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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2011
Asset Retirement Obligation [Abstract]  
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS
FirstEnergy has recognized applicable legal obligations for AROs and their associated cost primarily for nuclear power plant decommissioning, reclamation of sludge disposal ponds, closure of coal ash disposal sites, underground and above-ground storage tanks, wastewater treatment lagoons and transformers containing PCBs. In addition, FirstEnergy has recognized conditional 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 interest 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 and the applicable Utilities use an expected cash flow approach to measure the fair value of their nuclear decommissioning AROs.
FirstEnergy, FES and certain Utilities maintain NDTs that are legally restricted for purposes of settling the nuclear decommissioning ARO. The fair values of the decommissioning trust assets as of December 31, 2011 and 2010 were as follows:
 
 
2011
 
2010
 
 
(In millions)
FirstEnergy
 
$
2,112

 
$
1,973

FES
 
1,223

 
1,146

OE
 
137

 
127

TE
 
83

 
76

JCP&L
 
193

 
182

Met-Ed
 
310

 
289

Penelec
 
166

 
153


Accounting standards for conditional retirement obligations associated with tangible long-lived assets require recognition of the fair value of a liability for an ARO in the period in which it is incurred if a reasonable estimate can made, even though there may be uncertainty about timing or method of settlement. When settlement is conditional on a future event occurring, it is reflected in the measurement of the liability, not in the recognition of the liability.
The following table summarizes the changes to the ARO balances during 2011 and 2010.
ARO Reconciliation
 
FirstEnergy(3)
 
FES
 
OE
 
CEI
 
TE
 
JCP&L
 
Met-Ed
 
Penelec
 
 
(In millions)
Balance, January 1, 2010
 
$
1,425

 
$
921

 
$
86

 
$
2

 
$
32

 
$
102

 
$
180

 
$
92

Liabilities settled
 
(11
)
 
—

 
(10
)
 
—

 
—

 
—

 
—

 
—

Accretion
 
93

 
59

 
5

 
—

 
2

 
6

 
13

 
6

Revisions in estimated cash flows(1)
 
(100
)
 
(88
)
 
(7
)
 
—

 
(5
)
 
—

 
—

 
—

Balance, December 31, 2010
 
1,407

 
892

 
74

 
2

 
29

 
108

 
193

 
98

Liabilities assumed from Allegheny merger
 
60

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Liabilities settled(2)
 
(15
)
 
(1
)
 
(2
)
 
—

 
—

 
—

 
—

 
—

Accretion
 
97

 
59

 
5

 
1

 
2

 
7

 
13

 
7

Revisions in estimated cash flows(4)
 
(52
)
 
(46
)
 
(6
)
 
—

 
—

 
—

 
—

 
—

Balance, December 31, 2011
 
$
1,497

 
$
904

 
$
71

 
$
3

 
$
31

 
$
115

 
$
206

 
$
105

(1) 
During the second quarter of 2010, studies were completed to reassess the estimated cost of decommissioning the Beaver Valley nuclear generating facilities. The cost studies resulted in a revision to the estimated cash flows associated with the ARO liabilities and reduced the discounted liabilities as shown.
(2) 
Includes approximately $10 million in reduced ARO liabilities for FirstEnergy as a result of deconsolidation of the Signal Peak joint venture (See Note 8, Variable Interest Entities).
(3) 
The 2011 changes include activity relating to Allegheny, which merged with FE in February 2011.
(4) 
During 2011, studies were completed to reassess the estimated cost of decommissioning the Perry and Davis-Besse nuclear generating facilities. The cost studies resulted in revisions to the estimated cash flows associated with the ARO liabilities and reduced the discounted liabilities as shown. These revisions had no significant impact on accretion of the obligations during 2011, as compared to 2010.