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Revenue
 9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
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 and nine months ended September 30, 2021 and 2020, by type of service from each reportable segment:

For the Three Months Ended September 30, 2021
Revenues by Type of ServiceRegulated DistributionRegulated Transmission
Corporate/Other and Reconciling Adjustments (1)
Total
(In millions)
Distribution services $1,534 $— $(25)$1,509 
Retail generation1,054 — (13)1,041 
Wholesale sales117 — 5 122 
Transmission — 411 — 411 
Other30 — — 30 
Total revenues from contracts with customers$2,735 $411 $(33)$3,113 
ARP— — — — 
Other non-customer revenue 24 4 (17)11 
Total revenues$2,759 $415 $(50)$3,124 
(1) Includes eliminations and reconciling adjustments of inter-segment revenues.
For the Three Months Ended September 30, 2020
Revenues by Type of ServiceRegulated DistributionRegulated Transmission
Corporate/Other and Reconciling Adjustments (1)
Total
(In millions)
Distribution services (2)
$1,503 $— $(22)$1,481 
Retail generation1,005 — (16)989 
Wholesale sales67 — 3 70 
Transmission (2)
— 408 — 408 
Other35 — — 35 
Total revenues from contracts with customers$2,610 $408 $(35)$2,983 
ARP (3)
25 — — 25 
Other non-customer revenue 26 5 (17)14 
Total revenues$2,661 $413 $(52)$3,022 
(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. See Note 8, “Regulatory Matters,” for further discussion on Ohio decoupling rates.

Other non-customer revenue includes revenue from late payment charges of $9 million and $6 million for the three months ended September 30, 2021 and 2020, respectively. Other non-customer revenue also includes revenue from derivatives of $3 million and $8 million for the three months ended September 30, 2021 and 2020, respectively.

For the Nine Months Ended September 30, 2021
Revenues by Type of ServiceRegulated DistributionRegulated Transmission
Corporate/Other and Reconciling Adjustments (1)
Total
(In millions)
Distribution services $4,177 $— $(77)$4,100 
Retail generation2,820 — (38)2,782 
Wholesale sales260 — 12 272 
Transmission — 1,223 — 1,223 
Other89 — — 89 
Total revenues from contracts with customers$7,346 $1,223 $(103)$8,466 
ARP (2)
(27)— — (27)
Other non-customer revenue 68 10 (45)33 
Total revenues$7,387 $1,233 $(148)$8,472 
(1) Includes eliminations and reconciling adjustments of inter-segment revenues.
(2) Reflects amounts the Ohio Companies refunded to customers that was previously collected under decoupling mechanisms, with interest. See Note 8, “Regulatory Matters,” for further discussion on Ohio decoupling rates.
For the Nine Months Ended September 30, 2020
Revenues by Type of ServiceRegulated DistributionRegulated Transmission
Corporate/Other and Reconciling Adjustments (1)
Total
(In millions)
Distribution services (2)
$4,000 $— $(65)$3,935 
Retail generation2,735 — (46)2,689 
Wholesale sales188 — 6 194 
Transmission (2)
— 1,185 — 1,185 
Other102 — — 102 
Total revenues from contracts with customers$7,025 $1,185 $(105)$8,105 
ARP (3)
108 — — 108 
Other non-customer revenue 74 13 (47)40 
Total revenues$7,207 $1,198 $(152)$8,253 
(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. See Note 8, “Regulatory Matters,” for further discussion on Ohio decoupling rates.

Other non-customer revenue includes revenue from late payment charges of $27 million and $22 million for the nine months ended September 30, 2021 and 2020, respectively. Other non-customer revenue also includes revenue from derivatives of $5 million and $14 million for the nine months ended September 30, 2021 and 2020, respectively.

Regulated Distribution

The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies and also controls 3,580 MWs of regulated electric generation capacity located primarily in West Virginia and Virginia. 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 8, “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, 2021 and 2020, by class:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
Revenues by Customer Class 2021202020212020
(In millions)
Residential$1,666 $1,621 $4,410 $4,220 
Commercial619 589 1,722 1,640 
Industrial284 278 810 814 
Other19 20 55 61 
Total Revenues$2,588 $2,508 $6,997 $6,735 

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, revenues 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 had ARPs in Ohio primarily for decoupling revenue in 2020, and has reflected refunds of decoupling revenue owed to customers as reductions to ARPs in 2021. Please see Note 8, “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 derived from forward-looking formula rates. See Note 8, “Regulatory Matters,” for additional information.

Forward-looking formula 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. 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, 2021 and 2020, by transmission owner:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
Transmission Owner2021202020212020
(In millions)
ATSI$206 $202 $604 $598 
TrAIL59 61 176 182 
MAIT75 68 222 183 
JCP&L41 43 126 122 
MP, PE and WP 30 34 95 100 
Total Revenues$411 $408 $1,223 $1,185