REVENUE

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

The following represents a disaggregation of revenue from contracts with customers for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Regulated Distribution
Retail generation and distribution services
Residential	$	1,894	$	1,756	$	5,010	$	4,608
Commercial	698		686		1,970		1,858
Industrial	296		348		1,002		943
Other	26		23		78		61
Wholesale	65		159		173		408
Other revenue from contracts with customers	30		27		86		82
Total revenues from contracts with customers	3,009		2,999		8,319		7,960
Other revenue unrelated to contracts with customers	25		24		83		78
Total Regulated Distribution	$	3,034	$	3,023	$	8,402	$	8,038
Regulated Transmission
ATSI	$	244	$	252	$	712	$	686
TrAIL	72		78		203		205
MAIT	101		97		289		253
JCP&L	52		45		152		151
MP, PE and WP	39		$	30	130		98
Total revenues from contracts with customers	508		502		1,486		1,393
Other revenue unrelated to contracts with customers	1		1		4		4
Total Regulated Transmission	$	509	$	503	$	1,490	$	1,397
Corporate/Other and Reconciling Adjustments (1)
Wholesale	$	1	$	7	$	6	$	21
Retail generation and distribution services (1)	(45)		(46)		(136)		(136)
Other revenue unrelated to contracts with customers (1)	(12)		(12)		(38)		(38)
Total Corporate/Other and Reconciling	$	(56)	$	(51)	$	(168)	$	(153)
FirstEnergy Total Revenues	$	3,487	$	3,475	$	9,724	$	9,282

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

Other revenue unrelated to contracts with customers includes revenue from late payment charges of $10 million for both the three months ended September 30, 2023 and 2022. Other revenue unrelated to contracts with customers also includes revenue from derivatives of $4 million and $2 million for the three months ended September 30, 2023 and 2022, respectively.

Other revenue unrelated to contracts with customers includes revenue from late payment charges of $31 million and $29 million for the nine months ended September 30, 2023 and 2022, respectively. Other revenue unrelated to contracts with customers also includes revenue from derivatives of $16 million and $13 million for the nine months ended September 30, 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 September 30, 2023 and December 31, 2022, are included below:

Customer Receivables	September 30, 2023		December 31, 2022
	(In millions)
Billed	$	848	$	674
Unbilled	539		781
	1,387		1,455
Less: Uncollectible Reserve	85		137
Total Customer Receivables	$	1,302	$	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 customer receivables 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.

During 2023, various regulatory actions, including extended installment plans, continue to impact the level of past due balances in certain states, resulting in the allowances for uncollectible customer 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 $52 million decrease to its allowance during the first nine months of 2023, of which $27 million was applied to existing deferred regulatory assets.

Activity in the allowance for uncollectible accounts on customer receivables for the nine months ended September 30, 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)	3
Charged to other accounts (2)	25
Write-offs	(80)
Balance, September 30, 2023	$	85

(1) Approximately $(7) million and $11 million of which was deferred for future recovery (refund) in the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively.

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