Transactions With Affiliated Companies

12 Months Ended

Dec. 31, 2012

Transactions With Affiliated Companies [Abstract]

TRANSACTIONS WITH AFFILIATED COMPANIES

TRANSACTIONS WITH AFFILIATED COMPANIES

FES’ and the Registrant Utilities’ operating revenues, operating expenses, investment income and interest expenses include transactions with affiliated companies. These affiliated company transactions include affiliated company power sales agreements between FirstEnergy's competitive and regulated companies, support service billings, interest on affiliated company notes including the money pools and other transactions.

FirstEnergy's competitive companies at times provide power through affiliated company power sales to meet a portion of the Utilities' POLR and default service requirements. The primary affiliated company transactions for FES and the Registrant Utilities during the three years ended December 31, 2012 are as follows:

2012	FES		OE		JCP&L
	(In millions)
Revenues:
Electric sales to affiliates	$	515	$	209	$	—
Ground lease with ATSI	—		12		—
Other	16		1		—
Expenses:
Purchased power from affiliates	451		159		—
Fuel	2		—		—
Support services	570		118		96
Investment Income:
Interest income from FE	2		1		—
Interest Expense:
Interest expense to affiliates	10		6		4
Interest expense to FE	1		—		2

2011	FES		OE		JCP&L
	(In millions)
Revenues:
Electric sales to affiliates	$	752	$	200	$	—
Ground lease with ATSI	—		12		—
Other	80		1		—
Expenses:
Purchased power from affiliates	242		287		—
Fuel	37		—		—
Support services	655		130		90
Investment Income:
Interest income from FE	2		—		—
Interest Expense:
Interest expense to affiliates	8		4		4
Interest expense to FE	1		—		1

2010	FES		OE		JCP&L
	(In millions)
Revenues:
Electric sales to affiliates	$	2,227	$	190	$	—
Ground lease with ATSI	—		12		—
Other	88		1		—
Expenses:
Purchased power from affiliates	371		522		—
Fuel	46		—		—
Support services	620		128		94
Investment Income:
Interest income from FE	3		—		—
Interest Expense:
Interest expense to affiliates	10		3		4
Interest expense to FE	—		—		—

FirstEnergy does not bill directly or allocate any of its costs to any subsidiary company. Costs are allocated to FES and the Utilities from FESC, AESC and FENOC. The majority of costs are directly billed or assigned at no more than cost. The remaining costs are for services that are provided on behalf of more than one company, or costs that cannot be precisely identified and are allocated using formulas developed by FESC, AESC and FENOC. The current allocation or assignment formulas used and their bases include multiple factor formulas: each company’s proportionate amount of FirstEnergy’s aggregate direct payroll, number of employees, asset balances, revenues, number of customers, other factors and specific departmental charge ratios. Management believes that these allocation methods are reasonable. Intercompany transactions are generally settled under commercial terms within thirty days.

FES and the Utilities are parties to an intercompany income tax allocation agreement with FirstEnergy and its other subsidiaries that provides for the allocation of consolidated tax liabilities. Net tax benefits attributable to FirstEnergy are generally reallocated to the subsidiaries of FirstEnergy that have taxable income. That allocation is accounted for as a capital contribution to the company receiving the tax benefit (see Note 4, Taxes).