REVENUE

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

The following represents a disaggregation of revenue from contracts with customers for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31
(In millions)	2023		2022
Regulated Distribution
Retail generation and distribution services
Residential	$	1,702	$	1,542
Commercial	645		597
Industrial	353		283
Other	25		20
Wholesale	47		90
Other revenue from contracts with customers	24		26
Total revenues from contracts with customers	2,796		2,558
Other revenue unrelated to contracts with customers	30		31
Total Regulated Distribution	$	2,826	$	2,589
Regulated Transmission
ATSI	$	226	$	217
TrAIL	66		63
MAIT	89		79
JCP&L	43		60
MP, PE and WP	36		32
Total revenues from contracts with customers	460		451
Other revenue unrelated to contracts with customers	1		2
Total Regulated Transmission	$	461	$	453
Corporate/Other and Reconciling Adjustments (1)
Wholesale	$	2	$	6
Retail generation and distribution services (1)	(45)		(45)
Other revenue unrelated to contracts with customers (1)	(13)		(14)
Total Corporate/Other and Reconciling	$	(56)	$	(53)
FirstEnergy Total Revenues	$	3,231	$	2,989

.

(1) Includes eliminations and reconciling adjustments of inter-segment revenues.

Other revenue unrelated to contracts with customers includes revenue from late payment charges of $11 million and $10 million for the three months ended March 31, 2023 and 2022, respectively. Other revenue unrelated to contracts with customers also includes revenue from derivatives of $6 million and $9 million for the three months ended March 31, 2023 and 2022, respectively.

Customer Receivables

Receivables from contracts with customers include distribution services and retail generation sales to residential, commercial and industrial customers of the Utilities. Billed and unbilled customer receivables as of March 31, 2023 and December 31, 2022, are included below.

Customer Receivables	March 31, 2023		December 31, 2022
	(In millions)
Billed	$	752	$	674
Unbilled	631		781
	1,383		1,455
Less: Uncollectible Reserve	124		137
Total Customer Receivables	$	1,259	$	1,318

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.

FirstEnergy reviews its allowance for uncollectible customer receivables utilizing a quantitative and qualitative assessment. Management contemplates available current information such as changes in economic factors, regulatory matters, industry trends, customer credit factors, amount of receivable balances that are past-due, payment options and programs available to customers, and the methods that the Utilities are able to utilize to ensure payment. This analysis includes consideration of the outbreak of the pandemic and the impact on customer receivable balances outstanding and write-offs since the pandemic began and subsequent economic slowdown. FirstEnergy’s uncollectible risk on PJM receivables, resulting from transmission and wholesale sales, is minimal due to the nature of PJM’s settlement process and as a result there is no current allowance for doubtful accounts.

As a result of its analysis, FirstEnergy recognized a $25 million decrease to its allowance for uncollectible customer receivables during the first quarter of 2022, of which $15 million was applied to existing deferred regulatory assets.

During 2023, various regulatory actions, including extended installment plans, continue to impact the level of past due balances in certain states, resulting in the allowance for uncollectible accounts on receivables to remain elevated above 2019 pre-pandemic levels. However, normal collection activity has resumed and arrears levels continue to decline towards pre-pandemic levels. As a result, FirstEnergy recognized a $14 million decrease to its allowance during the first quarter of 2023, of which $6 million was applied to existing deferred regulatory assets.

Activity in the allowance for uncollectible accounts on customer receivables for the three months ended March 31, 2023 and for the year ended December 31, 2022 are as follows:

	(In millions)
Balance, January 1, 2022	$	159
Provision for expected credit losses (1)	59
Charged to other accounts (2)	62
Write-offs	(143)
Balance, December 31, 2022	$	137
Provision for expected credit losses (1)	10
Charged to other accounts (2)	23
Write-offs	(46)
Balance, March 31, 2023	$	124

(1) Approximately $11 million of which was deferred for future recovery in the twelve months ended December 31, 2022. An immaterial amount was deferred for future refund in the first quarter of 2023.

(2) Represents recoveries and reinstatements of accounts written off for uncollectible accounts.