforce adherence to certain FirstEnergy policies and its code of conduct. Furthermore, certain former members of senior management did not reasonably ensure that relevant information was communicated within our organization and not withheld from our independent directors, our Audit Committee, and our independent auditor. Among the matters considered with respect to the determination by the committee of independent members of the Board of Directors that certain former members of senior management violated certain FirstEnergy policies and its code of conduct related to a payment of approximately $4 million made in early 2019 in connection with the termination of a purported consulting agreement, as amended, which had been in place since 2013. The counterparty to such agreement was an entity associated with an individual who subsequently was appointed to a full-time role as an Ohio government official directly involved in regulating the Ohio Companies, including with respect to distribution rates. At this time, it has not been determined if the payments were for the purposes represented within the consulting agreement. Immediately following these terminations, the independent members of its Board appointed Mr. Steven E. Strah to the position of Acting Chief Executive Officer and Mr. Christopher D. Pappas, a current member of the Board, to the temporary position of Executive Director, each effective as of October 29, 2020. Mr. Donald T. Misheff will continue to serve as Non-Executive Chairman of the Board. Additionally, on November 8, 2020, Robert Reffner, Senior Vice President and Chief Legal Officer, and Ebony Yeboah-Amankwah, Vice President, General Counsel, and Chief Ethics Officer, were separated from FirstEnergy due to inaction and conduct that the Board determined was influenced by the improper tone at the top. The matter is a subject of the ongoing internal investigation as it relates to the government investigations. Nuclear Plant Matters Under NRC regulations, JCP&L, ME and PN must ensure that adequate funds will be available to decommission their retired nuclear facility, TMI-2. As of September 30, 2020, JCP&L, ME and PN had in total approximately $881 million invested in external trusts to be used for the decommissioning and environmental remediation of their retired TMI-2 nuclear generating facility. The values of these NDTs also fluctuate based on market conditions. If the values of the trusts decline by a material amount, the obligation to JCP&L, ME and PN to fund the trusts may increase. Disruptions in the capital markets and their effects on particular businesses and the economy could also affect the values of the NDTs. On October 15, 2019, JCP&L, ME, PN and GPUN executed an asset purchase and sale agreement with TMI-2 Solutions, LLC, a subsidiary of EnergySolutions, LLC, concerning the transfer and dismantlement of TMI-2. This transfer of TMI-2 to TMI-2 Solutions, LLC will include the transfer of: (i) the ownership and operating NRC licenses for TMI-2; (ii) the external trusts for the decommissioning and environmental remediation of TMI-2; and (iii) related liabilities of approximately $900 million as of September 30, 2020. There can be no assurance that the transfer will receive the required regulatory approvals and, even if approved, whether the conditions to the closing of the transfer will be satisfied. On November 12, 2019, JCP&L filed a Petition with the NJBPU seeking approval of the transfer and sale of JCP&L’s entire 25% interest in TMI-2 to TMI-2 Solutions, LLC. On October 28, 2020, Rate Counsel submitted comments recommending that the NJBPU only approve the sale of TMI-2 on the condition that any liability for TMI-2 be absorbed by the joint owners and that JCP&L should agree to not seek to recover any such costs from its utility customers. On November 2, 2020, JCP&L submitted reply comments accepting Rate Counsel’s condition. JCP&L is awaiting a NJBPU order. Also on November 12, 2019, JCP&L, ME, PN, GPUN and TMI-2 Solutions, LLC filed an application with the NRC seeking approval to transfer the NRC license for TMI-2 to TMI-2 Solutions, LLC. On August 10, 2020, JCP&L, ME, PN, GPUN, TMI-2 Solutions, LLC, and the PA DEP reached a settlement agreement regarding the decommissioning of TMI-2. The settlement agreement provides for increased and detailed oversight by the PA DEP over the decommissioning work, expenditures, and environmental impacts of the dismantlement of TMI-2 by TMI-2 Solutions, LLC. In addition, the PA DEP withdrew its objection to the TMI-2 transfer in the NRC proceedings. Both the NRC and NJBPU proceedings are ongoing. Assets and liabilities held for sale on FirstEnergy’s Consolidated Balance Sheet associated with the transaction consist of asset retirement obligations of $718 million, NDTs of $881 million as well as property, plant and equipment with a net book value of zero, which are included in the regulated distribution segment. FES Bankruptcy On March 31, 2018, FES, including its consolidated subsidiaries, FG, NG, FE Aircraft Leasing Corp., Norton Energy Storage L.L.C. and FGMUC, and FENOC filed voluntary petitions for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court and emerged on February 27, 2020. See Note 3, “Discontinued Operations,” for additional discussion. Other Legal Matters There are various lawsuits, claims (including claims for asbestos exposure) and proceedings related to FirstEnergy’s normal business operations pending against FE or its subsidiaries. The loss or range of loss in these matters is not expected to be material to FE or its subsidiaries. The other potentially material items not otherwise discussed above are described under Note 9, “Regulatory Matters.” FirstEnergy accrues legal liabilities only when it concludes that it is probable that it has an obligation for such costs and can reasonably estimate the amount of such costs. In cases where FirstEnergy determines that it is not probable, but reasonably possible that it has a material obligation, it discloses such obligations and the possible loss or range of loss if such estimate can be made. If it were ultimately determined that FE or its subsidiaries have legal liability or are otherwise made subject to liability based on any of the matters referenced above, it could have a material adverse effect on FE’s or its subsidiaries’ financial condition, results of operations and cash flows.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity through its reportable segments, Regulated Distribution and Regulated Transmission. The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies, serving approximately six million customers within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This segment also controls 3,790 MWs of regulated electric generation capacity located primarily in West Virginia, Virginia and New Jersey, of which, 210 MWs are related to the Yards Creek generating station that is being sold pursuant to an asset purchase agreement as further discussed below. The segment’s results reflect the costs of securing and delivering electric generation from transmission facilities to customers, including the deferral and amortization of certain related costs. Included within the segment are $881 million and $882 million of assets classified as held for sale as of September 30, 2020 and December 31, 2019 associated with the asset purchase and sale agreements with TMI-2 Solutions to transfer TMI-2 to TMI-2 Solutions, LLC. See Note 10, "Commitments, Guarantees and Contingencies" for additional information. Also included within the segment is $44 million of assets classified as held for sale as of September 30, 2020 associated with the asset purchase agreement with Yards Creek Energy, LLC to transfer JCP&L’s 50% interest in the Yards Creek pumped-storage hydro generation station (210 MWs). See Note 9, "Regulatory Matters" for additional information. The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy’s utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment’s revenues are primarily derived from forward-looking formula rates at the Transmission Companies as well as stated transmission rates at JCP&L, MP, PE and WP; although as explained in Note 9, “Regulatory Matters”, on October 29, 2020, MP, PE and WP filed with FERC to convert their existing stated rates to forward-looking formula rates, effective January 1, 2021. Effective January 1, 2020, JCP&L's transmission rates became forward-looking formula rates, subject to refund, pending further hearing and settlement proceedings. Both the forward-looking formula and stated rates recover costs that the regulatory agencies determine are permitted to be recovered and provide a return on transmission capital investment. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual costs. The segment’s results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy’s transmission facilities. Corporate/Other reflects corporate support costs not charged to FE’s subsidiaries, including FE’s retained Pension and OPEB assets and liabilities of the FES Debtors, interest expense on FE’s holding company debt and other businesses that do not constitute an operating segment. Reconciling adjustments for the elimination of inter-segment transactions and discontinued operations are shown separately in the following table of Segment Financial Information. As of September 30, 2020, 67 MWs of electric generating capacity, representing AE Supply’s OVEC capacity entitlement, was included in continuing operations of Corporate/Other. As of September 30, 2020, Corporate/Other had approximately $7.85 billion of FE holding company debt.Financial information for each of FirstEnergy’s reportable segments is presented in the tables below: Segment Financial Information
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Organization and Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | These interim financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2019. FE and its subsidiaries follow GAAP and comply with the related regulations, orders, policies and practices prescribed by the SEC, FERC, and, as applicable, the NRC, the PUCO, the PPUC, the MDPSC, the NYPSC, the WVPSC, the VSCC and the NJBPU. The accompanying interim financial statements are unaudited, but reflect all adjustments, consisting of normal recurring adjustments, that, in the opinion of management, are necessary for a fair statement of the financial statements. The preparation of financial statements in conformity with GAAP requires management to make periodic estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from these estimates. The reported results of operations are not necessarily indicative of results of operations for any future period. FE and its subsidiaries have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
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Consolidation Policy | FE and its subsidiaries consolidate all majority-owned subsidiaries over which they exercise control and, when applicable, entities for which they have a controlling financial interest. Intercompany transactions and balances are eliminated in consolidation as appropriate and permitted pursuant to GAAP. FE and its subsidiaries consolidate a VIE when it is determined that it is the primary beneficiary. Investments in affiliates over which FE and its subsidiaries have the ability to exercise significant influence, but do not have a controlling financial interest, follow the equity method of accounting. Under the equity method, the interest in the entity is reported as an investment in the Consolidated Balance Sheets and the percentage of FE’s ownership share of the entity’s earnings is reported in the Consolidated Statements of Income and Comprehensive Income. |
Goodwill | Goodwill FirstEnergy evaluates goodwill for impairment annually on July 31 and more frequently if indicators of impairment arise. For 2020, FirstEnergy performed a qualitative assessment of the Regulated Distribution and Regulated Transmission reporting units' goodwill, assessing economic, industry and market considerations in addition to the reporting units' overall financial performance. Key factors used in the assessment include: growth rates, interest rates, expected capital expenditures, utility sector market performance, regulatory and legal developments and other market considerations. It was determined that the fair value of these reporting units was, more likely than not, greater than their carrying value and a quantitative analysis was not necessary.
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Restricted Cash | Restricted Cash Restricted cash primarily relates to cash collected from JCP&L, MP, PE and the Ohio Companies’ customers that is specifically used to service debt of their respective funding companies.
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Short-Term Borrowings/Revolving Credit Facilities, Long-Term Debt and Other Long-Term Obligations | Short-Term Borrowings/ Revolving Credit Facilities FE and the Utilities and FET and certain of its subsidiaries participate in two separate five-year syndicated revolving credit facilities providing for aggregate commitments of $3.5 billion, which are available until December 6, 2022. Under the FE credit facility, an aggregate amount of $2.5 billion is available to be borrowed, repaid and reborrowed, subject to separate borrowing sublimits for each borrower including FE and its regulated distribution subsidiaries. Under the FET credit facility, an aggregate amount of $1.0 billion is available to be borrowed, repaid and reborrowed under a syndicated credit facility, subject to separate borrowing sublimits for each borrower including FE's transmission subsidiaries. On November 17, 2020, FE and the Utilities and FET and certain of its subsidiaries entered into amendments to the FE credit facility and the FET credit facility, respectively. The amendments provide for modifications and/or waivers of (i) certain representations and warranties and (ii) certain affirmative and negative covenants, contained therein, which allowed FirstEnergy to regain compliance with such provisions. In addition, among other things, the amendment to the FE credit facility reduces the sublimit applicable to FE to $1.5 billion, and the amendments increased certain tiers of pricing applicable to borrowings under the credit facilities. LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONSAll borrowings with initial maturities of less than one year are defined as short-term financial instruments under GAAP and are reported as Short-term borrowings on the Consolidated Balance Sheets at cost. Since these borrowings are short-term in nature, FirstEnergy believes that their costs approximate their fair market value.
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New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Pronouncements ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (Issued June 2016 and subsequently updated): ASU 2016-13 removes all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. Prior to adoption, FirstEnergy analyzed its financial instruments within the scope of this guidance, primarily trade receivables and AFS debt securities. The adoption of this standard upon January 1, 2020 did not have a material impact to FirstEnergy’s financial statements and required additional disclosures in these Notes to the Consolidated Financial Statements. Please see above for additional information on FirstEnergy’s allowance for uncollectible customer receivables. ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (Issued August 2018): ASU 2018-15 allows implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customers in a software licensing arrangement. FirstEnergy adopted this standard as of January 1, 2020, with no material impact to its financial statements. ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (Issued March 2020): ASU 2020-04 provides temporary optional expedients and exceptions to the current guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. FirstEnergy’s $3.5 billion Revolving Credit Facility bears interest at fluctuating interest rates based on LIBOR and contains provisions (requiring an amendment) in the event that LIBOR can no longer be used. As of September 30, 2020, FirstEnergy has not utilized any of the expedients discussed within this ASU. Recently Issued Pronouncements - The following new authoritative accounting guidance issued by the FASB has not yet been adopted. Unless otherwise indicated, FirstEnergy is currently assessing the impact such guidance may have on its financial statements and disclosures, as well as the potential to early adopt where applicable. FirstEnergy has assessed other FASB issuances of new standards not described below based upon the current expectation that such new standards will not significantly impact FirstEnergy's financial reporting. ASU 2019-12, "Simplifying the Accounting for Income Taxes" (Issued in December 2019): ASU 2019-12 enhances and simplifies various aspects of the income tax accounting guidance including the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. FirstEnergy continues to evaluate the new guidance, but currently does not expect a material impact upon adopting this standard.
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Revenue | FirstEnergy accounts for revenues from contracts with customers under ASC 606, “Revenue from Contracts with Customers.” Revenue from leases, financial instruments, other contractual rights or obligations and other revenues that are not from contracts with customers are outside the scope of the standard and accounted for under other existing GAAP. FirstEnergy has elected to exclude sales taxes and other similar taxes collected on behalf of third parties from revenue as prescribed in the standard. As a result, tax collections and remittances are excluded from recognition in the income statement and instead recorded through the balance sheet. Excise and gross receipts taxes that are assessed on FirstEnergy are not subject to the election and are included in revenue. FirstEnergy has elected the optional invoice practical expedient for most of its revenues and utilizes the optional short-term contract exemption for transmission revenues due to the annual establishment of revenue requirements, which eliminates the need to provide certain revenue disclosures regarding unsatisfied performance obligations. FirstEnergy’s revenues are primarily derived from electric service provided by the Utilities and Transmission Companies.
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Earnings Per Share | During 2019, EPS was computed using the two-class method required for participating securities. The convertible preferred stock issued in January 2018 were considered participating securities since the shares participated in dividends on common stock on an “as-converted” basis. All convertible preferred stock was converted to common stock during 2019. The two-class method uses an earnings allocation formula that treats participating securities as having rights to earnings that otherwise would have been available only to common stockholders. Under the two-class method, net income attributable to common stockholders is derived by subtracting the following from income from continuing operations: •preferred stock dividends, •deemed dividends for the amortization of the beneficial conversion feature recognized at issuance of the preferred stock (if any), and •an allocation of undistributed earnings between the common stock and the participating securities (convertible preferred stock) based on their respective rights to receive dividends. Net losses were not allocated to the convertible preferred stock as they did not have a contractual obligation to share in the losses of FirstEnergy. FirstEnergy allocated undistributed earnings based upon income from continuing operations. Diluted EPS reflects the dilutive effect of potential common shares from share-based awards and convertible shares of preferred stock. The dilutive effect of outstanding share-based awards was computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of the award would be used to purchase common stock at the average market price for the period. The dilutive effect of the convertible preferred stock was computed using the if-converted method, which assumes conversion of the convertible preferred stock at the beginning of the period, giving income recognition for the add-back of the preferred stock dividends, amortization of beneficial conversion feature, and undistributed earnings allocated to preferred stockholders.
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Investments | INVESTMENTS All temporary cash investments purchased with an initial maturity of three months or less are reported as cash equivalents on the Consolidated Balance Sheets at cost, which approximates their fair market value. Investments other than cash and cash equivalents include equity securities, AFS debt securities and other investments. FirstEnergy has no debt securities held for trading purposes. Generally, unrealized gains and losses on equity securities are recognized in income whereas unrealized gains and losses on AFS debt securities are recognized in AOCI. However, the NDTs and nuclear fuel disposal trusts of JCP&L, ME and PN are subject to regulatory accounting with all gains and losses on equity and AFS debt securities offset against regulatory assets. The investment policy for the NDT funds restricts or limits the trusts’ ability to hold certain types of assets including private or direct placements, warrants, securities of FirstEnergy, investments in companies owning nuclear power plants, financial derivatives, securities convertible into common stock and securities of the trust funds’ custodian or managers and their parents or subsidiaries.
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Organization and Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in the allowance for uncollectible accounts on customer receivables | Activity in the allowance for uncollectible accounts on customer receivables for the nine months ended September 30, 2020 and for the year ended December 31, 2019 are as follows:
(1) $25 million of which was deferred for future recovery in the twelve months ended December 31, 2019. (2) Represents recoveries and reinstatements of accounts written off for uncollectible accounts. (3) $54 million of which was deferred for future recovery in the first nine months of 2020.
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Schedule of customer disconnections and collection activities | The following table summarizes when customer disconnections and collection activities have or are expected to resume based upon current state guidelines subject to applicable regulations to winter moratoriums for residential customers, which begin as early as November 1, 2020, and are in effect until April 15, 2021. However, see Note 9, “Regulatory Matters,” for further discussion on applicable regulations that may alter residential customer disconnection and collection activity, such as winter moratoriums.
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables represent a disaggregation of revenue from contracts with customers for the three months ended September 30, 2020 and 2019, by type of service from each reportable segment:
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($1 million at Regulated Distribution and $3 million at Regulated Transmission). (3) ARP revenue for the three months ended September 30, 2020, is primarily related to the reconciliation of Ohio decoupling rates that became effective on February 1, 2020.
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($4 million at Regulated Distribution and $4 million at Regulated Transmission) and Rider DMR as discussed in Note 9, “Regulatory Matters” (approximately $31 million at Regulated Distribution). (3) ARP revenue for the three months ended September 30, 2019, includes DMR revenue, lost distribution and shared savings revenue in Ohio.The following tables represent a disaggregation of revenue from contracts with customers for the nine months ended September 30, 2020 and 2019, by type of service from each reportable segment:
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($2 million at Regulated Distribution and $6 million at Regulated Transmission). (3) ARP revenue for the nine months ended September 30, 2020, is primarily related to the reconciliation of Ohio decoupling rates that became effective on February 1, 2020.
(1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Includes reductions to revenue related to amounts subject to refund resulting from the Tax Act ($31 million at Regulated Distribution and $11 million at Regulated Transmission) and Rider DMR as discussed in Note 9, “Regulatory Matters” (approximately $31 million at Regulated Distribution). (3) ARP revenue for the nine months ended September 30, 2019, includes DMR revenue, and lost distribution and shared savings revenue in Ohio.The following table represents a disaggregation of the Regulated Distribution segment revenue from contracts with distribution service and retail generation customers for the three and nine months ended September 30, 2020 and 2019, by class:
The following table represents a disaggregation of revenue from contracts with regulated transmission customers for the three and nine months ended September 30, 2020 and 2019, by transmission owner:
|
Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | Summarized results of discontinued operations for the three and nine months ended September 30, 2020 and 2019, were as follows:
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Earnings Per Share Of Common Stock (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic and Diluted Earnings Per Share | The following table reconciles basic and diluted EPS of common stock:
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Pension and Other Post-Employment Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Costs | The components of the consolidated net periodic costs (credits) for pension and OPEB were as follows:
(1) Subject to a cap, FirstEnergy agreed to fund a pension enhancement through its pension plan, for voluntary enhanced retirement packages offered to certain FES employees, as well as offer certain other employee benefits. The costs are a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income. (2) 2020 includes the acceleration of $18 million in net credits as a result of the FES Debtors’ emergence during the first quarter of 2020 and is a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income. (3) Costs represent additional benefits provided to FES and FENOC employees under the approved settlement agreement and are a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income.
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Accumulated Other Comprehensive Income (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income | The following tables show the changes in AOCI for the three and nine months ended September 30, 2020 and 2019:
(1) Relates to previous cash flow hedges used to hedge fixed rate long-term debt securities prior to their issuance.
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Reclassification out of Accumulated Other Comprehensive Income | The following amounts were reclassified from AOCI in the three and nine months ended September 30, 2020 and 2019:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured on Recurring Basis | The following tables set forth the recurring assets and liabilities that are accounted for at fair value by level within the fair value hierarchy:
(1)Contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings. (2)Primarily consists of short-term cash investments. (3)Excludes $2 million and $(16) million as of September 30, 2020 and December 31, 2019, respectively, of net receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
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Reconciliation of Changes in the Fair Value Roll Forward of Level 3 Measurements of NUG Contracts | The following table provides a reconciliation of changes in the fair value of NUG contracts and FTRs that are classified as Level 3 in the fair value hierarchy for the periods ended September 30, 2020, and December 31, 2019:
(1)Contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings.
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Quantitative Information for Level 3 Valuation | The following table provides quantitative information for the FTRs contracts that are classified as Level 3 in the fair value hierarchy for the period ended September 30, 2020:
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Amortized Cost Basis, Unrealized Gains and Losses and Fair Values of Investments in Available-for-sale Securities | The following table summarizes the amortized cost basis, unrealized gains, unrealized losses and fair values of investments held in NDT and nuclear fuel disposal trusts as of September 30, 2020, and December 31, 2019:
(1) Excludes short-term cash investments of $753 million, of which $746 million is classified as held for sale. (2) Excludes short-term cash investments of $751 million, of which $747 million is classified as held for sale. (3) Includes $135 million classified as held for sale as of September 30, 2020 and December 31, 2019.
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Proceeds from the Sale of Investments in Available-for-sale Securities, Realized Gains and Losses on Those Sales, and Interest and Dividend Income | Proceeds from the sale of investments in equity and AFS debt securities, realized gains and losses on those sales and interest and dividend income for the three and nine months ended September 30, 2020 and 2019, were as follows:
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Fair Value and Related Carrying Amounts of Long-term Debt and Other Long-term Obligations | The following table provides the approximate fair value and related carrying amounts of long-term debt, which excludes finance lease obligations and net unamortized debt issuance costs, premiums and discounts as of September 30, 2020 and December 31, 2019:
(1) The carrying value as of September 30, 2020, includes $3,425 million of debt issuances and $1,110 million of redemptions that occurred in 2020.
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Commitments, Guarantees and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Guarantor Obligations | These credit-risk-related contingent features stipulate that if the subsidiary were to be downgraded or lose its investment grade credit rating (based on its senior unsecured debt rating), it would be required to provide additional collateral. The following table discloses the potential additional credit rating contingent contractual collateral obligations as of September 30, 2020:
(1)As a result of certain credit rating downgrades in October 2020, FirstEnergy may be required to provide $4.5 million in collateral. (2)Surety Bonds are not tied to a credit rating. Surety Bonds’ impact assumes maximum contractual obligations (typical obligations require 30 days to cure).
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Financial Information | Financial information for each of FirstEnergy’s reportable segments is presented in the tables below: Segment Financial Information
|
Organization and Basis of Presentation - Activity in Uncollectable Accounts (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 46 | $ 50 |
Charged to income | 112 | 81 |
Charged to other accounts | 35 | 47 |
Write-offs | (85) | (132) |
Ending balance | 108 | 46 |
Deferred for recovery | $ 54 | $ 25 |
Discontinued Operations - Narrative (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 27, 2020
USD ($)
|
Feb. 18, 2020
USD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2019
MW
|
|||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Worthless stock deduction | $ 4,900 | ||||||||||||
Unrecognized tax benefits from worthless stock deduction | 316 | ||||||||||||
Worthless stock deduction, net of tax | 1,000 | ||||||||||||
Unrecognized tax benefits from worthless stock deduction, net of tax | 72 | ||||||||||||
Adjustments related to intercompany tax sharing | $ 6 | ||||||||||||
Discontinued operations, net of tax | (6) | [1] | $ 2 | [1] | $ 46 | $ (62) | |||||||
Pleasants Power Station | AE Supply | Purchase Agreement with Subsidiary of LS Power | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Plant capacity (in MW's) | MW | 1,300 | ||||||||||||
Discontinued Operations, Disposed of by Means Other than Sale | FES and FENOC | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Discontinued operations, net of tax | $ (6) | $ 2 | $ 46 | $ (62) | |||||||||
Disposed of by Sale | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Proceeds from asset sales | $ 65 | ||||||||||||
FES Key Creditor Groups | Affiliated Companies | FES | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Settlement of certain claims | $ 853 | ||||||||||||
Settlement of claims upon emergence | 853 | ||||||||||||
IT Access Agreement | Affiliated Companies | FES | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Settlement of certain claims | $ 125 | ||||||||||||
Settlement of claims upon emergence | 125 | ||||||||||||
State and Local Jurisdiction | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Worthless stock deduction, net of tax | $ 83 | ||||||||||||
|
Discontinued Operations - Summarized Results (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Income tax expense | $ 6 | $ 2 | $ (29) | $ 46 | ||||
Loss from discontinued operations, net of tax | 46 | (16) | ||||||
Income (loss) from discontinued operations | (6) | [1] | 2 | [1] | 46 | (62) | ||
FES and FENOC | Discontinued Operations, Disposed of by Means Other than Sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Revenues | 0 | 62 | 7 | 147 | ||||
Fuel | 0 | (50) | (6) | (105) | ||||
Other operating expenses | 0 | (16) | (6) | (42) | ||||
General taxes | 0 | (2) | 0 | (11) | ||||
Other income | 0 | 2 | 5 | 10 | ||||
Loss from discontinued operations, before tax | 0 | (4) | 0 | (1) | ||||
Income tax expense | 0 | 17 | 0 | 45 | ||||
Loss from discontinued operations, net of tax | 0 | (21) | 0 | (46) | ||||
Settlement consideration | 0 | 8 | (1) | (15) | ||||
Accelerated net pension and OPEB prior service credits | 0 | 0 | 18 | 0 | ||||
Gain (loss) on Disposal of FES and FENOC, before tax | 0 | 8 | 17 | (15) | ||||
Income tax expense (benefit) including worthless stock deduction | 6 | (15) | (29) | 1 | ||||
Gain (loss) on disposal of FES and FENOC, net of tax | (6) | 23 | 46 | (16) | ||||
Income (loss) from discontinued operations | $ (6) | $ 2 | $ 46 | $ (62) | ||||
|
Earnings Per Share Of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||||
EPS of Common Stock | ||||||||
Income from continuing operations | $ 460 | $ 389 | $ 791 | $ 1,085 | ||||
Less: Preferred dividends | 0 | 0 | 0 | (3) | ||||
Less: Undistributed earnings allocated to preferred stockholders | 0 | 0 | 0 | (4) | ||||
Income from continuing operations available to common stockholders | 460 | 389 | 791 | 1,078 | ||||
Discontinued operations, net of tax | (6) | [1] | 2 | [1] | 46 | (62) | ||
Less: Undistributed earnings allocated to preferred stockholders | 0 | 0 | 0 | 0 | ||||
Income (loss) from discontinued operations available to common stockholders | (6) | 2 | 46 | (62) | ||||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | 454 | 391 | 837 | 1,016 | ||||
Income allocated to preferred shareholders, preferred dilutive | 0 | 0 | 0 | (7) | ||||
Income available to common stockholders, dilutive | $ 454 | $ 391 | $ 837 | $ 1,023 | ||||
Share Count information: | ||||||||
Weighted average number of basic shares outstanding (in shares) | 542,000 | 538,000 | 542,000 | 533,000 | ||||
Assumed exercise of dilutive stock options and awards (in shares) | 1,000 | 2,000 | 1,000 | 2,000 | ||||
Assumed conversion of preferred stock (in shares) | 0 | 2,000 | 0 | 6,000 | ||||
Weighted average number of diluted shares outstanding | 543,000 | 542,000 | 543,000 | 541,000 | ||||
Income available to common stockholders, per common share: | ||||||||
Income from continuing operations, basic (in dollars per share) | $ 0.85 | $ 0.72 | $ 1.46 | $ 2.02 | ||||
Discontinued operations, basic (in dollars per share) | (0.01) | 0.01 | 0.08 | (0.12) | ||||
Basic - Net Income Attributable to Common Stockholders (in dollars per share) | 0.84 | 0.73 | 1.54 | 1.90 | ||||
Income from continuing operations, diluted (in dollars per share) | 0.85 | 0.72 | 1.46 | 2.00 | ||||
Discontinued operations, diluted (in dollars per share) | (0.01) | 0 | 0.08 | (0.11) | ||||
Diluted - Net Income Attributable to Common Stockholders (in dollars per share) | $ 0.84 | $ 0.72 | $ 1.54 | $ 1.89 | ||||
Stock Options | ||||||||
Income available to common stockholders, per common share: | ||||||||
Shares excluded from the calculation of diluted shares outstanding, in shares | 80 | 0 | 0 | |||||
|
Pension and Other Post-Employment Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 01, 2019 |
Sep. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Mark-to-market adjustment | $ 423 | |||||
Decrease in discount rate | (0.38%) | |||||
Contributions by employer | $ 500 | |||||
Pension | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Service costs | $ 47 | $ 48 | $ 147 | $ 144 | ||
Interest costs | 71 | 93 | 216 | 279 | ||
Expected return on plan assets | (156) | (135) | (464) | (405) | ||
Amortization of prior service costs (credits) | 1 | 2 | 12 | 6 | ||
Special termination costs | 0 | 14 | ||||
One-time termination benefit | 8 | 0 | ||||
Pension and OPEB mark-to-market adjustment | 386 | 0 | ||||
Net periodic costs (credits), including amounts capitalized | (37) | 8 | 305 | 38 | ||
Net periodic credits, recognized in earnings | (56) | (11) | 240 | (19) | ||
Net accelerated credits | $ 18 | |||||
OPEB | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Service costs | 1 | 1 | 3 | 3 | ||
Interest costs | 4 | 6 | 12 | 16 | ||
Expected return on plan assets | (9) | (7) | (25) | (21) | ||
Amortization of prior service costs (credits) | (4) | (9) | (42) | (27) | ||
Special termination costs | 0 | 0 | ||||
One-time termination benefit | 0 | 0 | ||||
Pension and OPEB mark-to-market adjustment | 37 | 0 | ||||
Net periodic costs (credits), including amounts capitalized | (8) | (9) | (15) | (29) | ||
Net periodic credits, recognized in earnings | $ (8) | $ (10) | $ (15) | $ (30) |
Accumulated Other Comprehensive Income - Changes in AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ 7,143 | $ 6,814 | $ 6,975 | $ 7,269 | $ 6,932 | $ 6,814 | $ 6,975 | $ 6,814 |
Amounts reclassified from AOCI | (3) | (7) | (29) | (20) | ||||
Other comprehensive loss | (3) | (7) | (29) | (20) | ||||
Income taxes (benefits) on other comprehensive income (loss) | (1) | (3) | (7) | (6) | ||||
Other comprehensive loss, net of tax | (2) | (2) | (18) | (4) | (5) | (5) | (22) | (14) |
Ending balance | 7,188 | 7,143 | 6,814 | 7,272 | 7,269 | 6,932 | 7,188 | 7,272 |
Gains & Losses on Cash Flow Hedges | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | (8) | (9) | (10) | (11) | (9) | (11) | ||
Amounts reclassified from AOCI | 0 | 0 | 1 | 1 | ||||
Other comprehensive loss | 0 | 0 | 1 | 1 | ||||
Income taxes (benefits) on other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Other comprehensive loss, net of tax | 0 | 0 | 1 | 1 | ||||
Ending balance | (8) | (8) | (10) | (10) | (8) | (10) | ||
Defined Benefit Pension & OPEB Plans | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | 8 | 29 | 41 | 52 | 29 | 52 | ||
Amounts reclassified from AOCI | (3) | (7) | (30) | (21) | ||||
Other comprehensive loss | (3) | (7) | (30) | (21) | ||||
Income taxes (benefits) on other comprehensive income (loss) | (1) | (3) | (7) | (6) | ||||
Other comprehensive loss, net of tax | (2) | (4) | (23) | (15) | ||||
Ending balance | 6 | 8 | 37 | 41 | 6 | 37 | ||
AOCI | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Beginning balance | 0 | 2 | 20 | 31 | 36 | 41 | 20 | 41 |
Other comprehensive loss, net of tax | (2) | (2) | (18) | (4) | (5) | (5) | ||
Ending balance | $ (2) | $ 0 | $ 2 | $ 27 | $ 31 | $ 36 | $ (2) | $ 27 |
Accumulated Other Comprehensive Income - Amounts Reclassified (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Interest expense | $ (266) | $ (261) | $ (792) | $ (773) | ||||
Other operating expenses | (937) | (758) | (2,416) | (2,143) | ||||
Income taxes | (116) | (107) | (122) | (281) | ||||
NET INCOME | 454 | $ 309 | $ 74 | 391 | $ 312 | $ 320 | 837 | 1,023 |
Reclassifications from AOCI | Gains & Losses on Cash Flow Hedges | ||||||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
NET INCOME | 0 | 0 | 1 | 1 | ||||
Reclassifications from AOCI | Gains & Losses on Cash Flow Hedges | Long-term debt | ||||||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Interest expense | 0 | 0 | 1 | 1 | ||||
Reclassifications from AOCI | Net prior service costs | ||||||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Other operating expenses | (3) | (7) | (30) | (21) | ||||
Income taxes | 1 | 3 | 7 | 6 | ||||
NET INCOME | $ (2) | $ (4) | $ (23) | $ (15) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 27, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||||
Effective tax rate (percent) | 20.10% | 21.60% | 13.40% | 20.60% | ||
Change in amount of valuation allowance | $ 52 | |||||
Benefits from accelerated amortization of certain investment tax credits | $ 10 | |||||
Worthless stock deduction | 28 | |||||
Unrecognized tax benefits, portion expected to be resolved in the next fiscal year | $ 57 | 57 | ||||
Unrecognized tax benefits that would impact effective tax rate | $ 55 | $ 55 | ||||
Amount of refundable AMT credits | $ 18 |
Fair Value Measurements - Recurring Assets and Liabilities (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Liabilities | ||
Investment excludes receivables, payables and accrued income | $ 2 | $ (16) |
Recurring | ||
Assets | ||
Fair value, assets | 1,459 | 1,828 |
Liabilities | ||
Fair value, liabilities | 0 | (17) |
Net assets (liabilities) | 1,459 | 1,811 |
Recurring | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | (1) |
Recurring | NUG contracts | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | (16) |
Recurring | Corporate debt securities | ||
Assets | ||
Fair value, assets | 135 | 135 |
Recurring | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 7 | 4 |
Recurring | Equity securities | ||
Assets | ||
Fair value, assets | 2 | 2 |
Recurring | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 274 | 271 |
Recurring | Other | ||
Assets | ||
Fair value, assets | 1,041 | 1,416 |
Recurring | Level 1 | ||
Assets | ||
Fair value, assets | 262 | 629 |
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Net assets (liabilities) | 262 | 629 |
Recurring | Level 1 | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Recurring | Level 1 | NUG contracts | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Recurring | Level 1 | Corporate debt securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 1 | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 1 | Equity securities | ||
Assets | ||
Fair value, assets | 2 | 2 |
Recurring | Level 1 | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 1 | Other | ||
Assets | ||
Fair value, assets | 260 | 627 |
Recurring | Level 2 | ||
Assets | ||
Fair value, assets | 1,190 | 1,195 |
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Net assets (liabilities) | 1,190 | 1,195 |
Recurring | Level 2 | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Recurring | Level 2 | NUG contracts | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Recurring | Level 2 | Corporate debt securities | ||
Assets | ||
Fair value, assets | 135 | 135 |
Recurring | Level 2 | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 2 | Equity securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 2 | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 274 | 271 |
Recurring | Level 2 | Other | ||
Assets | ||
Fair value, assets | 781 | 789 |
Recurring | Level 3 | ||
Assets | ||
Fair value, assets | 7 | 4 |
Liabilities | ||
Fair value, liabilities | 0 | (17) |
Net assets (liabilities) | 7 | (13) |
Recurring | Level 3 | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | (1) |
Recurring | Level 3 | NUG contracts | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | (16) |
Recurring | Level 3 | Corporate debt securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 3 | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 7 | 4 |
Recurring | Level 3 | Equity securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 3 | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 3 | Other | ||
Assets | ||
Fair value, assets | $ 0 | $ 0 |
Fair Value Measurements - Level 3 Rollforward (Details) - Level 3 - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
NUG contracts | ||
Reconciliation of changes in the fair value of FTRs contracts | ||
Beginning Balance, Derivative Assets | $ 0 | $ 0 |
Beginning Balance, Derivative Liabilities | (16) | (44) |
Beginning Balance, Net | (16) | (44) |
Unrealized gain (loss), Derivative Assets | 0 | 0 |
Unrealized loss, Derivative Liabilities | (3) | (11) |
Unrealized loss, Net | (3) | (11) |
Purchases, Derivative Assets | 0 | 0 |
Purchases, Derivative Liabilities | 0 | 0 |
Purchases, Net | 0 | 0 |
Settlements, Derivative Assets | 0 | 0 |
Settlements, Derivative Liabilities | 19 | 39 |
Settlements, Net | 19 | 39 |
Ending Balance, Derivative Assets | 0 | 0 |
Ending Balance, Derivative Liabilities | 0 | (16) |
Ending Balance, Net | 0 | (16) |
FTRs | ||
Reconciliation of changes in the fair value of FTRs contracts | ||
Beginning Balance, Derivative Assets | 4 | 10 |
Beginning Balance, Derivative Liabilities | (1) | (1) |
Beginning Balance, Net | 3 | 9 |
Unrealized gain (loss), Derivative Assets | 0 | (1) |
Unrealized loss, Derivative Liabilities | 0 | 0 |
Unrealized loss, Net | 0 | (1) |
Purchases, Derivative Assets | 7 | 6 |
Purchases, Derivative Liabilities | (2) | (4) |
Purchases, Net | 5 | 2 |
Settlements, Derivative Assets | (4) | (11) |
Settlements, Derivative Liabilities | 3 | 4 |
Settlements, Net | (1) | (7) |
Ending Balance, Derivative Assets | 7 | 4 |
Ending Balance, Derivative Liabilities | 0 | (1) |
Ending Balance, Net | $ 7 | $ 3 |
Fair Value Measurements - Level 3 Quantitative Information (Details) - Level 3 - FTRs $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020
USD ($)
$ / MWh
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Fair Value | $ | $ 7 | $ 3 | $ 9 |
Model | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Fair Value | $ | $ 7 | ||
Model | Minimum | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, RTO Auction Clearing Prices (in $/MWH) | 0.10 | ||
Model | Maximum | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, RTO Auction Clearing Prices (in $/MWH) | 2.40 | ||
Model | Weighted Average | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, RTO Auction Clearing Prices (in $/MWH) | 1.20 |
Fair Value Measurements - Investments Held in Trusts (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Short-term cash investments | $ 753 | $ 751 |
Short-term cash investments held for sale | 746 | 747 |
Debt securities held for sale | 135 | 135 |
Debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost Basis | 406 | 403 |
Unrealized Gains | 11 | 9 |
Unrealized Losses | (8) | (11) |
Fair Value | $ 409 | $ 401 |
Fair Value Measurements - Proceeds from the Sale of Investments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Proceeds from the sale of investments in available-for-sale securities, realized gains and losses on those sales, and interest and dividend income | ||||
Sale proceeds | $ 6 | $ 204 | $ 45 | $ 506 |
Realized gains | 0 | 8 | 4 | 20 |
Realized Losses | 0 | (7) | (7) | (18) |
Interest and dividend income | $ 4 | $ 10 | $ 18 | $ 30 |
Fair Value Measurements - Carrying Amounts of Long-term Debt (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Fair value and related carrying amounts of long-term debt and other long-term obligations | |||
Debt issuances | $ 3,425 | $ 2,100 | |
Debt redemptions | 1,110 | $ 784 | |
Carrying Value | |||
Fair value and related carrying amounts of long-term debt and other long-term obligations | |||
Long-term debt and other long-term obligations | 22,389 | $ 20,074 | |
Debt issuances | 3,425 | ||
Debt redemptions | 1,110 | ||
Fair Value | |||
Fair value and related carrying amounts of long-term debt and other long-term obligations | |||
Long-term debt and other long-term obligations | $ 26,161 | $ 22,928 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Fair Value of Financial Instruments [Line Items] | ||
Noncurrent liabilities - held for sale (Note 10) | $ 718 | $ 691 |
Investments - held for sale (Note 10) | 881 | 882 |
Investments not required to be disclosed | $ 301 | $ 299 |
NUG contracts | ||
Fair Value of Financial Instruments [Line Items] | ||
Period of future observable data to determine contract price | 2 years |
Regulatory Matters - Maryland and New Jersey (Details) meter in Millions, $ in Millions |
9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 16, 2020
USD ($)
|
Sep. 25, 2020
USD ($)
|
Sep. 22, 2020 |
Sep. 01, 2020
USD ($)
|
Aug. 27, 2020
USD ($)
meter
|
Jun. 02, 2020
USD ($)
|
Apr. 06, 2020
USD ($)
MW
|
Feb. 18, 2020
USD ($)
|
May 08, 2019
USD ($)
rate_adjustment
|
Mar. 22, 2019
USD ($)
program
|
Aug. 24, 2018
USD ($)
program
|
Jan. 19, 2018
USD ($)
|
Sep. 30, 2020
USD ($)
MW
|
|
Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Plant capacity (in MW's) | MW | 3,790 | ||||||||||||
PE | Maryland | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Incremental energy savings goal per year (percent) | 0.20% | ||||||||||||
Incremental energy savings goal thereafter (percent) | 2.00% | ||||||||||||
Recovery period for expenditures for cost recovery program | 3 years | 3 years | |||||||||||
Expenditures for cost recovery program | $ 116.0 | ||||||||||||
Amortization period | 5 years | ||||||||||||
Amount of requested rate increase (decrease) | $ 148.0 | ||||||||||||
PE | MPSC | Maryland | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 19.7 | ||||||||||||
Cost of charging equipment rebates | $ 12.0 | ||||||||||||
Charging equipment rebates amortization period | 5 years | ||||||||||||
Number of enhanced service reliability programs | program | 4 | ||||||||||||
Approved amount of annual increase (decrease) | $ 17.6 | ||||||||||||
Revised requested rate increase | $ 7.3 | ||||||||||||
Amount of approved annual rate increase | $ 6.2 | ||||||||||||
Number of enhanced service reliability programs | program | 3 | ||||||||||||
Enhanced service reliability program term | 4 years | ||||||||||||
Period to file new depreciation study | 18 months | ||||||||||||
Enhanced service reliability program renewal period | 4 years | ||||||||||||
PE | MPSC | Maryland | Maximum | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Increase in depreciation rate | 1.00% | ||||||||||||
JCP&L | New Jersey | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) (percent) | 7.80% | ||||||||||||
JCP&L | Advanced Metering Infrastructure | New Jersey | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 732.0 | ||||||||||||
JCP&L | NJBPU | New Jersey | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 185.0 | $ 186.9 | |||||||||||
JCP&L | NJBPU | New Jersey | Subsequent Event | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Requested increase to ROE | 9.60% | ||||||||||||
Amount of revenue increase | $ 94.0 | ||||||||||||
Decrease in regulatory liability | $ 86.0 | ||||||||||||
JCP&L | NJBPU | JCP&L Reliability Plus | New Jersey | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Planned capital expenditures | $ 97.0 | ||||||||||||
Processes for rate adjustments | rate_adjustment | 2 | ||||||||||||
JCP&L | NJBPU | Advanced Metering Infrastructure | New Jersey | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Meter deployment period | 3 years | ||||||||||||
Number of meters to be deployed | meter | 1.2 | ||||||||||||
Expected cost of the program | $ 418.0 | ||||||||||||
Time period of the program | 20 years | ||||||||||||
JCP&L | NJBPU | Energy Efficiency and Peak Demand Reduction | New Jersey | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 230.0 | ||||||||||||
Yard's Creek Energy | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Ownership interest acquired | 50.00% | ||||||||||||
Plant capacity (in MW's) | MW | 210 | ||||||||||||
Yard's Creek Energy | JCP&L | New Jersey | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Plant capacity (in MW's) | MW | 210 | ||||||||||||
Purchase price | $ 155.0 | ||||||||||||
Yard's Creek Energy | JCP&L | New Jersey | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Book value | $ 44.0 | ||||||||||||
Yard's Creek Energy | JCP&L | NJBPU | New Jersey | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Ownership interest acquired | 50.00% |
Regulatory Matters - Ohio (Details) - USD ($) $ in Millions |
6 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Nov. 02, 2020 |
Jul. 15, 2019 |
Nov. 09, 2018 |
Jun. 01, 2016 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Sep. 30, 2020 |
|
Regulatory Matters [Line Items] | |||||||
Proposed goal to reduce CO2 pollution (percent) | 90.00% | ||||||
OHIO | PUCO | |||||||
Regulatory Matters [Line Items] | |||||||
Proposed goal to reduce CO2 pollution (percent) | 90.00% | ||||||
OHIO | PUCO | Energy Conservation, Economic Development and Job Retention | |||||||
Regulatory Matters [Line Items] | |||||||
Contribution amount | $ 51.0 | ||||||
OHIO | Distribution Modernization Rider | PUCO | |||||||
Regulatory Matters [Line Items] | |||||||
Annual revenue cap for rider | $ 132.5 | ||||||
Recovery period | 3 years | ||||||
Approved amount for rider | $ 168.0 | ||||||
OHIO | Delivery Capital Recovery Rider | PUCO | |||||||
Regulatory Matters [Line Items] | |||||||
Annual revenue cap for rider for years three through six | 20.0 | ||||||
Annual revenue cap for rider for years six through eight | $ 15.0 | ||||||
OHIO | Distribution Platform Modernization Plan | PUCO | |||||||
Regulatory Matters [Line Items] | |||||||
Approved amount of annual increase (decrease) | $ 516.0 | ||||||
Period of grid modernization plan | 3 years | ||||||
The Ohio Companies | OHIO | OCC DMR Refund | PUCO | |||||||
Regulatory Matters [Line Items] | |||||||
Loss contingency, damages sought | $ 42.0 | ||||||
The Ohio Companies | OHIO | HB 6 | PUCO | |||||||
Regulatory Matters [Line Items] | |||||||
Regulatory assets | $ 100.0 | ||||||
Estimated lost distribution revenue | 63.0 | ||||||
Pre-tax net impact of lost distribution revenues | $ 37.0 | ||||||
The Ohio Companies | OHIO | Decoupling Rider | PUCO | Subsequent Event | |||||||
Regulatory Matters [Line Items] | |||||||
Amount of requested rate increase (decrease) | $ 113.0 |
Regulatory Matters - Pennsylvania and West Virginia (Details) $ in Millions |
1 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Aug. 28, 2020
USD ($)
|
Mar. 12, 2020 |
Mar. 11, 2020 |
Aug. 30, 2019
USD ($)
|
Mar. 31, 2016
USD ($)
|
Sep. 30, 2020
USD ($)
proposal
|
Oct. 13, 2020 |
Jun. 18, 2020 |
Dec. 31, 2019
USD ($)
|
|
ATSI | FERC | |||||||||
Regulatory Matters [Line Items] | |||||||||
Regulatory assets | $ 76.0 | $ 73.0 | |||||||
Pennsylvania | DSP June 2019- May 2023 | |||||||||
Regulatory Matters [Line Items] | |||||||||
Number of RFP's | proposal | 2 | ||||||||
RFP term | 2 years | ||||||||
Pennsylvania | Three Month Period | DSP June 2019- May 2023 | |||||||||
Regulatory Matters [Line Items] | |||||||||
Term of energy contract | 3 months | ||||||||
Pennsylvania | Twelve month period | DSP June 2019- May 2023 | |||||||||
Regulatory Matters [Line Items] | |||||||||
Term of energy contract | 12 months | ||||||||
Pennsylvania | Twenty-four month period | DSP June 2019- May 2023 | |||||||||
Regulatory Matters [Line Items] | |||||||||
Term of energy contract | 24 months | ||||||||
Pennsylvania | Pennsylvania Companies | PPUC | Subsequent Event | |||||||||
Regulatory Matters [Line Items] | |||||||||
Percent of federal poverty income level | 300.00% | ||||||||
Pennsylvania | Pennsylvania Companies | PPUC | EE&C Phase III | |||||||||
Regulatory Matters [Line Items] | |||||||||
Approved amount of annual increase | $ 390.0 | ||||||||
Pennsylvania | Pennsylvania Companies | PPUC | New LTIIPs | |||||||||
Regulatory Matters [Line Items] | |||||||||
Amount of requested rate increase (decrease) | $ 572.0 | ||||||||
Recovery period | 5 years | ||||||||
Pennsylvania | Pennsylvania Companies | PPUC | Wavier of DSIC Cap | |||||||||
Regulatory Matters [Line Items] | |||||||||
Amount of requested rate increase (decrease) (percent) | 11.81% | ||||||||
Approved ROE | 5.00% | ||||||||
Temporary increase in rate cap | 7.50% | ||||||||
Pennsylvania | ME | PPUC | EE&C Phase IV | |||||||||
Regulatory Matters [Line Items] | |||||||||
Demand reduction targets | 2.90% | ||||||||
Energy consumption reduction targets | 3.10% | ||||||||
Pennsylvania | PN | PPUC | EE&C Phase IV | |||||||||
Regulatory Matters [Line Items] | |||||||||
Demand reduction targets | 3.30% | ||||||||
Energy consumption reduction targets | 3.00% | ||||||||
Pennsylvania | Penn | PPUC | EE&C Phase IV | |||||||||
Regulatory Matters [Line Items] | |||||||||
Demand reduction targets | 2.00% | ||||||||
Energy consumption reduction targets | 2.70% | ||||||||
Pennsylvania | WP | PPUC | EE&C Phase IV | |||||||||
Regulatory Matters [Line Items] | |||||||||
Demand reduction targets | 2.50% | ||||||||
Energy consumption reduction targets | 2.40% | ||||||||
West Virginia | MP and PE | WVPSC | ENEC | |||||||||
Regulatory Matters [Line Items] | |||||||||
Amount of requested rate increase (decrease) | $ (55.0) | ||||||||
Amount of requested rate increase (decrease) (percent) | (4.10%) | ||||||||
Recovery of deferred, incremental uncollectible and other related costs | $ 10.5 | ||||||||
West Virginia | MP and PE | WVPSC | Modernization and Improvement Program For Coal-Fired Boilers | |||||||||
Regulatory Matters [Line Items] | |||||||||
Amount of requested rate increase (decrease) | $ 5.0 |
Commitments, Guarantees and Contingencies - Potential Collateral Obligations (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Oct. 31, 2020 |
|
Guarantor Obligations [Line Items] | ||
Guarantor obligations | $ 363.0 | |
Curing period | 30 days | |
Upon Further Downgrade | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | $ 40.0 | |
Upon Further Downgrade | Subsequent Event | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | $ 4.5 | |
Surety Bond (Collateralized Amount) | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | 323.0 | |
Utilities and FET | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | 106.0 | |
Utilities and FET | Upon Further Downgrade | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | 40.0 | |
Utilities and FET | Surety Bond (Collateralized Amount) | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | 66.0 | |
FirstEnergy | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | 257.0 | |
FirstEnergy | Upon Further Downgrade | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | 0.0 | |
FirstEnergy | Surety Bond (Collateralized Amount) | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations | $ 257.0 |
Commitments, Guarantees and Contingencies - Narrative (Details) T in Millions |
9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 06, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
phase
T
|
Dec. 31, 2019
USD ($)
|
Oct. 29, 2020
director
|
Nov. 12, 2019 |
Nov. 04, 2019
USD ($)
|
|
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | $ 1,700,000,000 | |||||
Company posted collateral related to net liability positions | $ 1,000,000 | |||||
Amount of code of conduct payment | $ 4,000,000 | |||||
Reduction in CO2 emissions | 62.00% | |||||
Proposed goal to reduce CO2 pollution (percent) | 90.00% | |||||
Noncurrent liabilities - held for sale (Note 10) | $ 718,000,000 | 691,000,000 | ||||
Subsequent Event | ||||||
Guarantor Obligations [Line Items] | ||||||
Number of additional executives terminated | director | 2 | |||||
Minimum | Pending Litigation | Mitchell v. FirstEnergy Corp. | Subsequent Event | ||||||
Guarantor Obligations [Line Items] | ||||||
Loss contingency, damages sought | $ 875,000 | |||||
Clean Water Act | ||||||
Guarantor Obligations [Line Items] | ||||||
Waste water discharge permit renewal cycle | 5 years | |||||
Regulation of Waste Disposal | ||||||
Guarantor Obligations [Line Items] | ||||||
Accrual for environmental loss contingencies | $ 104,000,000 | |||||
Environmental liabilities former gas facilities | $ 68,000,000 | |||||
National Ambient Air Quality Standards | ||||||
Guarantor Obligations [Line Items] | ||||||
Capping of SO2 Emissions Under CSAPR | T | 2.4 | |||||
Capping of NOx emissions under CSAPR | T | 1.2 | |||||
National Ambient Air Quality Standards | CSAPR | ||||||
Guarantor Obligations [Line Items] | ||||||
Number of phases under the EPA’s CAIR for reductions of Sulfur Dioxide and Mono-Nitrogen Oxides | phase | 2 | |||||
Global Holding | Senior Secured Term Loan | Senior Loans | Signal Peak, Global Rail and Affiliates | ||||||
Guarantor Obligations [Line Items] | ||||||
Investment ownership percentage | 69.99% | |||||
FEV | Senior Secured Term Loan | Senior Loans | Signal Peak | Global Holding | ||||||
Guarantor Obligations [Line Items] | ||||||
Investment ownership percentage | 33.33% | |||||
WMB Marketing Ventures, LLC | Senior Secured Term Loan | Senior Loans | Signal Peak | Global Holding | ||||||
Guarantor Obligations [Line Items] | ||||||
Investment ownership percentage | 33.33333% | |||||
JCP&L, ME and PN | Nuclear Plant Matters | Financial Guarantee | ||||||
Guarantor Obligations [Line Items] | ||||||
Nuclear plant decommissioning trusts | 900,000,000 | |||||
Ownership interest | 25.00% | |||||
FE | ||||||
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | $ 1,000,000,000.0 | |||||
Other Guarantee | ||||||
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | 114,000,000 | |||||
Other Assurances | ||||||
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | 502,000,000 | |||||
Term Loan Facility due November 2024 | Line of Credit | Global Holding | ||||||
Guarantor Obligations [Line Items] | ||||||
Face amount of debt | 120,000,000 | |||||
EPA | Clean Water Act | ||||||
Guarantor Obligations [Line Items] | ||||||
Proposed penalty amount | $ 900,000 | |||||
Regulated Distribution | TMI-2 | Held-for-sale | ||||||
Guarantor Obligations [Line Items] | ||||||
Investments - held for sale | $ 881,000,000 | $ 882,000,000 |
Segment Information - Narrative (Details) mi² in Thousands, customer in Millions, $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020
USD ($)
mi²
company
customer
MW
|
Dec. 31, 2019
USD ($)
|
|
Regulated Distribution | ||
Segment Reporting Information [Line Items] | ||
Number of existing utility operating companies | company | 10 | |
Number of customers served by utility operating companies | customer | 6 | |
Number of square miles in service area | mi² | 65 | |
Megawatts of net demonstrated capacity of competitive segment | MW | 3,790 | |
Regulated Distribution | Yard's Creek Energy | ||
Segment Reporting Information [Line Items] | ||
Megawatts of net demonstrated capacity of competitive segment | MW | 210 | |
Ownership interest acquired | 50.00% | |
Other/Corporate | OVEC | ||
Segment Reporting Information [Line Items] | ||
Megawatts of net demonstrated capacity of competitive segment | MW | 67 | |
FirstEnergy | Other/Corporate | ||
Segment Reporting Information [Line Items] | ||
Long-term debt and other long-term obligations | $ | $ 7,850 | |
Held-for-sale | TMI-2 | Regulated Distribution | ||
Segment Reporting Information [Line Items] | ||
Investments - held for sale | $ | 881 | $ 882 |
Held-for-sale | Yard Creek Generating Facility | Regulated Distribution | ||
Segment Reporting Information [Line Items] | ||
Investments - held for sale | $ | $ 44 |
Segment Information - Financial Data (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|||||
Segment Financial Information | |||||||||
Revenues | $ 3,022 | [1] | $ 2,963 | [1] | $ 8,253 | $ 8,362 | |||
Depreciation | 316 | 304 | 954 | 910 | |||||
Amortization (deferral) of regulatory assets, net | (91) | 43 | (26) | 85 | |||||
Miscellaneous income (expense), net | 100 | 57 | 303 | 191 | |||||
Interest expense | 266 | 261 | 792 | 773 | |||||
Income taxes (benefits) | 116 | 107 | 122 | 281 | |||||
Income (loss) from continuing operations | 460 | 389 | 791 | 1,085 | |||||
Property additions | 687 | 684 | 1,979 | 1,912 | |||||
Total assets | 42,938 | 42,938 | $ 42,301 | ||||||
Goodwill | 5,618 | 5,618 | 5,618 | ||||||
External Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 3,022 | 2,963 | 8,253 | 8,362 | |||||
Internal Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 0 | 0 | 0 | 0 | |||||
Regulated Distribution | |||||||||
Segment Financial Information | |||||||||
Revenues | 2,508 | 2,446 | 6,735 | 6,756 | |||||
Regulated Transmission | |||||||||
Segment Financial Information | |||||||||
Revenues | 408 | 371 | 1,185 | 1,090 | |||||
Operating Segments | Regulated Distribution | |||||||||
Segment Financial Information | |||||||||
Revenues | 2,661 | 2,636 | 7,207 | 7,401 | |||||
Depreciation | 223 | 215 | 672 | 644 | |||||
Amortization (deferral) of regulatory assets, net | (91) | 42 | (32) | 79 | |||||
Miscellaneous income (expense), net | 81 | 36 | 246 | 128 | |||||
Interest expense | 124 | 124 | 374 | 370 | |||||
Income taxes (benefits) | 109 | 103 | 144 | 259 | |||||
Income (loss) from continuing operations | 413 | 370 | 800 | 957 | |||||
Property additions | 391 | 365 | 1,115 | 1,037 | |||||
Total assets | 30,249 | 30,249 | 29,642 | ||||||
Goodwill | 5,004 | 5,004 | 5,004 | ||||||
Operating Segments | Regulated Distribution | External Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 2,611 | 2,590 | 7,062 | 7,261 | |||||
Operating Segments | Regulated Distribution | Internal Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 50 | 46 | 145 | 140 | |||||
Operating Segments | Regulated Transmission | |||||||||
Segment Financial Information | |||||||||
Revenues | 413 | 375 | 1,198 | 1,103 | |||||
Depreciation | 79 | 71 | 233 | 211 | |||||
Amortization (deferral) of regulatory assets, net | 0 | 1 | 6 | 6 | |||||
Miscellaneous income (expense), net | 7 | 4 | 21 | 12 | |||||
Interest expense | 55 | 49 | 162 | 142 | |||||
Income taxes (benefits) | 35 | 26 | 103 | 87 | |||||
Income (loss) from continuing operations | 115 | 113 | 346 | 333 | |||||
Property additions | 278 | 304 | 817 | 835 | |||||
Total assets | 12,078 | 12,078 | 11,611 | ||||||
Goodwill | 614 | 614 | 614 | ||||||
Operating Segments | Regulated Transmission | External Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 408 | 371 | 1,185 | 1,091 | |||||
Operating Segments | Regulated Transmission | Internal Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 5 | 4 | 13 | 12 | |||||
Corporate/Other | |||||||||
Segment Financial Information | |||||||||
Revenues | 3 | 2 | 6 | 10 | |||||
Depreciation | 0 | 0 | 2 | 3 | |||||
Amortization (deferral) of regulatory assets, net | 0 | 0 | 0 | 0 | |||||
Miscellaneous income (expense), net | 13 | 24 | 45 | 73 | |||||
Interest expense | 88 | 95 | 265 | 283 | |||||
Income taxes (benefits) | (28) | (22) | (125) | (65) | |||||
Income (loss) from continuing operations | (68) | (94) | (355) | (205) | |||||
Property additions | 18 | 15 | 47 | 40 | |||||
Total assets | 611 | 611 | 1,015 | ||||||
Goodwill | 0 | 0 | 0 | ||||||
Corporate/Other | External Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 3 | 2 | 6 | 10 | |||||
Corporate/Other | Internal Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 0 | 0 | 0 | 0 | |||||
Reconciling Adjustments | |||||||||
Segment Financial Information | |||||||||
Revenues | (55) | (50) | (158) | (152) | |||||
Depreciation | 14 | 18 | 47 | 52 | |||||
Amortization (deferral) of regulatory assets, net | 0 | 0 | 0 | 0 | |||||
Miscellaneous income (expense), net | (1) | (7) | (9) | (22) | |||||
Interest expense | (1) | (7) | (9) | (22) | |||||
Income taxes (benefits) | 0 | 0 | 0 | 0 | |||||
Income (loss) from continuing operations | 0 | 0 | 0 | 0 | |||||
Property additions | 0 | 0 | 0 | 0 | |||||
Total assets | 0 | 0 | 33 | ||||||
Goodwill | 0 | 0 | $ 0 | ||||||
Reconciling Adjustments | External Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | 0 | 0 | 0 | 0 | |||||
Reconciling Adjustments | Internal Customers | |||||||||
Segment Financial Information | |||||||||
Revenues | $ (55) | $ (50) | $ (158) | $ (152) | |||||
|
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