Asset Retirement Obligations

9 Months Ended

Sep. 30, 2011

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

FirstEnergy has recognized applicable legal obligations for AROs and the associated cost of nuclear power plant decommissioning, reclamation of sludge disposal ponds and closure of coal ash disposal sites. In addition, FirstEnergy has recognized conditional asset retirement obligations, primarily for asbestos remediation.

The ARO liabilities for FES, OE and TE primarily relate to the decommissioning of the Beaver Valley, Davis-Besse and Perry nuclear generating facilities (OE for its leasehold interests in Beaver Valley Unit 2 and Perry and TE for its leasehold interest in Beaver Valley Unit 2). The ARO liabilities for JCP&L, Met-Ed and Penelec primarily relate to the decommissioning of the TMI-2 nuclear generating facility. FES, OE, TE, JCP&L, Met-Ed and Penelec use an expected cash flow approach to measure the fair value of their nuclear decommissioning ARO.

During the first quarter of 2011, studies were completed to update the estimated cost of decommissioning the Perry nuclear generating facility. The cost studies resulted in a revision to the estimated cash flows associated with the ARO liabilities of FES and OE and reduced the liability for each subsidiary in the amounts of $40 million and $6 million, respectively.

During the second quarter of 2011, studies were completed to update the estimated cost of decommissioning the Davis-Besse nuclear facility. The cost studies resulted in a revision to the estimated cash flows associated with the ARO liabilities of FES and reduced the liability for FES in the amount of $5 million.

The revisions to the estimated cash flows had no significant impact on accretion of the obligation during the three months and nine months endedSeptember 30, 2011, when compared to the same periods of 2010.