This combined Amendment No. 1 on Form 10-K/A for the fiscal year ended December 31, 2007 is being filed by Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Pennsylvania Electric Company (the “registrants”) to correct common stock dividend payments reported in their respective consolidated statements of cash flows for the year ended December 31, 2007, contained in Part II, Item 8, Financial Statements and Supplementary Data. This correction does not affect the respective registrants’ previously reported consolidated statements of income for the year ended December 31, 2007, nor the consolidated balance sheets, consolidated statements of capitalization and consolidated statements of common stockholder's equity as of December 31, 2007 contained in the combined Form 10-K for the fiscal year ended December 31, 2007, as originally filed on February 29, 2008 (the “original Form 10-K”). Except for Part II, Items 8 and 9(A)T and certain exhibits under Part IV, Item 15, no other information included in the Form 10-K as originally filed is being revised by, or repeated in this amendment.

As discussed under “Restatement of the Consolidated Statements of Cash Flows” in Note 1 to the revised Combined Notes to Consolidated Financial Statements of the registrants included in this Form 10-K/A, the registrants have restated their respective consolidated statements of cash flows to correct common stock dividend payments reported in cash flows from financing activities. The consolidated statements of cash flows for those registrants, as originally filed, erroneously reflected the dividends declared in the third quarter of 2007 applicable to future quarters' payments as dividends paid in the quarter that they were declared. The corrections resulted in a corresponding change in operating liabilities - accounts payable, included in cash flows from operating activities.

The original Form 10-K was a combined Form 10-K representing separate filings by each of the registrants and their affiliates, FirstEnergy Corp., FirstEnergy Solutions Corp., Jersey Central Power & Light Company and Metropolitan Edison Company (the “affiliates”). However, this Form 10-K/A constitutes an amendment only to Part II, Items 8 and 9(A)T and Part IV, Item 15 of the original Form 10-K filed by each registrant. In addition, information contained herein relating to any individual registrant is filed by such registrant on its own behalf and no registrant makes any representation as to information contained herein relating to any other registrant ~~except that information relating to~~or any of the ~~six FirstEnergy subsidiary registrants is also attributed~~affiliates, including, but not limited to, ~~FirstEnergy.~~any such information contained in the revised Combined Notes to Consolidated Financial Statements included herein.

Please note that the information contained in this Amendment No. 1, including the consolidated financial statements and notes thereto, does not reflect events occurring after the date of the original Form 10-K filing on February 29, 2008, except to the extent described above.

FirstEnergy Corp. was organized under the laws of the State of Ohio in 1996. FirstEnergy's principal business is the holding, directly or indirectly, of all of the outstanding common stock of its eight principal electric utility operating subsidiaries: OE, CEI, TE, Penn, ATSI, JCP&L, Met-Ed and Penelec. FirstEnergy's consolidated revenues are primarily derived from electric service provided by its utility operating subsidiaries and the revenues of its other principal subsidiary, FES. In addition, FirstEnergy holds all of the outstanding common stock of other direct subsidiaries including: FirstEnergy Properties, Inc., FirstEnergy Ventures Corp., FENOC, FirstEnergy Securities Transfer Company, GPU Diversified Holdings, LLC, GPU Telecom Services, Inc., GPU Nuclear, Inc. and FESC.

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

CONSOLIDATED STATEMENTS OF INCOME




For the Years Ended December 31,	2007			2006			2005
	(In thousands)
REVENUES (Note 3):
Electric sales	$	1,753,385		$	1,702,089		$	1,799,211
Excise tax collections		69,465			67,619			68,950
Total revenues		1,822,850			1,769,708			1,868,161

EXPENSES (Note 3):
Fuel		40,551			50,291			85,993
Purchased power		748,214			704,517			557,593
Nuclear operating costs		-			-			142,698
Other operating costs		310,274			290,904			301,366
Provision for depreciation		75,238			63,589			127,959
Amortization of regulatory assets		144,370			127,403			227,221
Deferral of new regulatory assets		(149,556	)		(128,220	)		(163,245	)
General taxes		141,551			134,663			152,678
Total expenses		1,310,642			1,243,147			1,432,263

OPERATING INCOME		512,208			526,561			435,898

OTHER INCOME (EXPENSE) (Note 3):
Investment income		57,724			100,816			86,898
Miscellaneous income (expense)		7,902			6,428			(9,031	)
Interest expense		(138,977	)		(141,710	)		(132,226	)
Capitalized interest		918			2,618			2,533
Total other expense		(72,433	)		(31,848	)		(51,826	)

INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE		439,775			494,713			384,072

INCOME TAXES		163,363			188,662			153,014

INCOME BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE		276,412			306,051			231,058

Cumulative effect of a change in accounting principle (net of income
tax benefit of $2,101,000) (Note 2(G))		-			-			(3,724	)

NET INCOME		276,412			306,051			227,334

PREFERRED STOCK DIVIDEND REQUIREMENTS		-			-			2,918

EARNINGS ON COMMON STOCK	$	276,412		$	306,051		$	224,416


The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating Company
are an integral part of these statements.

9

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

CONSOLIDATED BALANCE SHEETS

As of December 31,	2007		2006
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	232	$	221
Receivables-
Customers (less accumulated provisions of $7,540,000 and		251,000		245,193
$6,783,000, respectively, for uncollectible accounts)
Associated companies		166,587		249,735
Other		12,184		14,240
Notes receivable from associated companies		52,306		27,191
Prepayments and other		2,327		2,314
		484,636		538,894
UTILITY PLANT:
In service		2,256,956		2,136,766
Less - Accumulated provision for depreciation		872,801		819,633
		1,384,155		1,317,133
Construction work in progress		41,163		46,385
		1,425,318		1,363,518
OTHER PROPERTY AND INVESTMENTS:
Long-term notes receivable from associated companies		-		486,634
Investment in lessor notes (Note 7)		463,431		519,611
Other		10,285		13,426
		473,716		1,019,671
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill		1,688,521		1,688,521
Regulatory assets		870,695		854,588
Pension assets (Note 4)		62,471		-
Property taxes		76,000		65,000
Other		32,987		33,306
		2,730,674		2,641,415
	$	5,114,344	$	5,563,498
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	207,266	$	120,569
Short-term borrowings-
Associated companies		531,943		218,134
Accounts payable-
Associated companies		169,187		365,678
Other		5,295		7,194
Accrued taxes		94,991		128,829
Accrued interest		13,895		19,033
Lease market valuation liability		-		60,200
Other		34,350		52,101
		1,056,927		971,738
CAPITALIZATION (See Consolidated Statements of Capitalization):
Common stockholder's equity		1,489,835		1,468,903
Long-term debt and other long-term obligations		1,459,939		1,805,871
		2,949,774		3,274,774
NONCURRENT LIABILITIES:
Accumulated deferred income taxes		725,523		470,707
Accumulated deferred investment tax credits		18,567		20,277
Lease market valuation liability		-		547,800
Retirement benefits		93,456		122,862
Deferred revenues - electric service programs		27,145		51,588
Lease assignment payable to associated companies		131,773		-
		111,179		103,752
		1,107,643		1,316,986
COMMITMENTS AND CONTINGENCIES (Notes 6 and 13)
	$	5,114,344	$	5,563,498


The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating
Company are an integral part of these balance sheets.

10

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

CONSOLIDATED STATEMENTS OF CAPITALIZATION

As of December 31,	2007			2006
	(In thousands)

COMMON STOCKHOLDER'S EQUITY:
Common stock, without par value, 105,000,000 shares authorized,
67,930,743 shares outstanding	$	873,536		$	860,133
Accumulated other comprehensive loss (Note 2(F))		(69,129	)		(104,431	)
Retained earnings (Note 10(A))		685,428			713,201
Total		1,489,835			1,468,903


LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS (Note 10(C)):
First mortgage bonds-
6.860% due 2008		125,000			125,000
Total		125,000			125,000

Secured notes-
7.130% due 2007		-			120,000
7.430% due 2009		150,000			150,000
7.880% due 2017		300,000			300,000
6.000% due 2020		-			62,560
6.100% due 2020		-			70,500
5.375% due 2028		5,993			5,993
* 3.750% due 2030		81,640			81,640
* 3.650% due 2035		-			53,900
Total		537,633			844,593

Unsecured notes-
6.000% due 2013		-			78,700
5.650% due 2013		300,000			300,000
5.700% due 2017		250,000			-
9.000% due 2031		-			103,093
5.950% due 2036		300,000			300,000
7.651% due to associated companies 2008-2016 (Note 7)		153,044			167,696
Total		1,003,044			949,489


Capital lease obligations (Note 6)		3,748			4,371
Net unamortized premium (discount) on debt		(2,220	)		2,987
Long-term debt due within one year		(207,266	)		(120,569	)
Total long-term debt and other long-term obligations		1,459,939			1,805,871
TOTAL CAPITALIZATION	$	2,949,774		$	3,274,774


* Denotes variable rate issue with applicable year-end interest rate shown.

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating
Company are an integral part of these statements.

11

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

										Accumulated
				Common Stock						Other
	Comprehensive			Number			Carrying			Comprehensive			Retained
	Income			of Shares			Value			Income (Loss)			Earnings
	(Dollars in thousands)

Balance, January 1, 2005					79,590,689		$	1,281,962		$	17,859		$	553,740
Net income	$	227,334												227,334
Unrealized loss on investments, net of
$27,734,000 of income tax benefits		(39,472	)								(39,472	)
Minimum liability for unfunded retirement benefits,
net of $15,186,000 of income taxes		21,613									21,613
Comprehensive income	$	209,475
Equity contribution from parent								75,000
Affiliated company asset transfers								(2,086	)
Restricted stock units								48
Cash dividends on preferred stock														(2,924	)
Cash dividends on common stock														(191,000	)
Balance, December 31, 2005					79,590,689			1,354,924			-			587,150
Net income and comprehensive income	$	306,051												306,051
Net liability for unfunded retirement benefits
due to the implementation of SFAS 158, net
of $69,609,000 of income tax benefits (Note 4)											(104,431	)
Repurchase of common stock					(11,659,946	)		(300,000	)
Affiliated company asset transfers								(194,910	)
Restricted stock units								86
Stock based compensation								33
Cash dividends on common stock														(180,000	)
Balance, December 31, 2006					67,930,743			860,133			(104,431	)		713,201
Net income	$	276,412												276,412
Pension and other postretirement benefits, net
of $30,705,000 of income taxes (Note 4)		35,302									35,302
Comprehensive income	$	311,714
Restricted stock units								184
Stock based compensation								10
Consolidated tax benefit allocation								13,209
FIN 48 cumulative effect adjustment														(185	)
Cash dividends on common stock														(304,000	)
Balance, December 31, 2007					67,930,743		$	873,536		$	(69,129	)	$	685,428

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating Company
are an integral part of these statements.

12

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Restated
For the Years Ended December 31,	2007			2006			2005
				(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	276,412		$	306,051		$	227,334
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		75,238			63,589			127,959
Amortization of regulatory assets		144,370			127,403			227,221
Deferral of new regulatory assets		(149,556	)		(128,220	)		(163,245	)
Nuclear fuel and capital lease amortization		235			239			25,803
Deferred rents and lease market valuation liability		(357,679	)		(71,943	)		(67,353	)
Deferred income taxes and investment tax credits, net		(22,767	)		(17,093	)		42,024
Accrued compensation and retirement benefits		3,196			2,367			4,624
Cumulative effect of a change in accounting principle		-			-			3,724
Pension trust contributions		(24,800	)		-			(93,269	)
Tax refund related to pre-merger period		-			-			9,636
Decrease (increase) in operating assets-
Receivables		209,426			(137,711	)		(103,018	)
Materials and supplies		-			-			(12,934	)
Prepayments and other current assets		(152	)		160			233
Increase (decrease) in operating liabilities-
Accounts payable		(316,638	)		293,214			(82,434	)
Accrued taxes		(33,659	)		7,342			(7,967	)
Accrued interest		(5,138	)		147			(3,216	)
Electric service prepayment programs		(24,443	)		(19,673	)		53,447
Other		471			(6,626	)		(40,878	)
Net cash provided from (used for) operating activities		(225,484	)		419,246			147,691

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		247,362			295,662			141,004
Short-term borrowings, net		277,581			-			155,883
Equity contribution from parent		-			-			75,000
Redemptions and Repayments-
Common stock		-			(300,000	)		-
Preferred stock		-			-			(101,900	)
Long-term debt		(493,294	)		(376,702	)		(147,923	)
Short-term borrowings, net		-			(143,272	)		-
Dividend Payments-
Common stock		(204,000	)		(180,000	)		(191,000	)
Preferred stock		-			-			(2,260	)
Net cash used for financing activities		(172,351	)		(704,312	)		(71,196	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(149,131	)		(119,795	)		(148,783	)
Loan repayments from (loans to) associated companies, net		6,714			(7,813	)		(387,746	)
Collection of principal on long-term notes receivable		486,634			376,135			466,378
Investments in lessor notes		56,179			44,556			32,479
Sales of investment securities held in trusts		-			-			490,126
Purchases of investment securities held in trusts		-			-			(519,150	)
Other		(2,550	)		(8,003	)		(9,789	)
Net cash provided from (used for) investing activities		397,846			285,080			(76,485	)

Net increase in cash and cash equivalents		11			14			10
Cash and cash equivalents at beginning of year		221			207			197
Cash and cash equivalents at end of year	$	232		$	221		$	207

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid During the Year-
Interest (net of amounts capitalized)	$	141,390		$	135,276		$	144,730
Income taxes	$	186,874		$	180,941		$	116,323

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating Company
are an integral part of these statements.

13

THE TOLEDO EDISON COMPANY

CONSOLIDATED STATEMENTS OF INCOME




For the Years Ended December 31,	2007			2006			2005
	(In thousands)
REVENUES (Note 3):
Electric sales	$	934,772		$	899,930		$	1,011,239
Excise tax collections		29,173			28,071			28,947
Total revenues		963,945			928,001			1,040,186

EXPENSES (Note 3):
Fuel		31,199			36,313			58,897
Purchased power		398,423			368,654			296,720
Nuclear operating costs		71,657			81,845			181,410
Other operating costs		176,191			166,403			168,522
Provision for depreciation		36,743			33,310			62,486
Amortization of regulatory assets		104,348			95,032			141,343
Deferral of new regulatory assets		(62,664	)		(54,946	)		(58,566	)
General taxes		50,640			50,869			57,108
Total expenses		806,537			777,480			907,920

OPERATING INCOME		157,408			150,521			132,266

OTHER INCOME (EXPENSE) (Note 3):
Investment income		27,713			38,187			49,440
Miscellaneous expense		(6,651	)		(7,379	)		(10,587	)
Interest expense		(34,135	)		(23,179	)		(21,489	)
Capitalized interest		640			1,123			465
Total other income (expense)		(12,433	)		8,752			17,829

INCOME BEFORE INCOME TAXES		144,975			159,273			150,095

INCOME TAXES		53,736			59,869			73,931

NET INCOME		91,239			99,404			76,164

PREFERRED STOCK DIVIDEND REQUIREMENTS		-			9,409			7,795

EARNINGS ON COMMON STOCK	$	91,239		$	89,995		$	68,369

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company
are an integral part of these statements.

15

THE TOLEDO EDISON COMPANY

CONSOLIDATED BALANCE SHEETS


As of December 31,	2007		2006
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	22	$	22
Receivables-
Customers		449		772
Associated companies		88,796		13,940
Other (less accumulated provisions of $615,000 and $430,000,
respectively, for uncollectible accounts)		3,116		3,831
Notes receivable from associated companies		154,380		100,545
Prepayments and other		865		851
		247,628		119,961
UTILITY PLANT:
In service		931,263		894,888
Less - Accumulated provision for depreciation		420,445		394,225
		510,818		500,663
Construction work in progress		19,740		16,479
		530,558		517,142
OTHER PROPERTY AND INVESTMENTS:
Investment in lessor notes		154,646		169,493
Long-term notes receivable from associated companies		37,530		128,858
Nuclear plant decommissioning trusts		66,759		61,094
Other		1,756		1,871
		260,691		361,316
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill		500,576		500,576
Regulatory assets		203,719		247,595
Pension assets (Note 4)		28,601		-
Property taxes		21,010		22,010
Other		20,496		30,042
		774,402		800,223
	$	1,813,279	$	1,798,642
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	34	$	30,000
Accounts payable-
Associated companies		245,215		84,884
Other		4,449		4,021
Notes payable to associated companies		13,396		153,567
Accrued taxes		30,245		47,318
Lease market valuation liability		36,900		24,600
Other		22,747		37,551
		352,986		381,941
CAPITALIZATION (See Statements of Capitalization):
Common stockholder's equity		485,191		481,415
Long-term debt and other long-term obligations		303,397		358,281
		788,588		839,696
NONCURRENT LIABILITIES:
Accumulated deferred income taxes		103,463		161,024
Accumulated deferred investment tax credits		10,180		11,014
Lease market valuation liability		310,000		218,800
Retirement benefits		63,215		77,843
Asset retirement obligations		28,366		26,543
Deferred revenues - electric service programs		12,639		23,546
Lease assignment payable to associated companies		83,485		-
Other		60,357		58,235
		671,705		577,005
COMMITMENTS AND CONTINGENCIES (Notes 6 and 13)
	$	1,813,279	$	1,798,642

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company are an
integral part of these balance sheets.

16

THE TOLEDO EDISON COMPANY

CONSOLIDATED STATEMENTS OF CAPITALIZATION

As of December 31,	2007			2006
	(In thousands)
COMMON STOCKHOLDER'S EQUITY:
Common stock, $5 par value, 60,000,000 shares authorized,
29,402,054 shares outstanding	$	147,010		$	147,010
Other paid-in capital		173,169			166,786
Accumulated other comprehensive loss (Note 2(F))		(10,606	)		(36,804	)
Retained earnings (Note 10(A))		175,618			204,423
Total		485,191			481,415


LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS (Note 10(C)):
Secured notes-
7.130% due 2007		-			30,000
6.100% due 2027		-			10,100
5.375% due 2028		3,751			3,751
* 3.750% due 2035		-			45,000
Total		3,751			88,851

Unsecured notes-
6.150% due 2037		300,000			300,000
Total		300,000			300,000


Capital lease obligations (Note 6)		114			-
Net unamortized discount on debt		(434	)		(570	)
Long-term debt due within one year		(34	)		(30,000	)
Total long-term debt		303,397			358,281
TOTAL CAPITALIZATION	$	788,588		$	839,696


* Denotes variable-rate issue with applicable year-end interest rate shown.

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company
are an integral part of these statements.

17

THE TOLEDO EDISON COMPANY

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY


													Accumulated
				Common Stock						Other			Other
	Comprehensive			Number			Par			Paid-In			Comprehensive			Retained
	Income			of Shares			Value			Capital			Income (Loss)			Earnings
	(Dollars in thousands)

Balance, January 1, 2005					39,133,887		$	195,670		$	428,559		$	20,039		$	191,059
Net income	$	76,164															76,164
Unrealized loss on investments, net
of $16,884,000 of income tax benefits		(23,654	)											(23,654	)
Minimum liability for unfunded retirement benefits,
net of $5,836,000 of income taxes		8,305												8,305
Comprehensive income	$	60,815
Affiliated company asset transfers											45,060
Restricted stock units											19
Cash dividends on preferred stock																	(7,795	)
Cash dividends on common stock																	(70,000	)
Balance, December 31, 2005					39,133,887			195,670			473,638			4,690			189,428
Net income	$	99,404															99,404
Unrealized gain on investments, net
of $211,000 of income taxes		462												462
Comprehensive income	$	99,866
Net liability for unfunded retirement benefits
due to the implementation of SFAS 158, net
of $26,929,000 of income tax benefits (Note 4)														(41,956	)
Affiliated company asset transfers											(130,571	)
Repurchase of common stock					(9,731,833	)		(48,660	)		(176,341	)
Preferred stock redemption premiums																	(4,840	)
Restricted stock units											38
Stock based compensation											22
Cash dividends on preferred stock																	(4,569	)
Cash dividends on common stock																	(75,000	)
Balance, December 31, 2006					29,402,054			147,010			166,786			(36,804	)		204,423
Net income	$	91,239															91,239
Unrealized gain on investments, net
of $1,089,000 of income taxes		1,901												1,901
Pension and other postretirement benefits, net
of $15,077,000 of income taxes (Note 4)		24,297												24,297
Comprehensive income	$	117,437
Restricted stock units											53
Stock based compensation											2
Consolidated tax benefit allocation											6,328
FIN 48 cumulative effect adjustment																	(44	)
Cash dividends on common stock																	(120,000	)
Balance, December 31, 2007					29,402,054		$	147,010		$	173,169		$	(10,606	)	$	175,618

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company are an integral
part of these statements.

18

THE TOLEDO EDISON COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Restated
For the Years Ended December 31,	2007			2006			2005
				(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	91,239		$	99,404		$	76,164
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		36,743			33,310			62,486
Amortization of regulatory assets		104,348			95,032			141,343
Deferral of new regulatory assets		(62,664	)		(54,946	)		(58,566	)
Nuclear fuel and capital lease amortization		23			-			18,463
Deferred rents and lease market valuation liability		265,981			(32,925	)		(30,088	)
Deferred income taxes and investment tax credits, net		(26,318	)		(37,133	)		(6,519	)
Accrued compensation and retirement benefits		5,276			4,415			5,396
Pension trust contributions		(7,659	)		-			(19,933	)
Tax refund related to pre-merger period		-			-			8,164
Decrease (increase) in operating assets-
Receivables		(64,489	)		6,387			10,813
Materials and supplies		-			-			(3,210	)
Prepayments and other current assets		(13	)		208			91
Increase (decrease) in operating liabilities-
Accounts payable		8,722			39,847			(45,416	)
Accrued taxes		(14,954	)		(2,026	)		2,387
Accrued interest		(1,350	)		1,899			(1,557	)
Electric service prepayment programs		(10,907	)		(9,060	)		32,605
Other		5,165			4,640			(36,939	)
Net cash provided from operating activities		329,143			149,052			155,684

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		-			296,663			45,000
Short-term borrowings, net		-			62,909			-
Redemptions and Repayments-
Common stock		-			(225,000	)		-
Preferred stock		-			(100,840	)		(30,000	)
Long-term debt		(85,797	)		(202,550	)		(138,859	)
Short-term borrowings, net		(153,567	)		-			(8,996	)
Dividend Payments-
Common stock		(85,000	)		(75,000	)		(70,000	)
Preferred stock		-			(4,569	)		(7,795	)
Net cash used for financing activities		(324,364	)		(248,387	)		(210,650	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(58,871	)		(61,232	)		(71,976	)
Loans to associated companies		(51,002	)		(52,178	)		(409,409	)
Collection of principal on long-term notes receivable		91,308			202,787			552,613
Redemption of lessor notes (Note 6)		14,847			9,305			11,894
Sales of investment securities held in trusts		44,682			53,458			365,807
Purchases of investment securities held in trusts		(47,853	)		(53,724	)		(394,348	)
Other		2,110			926			385
Net cash provided from (used for) investing activities		(4,779	)		99,342			54,966

Net change in cash and cash equivalents		-			7			-
Cash and cash equivalents at beginning of year		22			15			15
Cash and cash equivalents at end of year	$	22		$	22		$	15

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid During the Year-
Interest (net of amounts capitalized)	$	33,841		$	17,785		$	29,709
Income taxes	$	73,845		$	95,753		$	78,265

The accompanying Combined Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company are an integral
part of these statements.

OE

	Year Ended
	December 31, 2007
	As Previously			As
	Reported			Restated
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	197,166		$	197,166
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		77,405			77,405
Amortization of regulatory assets		191,885			191,885
Deferral of new regulatory assets		(177,633	)		(177,633	)
Nuclear fuel and lease amortization		33			33
Amortization of lease costs		(7,425	)		(7,425	)
Deferred income taxes and investment tax credits, net		423			423
Accrued compensation and retirement benefits		(46,313	)		(46,313	)
Pension trust contributions		(20,261	)		(20,261	)
Decrease (increase) in operating assets-
Receivables		(57,461	)		(57,461	)
Prepayments and other current assets		3,265			3,265
Increase (decrease) in operating liabilities-
Accounts payable		65,649			15,649
Accrued taxes		(81,079	)		(81,079	)
Accrued interest		(2,334	)		(2,334	)
Electric service prepayment programs		(39,861	)		(39,861	)
Other		6,096			6,096
Net cash provided from operating activities		109,555			59,555

CASH FLOWS FROM FINANCING ACTIVITIES:
Redemptions and Repayments-
Common stock		(500,000	)		(500,000	)
Long-term debt		(112,497	)		(112,497	)
Short-term borrowings, net		(114,475	)		(114,475	)
Dividend Payments-
Common stock		(150,000	)		(100,000	)
Net cash used for financing activities		(876,972	)		(826,972	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(145,311	)		(145,311	)
Sales of investment securities held in trusts		37,736			37,736
Purchases of investment securities held in trusts		(43,758	)		(43,758	)
Loans to associated companies, net		(79,115	)		(79,115	)
Collection of principal on long-term notes receivable		960,327			960,327
Cash investments		37,499			37,499
Other		59			59
Net cash provided from investing activities		767,437			767,437

Net increase in cash and cash equivalents	$	20		$	20

In March 2006, FirstEnergy sold 60% of its interest in MYR for an after-tax gain of $0.2 million. In June 2006, as part of the March 2006 agreement, FirstEnergy sold an additional 1.67% interest. As a result of the March sale, FirstEnergy deconsolidated MYR in the first quarter of 2006 and accounted for its remaining interest under the equity method. In November 2006, FirstEnergy sold the remaining 38.33% interest in MYR for an after-tax gain of $8.6 million. In accordance with SFAS 144, the income for the time period that MYR was accounted for as an equity method investment has not been included in discontinued operations; however, results for all reporting periods prior to the initial sale in March 2006, including the portion of 2006 prior to the sale are reported as discontinued operations.

~~Utility Regulation~~

On August 8, 2005 President Bush signed into law the EPACT. The EPACT repealed PUHCA effective February 2006. PUHCA imposed financial and operational restrictions on many aspects of FirstEnergy's business. Some of PUHCA's consumer protection authority was transferred to the FERC and state utility commissions. The EPACT also provides for tax credits for the development of certain clean coal and emissions technologies.

227

CEI

	Year Ended
	December 31, 2007
	As Previously			As
	Reported			Restated
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	276,412		$	276,412
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		75,238			75,238
Amortization of regulatory assets		144,370			144,370
Deferral of new regulatory assets		(149,556	)		(149,556	)
Nuclear fuel and capital lease amortization		235			235
Deferred rents and lease market valuation liability		(357,679	)		(357,679	)
Deferred income taxes and investment tax credits, net		(22,767	)		(22,767	)
Accrued compensation and retirement benefits		3,196			3,196
Pension trust contributions		(24,800	)		(24,800	)
Decrease (increase) in operating assets-
Receivables		209,426			209,426
Prepayments and other current assets		(152	)		(152	)
Increase (decrease) in operating liabilities-
Accounts payable		(216,638	)		(316,638	)
Accrued taxes		(33,659	)		(33,659	)
Accrued interest		(5,138	)		(5,138	)
Electric service prepayment programs		(24,443	)		(24,443	)
Other		471			471
Net cash used for operating activities		(125,484	)		(225,484	)

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		247,362			247,362
Short-term borrowings, net		277,581			277,581
Redemptions and Repayments-
Long-term debt		(493,294	)		(493,294	)
Dividend Payments-
Common stock		(304,000	)		(204,000	)
Net cash used for financing activities		(272,351	)		(172,351	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(149,131	)		(149,131	)
Loan repayments from associated companies, net		6,714			6,714
Collection of principal on long-term notes receivable		486,634			486,634
Investments in lessor notes		56,179			56,179
Other		(2,550	)		(2,550	)
Net cash provided from investing activities		397,846			397,846

Net increase in cash and cash equivalents	$	11		$	11

28

TE
	Year Ended
	December 31, 2007
	As Previously			As
	Reported			Restated
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	91,239		$	91,239
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		36,743			36,743
Amortization of regulatory assets		104,348			104,348
Deferral of new regulatory assets		(62,664	)		(62,664	)
Nuclear fuel and capital lease amortization		23			23
Deferred rents and lease market valuation liability		265,981			265,981
Deferred income taxes and investment tax credits, net		(26,318	)		(26,318	)
Accrued compensation and retirement benefits		5,276			5,276
Pension trust contributions		(7,659	)		(7,659	)
Decrease (increase) in operating assets-
Receivables		(64,489	)		(64,489	)
Prepayments and other current assets		(13	)		(13	)
Increase (decrease) in operating liabilities-
Accounts payable		43,722			8,722
Accrued taxes		(14,954	)		(14,954	)
Accrued interest		(1,350	)		(1,350	)
Electric service prepayment programs		(10,907	)		(10,907	)
Other		5,165			5,165
Net cash provided from operating activities		364,143			329,143

CASH FLOWS FROM FINANCING ACTIVITIES:
Redemptions and Repayments-
Long-term debt		(85,797	)		(85,797	)
Short-term borrowings, net		(153,567	)		(153,567	)
Dividend Payments-
Common stock		(120,000	)		(85,000	)
Net cash used for financing activities		(359,364	)		(324,364	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(58,871	)		(58,871	)
Loans to associated companies		(51,002	)		(51,002	)
Collection of principal on long-term notes receivable		91,308			91,308
Redemption of lessor notes		14,847			14,847
Sales of investment securities held in trusts		44,682			44,682
Purchases of investment securities held in trusts		(47,853	)		(47,853	)
Other		2,110			2,110
Net cash used for investing activities		(4,779	)		(4,779	)

Net change in cash and cash equivalents	$	-		$	-

29

PENELEC

	Year Ended
	December 31, 2007
	As Previously			As
	Reported			Restated
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	92,938		$	92,938
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		49,558			49,558
Amortization of regulatory assets		55,863			55,863
Deferral of new regulatory assets		(9,102	)		(9,102	)
Deferred costs recoverable as regulatory assets		(71,939	)		(71,939	)
Deferred income taxes and investment tax credits, net		10,713			10,713
Accrued compensation and retirement benefits		(20,830	)		(20,830	)
Pension trust contributions		(13,436	)		(13,436	)
Decrease in operating assets-
Receivables		18,771			18,771
Prepayments and other current assets		1,159			1,159
Increase (decrease) in operating liabilities-
Accounts payable		(4,513	)		(59,513	)
Accrued taxes		4,743			4,743
Accrued interest		5,943			5,943
Other		13,125			13,125
Net cash provided from operating activities		132,993			77,993

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		296,899			296,899
Short-term borrowings, net		15,662			15,662
Redemptions and Repayments-
Common Stock		(200,000	)		(200,000	)
Dividend Payments-
Common stock		(125,000	)		(70,000	)
Net cash provided from (used for) financing activities		(12,439	)		42,561

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(94,991	)		(94,991	)
Loan repayments from associated companies, net		3,235			3,235
Sales of investment securities held in trusts		175,222			175,222
Purchases of investment securities held in trusts		(199,375	)		(199,375	)
Other, net		(4,643	)		(4,643	)
Net cash used for investing activities		(120,552	)		(120,552	)

Net increase in cash and cash equivalents	$	2		$	2

30

3

As a result of outages experienced in JCP&L's service area in 2002 and 2003, the NJBPU ~~had implemented reviews into~~performed a review of JCP&L's service reliability. In 2004, the NJBPU adopted an MOU that set out specific tasks related to service reliability to be performed by JCP&L and a timetable for completion and endorsed JCP&L's ongoing actions to implement the MOU. On June 9, 2004, the NJBPU approved a ~~Stipulation~~stipulation that ~~incorporates the final report of an SRM who made~~addresses a third-party consultants recommendations on appropriate courses of action necessary to ensure system-wide reliability. The ~~Stipulation also~~stipulation incorporates the ~~Executive Summary and Recommendation portions of the final report of a~~consultants focused audit of, and recommendations regarding, JCP&L's Planning and Operations and Maintenance programs and ~~practices (Focused Audit).~~practices. On ~~February 11,~~June 1, 2005, ~~JCP&L met with~~ the ~~DRA to discuss reliability improvements. The SRM~~consultant completed his work and issued his final report to the ~~NJBPU on June 1, 2006.~~NJBPU. On July 14, 2006, JCP&L filed a comprehensive response to the ~~NJBPU on July 14, 2006.~~consultants report with the NJBPU. JCP&L will complete the remaining substantive work described in the stipulation in 2008. JCP&L continues to file compliance reports with the NJBPU reflecting JCP&L's activities associated with implementing the ~~MOU and Stipulation.~~stipulation.

In 2005, Congress amended the Federal Power Act to provide for federally-enforceable mandatory reliability standards. The ~~EPACT provides for the creation of an ERO to establish and enforce~~mandatory reliability standards ~~for~~apply to the bulk power system ~~subject to FERC's review. On February 3, 2006,~~and impose certain operating, record-keeping and reporting requirements on the ~~FERC adopted a rule establishing certification requirements for the ERO, as well as regional entities envisioned to assume compliance monitoring~~Companies and ~~enforcement responsibility for the new reliability standards. The FERC issued an order on rehearing on March 30, 2006, providing certain clarifications and essentially affirming the rule.~~

ATSI. The NERC is charged with establishing and enforcing these reliability standards, although it has ~~been preparing the~~delegated day-to-day implementation aspects of reorganizing its structure to meet the FERC's certification requirements for the ERO. The NERC made a filing with the FERC on April 4, 2006 to obtain certification as the ERO and to obtain FERC approval of pro forma delegation agreements with regional reliability organizations (regional entities). The new FERC rule referred to above, further provides for reorganizing regional entities that would replace the current regional councils and for rearranging their relationship with the ERO. The "regional entity" may be delegated authority by the ERO, subject to FERC approval, for compliance and enforcement of ~~reliability standards adopted by~~its responsibilities to eight regional entities, including the ERO and approved by the FERC. The ERO filing was noticed on April 7, 2006 and comments and reply comments were filed in May, June and July 2006. On July 20, 2006, the FERC certified the NERC as the ERO to implement the provisions of Section 215 of the Federal Power Act and directed the NERC to make compliance filings addressing governance and non-governance issues and the regional delegation agreements. On September 18, 2006 and October 18, 2006, NERC submitted compliance filings addressing the governance and non-governance issues identified in the FERC ERO Certification Order, dated July 20, 2006. On October 30, 2006, the FERC issued an order accepting most of NERC's governance filings. On January 18, 2007, the FERC issued an order largely accepting NERC's compliance filings addressing non-governance issues, subject to an additional compliance filing requirement.

ReliabiltyOn April 4, 2006, NERC also submitted a filing with the FERC seeking approval of mandatory reliability standards, as well as for approval with the relevant Canadian authorities. These reliability standards are based, with some modifications and additions, on the current NERC Version 0 reliability standards. The reliability standards filing was subsequently evaluated by the FERC on May 11, 2006, leading to the FERC staff's release of a preliminary assessment that cited many deficiencies in the proposed reliability standards. The NERC and industry participants filed comments in response to the Staff's preliminary assessment. The FERC held a technical conference on the proposed reliability standards on July 6, 2006. The FERC issued a NOPR on the proposed reliability standards on October 20, 2006. In the NOPR, the FERC proposed to approve 83 of the 107 reliability standards and directed NERC to make technical improvements to 62 of the 83 standards approved. The 24 standards that were not approved remain pending at the FERC awaiting further clarification and filings by the NERC and regional entities. The FERC also provided additional clarification within the NOPR regarding the proposed application of final standards and guidance with regard to technical improvements of the standards. On November 15, 2006, NERC submitted several revised reliability standards and three new proposed reliability standards. Interested parties were provided the opportunity to comment on the NOPR (including the revised standards submitted by NERC in November) by January 3, 2007. Numerous parties, including FirstEnergy, filed comments on the NOPR on January 3, 2007. Mandatory reliability standards enforceable with penalties are expected to be in place by the summer of 2007. In a separate order issued October 24, 2006, the FERC approved NERC's 2007 budget and business plan subject to certain compliance filings.First

On November 29, 2006, NERC submitted an additional compliance filing with the FERC regarding the Compliance Monitoring and Enforcement Program (CMEP) along with the proposed Delegation Agreements between the ERO and the regional reliability entities. The FERC provided opportunity for interested parties to comment on the CMEP by January 10, 2007. We, as well as other parties, moved to intervene and submitted responsive comments on January 10, 2007. This filing is pending before the FERC.

The ECAR, Mid-Atlantic Area Council, and Mid-American Interconnected Network reliability councils completed the consolidation of these regions into a single new regional reliability organization known as Reliability~~First~~ Corporation. ~~Reliability~~~~First~~ began operations as a regional reliability council under NERC on January 1, 2006 and on November 29, 2006 filed a proposed Delegation Agreement with NERC to obtain certification consistent with the final rule as a "regional entity" under the ERO. All of FirstEnergy's facilities are located within the ~~Reliability~~ReliabiltyFirst~~First~~ region.

4

~~On May 2, 2006,~~ FirstEnergy actively participates in the NERC ~~Board of Trustees adopted eight new cyber security standards that replaced interim standards put~~and ReliabiltyFirst stakeholder processes, and otherwise monitors and manages its companies in ~~place in~~response to the ~~wake~~ongoing development, implementation and enforcement of the ~~September 11, 2001 terrorist attacks, and thirteen additional~~ reliability standards. The security standards became effective on June 1, 2006, and the remaining standards will become effective throughout 2006 and 2007. NERC filed these proposed standards with the FERC and relevant Canadian authorities for approval. The cyber security standards were not included in the October 20, 2006 NOPR and are being addressed in a separate FERC docket. On December 11, 2006, the FERC Staff provided its preliminary assessment of these proposed mandatory reliability standards and again cited various deficiencies in the proposed standards, providing interested parties with the opportunity to comment on the assessment by February 12, 2007.

FirstEnergy believes that it is in compliance with all ~~current NERC~~currently-effective and enforceable reliability standards. ~~However, based upon a review of the October 20, 2006 NOPR,~~Nevertheless, it ~~appears~~is clear that NERC, ReliabiltyFirst and the FERC will ~~adopt more strict~~continue to refine existing reliability standards ~~than those contained in the current NERC~~as well as to develop and adopt new reliability standards. The financial impact of complying with ~~the~~ new or amended standards cannot be determined at this time. However, the ~~EPACT required~~2005 amendments to the Federal Power Act provide that all prudent costs incurred to comply with the new reliability standards be recovered in rates. Still, any future inability on FirstEnergy's part to comply with the reliability standards for its bulk power system could have a material adverse effect on its financial condition, results of operations and cash flows.

~~PUCO Rate Matters~~In April 2007, ReliabilityFirst performed a routine compliance audit of FirstEnergy's bulk-power system within the Midwest ISO region and found it to be in full compliance with all audited reliability standards. Similarly, ReliabilityFirst has scheduled a compliance audit of FirstEnergy's bulk-power system within the PJM region in 2008. FirstEnergy currently does not expect any material adverse financial impact as a result of these audits.

54

(B) OHIO

On ~~October 21, 2003,~~September 9, 2005, the Ohio Companies filed their ~~RSP case~~RCP with the PUCO. The filing included a stipulation and supplemental stipulation with several parties agreeing to the provisions set forth in the plan. On ~~August 5, 2004, the Ohio Companies accepted the RSP as modified and approved by~~January 4, 2006, the PUCO inissued an ~~August 4, 2004 Entry on Rehearing, subject~~order which approved the stipulations clarifying certain provisions. Several parties subsequently filed appeals to a CBP. The RSP was intended to establish generation service rates beginning January 1, 2006, in response to the PUCO's concerns about price and supply uncertainty following the end of the Ohio Companies' transition plan market development period. On May 3, 2006, the Supreme Court of Ohio ~~issued~~in connection with certain portions of the approved RCP. In its order, the PUCO authorized the Ohio Companies to recover certain increased fuel costs through a fuel rider, and to defer certain other increased fuel costs to be incurred from January 1, 2006 through December 31, 2008, including interest on the deferred balances. The order also provided for recovery of the deferred costs over a 25-year period through distribution rates, which are expected to be effective on January 1, 2009 for OE and TE, and approximately May 2009 for CEI. Through December 31, 2007, the deferred fuel costs, including interest, were $111 million, $76 million and $33 million for OE, CEI and TE, respectively.

On August 29, 2007, the Supreme Court of Ohio concluded that the PUCO violated a provision of the Ohio Revised Code by permitting the Ohio Companies to collect deferred increased fuel costs through future distribution rate cases, or to alternatively use excess fuel-cost recovery to reduce deferred distribution-related expenses because fuel costs are a component of generation service, not distribution service, and permitting recovery of deferred fuel costs through distribution rates constituted an ~~opinion affirming~~impermissible subsidy. The Court remanded the matter to the PUCO for further consideration consistent with the Courts Opinion on this issue and affirmed the PUCO's order in all respects, except it remanded back to the PUCO the matter of ensuring the availability of sufficient means for customer participation in the marketplace. The RSP contained a provision that permitted the Ohio Companies to withdraw and terminate the RSP in the event that the PUCO, or the Supreme Court of Ohio, rejected all or part of the RSP. In such event, the Ohio Companies have 30 days from the final order or decision to provide notice of termination.other respects. On ~~July 20, 2006~~September 10, 2007 the Ohio Companies filed an Application with the PUCO ~~a Request~~that requested the implementation of two generation-related fuel cost riders to ~~Initiate a Proceeding on Remand. In their Request,~~collect the increased fuel costs that were previously authorized to be deferred. The Ohio Companies requested the riders to become effective in October 2007 and end in December 2008, subject to reconciliation that would be expected to continue through the first quarter of 2009. On January 9, 2008 the PUCO approved the Ohio Companies ~~provided notice of termination~~proposed fuel cost rider to ~~those provisions of the RSP subject~~recover increased fuel costs to ~~termination, subject~~be incurred commencing January 1, 2008 through December 31, 2008, which is expected to ~~being withdrawn,~~be approximately $167 million. The fuel cost rider became effective January 11, 2008 and ~~also set forth a framework for addressing the Supreme Court of Ohio's findings on customer participation. If~~will be adjusted and reconciled quarterly. In addition, the PUCO approves a resolution to the issues raised by the Supreme Court of Ohio that is acceptable to the Ohio Companies, the Ohio Companies' termination will be withdrawn and considered to be null and void. On July 26, 2006, the PUCO issued an Entry directingordered the Ohio Companies to file a ~~plan in~~separate application for an alternate recovery mechanism to collect the 2006 and 2007 deferred fuel costs. On February 8, 2008, the Ohio Companies filed an application proposing to recover $220 million of deferred fuel costs and carrying charges for 2006 and 2007 pursuant to a ~~new docket~~separate fuel rider, with alternative options for the recovery period ranging from five to ~~address~~twenty-five years. This second application is currently pending before the ~~Court's concern.~~ PUCO.

The Ohio Companies recover all MISO transmission and ancillary service related costs incurred through a reconcilable rider that is updated annually on July 1. The riders that became effective on July 1, 2007, represent an increase over the amounts collected through the 2006 riders of approximately $64 million annually (OE - $28 million, CEI - $22 million and TE - $14 million). If it is subsequently determined by the PUCO that adjustments to the riders as filed ~~their RSP Remand CBP on September 29, 2006. Initial comments were filed on January 12, 2007 and reply comments were filed on January 29, 2007. In their reply comments~~are necessary, such adjustments, with carrying costs, will be incorporated into the Ohio Companies described the highlights of a new tariff offering they would be willing to make available to customers that would allow customers to purchase renewable energy certificates associated with a renewable generation source, subject to PUCO approval. No further proceedings are scheduled at this time.2008 transmission rider filing.

The Ohio Companies filed an application and ~~stipulation~~rate request for an increase in electric distribution rates with the PUCO on ~~September 9, 2005 seeking approval~~June 7, 2007. The requested increase is expected to be more than offset by the elimination or reduction of transition charges at the time the rates go into effect and would result in lowering the overall non-generation portion of the ~~RCP,~~average electric bill for most Ohio customers. The distribution rate increases reflect capital expenditures since the Ohio Companies last distribution rate proceedings, increases in operation and maintenance expenses and recovery of regulatory assets that were authorized in prior cases. On August 6, 2007, the Ohio Companies updated their filing supporting a ~~supplement~~distribution rate increase of $332 million (OE - $156 million, CEI - $108 million and TE - $68 million). On December 4, 2007, the PUCO Staff issued its Staff Reports containing the results of their investigation into the distribution rate request. In its reports, the PUCO Staff recommended a distribution rate increase in the range of $161 million to $180 million (OE - $57 million to $66 million, CEI - $54 million to $61 million and TE - $50 million to $53 million), with $108 million to $127 million for distribution revenue increases and $53 million for recovery of costs deferred under prior cases. This amount excludes the recovery of deferred fuel costs, whose recovery is now being sought in a separate proceeding before the PUCO, discussed above. On January 3, 2008, the Ohio Companies and intervening parties filed objections to the ~~RSP. On November 4, 2005,~~Staff Reports and on January 10, 2008, the Ohio Companies filed a supplemental ~~stipulation with~~testimony. Evidentiary hearings began on January 29, 2008 and continued through February 2008. During the evidentiary hearings, the PUCO ~~which constituted an additional component~~Staff submitted testimony decreasing their recommended revenue increase to a range of $114 million to $132 million. Additionally, in testimony submitted on February 11, 2008, the PUCO Staff adopted a position regarding interest deferred pursuant to the RCP ~~filed on September 9, 2005. Major provisions~~that, if upheld by the PUCO, would result in the write-off of approximately $13 million (OE - $6 million, CEI - $5 million and TE - $2 million) of interest costs deferred through December 31, 2007. The PUCO is expected to render its decision during the ~~RCP include:~~second or third quarter of 2008. The new rates would become effective January 1, 2009 for OE and TE, and approximately May 2009 for CEI.

·	~~Maintaining the existing level of base distribution rates through December 31, 2008 for OE and TE, and April 30, 2009 for CEI;~~

·	Deferring and capitalizing for future recovery (over a 25-year period) with carrying charges certain distribution costs to be incurred during the period January 1, 2006 through December 31, 2008, not to exceed $150 million in each of the three years;

·	~~Adjusting the RTC and extended RTC recovery periods and rate levels so that full recovery of authorized costs will occur as of December 31, 2008 for OE and TE and as of December 31, 2010 for CEI;~~

·	Reducing the deferred shopping incentive balances as of January 1, 2006 by up to $75 million for OE, $45 million for TE, and $85 million for CEI by accelerating the application of each respective company's accumulated cost of removal regulatory liability; and

·	Recovering increased fuel costs (compared to a 2002 baseline) of up to $75 million, $77 million, and $79 million, in 2006, 2007, and 2008, respectively, from all OE and TE distribution and transmission customers through a fuel recovery mechanism. OE, TE, and CEI may defer and capitalize (for recovery over a 25-year period) increased fuel costs above the amount collected through the fuel recovery mechanism.

555

On January 4, 2006, the PUCO approved, with modifications, the Ohio Companies' RCP to supplement the RSP to provide customers with more certain rate levels than otherwise available under the RSP during the plan period. On JanuaryJuly 10, 2006, the Ohio Companies filed a Motion for Clarification seeking clarity on a number of issues. On January 25, 2006, the PUCO issued an Entry on Rehearing granting in part, and denying in part, the Ohio Companies' previous requests and clarifying issues referred to above. The PUCO granted the Ohio Companies' requests to:

	·	~~Recognize fuel and distribution deferrals commencing January 1, 2006;~~

	·	~~Recognize distribution deferrals on a monthly basis prior to review by the PUCO Staff;~~

	·	~~Clarify that the types of distribution expenditures included in the Supplemental Stipulation may be deferred; and~~

	·	~~Clarify that distribution expenditures do not have to be "accelerated" in order to be deferred.~~

The PUCO approved the Ohio Companies' methodology for determining distribution deferral amounts, but denied the Motion in that the PUCO Staff must verify the level of distribution expenditures contained in current rates, as opposed to simply accepting the amounts contained in the Ohio Companies' Motion. On February 3, 2006, several other parties filed applications for rehearing, which the PUCO denied on March 1, 2006. Two of these parties subsequently filed notices of appeal with the Supreme Court of Ohio. The Ohio Supreme Court scheduled this case for oral argument on February 27, 2007. On January 31, 2007, the Ohio Companies filed ~~a stipulation which, among other matters and subject to PUCO approval, affirmed that the supplemental stipulation in the RCP would be implemented. This stipulation was approved by~~an application with the PUCO ~~on February 14, 2007.~~

~~On December 30, 2004,~~requesting approval of a comprehensive supply plan for providing retail generation service to customers who do not purchase electricity from an alternative supplier, beginning January 1, 2009. The proposed competitive bidding process would average the results of multiple bidding sessions conducted at different times during the year. The final price per kilowatt-hour would reflect an average of the prices resulting from all bids. In their filing, the Ohio Companies ~~filed with~~offered two alternatives for structuring the bids, either by customer class or a slice-of-system approach. A slice-of-system approach would require the successful bidder to be responsible for supplying a fixed percentage of the utilitys total load notwithstanding the customers classification. The proposal provides the PUCO ~~two applications related~~with an option to phase in generation price increases for residential tariff groups who would experience a change in their average total price of 15 percent or more. The PUCO held a technical conference on August 16, 2007 regarding the filing. Initial and reply comments on the proposal were filed by various parties in September and October, 2007, respectively. The proposal is currently pending before the PUCO.

On September 25, 2007, the Ohio Governors proposed energy plan was officially introduced into the Ohio Senate. The bill proposes to revise state energy policy to address electric generation pricing after 2008, establish advanced energy portfolio standards and energy efficiency standards, and create GHG emissions reporting and carbon control planning requirements. The bill also proposes to move to a hybrid system for determining rates for default service in which electric utilities would provide regulated generation service unless they satisfy a statutory burden to demonstrate the existence of a competitive market for retail electricity. The Senate Energy & Public Utilities Committee conducted hearings on the bill and received testimony from interested parties, including the Governors Energy Advisor, the Chairman of the PUCO, consumer groups, utility executives and others. Several proposed amendments to the ~~recovery~~bill were submitted, including those from Ohios investor-owned electric utilities. A substitute version of ~~transmission~~the bill, which incorporated certain of the proposed amendments, was introduced into the Senate Energy & Public Utilities Committee on October 25, 2007 and ancillary service related costs. The first application sought recovery of these costs beginning January 1, 2006. The Ohio Companies requested that these costs be recovered through a rider that would be effective on January 1, 2006 and adjusted each July 1 thereafter. The parties reached a settlement agreement that was ~~approved~~passed by the ~~PUCO~~Ohio Senate on ~~August~~October 31, ~~2005.~~2007. The ~~incremental transmission and ancillary service revenues recovered~~bill as passed by the Senate is now being considered by the House Public Utilities Committee, which has conducted hearings on the bill. Testimony has been received from ~~January 1 through June 30, 2006 were approximately $54 million. That amount included~~interested parties, including the ~~recovery of a portion~~Chairman of the ~~2005 deferred MISO expenses as described below. On April 27, 2006,~~PUCO, consumer groups, utility executives and others. At this time, the Ohio Companies ~~filed~~cannot predict the ~~annual update rider to~~outcome of this process nor determine ~~revenues ($124 million) from July 2006 through June 2007. The filed rider went into effect~~the impact, if any, such legislation may have on ~~July 1, 2006.~~their operations.

(C) PENNSYLVANIA

The second application sought authority to defer costs associated with transmission and ancillary service related costs incurred during the period October 1, 2003 through December 31, 2005. On May 18, 2005, the PUCO granted the accounting authority for the Ohio Companies to defer incremental transmission and ancillary service-related charges incurred as a participant in MISO, but only for those costs incurred during the period December 30, 2004 through December 31, 2005. Permission to defer costs incurred prior to December 30, 2004 was denied. The PUCO also authorized the Ohio Companies to accrue carrying charges on the deferred balances. On August 31, 2005, the OCC appealed the PUCO's decision. On January 20, 2006, the OCC sought rehearing of the PUCO's approval of the recovery of deferred costs through the rider during the period January 1, 2006 through June 30, 2006. The PUCO denied the OCC's application on February 6, 2006. On March 23, 2006, the OCC appealed the PUCO's order to the Ohio Supreme Court. On March 27, 2006, the OCC filed a motion to consolidate this appeal with the deferral appeals discussed above and to postpone oral arguments in the deferral appeal until after all briefs are filed in this most recent appeal of the rider recovery mechanism. On March 20, 2006, the Ohio Supreme Court, on its own motion, consolidated the OCC's appeal of the Ohio Companies' case with a similar case involving Dayton Power & Light Company. Oral arguments were heard on May 10, 2006. On November 29, 2006, the Ohio Supreme Court issued its opinion upholding the PUCO's determination that the Ohio Companies may defer transmission and ancillary service related costs incurred on and after December 30, 2004. The Ohio Supreme Court also determined that the PUCO erred when it denied the OCC intervention, but further ruled that such error did not prejudice OCC and, therefore, the Ohio Supreme Court did not reverse or remand the PUCO on this ground. The Ohio Supreme Court also determined that the OCC's appeal was not premature. No party filed a motion for reconsideration with the Ohio Supreme Court.

~~PPUC Rate Matters~~

A February 2002 Commonwealth Court of Pennsylvania decision affirmed the June 2001 PPUC decision regarding approval of the FirstEnergy/GPU merger, remanded the issues of quantification and allocation of merger savings to the PPUC and denied Met-Ed and Penelec the rate relief initially approved in the PPUC decision. On May 4, 2006, the PPUC consolidated the merger savings proceeding with the April 10, 2006 comprehensive rate filing proceeding discussed below. On January 11, 2007, the PPUC entered an order in that rate filing proceeding and determined that no merger savings from prior years should be considered in determining customers' rates.

6

On January 12, 2005, Met-Ed and Penelec filed, before the PPUC, a request for deferral of transmission-related costs beginning January 1, 2005. Met-Ed and Penelec sought to consolidate this proceeding (and modified their request to provide deferral of 2006 transmission-related costs only) with the comprehensive rate filing made on April 10, 2006, described below. On May 4, 2006, the PPUC approved the modified request.

Met-Ed and Penelec have been purchasing a portion of their PLR and default service requirements from FES through a partial requirements wholesale power sales agreement and various amendments. Under these agreements, FES retained the supply obligation and the supply profit and loss risk for the portion of power supply requirements not self-supplied by Met-Ed and Penelec. The FES agreements have reduced Met-Ed's and Penelec's exposure to high wholesale power prices by providing power at a fixed price for their uncommitted PLR capacity and energy costs during the term of these agreements with FES.

On April 7, 2006, the parties entered into a Tolling Agreement that arose from FES' notice to Met-Ed and Penelec that FES elected to exercise its right to terminate the partial requirements agreement effective midnight December 31, 2006. On November 29, 2006, Met-Ed, Penelec and FES agreed to suspend the April 7 Tolling Agreement pending resolution of the PPUC's proceedings regarding the Met-Ed and Penelec Transition Rate cases filed April 10, 2006, described below. Separately, on September 26, 2006, Met-Ed and Penelec successfully conducted a competitive RFP for a portion of their PLR obligation for the period December 1, 2006 through December 31, 2008. FES was one of the successful bidders in that RFP process and on September 26, 2006 entered into a Supplier Master Agreement to supply a certain portion of Met-Ed's and Penelec's PLR requirements at market prices that substantially exceed the fixed price in the partial requirements agreements.

Based on the outcome of the ~~Transition Rate~~2006 comprehensive transition rate filing, as described below, Met-Ed, Penelec and FES agreed to restate the partial requirements power sales agreement effective January 1, 2007. The restated agreement incorporates the same fixed price for residual capacity and energy supplied by FES as in the prior arrangements between the parties, and automatically extends for successive one year terms unless any party gives 60 ~~days'~~days notice prior to the end of the year. The restated agreement also allows Met-Ed and Penelec to sell the output of NUG ~~generation~~energy to the market and requires FES to provide energy at fixed prices to replace any NUG energy ~~thus~~ sold to the extent needed for Met-Ed and Penelec to satisfy their PLR and default service obligations. The parties have also separately terminated the Tolling, Suspension and Supplier Master agreements in connection with the restatement of the partial requirements agreement. Accordingly, the energy that would have been supplied under the Master Supplier Agreement will now be providedfixed price under the restated ~~partial requirements~~agreement is expected to remain below wholesale market prices during the term of the agreement.

If Met-Ed and Penelec were to replace the entire FES supply at current market power prices without corresponding regulatory authorization to increase their generation prices to customers, each company would likely incur a significant increase in operating expenses and experience a material deterioration in credit quality metrics. Under such a scenario, each company's credit profile would no longer be expected to support an investment grade rating for ~~its~~their fixed income securities. Based on the PPUC's January 11, 2007 order described below, if FES ultimately determines to terminate, reduce, or significantly modify the agreement prior to the expiration of Met-Ed's and Penelec's generation rate caps in 2010, timely regulatory relief is not likely to be granted by the PPUC.

Met-Ed and Penelec made a comprehensive transition rate filing with the PPUC on April 10, 2006 to address a number of transmission, distribution and supply issues. If Met-Ed's and Penelec's preferred approach involving accounting deferrals ~~was~~had been approved, ~~the filing~~annual revenues would have increased ~~annual revenues~~ by $216 million and $157 million, respectively. That filing included, among other things, a request to charge customers for an increasing amount of ~~market priced~~market-priced power procured through a CBP as the amount of supply provided under the then existing FES agreement iswas to be phased ~~out in accordance with the April 7, 2006 Tolling Agreement described above.~~out. Met-Ed and Penelec also requested approval of ~~the~~a January 12, 2005 petition for the deferral of transmission-related costs ~~discussed above, but only for those costs~~ incurred during 2006. In this rate filing, Met-Ed and Penelec ~~also~~ requested recovery of annual transmission and related costs incurred on or after January 1, 2007, plus the amortized portion of 2006 costs over a ten-year period, along with applicable carrying charges, through an adjustable ~~rider similar to that implemented in Ohio.~~rider. Changes in the recovery of NUG expenses and the recovery of Met-Ed's non-NUG stranded costs were also included in the filing. ~~Hearings were held in late August~~On May 4, 2006, the PPUC consolidated the remand of the FirstEnergy and ~~briefing occurred in September~~GPU merger proceeding, related to the quantification and ~~October. The ALJs issued their Recommended Decision on November 2, 2006.~~allocation of merger savings, with the comprehensive transition rate filing case.

756

The PPUC entered its ~~Opinion~~opinion and ~~Order~~order in the comprehensive rate filing proceeding on January 11, 2007. The ~~Order~~order approved the recovery of transmission costs, including the transmission-related deferral for January 1, 2006 ~~deferral,~~through January 10, 2007, and determined that no merger savings from prior years should be considered in determining ~~customers'~~customers rates. The request for increases in generation supply rates was denied as were the requested changes into NUG expense recovery and Met-Ed's non-NUG stranded costs. The order decreased Met-Ed's and Penelec's distribution rates by $80 million and $19 million, respectively. These decreases were offset by the increases allowed for the recovery of transmission ~~expenses~~costs. Met-Ed's and ~~the 2006 transmission deferral.~~Penelec's request for recovery of Saxton decommissioning costs was granted and, in January 2007, Met-Ed and Penelec recognized income of $15 million and $12 million, respectively, to establish regulatory assets for those previously expensed decommissioning costs. Overall rates increased by 5.0% for Met-Ed ($59 million) and 4.5% for Penelec ($50 million). Met-Ed and Penelec filed a Petition for Reconsideration on January 26, 2007, on the issues of consolidated tax savings and rate of return on equity. Other parties filed Petitions for Reconsideration on transmission ~~congestion,~~(including congestion), transmission deferrals and rate design issues. ~~The~~On March 1, 2007, the PPUC issued three orders: (1) a tentative order regarding the reconsideration by the PPUC of its own order; (2) an order denying the Petitions for Reconsideration of Met-Ed, Penelec and the OCA and denying in part and accepting in part the MEIUGs and PICAs Petition for Reconsideration; and (3) an order approving the compliance filing. Comments to the PPUC for reconsideration of its order were filed on ~~February~~March 8, 2007, ~~entered an order granting Met-Ed's, Penelec's~~ and the PPUC ruled on the reconsideration on April 13, 2007, making minor changes to rate design as agreed upon by Met-Ed, Penelec and certain other ~~parties' petitions~~parties.

On March 30, 2007, MEIUG and PICA filed a Petition for ~~procedural purposes. Due to that ruling, the period for appeals to~~Review with the Commonwealth Court ~~is tolled until 30 days after~~of Pennsylvania asking the ~~PPUC enters~~court to review the PPUC's determination on transmission (including congestion) and the transmission deferral. Met-Ed and Penelec filed a ~~subsequent order ruling~~Petition for Review on April 13, 2007 on the ~~substantive~~ issues ~~raised in~~of consolidated tax savings and the ~~petitions.~~requested generation rate increase. The OCA filed its Petition for Review on April 13, 2007, on the issues of transmission (including congestion) and recovery of universal service costs from only the residential rate class. From June through October 2007, initial responsive and reply briefs were filed by various parties. Oral arguments are expected to take place on April 7, 2008. If Met-Ed and Penelec do not prevail on the issue of congestion, it could have a material adverse effect on their results of operations.

As of December 31, ~~2006,~~2007, Met-Ed's and Penelec's unrecovered regulatory deferrals pursuant to the 2006 comprehensive transition rate case, the 1998 Restructuring Settlement (including the Phase 2 ~~Proceedings)~~proceedings) and the FirstEnergy/GPU Merger Settlement Stipulation were ~~$303~~$512 million and ~~$70~~$55 million, respectively. ~~Penelec's $70 million deferral is subject to final resolution of an IRS settlement associated with NUG trust fund proceeds.~~ During the PPUC's annual audit of Met-Ed's and Penelec's NUG stranded cost balances in 2006, it noted a modification to the NUG purchased power stranded cost accounting methodology made by Met-Ed and Penelec. On August 18, 2006, a PPUC ~~Order~~order was entered requiring Met-Ed and Penelec to reflect the deferred NUG cost balances as if the stranded cost accounting methodology modification had not been implemented. As a result of ~~the PPUC's Order,~~this PPUC order, Met-Ed recognized a pre-tax charge of approximately $10.3 million in the third quarter of 2006, representing incremental costs deferred under the revised methodology in 2005. Met-Ed and Penelec continue to believe that the stranded cost accounting methodology modification is appropriate and on August 24, 2006 filed a petition with the PPUC pursuant to its ~~Order~~order for authorization to reflect the stranded cost accounting methodology modification effective January 1, 1999. Hearings on this petition ~~are scheduled for late~~were held in February 2007 and briefing was completed on March 28, 2007. ~~It is not known when~~The ALJs initial decision denied Met-Ed's and Penelec's request to modify their NUG stranded cost accounting methodology. The companies filed exceptions to the initial decision on May 23, 2007 and replies to those exceptions were filed on June 4, 2007. On November 8, 2007, the PPUC ~~may~~issued an order denying any changes in the accounting methodology for NUGs.

On May 2, 2007, Penn filed a plan with the PPUC for the procurement of default service supply from June 2008 through May 2011. The filing proposed multiple, competitive RFPs with staggered delivery periods for fixed-price, tranche-based, pay as bid default service supply to the residential and commercial classes. The proposal would phase out existing promotional rates and eliminates the declining block and the demand components on generation rates for residential and commercial customers. The industrial class default service would be provided through an hourly-priced service provided by Penn. Quarterly reconciliation of the differences between the costs of supply and revenues from customers was also proposed. On September 28, 2007, Penn filed a Joint Petition for Settlement resolving all but one issue ~~a final decision~~ in the case. Briefs were also filed on September 28, 2007 on the unresolved issue of incremental uncollectible accounts expense. The settlement was either supported, or not opposed, by all parties. On December 20, 2007, the PPUC approved the settlement except for the full requirements tranche approach for residential customers, which was remanded to the ALJ for hearings. Under the terms of the Settlement Agreement, the default service procurement for small commercial customers will be done with multiple RFPs, while the default service procurement for large commercial and industrial customers will utilize hourly pricing. Bids in the first RFP for small commercial load were received on February 20, 2008. In February 2008, parties filed direct and rebuttal testimony in the remand proceeding for the residential procurement approach. An evidentiary hearing was held on for February 26, 2008, and this ~~matter.~~matter will be presented to the PPUC for its consideration by March 13, 2008.

57

On February 1, 2007, the Governor of Pennsylvania proposed an ~~Energy Independence Strategy (EIS).~~EIS. The EIS includes four pieces of ~~preliminary draft~~proposed legislation that, according to the Governor, is designed to reduce energy costs, promote energy independence and stimulate the economy. Elements of the EIS include the installation of smart meters, funding for solar panels on residences and small businesses, conservation and demand reduction programs to meet ~~demand~~energy growth, a requirement that electric distribution companies acquire power ~~through~~that results in the lowest reasonable rate on a ~~"Least Cost Portfolio",~~long-term basis, the utilization of micro-grids and a three year phase-in of rate increases. ~~Since~~On July 17, 2007 the ~~EIS~~Governor signed into law two pieces of energy legislation. The first amended the Alternative Energy Portfolio Standards Act of 2004 to, among other things, increase the percentage of solar energy that must be supplied at the conclusion of an electric distribution companys transition period. The second law allows electric distribution companies, at their sole discretion, to enter into long term contracts with large customers and to build or acquire interests in electric generation facilities specifically to supply long-term contracts with such customers. A special legislative session on energy was convened in mid-September 2007 to consider other aspects of the EIS. On December 12, 2007, the Pennsylvania Senate passed the Alternative Energy Investment Act which, as amended, provides over $650 million over ten years to implement the Governor's proposal. The bill was then referred to the House Environmental Resources and Energy Committee where it awaits consideration. On February 12, 2008, the Pennsylvania House passed House Bill 2200 which provides for energy efficiency and demand management programs and targets as well as the installation of smart meters within ten years. Other legislation has ~~only recently~~ been ~~proposed, the~~introduced to address generation procurement, expiration of rate caps, conservation and renewable energy. The final form of ~~any~~this pending legislation is uncertain. Consequently, ~~FirstEnergy is~~the Pennsylvania Companies are unable to predict what impact, if any, such legislation may have on ~~its~~their operations.

~~NJBPU Rate Matters~~(D) NEW JERSEY

JCP&L is permitted to defer for future collection from customers the amounts by which its costs of supplying BGS to non-shopping customers and costs incurred under NUG agreements exceed amounts collected through BGS and NUGC rates and market sales of NUG energy and capacity. As of December 31, ~~2006,~~2007, the accumulated deferred cost balance totaled approximately ~~$369~~$322 million. New Jersey law allows for securitization of JCP&L's deferred balance upon application by JCP&L and a determination by the NJBPU that the conditions of the New Jersey restructuring legislation are met. On February 14, 2003, JCP&L filed for approval to securitize the July 31, 2003 deferred balance. On June 8, 2006, the NJBPU approved JCP&L's request to issue securitization bonds associated with BGS stranded cost deferrals. On August 10, 2006, JCP&L Transition Funding II, a wholly owned subsidiary of JCP&L, issued $182 million of transition bonds with a weighted average interest rate of 5.5%.

On December 2, 2005, JCP&L filed its request for recovery of $165 million of actual above-market NUG costs incurred from August 1, 2003 through October 31, 2005 and forecasted above-market NUG costs for November and December 2005. On February 23, 2006, JCP&L filed updated data reflecting actual amounts through December 31, 2005 of $154 million of costs incurred since July 31, 2003. On July 18, 2006, JCP&L further requested an additional $14 million of costs that had been eliminated from the securitized amount. A Stipulation of Settlement was signed by all parties, approved by the ALJ and adopted by the NJBPU in its Order dated December 6, 2006. The Order approves an annual $110 million increase in NUGC rates designed to recover deferred costs incurred since August 1, 2003, and a portion of costs incurred prior to August 1, 2003 that were not securitized. The Order requires that JCP&L absorb any net annual operating losses associated with the Forked River Generating Station. In the Settlement, JCP&L also agreed not to seek an increase to the NUGC to become effective before January 2010, unless the deferred balance exceeds $350 million any time after June 30, 2007.

8

Reacting to the higher closing prices of the 2006 BGS fixed rate auction, the NJBPU, on March 16, 2006, initiated a generic proceeding to evaluate the auction process and potential options for the future. On April 6, 2006, initial comments were submitted. A public meeting was held on April 21, 2006 and a legislative-type hearing was held on April 28, 2006. On June 21, 2006, the NJBPU approved the continued use of a descending block auction for the Fixed Price Residential Class. JCP&L filed its 2007 BGS company specific addendum on July 10, 2006. On October 27, 2006, the NJBPU approved the auction format to procure the 2007 Commercial Industrial Energy Price as well as the specific rules for both the Fixed Price and Commercial Industrial Energy Price auctions. These rules were essentially unchanged from the prior auctions.

In accordance with an April 28, 2004 NJBPU order, JCP&L filed testimony on June 7, 2004 supporting a continuation of the current level and duration of the funding of TMI-2 decommissioning costs by New Jersey customers without a reduction, termination or capping of the funding. On September 30, 2004, JCP&L filed an updated TMI-2 decommissioning study. This study resulted in an updated total decommissioning cost estimate of $729 million (in 2003 dollars) compared to the estimated $528 million (in 2003 dollars) from the prior 1995 decommissioning study. The DRA filed comments on February 28, 2005 requesting that decommissioning funding be suspended. On March 18, 2005, JCP&L filed a response to ~~the Ratepayer Advocate's~~those comments. A schedule for further NJBPU proceedings has not yet been set.

On August 1, 2005, the NJBPU established a proceeding to determine whether additional ratepayer protections are required at the state level in light of the repeal of the PUHCA pursuant to the EPACT. The NJBPU approved regulations effective October 2, 2006 that ~~would~~ prevent a holding company that owns a gas or electric public utility from investing more than 25% of the combined assets of its utility and utility-related subsidiaries into businesses unrelated to the utility industry. These regulations are not expected to materially impact FirstEnergy or JCP&L. Also, in the same proceeding, the NJBPU Staff issued an additional draft proposal on March 31, 2006 addressing various issues including access to books and records, ring-fencing, cross subsidization, corporate governance and related matters. With the approval of the NJBPU Staff, the affected utilities jointly submitted an alternative proposal on June 1, 2006. ~~Comments on the alternative proposal were submitted on June 15, 2006. On November 3, 2006, the NJPBU~~The NJBPU Staff circulated a revised ~~draft~~drafts of the proposal to interested ~~stakeholders.~~stakeholders in November 2006 and again in February 2007. On February 1, 2008, the NJBPU accepted proposed rules for publication in the New Jersey Register on March 17, 2008. An April 23, 2008 public hearing on these proposed rules is expected to be scheduled with comments from interested parties expected to be due on May 17, 2008.

New Jersey statutes require that the state periodically undertake a planning process, known as the ~~Energy Master Plan (EMP),~~EMP, to address energy related issues including energy security, economic growth, and environmental impact. The EMP is to be developed with involvement of the Governor's Office and the Governor's Office of Economic Growth, and is to be prepared by a Master Plan Committee, which is chaired by the NJBPU President and includes representatives of several State departments.

In October 2006, the current EMP process was initiated with the issuance of a proposed set of objectives which, as to electricity, included the following:

·~~Reduce the total projected electricity demand by 20% by 2020;~~

· ~~Meet 22.5% of the State's electricity needs with renewable energy resources by that date;~~

·~~Reduce air pollution related to energy use;~~

·~~Encourage and maintain economic growth and development;~~

▪

Reduce the total projected electricity demand by 20% by 2020;

·

▪

Meet 22.5% of New Jerseys electricity needs with renewable energy resources by that date;

▪

Reduce air pollution related to energy use;

▪

Encourage and maintain economic growth and development;

58

▪

Achieve a 20% reduction in both Customer Average Interruption Duration Index and System Average Interruption Frequency Index by 2020;

·

~~Unit~~

▪

Maintain unit prices for electricity ~~should remain~~to no more than +5% of the regional average price (region includes New York, New Jersey, Pennsylvania, Delaware, Maryland

and the District of Columbia); and

·~~Eliminate transmission congestion by 2020.~~

▪

Eliminate transmission congestion by 2020.

Comments on the objectives and participation in the development of the EMP have been solicited and a number of working groups have been formed to ~~attain~~obtain input from a broad range of interested stakeholders including utilities, environmental groups, customer groups, and major customers. EMP working groups addressing: (1) energy efficiency and demand response; (2) renewables; (3) reliability; and (4) pricing issues, have completed their assigned tasks of data gathering and analysis and have provided reports to the EMP Committee. Public stakeholder meetings were held in the fall of 2006 and in early 2007, and further public meetings are expected in ~~the summer of 2007. A final draft of the EMP is expected to be presented to the Governor in the fall of 2007 with further public hearings anticipated in early~~ 2008. At this time, ~~FirstEnergy~~JCP&L cannot predict the outcome of this process nor determine the impact, if any, such legislation may have on its ~~impact.~~operations.

9

On February 13, 2007, the NJBPU Staff informally issued a draft proposal relating to changes to the regulations addressing electric distribution service reliability and quality standards. Meetings between the NJBPU Staff and interested stakeholders to discuss the proposal were held and additional, revised informal proposals were subsequently circulated by the Staff. On September 4, 2007, proposed regulations were published in the New Jersey Register, which proposal will be subsequently considered by the NJBPU following comments that were submitted in September and October 2007. At this time, JCP&L cannot predict the outcome of this process nor determine the impact, if any, such regulations may have on its operations.

(E) FERC ~~Rate Matters~~MATTERS

~~On March 28, 2006, ATSI~~Transmission Service between MISO and MISO filed with the FERC a request to modify ATSI's Attachment O formula rate to include revenue requirements associated with recovery of deferred Vegetation Management Enhancement Program (VMEP) costs. ATSI estimated that it may defer approximately $54 million of such costs over a five-year period. Approximately $42 million has been deferred as of December 31, 2006. The effective date for recovery was June 1, 2006. The FERC conditionally approved the filing on May 22, 2006, and on July 14, 2006 FERC accepted the ATSI compliance filing. A request for rehearing of the FERC's May 22, 2006 Order was denied by FERC on October 25, 2006. The estimated annual revenues to ATSI from the VMEP cost recovery is $12 million for each of the five years beginning June 1, 2006.

On January 24, 2006, ATSI and MISO filed a request with the FERC to correct ATSI's Attachment 0 formula rate to reverse revenue credits associated with termination of revenue streams from transitional rates stemming from FERC's elimination of RTOR between the Midwest ISO and PJM. Revenues formerly collected under these transitional rates were included in, and served to reduce, ATSI's zonal transmission rate under the Attachment O formula. Absent the requested correction, elimination of these revenue credits would not be fully reflected in ATSI's formula rate until June 1, 2008. On March 16, 2006, the FERC approved the revenue credit correction without suspension, effective April 1, 2006. One party sought rehearing of the FERC's order, which was denied on June 27, 2006. No petition for review of the FERC's decision was filed. The estimated revenue impact of the correction mechanism is approximately $37 million for the period June 1, 2006 though May 31, 2007.PJM

On November 18, 2004, the FERC issued an order eliminating the ~~RTOR~~through and out rate for transmission service between the MISO and PJM regions. FERC's intent was to eliminate so-called pancaking of transmission charges between the MISO and PJM regions. The FERC also ordered the MISO, PJM and the transmission owners within MISO and PJM to submit compliance filings containing a ~~SECA~~rate mechanism to recover lost ~~RTOR~~transmission revenues created by elimination of this charge (referred to as the Seams Elimination Cost Adjustment or SECA) during a 16-month transition ~~period from load serving entities.~~period. The FERC issued orders in 2005 setting the SECA for hearing. ~~ATSI, JCP&L, Met-Ed, Penelec, and FES participated in the FERC hearings held in May 2006 concerning the calculation and imposition of the SECA charges.~~ The ~~Presiding Judge~~presiding judge issued an ~~Initial Decision~~initial decision on August 10, 2006, rejecting the compliance filings made by MISO, PJM, and the ~~RTOs and~~ transmission owners, ~~ruling on various issues~~ and directing new compliance filings. This decision is subject to review and approval by the FERC. Briefs addressing the ~~Initial Decision~~initial decision were filed on September 11, 2006 and October 20, 2006. A final order could be issued by the FERC in ~~early 2007.~~the first quarter of 2008.

PJM Transmission Rate Design

On January 31, 2005, certain PJM transmission owners made ~~three~~ filings with the FERC pursuant to a settlement agreement previously approved by the FERC. JCP&L, Met-Ed and Penelec were parties to that proceeding and joined in two of the filings. In the first filing, the settling transmission owners submitted a filing justifying continuation of their existing rate design within the PJM RTO. ~~In the second filing, the settling transmission owners~~Hearings were held and numerous parties appeared and litigated various issues concerning PJM rate design; notably AEP, which proposed a revised Schedule 12 to the PJM tariff designed to harmonize the rate treatment of new and existing transmission facilities. Interventions and protests were filed on February 22, 2005. In the third filing, Baltimore Gas and Electric Company and Pepco Holdings, Inc. requested a formula rate for transmission service provided within their respective zones. On May 31, 2005, the FERC issued an order on these cases. First, it set for hearing the existing rate design and indicated that it will issue a final order within six months. American Electric Power Company, Inc. filed in opposition proposing to create a "postage stamp", or average rate for all high voltage transmission facilities across ~~PJM. Second,~~PJM and a zonal transmission rate for facilities below 345 kV. This proposal would have the FERC approved the proposed Schedule 12 rate harmonization. Third, the FERC accepted the proposed formula rate, subject to refund and hearing procedures. On June 30, 2005, the settling PJM transmission owners filed a request for rehearingeffect of shifting recovery of the ~~May 31, 2005 order. On March 20, 2006, a settlement was filed with FERC in the formula rate proceeding that generally accepts the companies' formula rate proposal.~~costs of high voltage transmission lines to other transmission zones, including those where JCP&L, Met-Ed, and Penelec serve load. The ~~FERC~~ALJ issued an order approving this settlement on April 19, 2006. Hearings in the PJM rate design case concluded in April 2006. On July 13, 2006, an Initial Decision was issued by the ALJ. The ALJ adopted the FERC Trial Staff's positioninitial decision directing that the cost of all PJM transmission facilities, regardless of voltage, should be recovered through a postage stamp rate.The ALJ recommended an April 1, 2006 effective date for this change in rate design. IfNumerous parties, including FirstEnergy, submitted briefs opposing the ALJ's decision and recommendations. On April 19, 2007, the FERC ~~accepts this recommendation,~~issued an order rejecting the ALJ's findings and recommendations in nearly every respect. The FERC found that the PJM transmission owners existing license plate or zonal rate ~~applicable to many load zones in PJM would increase. FirstEnergy believes~~design was just and reasonable and ordered that ~~significant additional~~the current license plate rates for existing transmission ~~revenues would have~~facilities be retained. On the issue of rates for new transmission facilities, the FERC directed that costs for new transmission facilities that are rated at 500 kV or higher are to be ~~recovered~~collected from ~~the JCP&L, Met-Ed and Penelec~~all transmission zones ~~within PJM. JCP&L, Met-Ed~~throughout the PJM footprint by means of a postage-stamp rate. Costs for new transmission facilities that are rated at less than 500 kV, however, are to be allocated on a beneficiary pays basis. FERC found that PJM's current beneficiary-pays cost allocation methodology is not sufficiently detailed and, Penelec, as part of the Responsible Pricing Alliance, filed a brief addressing the Initial Decision on August 14, 2006 and September 5, 2006. The case will be reviewed by the FERC with a decision anticipated in early 2007.

On November 1, 2005, FES filed two power sales agreements for approval with the FERC. One power sales agreement provided for FES to provide the PLR requirements of the Ohio Companies at a price equal to the retail generation rates approved by the PUCO for a period of three years beginning January 1, 2006. The Ohio Companies will be relieved of their obligation to obtain PLR power requirements from FES if the Ohio CBP results in a ~~lower price~~related order that also was issued on April 19, 2007, directed that hearings be held for ~~retail customers. A similar power sales agreement between FES~~the purpose of establishing a just and ~~Penn permits Penn to obtain its PLR power requirements from FES at a fixed price equal to the retail generation price during 2006.~~reasonable cost allocation methodology for inclusion in PJM's tariff.

1059

On May 18, 2007, certain parties filed for rehearing of the FERC's April 19, 2007 order. On January 31, 2008, the requests for rehearing were denied. The FERC's orders on PJM rate design will prevent the allocation of a portion of the revenue requirement of existing transmission facilities of other utilities to JCP&L, Met-Ed and Penelec. In addition, the FERC's decision to allocate the cost of new 500 kV and above transmission facilities on a PJM-wide basis will reduce future transmission revenue recovery from the JCP&L, Met-Ed and Penelec zones. A partial settlement agreement addressing the beneficiary pays methodology for below 500 kV facilities, but excluding the issue of allocating new facilities costs to merchant transmission entities, was filed on September 14, 2007. The agreement was supported by the FERC's Trial Staff, and was certified by the Presiding Judge. The FERC's action on the settlement agreement is pending. The remaining merchant transmission cost allocation issues will proceed to hearing in May 2008. On February 13, 2008, AEP appealed the FERC's orders to the federal Court of Appeals for the D.C. Circuit. The Illinois Commerce Commission has also appealed these orders.

Post Transition Period Rate Design

FERC had directed MISO, PJM, and the respective transmission owners to make filings on or before August 1, 2007 to reevaluate transmission rate design within the MISO, and between MISO and PJM. On August 1, 2007, filings were made by MISO, PJM, and the vast majority of transmission owners, including FirstEnergy affiliates, which proposed to retain the existing transmission rate design. These filings were approved by the FERC on January 31, 2008. As a result of FERC's approval, the rates charged to FirstEnergy's load-serving affiliates for transmission service over existing transmission facilities in MISO and PJM are unchanged. In a related filing, MISO and MISO transmission owners requested that the current MISO pricing for new transmission facilities that spreads 20% of the cost of new 345 kV and higher transmission facilities across the entire MISO footprint (known as the RECB methodology) be retained.

Certain stand-alone transmission companies in MISO made a filing under Section 205 of the Federal Power Act requesting that 100% of the cost of new qualifying 345 kV and higher transmission facilities be spread throughout the entire MISO footprint. Further, Indianapolis Power and Light Company separately moved the FERC to reopen the record to address the cost allocation under the RECB methodology. FERC rejected these requests in an order issued January 31, 2008 again maintaining the status quo with respect to allocation of the cost of new transmission facilities in the MISO.

On September 17, 2007, AEP filed a complaint under Sections 206 and 306 of the Federal Power Act seeking to have the entire transmission rate design and cost allocation methods used by MISO and PJM declared unjust, unreasonable, and unduly discriminatory, and to have FERC fix a uniform regional transmission rate design and cost allocation method for the entire MISO and PJM Super Region that recovers the average cost of new and existing transmission facilities operated at voltages of 345 kV and above from all transmission customers. Lower voltage facilities would continue to be recovered in the local utility transmission rate zone through a license plate rate. AEP requested a refund effective October 1, 2007, or alternatively, February 1, 2008. On January 31, 2008, FERC issued an order denying the complaint.

Distribution of MISO Network Service Revenues

Effective February 1, 2008, the MISO Transmission Owners Agreement provides for a change in the method of distributing transmission revenues among the transmission owners. MISO and a majority of the MISO transmission owners filed on December 3, 2007 to change the MISO tariff to clarify, for purposes of distributing network transmission revenue to the transmission owners, that all network transmission service revenues, whether collected by MISO or directly by the transmission owner, are included in the revenue distribution calculation. This clarification was necessary because some network transmission service revenues are collected and retained by transmission owners in states where retail choice does not exist, and their unbundled retail load is currently exempt from MISO network service charges. The tariff changes filed with FERC ensure that revenues collected by transmission owners from bundled load are taken into account in the revenue distribution calculation, and that transmission owners with bundled load do not collect more than their revenue requirements. Absent the changes, transmission owners, and ultimately their customers, with unbundled load or in retail choice states, such as ATSI, would subsidize transmission owners with bundled load, who would collect their revenue requirement from bundled load, plus share in revenues collected by MISO from unbundled customers. This would result in a large revenue shortfall for ATSI, which would eventually be passed on to customers in the form of higher transmission rates as calculated pursuant to ATSIs Attachment O formula under the MISO tariff.

60

Numerous parties filed in support of the tariff changes, including the public service commissions of Michigan, Ohio and Wisconsin. Ameren filed a protest on December 26, 2007, arguing that the December 3 filing violates the MISO Transmission Owners Agreement as well as an agreement among Ameren (Union Electric), MISO, and the Missouri Public Service Commission, which provides that Union Electrics bundled load cannot be charged by MISO for network service. On January 31, 2008, FERC issued an order conditionally accepting the tariff amendment subject to a minor compliance filing. This order ensures that ATSI will continue to receive transmission revenues from MISO equivalent to its transmission revenue requirement.

MISO Ancillary Services Market and Balancing Area Consolidation

MISO made a filing on September 14, 2007 to establish Ancillary Services markets for regulation, spinning and supplemental reserves, to consolidate the existing 24 balancing areas within the MISO footprint, and to establish MISO as the NERC registered balancing authority for the region. This filing would permit load serving entities to purchase their operating reserve requirements in a competitive market. An effective date of June 1, 2008 was requested in the filing.

MISO's previous filing to establish an Ancillary Services market was rejected without prejudice by FERC on June 22, 2007, subject to MISO providing an analysis of market power within its footprint and a plan to ensure reliability during the consolidation of balancing areas. MISO made a September 14 filing addressing the FERC's directives. FirstEnergy supports the proposal to establish markets for Ancillary Services and consolidate existing balancing areas, but filed objections on specific aspects of the MISO proposal. Interventions and protests to MISO's filing were made with FERC on October 15, 2007. FERC conducted a technical conference on certain aspects of the MISO proposal on December 6, 2007, and additional comments were filed by FirstEnergy and other parties on December 19, 2007. FERC action is anticipated in the first quarter of 2008.

Duquesnes Request to Withdraw from PJM

On November 8, 2007, Duquesne Light Company (Duquesne) filed a request with the FERC to exit PJM and to join the MISO. In its filing, Duquesne asked FERC to be relieved of certain capacity payment obligations to PJM for capacity auctions conducted prior to its departure from PJM, but covering service for planning periods through May 31, 2010. Duquesne asserted that its primary reason for exiting PJM is to avoid paying future obligations created by PJM's forward capacity market. FirstEnergy believes that Duquesnes filing did not identify or address numerous legal, financial or operational issues that are implicated or affected directly by Duquesnes proposal. Consequently, on December 4, 2007 and January 3, 2008, FirstEnergy submitted responsive filings that, while conceding Duquesnes rights to exit PJM, contested various aspects of Duquesnes proposal. FirstEnergy particularly focused on Duquesnes proposal that it be allowed to exit PJM without payment of its share of existing capacity market commitments. FirstEnergy also objected to Duquesnes failure to address the firm transmission service requirements that would be necessary for FirstEnergy to continue to use the Beaver Valley Plant to meet existing commitments in the PJM capacity markets and to serve native load. Additionally, FirstEnergy protested Duquesnes failure to identify or address a number of legal, financial or operational issues and uncertainties that may or will result for both PJM and MISO market participants. Other market participants also submitted filings contesting Duquesnes plans.

On January 17, 2008, the FERC conditionally approved Duquesnes request to exit PJM. Among other conditions, FERC obligated Duquesne to pay the PJM capacity obligations that had accrued prior to January 17, 2008. Duquesne was given until February 1, 2008 to provide FERC written notice of its intent to withdraw and Duquesne filed the notice on February 1st. The FERC's order took notice of the numerous transmission and other issues raised by FirstEnergy and other parties to the proceeding, but did not provide any responsive rulings or other guidance. Rather, FERC ordered Duquesne to make a compliance filing in forty-five days from the FERC order (or by March 3, 2008) detailing how Duquesne will satisfy its obligations under the PJM Transmission Owner's Agreement. The FERC likewise directed the MISO to submit a compliance filing in forty-five days (or by March 3, 2008) detailing the MISO's plans to integrate Duquesne into the MISO. Finally, the FERC directed MISO and PJM to work together to resolve the substantive and procedural issues implicated by Duquesnes transition into the MISO. On February 19, 2008, FirstEnergy asked for clarification or rehearing of certain of the matters addressed in FERC's January 17, 2008 Order.

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MISO Resource Adequacy Proposal

MISO made a filing on December 28, 2007 that would create an enforceable planning reserve requirement in the MISO tariff for load serving entities such as the Ohio Companies, Penn, and FES. This requirement is proposed to become effective for the planning year beginning June 1, 2009. The filing would permit MISO to establish the reserve margin requirement for load serving entities based upon a one day loss of load in ten years standard, unless the state utility regulatory agency establishes a different planning reserve for load serving entities in its state. FirstEnergy generally supports the proposal as it promotes a mechanism that will result in long-term commitments from both load-serving entities and resources, including both generation and demand side resources, that are necessary for reliable resource adequacy and planning in the MISO footprint. FirstEnergy does not expect this filing to impose additional supply costs since its load serving entities in MISO are already bound by similar planning reserve requirements established by ReliabilityFirst Corporation. Comments on the filing were filed on January 28, 2008. An effective date of June 1, 2009 was requested in the filing, but MISO has requested FERC approval by the end of the first quarter of 2008.

Organized Wholesale Power Markets

On February 21, 2008, the FERC issued a NOPR through which it proposes to adopt new rules that it states will “improve operations in organized electric markets, boost competition and bring additional benefits to consumers.” The proposed rule addresses demand response and market pricing during reserve shortages, long-term power contracting, market-monitoring policies, and responsiveness of RTOs and ISOs to stakeholders and customers. FirstEnergy has not yet had an opportunity to evaluate the impact of the proposed rule on its operations.

10. CAPITALIZATION

(A) RETAINED EARNINGS (ACCUMULATED DEFICIT)

There are no restrictions on retained earnings for payment of cash dividends on OE's, CEI's, TE's, JCP&L's and FES' common stock. In general, Met-Ed's and Penelec's respective first mortgage indentures restrict the payment of dividends or distributions on or with respect to each of the company's common stock to amounts credited to earned surplus since the date of its indenture. As of December 31, 2007, Penelec had retained earnings available to pay common stock dividends of $48 million, net of amounts restricted under its first mortgage indenture. Met-Ed had an accumulated deficit of $139 million as of December 31, 2007, and is therefore restricted from making cash dividend distributions to FirstEnergy.

62

On

(B) PREFERRED AND PREFERENCE STOCK

No preferred shares or preference shares are currently outstanding. The following table details the change in preferred shares outstanding for OE, CEI, TE and JCP&L for the three years ended December ~~29, 2005,~~31, 2007.


	Not Subject to						Subject to
	Mandatory Redemption						Mandatory Redemption
				Par or						Par or
	Number			Stated			Number			Stated
	of Shares			Value			of Shares			Value
	(Dollars in thousands)
OE
Balance, January 1, 2005		1,000,699		$	100,070			127,500		$	12,750
Redemptions-
7.750% Series		(250,000	)		(25,000	)
7.625% Series								(127,500	)		(12,750	)
Balance, December 31, 2005		750,699			75,070			-			-
Redemptions-
3.90% Series		(152,510	)		(15,251	)
4.40% Series		(176,280	)		(17,628	)
4.44% Series		(136,560	)		(13,656	)
4.56% Series		(144,300	)		(14,430	)
4.24% Series		(40,000	)		(4,000	)
4.25% Series		(41,049	)		(4,105	)
4.64% Series		(60,000	)		(6,000	)
Balance, December 31, 2006		-			-			-			-
Balance, December 31, 2007		-		$	-			-		$	-
CEI
Balance, January 1, 2005		974,000		$	96,404			40,000		$	4,009
Redemptions-
$7.40 Series A		(500,000	)		(50,000	)
Adjustable Series L		(474,000	)		(46,404	)
$7.35 Series C								(40,000	)		(4,000	)
Amortization of fair market
value adjustments-
$7.35 Series C											(9	)
Balance, December 31, 2005		-			-			-			-
Balance, December 31, 2006		-			-			-			-
Balance, December 31, 2007		-		$	-			-		$	-
TE
Balance, January 1, 2005		4,110,000		$	126,000
Redemptions-
Adjustable Series A		(1,200,000	)		(30,000	)
Balance, December 31, 2005		2,910,000			96,000
Redemptions-
$4.25 Series		(160,000	)		(16,000	)
$4.56 Series		(50,000	)		(5,000	)
$4.25 Series		(100,000	)		(10,000	)
$2.365 Series		(1,400,000	)		(35,000	)
Adjustable Series B		(1,200,000	)		(30,000	)
Balance, December 31, 2006		-			-
Balance, December 31, 2007		-		$	-
JCP&L
Balance, January 1, 2005		125,000		$	12,649
Balance, December 31, 2005		125,000			12,649
Redemptions-
4.00% Series		(125,000	)		(12,649	)
Balance, December 31, 2006		-			-
Balance, December 31, 2007		-		$	-

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The Companies preferred stock and preference stock authorizations are as follows:

	Preferred Stock				Preference Stock
	Shares		Par		Shares		Par
	Authorized		Value		Authorized		Value
OE		6,000,000	$	100		8,000,000	no par
OE		8,000,000	$	25
Penn		1,200,000	$	100
CEI		4,000,000	no par			3,000,000	no par
TE		3,000,000	$	100		5,000,000	$	25
TE		12,000,000	$	25
JCP&L		15,600,000	no par
Met-Ed		10,000,000	no par
Penelec		11,435,000	no par

(C) LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS

Securitized Transition Bonds

JCP&L's consolidated financial statements include the ~~FERC issued an order setting~~results of JCP&L Transition Funding and JCP&L Transition Funding II, wholly owned limited liability companies of JCP&L. In June 2002, JCP&L Transition Funding sold $320 million of transition bonds to securitize the recovery of JCP&L's bondable stranded costs associated with the previously divested Oyster Creek Nuclear Generating Station. In August 2006, JCP&L Transition Funding II sold $182 million of transition bonds to securitize the recovery of deferred costs associated with JCP&L's supply of BGS.

JCP&L did not purchase and does not own any of the transition bonds, which are included as long-term debt on FirstEnergy's and JCP&L's Consolidated Balance Sheets. As of December 31, 2007, $397 million of the transition bonds were outstanding. The transition bonds are the sole obligations of JCP&L Transition Funding and JCP&L Transition Funding II and are collateralized by each company's equity and assets, which consists primarily of bondable transition property.

Bondable transition property represents the irrevocable right under New Jersey law of a utility company to charge, collect and receive from its customers, through a non-bypassable TBC, the principal amount and interest on transition bonds and other fees and expenses associated with their issuance. JCP&L sold its bondable transition property to JCP&L Transition Funding and JCP&L Transition Funding II and, as servicer, manages and administers the bondable transition property, including the billing, collection and remittance of the TBC, pursuant to separate servicing agreements with JCP&L Transition Funding and JCP&L Transition Funding II. For the two ~~power sales agreements~~series of transition bonds, JCP&L is entitled to aggregate annual servicing fees of up to $628,000 that are payable from TBC collections.

Other Long-term Debt

Each of the Companies, except for ~~hearing.~~JCP&L, has a first mortgage indenture under which it issues FMB secured by a direct first mortgage lien on substantially all of its property and franchises, other than specifically excepted property. JCP&L satisfied the provision of its senior note indenture for the release of all FMBs held as collateral for senior notes in May 2007, subsequently repaid its other remaining FMBs and, effective September 14, 2007, discharged and released its mortgage indenture.

FES and the Companies have various debt covenants under their respective financing arrangements. The ~~order criticized~~most restrictive of the ~~Ohio CBP,~~debt covenants relate to the nonpayment of interest and/or principal on debt and ~~required~~the maintenance of certain financial ratios. There also exist cross-default provisions among financing arrangements of FirstEnergy, FES and the Companies.

Based on the amount of FMB authenticated by the respective mortgage bond trustees through December 31, 2007, the Companies' annual sinking fund requirement for all FMB issued under the various mortgage indentures amounted to ~~submit additional evidence~~$50 million (Penn - $5 million, JCP&L - $16 million, Met-Ed - $8 million and Penelec - $21 million). Penn expects to deposit funds with its mortgage bond trustee in 2008 that will then be withdrawn upon the surrender for cancellation of a like principal amount of FMB, specifically authenticated for such purposes against unfunded property additions or against previously retired FMB. This method can result in minor increases in the amount of the annual sinking fund requirement. Met-Ed and Penelec could fulfill their sinking fund obligations by providing bondable property additions, previously retired FMB or cash to the respective mortgage bond trustees.

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The sinking fund requirements for FES and the Companies for FMB and maturing long-term debt (excluding capital leases) for the next five years are:

Sinking Fund Requirements	FES		OE		CEI		JCP&L		Met-Ed		Penelec
	(In millions)
2008	$	1,441	$	333	$	207	$	27	$	-	$	-
2009		-		2		162		29		-		100
2010		15		65		18		31		100		59
2011		-		1		20		32		-		-
2012		-		1		22		34		-		-

TE has no sinking fund requirements for the next five years.

Included in the table above are amounts for certain variable interest rate pollution control revenue bonds that currently bear interest in an interest rate mode that permits individual debt holders to put the respective debt back to the issuer for purchase prior to maturity. These amounts are $1.7 billion and $15 million in 2008 and 2010, respectively, representing the next time the debt holders may exercise this right. The applicable pollution control revenue bond indentures provide that bonds so tendered for purchase will be remarketed by a designated remarketing agent. These amounts for FES, OE and CEI are shown as follows:

Year	FES		OE		CEI
	(In millions)
2008	$	1,441	$	156	$	82
2010		15		-		-

Obligations to repay certain pollution control revenue bonds are secured by several series of FMB. Certain pollution control revenue bonds are entitled to the benefit of irrevocable bank LOCs of $1.6 billion as of December 31, 2007, or noncancelable municipal bond insurance of $593 million as of December 31, 2007, to pay principal of, or interest on, the applicable pollution control revenue bonds. To the extent that drawings are made under the LOCs or the policies, FGCO, NGC and the Companies are entitled to a credit against their obligation to repay those bonds. FGCO, NGC and the Companies pay annual fees of 0.15% to 1.70% of the amounts of the LOCs to the issuing banks and 0.15% to 0.16% of the amounts of the insurance policies to the insurers and are obligated to reimburse the banks or insurers, as the case may be, for any drawings thereunder. Certain of the issuing banks and insurers hold FMB as security for such reimbursement obligations. These amounts and percentages for FES and the Companies are shown as follows:

	FES			OE			CEI		TE		Met-Ed			Penelec
	(In millions)
Amounts
LOCs	$	1,455	*	$	158		$	-	$	-	$	-		$	-
Insurance Policies		456			16			6		4		42			69

Fees
LOCs	0.15% to 0.775 %				1.70	%		-		-		-			-
Insurance Policies		0.15	%		-			-		-		0.16	%		0.16	%

* Includes LOC of $490 million issued for FirstEnergy on behalf of NGC

CEI and TE have unsecured LOCs of approximately $194 million in connection with the sale and leaseback of Beaver Valley Unit 2 for which they are jointly and severally liable. OE has LOCs of $291 million and $134 million in connection with the sale and leaseback of Beaver Valley Unit 2 and Perry Unit 1, respectively. OE entered into a Credit Agreement pursuant to which a standby LOC was issued in support of ~~the reasonableness~~approximately $236 million of the ~~prices charged~~Beaver Valley Unit 2 LOCs and the issuer of the standby LOC obtained the right to pledge or assign participations in OE's reimbursement obligations under the ~~power sales agreements. On July 14, 2006,~~credit agreement to a trust. The trust then issued and sold trust certificates to institutional investors that were designed to be the ~~Chief Judge granted the joint motion~~credit equivalent of an investment directly in OE.

11. ASSET RETIREMENT OBLIGATIONS

FES and the ~~Trial Staff to appoint~~Companies have recognized applicable legal obligations under SFAS 143 for nuclear power plant decommissioning, reclamation of a ~~settlement judge in this proceeding~~sludge disposal pond and ~~the procedural schedule was suspended pending settlement discussions among the parties. A settlement conference was held on September 5, 2006.~~closure of two coal ash disposal sites. In addition, FES and the ~~Ohio~~ Companies ~~Penn, and the PUCO, along~~have recognized conditional retirement obligations (primarily for asbestos remediation) in accordance with ~~other parties, reached an agreement to settle the case. The settlement~~FIN 47, which was ~~filed with the FERC on October 17, 2006, and was unopposed by the remaining parties, including the FERC Trial Staff. This settlement was accepted by the FERC on December 8, 2006.~~

The terms of the settlement provide for modification of both the Ohio and Penn power supply agreements with FES. Under the Ohio power supply agreement, separate rates are established for the Ohio Companies' PLR requirements; special retail contract requirements, wholesale contract requirements, and interruptible buy-through retail load requirements. For their PLR and special retail contract requirements, the Ohio Companies will pay FES no more than the lower of (i) the sum of the retail generation charge, the rate stabilization charge, the fuel recovery mechanism charge, and FES' actual incremental fuel costs for such sales; or (ii) the wholesale price cap. Different wholesale price caps are imposed for PLR sales, special retail contracts, and wholesale contracts. The wholesale price for interruptible buy-through retail load requirements is limited to the actual spot price of power obtained by FES to provide this power. FES billed the Ohio Companies for the additional amount payable to FES for incremental fuel costs on power supplied during 2006. The total power supply cost billed by FES was lower in each case than the wholesale price caps specified in the settlement accepted by the FERC. In addition, pursuant to the settlement, the wholesale rate charged by FES under the Penn power supply agreement can be no greater than the generation component of charges for retail PLR load in Pennsylvania. The modifications to the Ohio and Pennsylvania power supply agreements became effective January 1, 2006. The Penn supply agreement subject to the settlement expired at midnightimplemented on December 31, ~~2006.~~2005.

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The ARO liabilities for FES, OE and TE primarily relate to the nuclear 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 nuclear decommissioning of the TMI-2 nuclear generating facility. FES and the Companies use an expected cash flow approach to measure the fair value of their nuclear decommissioning AROs.

In 2006, FES and OE revised the ARO associated with Perry as a result of revisions to the 2005 decommissioning study. The present value of revisions in the estimated cash flows associated with projected decommissioning costs increased the ARO and corresponding plant asset for Perry by $4 million. The ARO for FES sludge disposal pond located near the Bruce Mansfield Plant was revised in 2006 due to an updated cost study. The present value of revisions in the estimated cash flows associated with projected remediation costs associated with the site decreased the ARO and corresponding plant asset by $6 million. In May 2006, CEI sold its interest in the Ashtabula C plant. As part of the transaction, CEI settled the $6 million ARO that had been established with the adoption of FIN 47.

FES and the Companies maintain nuclear decommissioning trust funds that are legally restricted for purposes of settling the nuclear decommissioning ARO. The fair value of the decommissioning trust assets as of December 31, 2007 and 2006 were as follows:

	2007		2006
	(In millions)
FES	$	1,333	$	1,238
OE		127		118
TE		67		61
JCP&L		176		164
Met-Ed		287		270
Penelec		138		125

FIN 47 provides accounting standards for conditional retirement obligations associated with tangible long-lived assets, requiring recognition of the fair value of a liability for an ARO in the period in which it is incurred if a reasonable estimate can be identified. FIN 47 states that an obligation exists even though there may be uncertainty about timing or method of settlement and further clarifies SFAS 143, stating that the uncertainty surrounding the timing and method of settlement when settlement is conditional on a future event occurring should be reflected in the measurement of the liability, not in the recognition of the liability. Accounting for conditional ARO under FIN 47 is the same as described above for SFAS 143.

Applicable legal obligations as defined under the new standard were identified at FES active and retired generating units and the Companies substation control rooms, service center buildings, line shops and office buildings, identifying asbestos remediation as the primary conditional ARO. As a result of ~~Penn's PLR competitive solicitation process approved by the PPUC~~adopting FIN 47 in December 2005, after-tax charges of $8.8 million for ~~the period January 1, 2007 through May 31, 2008,~~ FES, ~~was selected~~$16.3 million for OE, $3.7 million for CEI, $0.3 million for Met-Ed and $0.8 million for Penelec were recorded as the winning bidder for a number of the tranches for individual customer classes. The balance of the tranches will be supplied by unaffiliated power suppliers. On October 2, 2006, FES filed an application with the FERC under Section 205 of the Federal Power Act for authorization to make these affiliate sales to Penn. Interventions or protests were due on this filing on October 23, 2006. Penn was the only party to file an intervention in this proceeding. This filing was accepted by the FERC on November 15, 2006, and no requests for rehearing were filed.

On February 15, 2007, MISO filed documents with the FERC to establish a market-based, competitive ancillary services market. MISO contends that the filing will integrate operating reserves into MISO's existing day-ahead and real-time settlements process, incorporate opportunity costs into these markets, address scarcity pricing through the implementationcumulative effect of a ~~demand curve methodology, foster demand response~~change in accounting principle.

The following table describes the provision of operating reserves, and provide for various efficiencies and optimization with regard to generation dispatch. The filing also proposes amendments to existing documents to provide for the transfer of balancing functions from existing local balancing authorities to MISO. MISO will then carry out this reliability function as the NERC-certified balancing authority for the MISO region. MISO is targeting implementation for the second or third quarter of 2008. The FERC has established March 23, 2007, as the date for interested parties to submit comments addressing the filing. The filing has not yet been fully evaluated to assess its impact on FirstEnergy's operations.

On February 16, 2007, the FERC issued a final rule that revises its decade-old open access transmission regulations and policies. The FERC explained that the final rule is intended to strengthen non-discriminatory accesschanges to the ~~transmission grid, facilitate FERC enforcement,~~ARO balances during 2007 and provide for a more open and coordinated transmission planning process. The final rule will not be effective until 60 days after publication in the Federal Register. The final rule has not yet been fully evaluated to assess its impact on FirstEnergy's operations.2006.

~~Capital Requirements~~

ARO Reconciliation	FES			OE		CEI			TE		JCP&L		Met-Ed		Penelec
	(In millions)
Balance as of January 1, 2006	$	716		$	83	$	8		$	25	$	80	$	142	$	72
Liabilities incurred		-			-		-			-		-		-		-
Liabilities settled		-			-		(6	)		-		-		-		-
Accretion		46			5		-			2		4		9		5
Revisions in estimated
cashflows		(2	)		-		-			-		-		-		-
Balance as of December 31, 2006		760			88		2			27		84		151		77
Liabilities incurred		-			-		-			-		-		-		-
Liabilities settled		(1	)		-		-			-		-		-		-
Accretion		51			6		-			1		6		10		5
Revisions in estimated
cashflows		-			-		-			-		-		-		-
Balance as of December 31, 2007	$	810		$	94	$	2		$	28	$	90	$	161	$	82

Capital expenditures for the Companies, FES and FirstEnergy's other subsidiaries for the years 2007 through 2011 excluding nuclear fuel, are shown in the following table. Such costs include expenditures for the betterment of existing facilities and for the construction of generating capacity, facilities for environmental compliance, transmission lines, distribution lines, substations and other assets.

1166

2006

Capital Expenditures Forecast

Actual

2007

2008-2011

Total

(In millions)
OE $ 105 $ 120 $ 544 $ 664
Penn 19 26 86 112
CEI 127 158 683 841
TE 61 64 261 325
JCP&L 160 192 1,144 1,336
Met-Ed 85 83 428 511
Penelec 111 92 522 614
ATSI 39 46 296 342
FGCO 213 445 1,712 2,157
NGC 204 126 534 660
Other subsidiaries 46 91 239 330
Total $ 1,170 $ 1,443 $ 6,449 $ 7,892
12. SHORT-TERM BORROWINGS AND BANK LINES OF CREDIT

~~During~~FirstEnergy, FES and the ~~2007-2011 period, maturities of, and sinking fund requirements for, long-term debt of FirstEnergy and its subsidiaries are:~~

Long-Term Debt Redemption Schedule

2007

2008-2011

Total

(In millions)

OE $ 3 $ 180 $ 183
Penn* 1 4 5
CEI** 120 275 395
TE 30 - 30
JCP&L 33 119 152
Met-Ed 50 100 150
Penelec - 159 159
FirstEnergy - 1,500 1,500
Other subsidiaries 4 25 29
Total $ 241 $ 2,362 $ 2,603

* Penn has an additional $63 million due to associated companies in 2008-2011.
** CEI has an additional $65 million due to associated companies in 2008-2011.

~~FirstEnergy's investments for additional nuclear fuel during the 2007-2011 period~~Companies are ~~estimated~~parties to be approximately $893 million, of which about $86 million applies to 2007. During the same period, its nuclear fuel investments are expected to be reduced by approximately $702 million and $103 million, respectively, as the nuclear fuel is consumed. As a result of the intra-system generation assets transfers, NGC is now responsible for FirstEnergy's nuclear fuel investments. The following table displays the Companies' operating lease commitments, net of capital trust cash receipts for the 2007-2011 period.

Net Operating Lease Commitments

2007

2008-2011

Total

(In millions)
OE $ 86 $ 428 $ 514
CEI 14 52 66
TE 79 291 370
JCP&L 8 32 40
Met-Ed 4 16 20
Penelec 5 16 21
FESC 8 31 39
Total $ 204 $ 866 $ 1,070

~~FirstEnergy had approximately $1.1 billion of short-term indebtedness as of December 31, 2006, comprised of $1.0 billion in borrowings from~~ a $2.75 billion revolving line of credit and $103 million of other bank borrowings. Total short-term bank lines of committed credit to FirstEnergy and the Companies as of December 31, 2006 were approximately $3.4 billion.

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~~On August 24, 2006, FirstEnergy and certain of its subsidiaries entered into a new $2.75 billion~~ five-year revolving ~~credit facility, which replaced FirstEnergy's prior $2 billion~~ credit facility. FirstEnergy may request an increase in the total commitments available under ~~the new~~this facility up to a maximum of $3.25 billion. Commitments under the ~~new~~ facility are available until August 24, ~~2011,~~2012, unless the lenders agree, at the request of the ~~Borrowers,~~borrowers, to ~~two~~an unlimited number of additional one-year extensions. Generally, borrowings under the facility must be repaid within 364 days. Available amounts for each ~~Borrower~~borrower are subject to a specified ~~sublimit,~~sub-limit, as well as applicable regulatory and other limitations. ~~As of December 31, 2006, FirstEnergy was the only borrower on this revolver with an outstanding balance of $1.0 billion.~~ The annual facility fee is 0.125%.

~~FirstEnergy may borrow under these facilities~~On December 28, 2007, the FERC issued an order authorizing JCP&L, Penn, Met-Ed and ~~could transfer~~Penelec to issue short-term debt securities up to $428 million, $39 million, $300 million and $300 million, respectively, during the period commencing January 1, 2008 through December 31, 2009.

The Companies, with the exception of TE and JCP&L, each have a wholly owned subsidiary whose borrowings are secured by customer accounts receivable purchased from its respective parent company. The CEI subsidiary's borrowings are also secured by customer accounts receivable purchased from TE. Each subsidiary company has its own receivables financing arrangement and, as a separate legal entity with separate creditors, would have to satisfy its obligations to creditors before any of its ~~borrowings~~remaining assets could be available to its ~~subsidiaries. These revolving credit facilities, combined with an aggregate $550 million of accounts receivable~~parent company. The receivables financing ~~facilities for OE, CEI, TE, Met-Ed, Penelec and Penn,~~borrowing capacity by company are intended to provide liquidity to meet FirstEnergy's short-term working capital requirements and those of its subsidiaries. Total unused borrowing capability under existing facilities and accounts receivable financing facilities totaled $1.8 billionshown in the following table. There were no outstanding borrowings as of December 31, 2006. An additional source of ongoing cash for FirstEnergy, as a holding company, is cash dividends from its subsidiaries. In 2006, the holding company received $560 million of cash dividends on common stock from its subsidiaries.2007.

~~Based~~

Subsidiary Company	Parent Company	Capacity		Annual Facility Fee
		(In millions)
OE's Capital, Incorporated	OE	$	170		0.15	%
Centerior Funding Corp.	CEI		200		0.15
Penn Power Funding LLC	Penn		25		0.13
Met-Ed Funding LLC	Met-Ed		80		0.13
Penelec Funding LLC	Penelec		75		0.13
		$	550

The weighted average interest rates on ~~their present plans, the Companies could provide for their cash requirements in 2007 from the following sources: funds to be received from operations; available cash and temporary cash investments~~short-term borrowings outstanding as of December 31, 2007 and 2006 (FirstEnergy's non-utility subsidiaries - $90 million and OE - $1 million); the issuance of long-term debt (for refunding purposes); funds from capital markets and funds available under revolving credit arrangements.were as follows:

	2007			2006
FES		5.23	%		5.62	%
OE		4.80	%		4.04	%
CEI		5.10	%		5.66	%
TE		5.04	%		5.41	%
JCP&L		5.04	%		5.62	%
Met-Ed		5.17	%		5.62	%
Penelec		5.04	%		5.62	%

13. COMMITMENTS, GUARANTEES AND CONTINGENCIES

(A) NUCLEAR INSURANCE

The extent and type of future financings will depend on the need for external funds as well as market conditions, the maintenance of an appropriate capital structure and the ability of the Companies to comply with coverage requirements in order to issue FMB and preferred stock. The Companies will continue to monitor financial market conditions and, where appropriate, may take advantage of economic opportunities to refund debt to the extent that their financial resources permit.

The coverage requirements contained in the first mortgage indentures under which the Companies issue FMB provide that, except for certain refunding purposes, the Companies may not issue FMB unless applicable net earnings (before income taxes), calculated as provided in the indentures, for any period of twelve consecutive months within the fifteen calendar months preceding the month in which such additional bonds are issued, are at least twice annual interest requirements on outstanding FMB, including those being issued. As of December 31, 2006, the Ohio Companies and Penn had the aggregate capability to issue approximately $2.8 billion of additional FMB on the basis of property additions and retired bonds under the terms of their respective mortgage indentures. The issuance of FMB by OE, CEI and TE are also subject to provisions of their senior note indentures generally limiting the incurrence of additional secured debt, subject to certain exceptions that would permit, among other things, the issuance of secured debt (including FMB) (i) supporting pollution control notes or similar obligations, or (ii) as an extension, renewal or replacement of previously outstanding secured debt. In addition, these provisions would permit OE, CEI and TE to incur additional secured debt not otherwise permitted by a specified exception of up to $543 million, $491 million and $126 million, respectively, as of December 31, 2006. Under the provisions of its senior note indenture, JCP&L may issue additional FMB only as collateral for senior notes. As of December 31, 2006, JCP&L had the capability to issue $678 million of additional senior notes upon the basis of FMB collateral.

As of December 31, 2006, each of OE, TE, Penn and JCP&L have redeemed all of their outstanding preferred stock. As a result of these redemptions, the applicable earnings coverage tests in each of their respective charters are inoperative. In the event that any of OE, TE, Penn and JCP&L issues preferred stock in the future, the applicable earnings coverage test will govern the amount of preferred stock that may be issued. CEI, Met-Ed and Penelec do not have similar restrictions and could issue up to the number of preferred shares authorized under their respective charters.

To the extent that coverage requirements or market conditions restrict the Companies' abilities to issue desired amounts of FMB or preferred stock, the Companies may seek other methods of financing. Such financings could include the sale of preferred and/or preference stock or of such other types of securities as might be authorized by applicable regulatory authorities which would not otherwise be sold and could result in annual interest charges and/or dividend requirements in excess of those that would otherwise be incurred.

As of December 31, 2006, approximately $1.0 billion of capacity remained unused under an existing shelf registration statement, filed by FirstEnergy with the SEC in 2003, to support future securities issuances. The shelf registration provides the flexibility to issue and sell various types of securities, including common stock, debt securities, and share purchase contracts and related share purchase units. As of December 31, 2006, OE and CEI had approximately $400 million and $250 million, respectively, of capacity remaining unused under their existing shelf registrations for unsecured debt securities.

13

~~Nuclear Regulation~~

On January 20, 2006, FENOC announced that it had entered into a deferred prosecution agreement with the U.S. Attorney's Office for the Northern District of Ohio and the Environmental Crimes Section of the Environment and Natural Resources Division of the DOJ related to FENOC's communications with the NRC during the fall of 2001 in connection with the reactor head issue at the Davis-Besse Nuclear Power Station. Under the agreement, the United States acknowledged FENOC's extensive corrective actions at Davis-Besse, FENOC's cooperation during investigations by the DOJ and the NRC, FENOC's pledge of continued cooperation in any related criminal and administrative investigations and proceedings, FENOC's acknowledgement of responsibility for the behavior of its employees, and its agreement to pay a monetary penalty. The DOJ agreed to refrain from seeking an indictment or otherwise initiating criminal prosecution of FENOC for all conduct related to the statement of facts attached to the deferred prosecution agreement, as long as FENOC remained in compliance with the agreement, which FENOC has done. FENOC paid a monetary penalty of $28 million (not deductible for income tax purposes) which reduced FirstEnergy's earnings by $0.09 per common share in the fourth quarter of 2005. The deferred prosecution agreement expired on December 31, 2006.

On April 21, 2005, the NRC issued a NOV and proposed a $5.45 million civil penalty related to the degradation of the Davis-Besse reactor vessel head issue described above. FirstEnergy accrued $2 million for a potential fine prior to 2005 and accrued the remaining liability for the proposed fine during the first quarter of 2005. On September 14, 2005, FENOC filed its response to the NOV with the NRC. FENOC accepted full responsibility for the past failure to properly implement its boric acid corrosion control and corrective action programs. The NRC NOV indicated that the violations do not represent current licensee performance FirstEnergy paid the penalty in the third quarter of 2005. On January 23, 2006, FENOC supplemented its response to the NRC's NOV on the Davis-Besse head degradation to reflect the deferred prosecution agreement that FENOC had reached with the DOJ.

On August 12, 2004, the NRC notified FENOC that it would increase its regulatory oversight of the Perry Nuclear Power Plant as a result of problems with safety system equipment over the preceding two years and the licensee's failure to take prompt and corrective action. FENOC operates the Perry Nuclear Power Plant.

On April 4, 2005, the NRC held a public meeting to discuss FENOC's performance at the Perry Nuclear Power Plant as identified in the NRC's annual assessment letter to FENOC. Similar public meetings are held with all nuclear power plant licensees following issuance by the NRC of their annual assessments. According to the NRC, overall the Perry Plant operated "in a manner that preserved public health and safety" even though it remained under heightened NRC oversight. During the public meeting and in the annual assessment, the NRC indicated that additional inspections will continue and that the plant must improve performance to be removed from the Multiple/Repetitive Degraded Cornerstone Column of the Action Matrix.

On September 28, 2005, the NRC sent a CAL to FENOC describing commitments that FENOC had made to improve the performance at the Perry Nuclear Power Plant and stated that the CAL would remain open until substantial improvement was demonstrated. The CAL was anticipated as part of the NRC's Reactor Oversight Process. In the NRC's 2005 annual assessment letter dated March 2, 2006 and associated meetings to discuss the performance of the Perry Nuclear Power Plant on March 14, 2006, the NRC again stated that the Perry Nuclear Power Plant continued to operate in a manner that "preserved public health and safety." However, the NRC also stated that increased levels of regulatory oversight would continue until sustained improvement in the performance of the facility was realized. If performance does not improve, the NRC has a range of options under the Reactor Oversight Process, from increased oversight to possible impact to the plant's operating authority.

~~Nuclear Insurance~~

The Price-Anderson Act limits the public liability ~~which can be assessed with respect~~relative to a single incident at a nuclear power plant to $10.8 ~~billion (assuming 104 units licensed to operate) for a single nuclear incident, which~~billion. The amount is covered ~~by: (i)~~by a combination of private insurance ~~amounting to $300 million;~~ and ~~(ii) $10.5 billion provided by~~ an industry retrospective rating plan required by the NRC pursuant thereto. Under such retrospective rating plan, in the event of a nuclear incident at any unit in the United States resulting in losses in excess of private insurance, up to $100.6 million (but not more than $15 million per unit per year in the event of more than one incident) must be contributed for each nuclear unit licensed to operate in the country by the licensees thereof to cover liabilities arising out of the incident. Based on its present nuclear ownership and leasehold interests, FirstEnergy'splan. The maximum potential assessment under ~~these provisions~~the industry retrospective rating plan would be ~~$402.4~~$402 million ~~(OE - $34.4 million, NGC - $349.6 million, and TE - $18.4 million)~~ per incident but not more than $60 million ~~(OE - $5.1 million, NGC - $52.1 million, and TE - $2.8 million)~~ in any one year for each incident.

14

~~In addition~~FES and the Companies are also insured under policies for each nuclear plant. Under these policies, up to $2.75 billion is provided for property damage and decontamination costs. FES and the ~~public liability insurance provided pursuant to the Price-Anderson Act, FirstEnergy has~~Companies have also obtained approximately $2.0 billion of insurance coverage in limited amounts for economic loss and property damage arising out of nuclear incidents. FirstEnergy is a member of Nuclear Electric Insurance Limited (NEIL) which provides coverage (NEIL I) for the extra expense of replacement power incurred due to prolonged accidental outages of nuclear units. Under NEIL I, FirstEnergy has policies, renewable yearly, corresponding to its nuclear interests, which provide an aggregate indemnity of up to approximately $1.96 billion (OE - $168 million, NGC - $1.703 billion, TE - $89 million) for replacement power ~~costs incurred during an outage after an initial 20-week waiting period. Members~~costs. Under these policies, FES and the Companies can be assessed a maximum of ~~NEIL I pay annual premiums and are subject to assessments if losses exceed the accumulated funds available to the insurer. FirstEnergy's present maximum aggregate assessment~~approximately $80.9 million for incidents at any covered nuclear facility occurring during a policy year ~~would be approximately $15.1 million (OE - $1.3 million, NGC - $13.2 million, and TE - $0.6 million).~~

~~FirstEnergy is insured under property damage insurance provided by NEIL~~which are in excess of accumulated funds available to the ~~operating company~~insurer for each plant. Under these arrangements, up to $2.75 billion of coverage for decontamination costs, decommissioning costs, debris removal and repair and/or replacement of property is provided. FirstEnergy pays annual premiums for this coverage and is liable for retrospective assessments of up to approximately $56.8 million (OE - $5.3 million, NGC - $48.5 million, TE - $2.2 million, Met-Ed - $0.4 million, Penelec - $0.2 million and JCP&L - $0.2 million) during a policy year. On September 30, 2003, FirstEnergy tendered a Proof of Loss under the NEIL policies for property damage and accidental outage losses associated with the extended outage at the Davis-Besse Nuclear Power Station, which began in February 2002. In December 2004, NEIL denied FirstEnergy's claim. FirstEnergy requested binding arbitration under the policies and has submitted expert testimony to support its claim. Under NEIL's policies, the arbitrators shall award reasonable attorney's fees and costs to the prevailing party.paying losses.

~~FirstEnergy intends~~FES and the Companies intend to maintain insurance against nuclear risks, as described above, as long as it is available. To the extent that replacement power, property damage, decontamination, ~~decommissioning,~~ repair and replacement costs and other such costs arising from a nuclear incident at any of ~~FirstEnergy's~~their plants exceed the policy limits of the insurance in effect with respect to that plant, to the extent a nuclear incident is determined not to be covered by ~~FirstEnergy's~~their insurance policies, or to the extent such insurance becomes unavailable in the future, ~~FirstEnergy~~FES and the Companies would remain at risk for such costs.

67

(B) GUARANTEES AND OTHER ASSURANCES

On July 13, 2007, FGCO completed a sale and leaseback transaction for its 93.825% undivided interest in Bruce Mansfield Unit 1 (see Note 6). FES has unconditionally and irrevocably guaranteed all of FGCOs obligations under each of the leases. The ~~NRC requires nuclear power plant licensees to obtain minimum property insurance coverage of $1.06 billion~~related lessor notes and pass through certificates are not guaranteed by FES or FGCO, but the ~~amount generally available from private sources, whichever is less. The proceeds of this insurance~~notes are ~~required to be used first to ensure that~~secured by, among other things, each lessor trusts undivided interest in Unit 1, rights and interests under the ~~licensed reactor is in a safe~~applicable lease and ~~stable condition~~rights and can be maintained in that condition so as to prevent any significant risk to the public health and safety. Within 30 days of stabilization, the licensee is required to prepare and submit to the NRC a cleanup plan for approval. The plan is required to identify all cleanup operations necessary to decontaminate the reactor sufficiently to permit the resumption of operations or to commence decommissioning. Any property insurance proceeds not already expended to place the reactor in a safe and stable condition must be used first to complete those decontamination operations that are ordered by the NRC. FirstEnergy is unable to predict what effect these requirements may have on the availability of insurance proceeds.interests under other related agreements, including FES lease guaranty.

(C) ENVIRONMENTAL MATTERS

~~Environmental Matters~~

Various federal, state and local authorities regulate ~~FirstEnergy~~FES with regard to air and water quality and other environmental matters. The effects of compliance on ~~FirstEnergy~~FES with regard to environmental matters could have a material adverse effect on ~~FirstEnergy's~~its earnings and competitive position to the extent that it competes with companies that are not subject to such regulations and, therefore, do not bear the risk of costs associated with compliance, or failure to comply, with such regulations. Overall, FirstEnergy believes it is in compliance with existing regulations but is unable to predict future changes in regulatory policies and what, if any, the effects of such changes would be. FirstEnergyFES estimates ~~additional~~ capital expenditures for environmental compliance of approximately ~~$1.8~~$1.4 billion for ~~2007 through 2011.~~the period 2008-2012.

~~FirstEnergy~~FES accrues environmental liabilities only when it concludes that it is probable that it has an obligation for such costs and can reasonably estimate the amount of such costs. Unasserted claims are reflected in ~~FirstEnergy's~~FES determination of environmental liabilities and are accrued in the period that they become both probable and reasonably estimable.

Clean Air Act Compliance

~~FirstEnergy~~FES is required to meet federally-approved SO2₂ emissions regulations. Violations of such regulations can result in the shutdown of the generating unit involved and/or civil or criminal penalties of up to $32,500 for each day the unit is in violation. The EPA has an interim enforcement policy for SO2₂ regulations in Ohio that allows for compliance based on a 30-day averaging period. ~~FirstEnergy~~FES believes it is currently in compliance with this policy, but cannot predict what action the EPA may take in the future with respect to the interim enforcement policy.

15

The EPA Region 5 issued a Finding of Violation and NOV to the Bay Shore Power Plant dated June 15, 2006, alleging violations to various sections of the Clean Air Act. ~~FirstEnergy~~FES has disputed those alleged violations based on its Clean Air Act permit, the Ohio SIP and other information provided to the EPA at an August 2006 meeting with the EPA. The EPA has several enforcement options (administrative compliance order, administrative penalty order, and/or judicial, civil or criminal action) and has indicated that such option may depend on the time needed to achieve and demonstrate compliance with the rules alleged to have been violated. On June 5, 2007, the EPA requested another meeting to discuss an appropriate compliance program and a disagreement regarding the opacity limit applicable to the common stack for Bay Shore Units 2, 3 and 4.

~~FirstEnergy~~FES complies with SO2₂ reduction requirements under the Clean Air Act Amendments of 1990 by burning lower-sulfur fuel, generating more electricity from lower-emitting plants, and/or using emission allowances. NOX_X reductions required by the 1990 Amendments are being achieved through combustion controls and the generation of more electricity at lower-emitting plants. In September 1998, the EPA finalized regulations requiring additional NOX_X reductions at ~~FirstEnergy's~~FES facilities. The EPA's NOX_X Transport Rule imposes uniform reductions of NOX_X emissions (an approximate 85% reduction in utility plant NOX_X emissions from projected 2007 emissions) across a region of nineteen states (including Michigan, New Jersey, Ohio and Pennsylvania) and the District of Columbia based on a conclusion that such NOX_X emissions are contributing significantly to ozone levels in the eastern United States. ~~FirstEnergy~~FES believes its facilities are also complying with the NOX_X budgets established under SIPs through combustion controls and post-combustion controls, including Selective Catalytic Reduction and ~~Selective Non-Catalytic Reduction~~SNCR systems, and/or using emission allowances.

On May 22, 2007, FirstEnergy and FGCO received a notice letter, required 60 days prior to the filing of a citizen suit under the federal Clean Air Act, alleging violations of air pollution laws at the Bruce Mansfield Plant, including opacity limitations. Prior to the receipt of this notice, the Plant was subject to a Consent Order and Agreement with the Pennsylvania Department of Environmental Protection concerning opacity emissions under which efforts to achieve compliance with the applicable laws will continue. On October 16, 2007, PennFuture filed a complaint, joined by three of its members, in the United States District Court for the Western District of Pennsylvania. On January 11, 2008, FirstEnergy filed a motion to dismiss claims alleging a public nuisance. FGCO is not required to respond to other claims until the Court rules on this motion to dismiss.

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On December 18, 2007, the state of New Jersey filed a Clean Air Act citizen suit alleging new source review violations at the Portland Generation Station against Reliant (the current owner and operator), Sithe Energy (the purchaser of the Portland Station from Met-Ed in 1999), GPU, Inc. and Met-Ed. Specifically, New Jersey alleges that "modifications" at Portland Units 1 and 2 occurred between 1980 and 1995 without preconstruction new source review or permitting required by the Clean Air Act's prevention of significant deterioration program, and seeks injunctive relief, penalties, attorney fees and mitigation of the harm caused by excess emissions. Although it remains liable for civil or criminal penalties and fines that may be assessed relating to events prior to the sale of the Portland Station in 1999, Met-Ed is indemnified by Sithe Energy against any other liability arising under the CAA whether it arises out of pre-1999 or post-1999 events.

National Ambient Air Quality Standards

~~In July 1997, the EPA promulgated changes in the NAAQS for ozone and fine particulate matter.~~ In March 2005, the EPA finalized the CAIR covering a total of 28 states (including Michigan, New Jersey, Ohio and Pennsylvania) and the District of Columbia based on proposed findings that air emissions from 28 eastern states and the District of Columbia significantly contribute to non-attainment of the NAAQS for fine particles and/or the "8-hour" ozone NAAQS in other states. CAIR ~~provided each affected state until 2006 to develop implementing regulations to achieve additional~~requires reductions of NOXNO_X and SO2₂ emissions in two phases (Phase I in 2009 for NOX_X, 2010 for SO2₂ and Phase II in 2015 for both NOX_X and SO2₂). ~~FirstEnergy's~~FES' Michigan, Ohio and Pennsylvania ~~fossil-fired~~fossil generation facilities will be subject to caps on SO2₂ and NOX_X ~~emissions, whereas its New Jersey fossil-fired generation facility will be subject to only a cap on NO~~_X emissions. According to the EPA, SO2₂ emissions will be reduced by 45% (from 2003 levels) by 2010 across the states covered by the rule, with reductions reaching 73% (from 2003 levels) by 2015, capping SO2₂ emissions in affected states to just 2.5 million tons annually. NOX_X emissions will be reduced by 53% (from 2003 levels) by 2009 across the states covered by the rule, with reductions reaching 61% (from 2003 levels) by 2015, achieving a regional NOX_X cap of 1.3 million tons annually. CAIR has been challenged in the United States Court of Appeals for the District of Columbia. The future cost of compliance with these regulations may be substantial and ~~will~~may depend on the outcome of this litigation and how ~~they are~~CAIR is ultimately ~~implemented by the states in which FirstEnergy operates affected facilities.~~implemented.

Mercury Emissions

In December 2000, the EPA announced it would proceed with the development of regulations regarding hazardous air pollutants from electric power plants, identifying mercury as the hazardous air pollutant of greatest concern. In March 2005, the EPA finalized the CAMR, which provides a cap-and-trade program to reduce mercury emissions from coal-fired power plants in two ~~phases. Initially,~~phases; initially, capping national mercury emissions ~~will be capped nationally~~ at 38 tons by 2010 (as a "co-benefit" from implementation of SO2₂ and NOX_X emission caps under the EPA's CAIR program)~~. Phase II of the mercury cap-and-trade program will cap nationwide mercury emissions from coal-fired power plants at~~ and 15 tons per year by 2018. ~~However, the final rules give~~Several states ~~substantial discretion in developing rules~~and environmental groups appealed CAMR to ~~implement these programs. In addition, both the CAIR and the CAMR have been challenged in~~ the United States Court of Appeals for the District of ~~Columbia. FirstEnergy's~~Columbia, which on February 8, 2008, vacated CAMR ruling that the EPA failed to take the necessary steps to “de-list” coal-fired power plants from its hazardous air pollutant program and, therefore, could not promulgate a cap and trade program. The EPA must now seek judicial review of that ruling or take regulatory action to promulgate new mercury emission standards for coal-fired power plants. FGCO’s future cost of compliance with ~~these~~mercury regulations may be substantial and will depend on the action taken by the EPA and on how they are ultimately ~~implemented by the states in which FirstEnergy operates affected facilities.~~implemented.

The model rules for both CAIR and CAMR contemplate an input-based methodology to allocate allowances to affected facilities. Under this approach, allowances would be allocated based on the amount of fuel consumed by the affected sources. FirstEnergy would prefer an output-based generation-neutral methodology in which allowances are allocated based on megawatts of power produced, allowing new and non-emitting generating facilities (including renewables and nuclear) to be entitled to their proportionate share of the allowances. Consequently, FirstEnergy will be disadvantaged if these model rules were implemented as proposed because FirstEnergy's substantial reliance on non-emitting (largely nuclear) generation is not recognized under the input-based allocation.

Pennsylvania has submitted a new mercury rule for EPA approval that does not provide a ~~cap and trade~~cap-and-trade approach as in the CAMR, but rather follows a ~~command and control~~command-and-control approach imposing emission limits on individual sources. ~~Pennsylvania's mercury regulation would deprive FES of mercury emission allowances~~It is anticipated that ~~were to be allocated to the Mansfield Plant under the CAMR and that would otherwise be available for achieving FirstEnergy system-wide compliance. The future cost of~~ compliance with these regulations, if approved by the EPA and implemented, ~~may be substantial.~~

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would not require the addition of mercury controls at the Bruce Mansfield Plant, FES only Pennsylvania coal-fired power plant, until 2015, if at all.

W. H. Sammis ~~Plan~~Plant

In 1999 and 2000, the EPA issued an NOV ~~or compliance orders to nine utilities alleging violations of~~and the ~~Clean Air Act~~DOJ filed a civil complaint against OE and Penn based on operation and maintenance of ~~44 power plants, including~~ the ~~W. H.~~W.H. Sammis Plant ~~which was owned at that time by OE~~(Sammis NSR Litigation) and ~~Penn. In addition, the DOJ~~ filed ~~eight civil~~similar complaints ~~against various investor-owned utilities, including a complaint against OE and Penn in the~~involving 44 other U.S. ~~District Court for the Southern District of Ohio. These~~power plants. This case, along with seven other similar cases, are referred to as the New Source Review (NSR) cases.

On March 18, 2005, OE and Penn announced that they had reached a settlement with the EPA, the DOJ and three states (Connecticut, New Jersey and New York) that resolved all issues related to the ~~New Source Review~~Sammis NSR litigation. This settlement agreement, which is in the form of a consent decree, was approved by the ~~Court~~court on July 11, 2005, and requires reductions of NOX_X and SO2₂ emissions at the ~~W. H.~~ Sammis, ~~Plant~~Burger, Eastlake and ~~other~~Mansfield coal-fired plants through the installation of pollution control devices and provides for stipulated penalties for failure to install and operate such pollution controls in accordance with that agreement. Consequently, if ~~we fail~~FirstEnergy fails to install such pollution control devices, for any reason, including, but not limited to, the failure of any third-party contractor to timely meet its delivery obligations for such devices, weFGCO, OE and Penn could be exposed to penalties under the Sammis NSR Litigation consent decree. Capital expenditures necessary to complete requirements of the Sammis NSR Litigation consent decree are currently estimated to be ~~$1.5~~$1.3 billion for 2008-2012 ($~~400~~650 million of which is expected to be spent ~~in 2007,~~during 2008, with the largest portion of the remaining ~~$1.1 billion~~$650 million expected to be spent in ~~2008 and~~ 2009). This amount is included in the estimated capital expenditures for environmental compliance referenced above.

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The Sammis NSR Litigation consent decree also requires usFirstEnergy to spend up to $25 million toward environmentally beneficial projects, $14 million of which is satisfied by entering into 93 MW (or 23 MW if federal tax credits are not applicable) of wind energy purchased power agreements with a 20-year term. An initial 16 MW of the 93 MW consent decree obligation was satisfied during 2006.

On August 26, 2005, FGCO entered into an agreement with Bechtel Power Corporation, or Bechtel, under which Bechtel will engineer, procure and construct ~~air quality control~~AQC systems for the reduction of SO2₂ emissions. FGCO also entered into an agreement with Babcock & Wilcox Company, or B&W, on August 25, 2006 to supply flue gas desulfurization systems for the reduction of SO2₂ emissions. ~~Selective Catalytic Reduction (SCR)~~SCR systems for the reduction of ~~NOx~~NOX emissions are also ~~are~~ being installed at the ~~W.H.~~ Sammis Plant under a 1999 ~~agreement~~Agreement with B&W.

~~OE and Penn agreed~~

On April 2, 2007, the United States Supreme Court ruled that changes in annual emissions (in tons/year) rather than changes in hourly emissions rate (in kilograms/hour) must be used to ~~pay a civil penalty of $8.5 million. Results for~~determine whether an emissions increase triggers NSR. Subsequently, on May 8, 2007, the ~~first quarter of 2005 included~~EPA proposed to change the ~~penalties paid by OE and Penn of $7.8 million and $0.7 million, respectively. OE and Penn also recognized liabilities~~NSR regulations to utilize changes in the ~~first quarter~~hourly emission rate (in kilograms/hour) to determine whether an emissions increase triggers NSR. The EPA has not yet issued a final regulation. FGCO’s future cost of ~~2005 of $9.2 million~~compliance with those regulations may be substantial and ~~$0.8 million, respectively, for probable future cash contributions toward environmentally beneficial projects.~~will depend on how they are ultimately implemented.

Climate Change

~~Climate Change~~

In December 1997, delegates to the United Nations' climate summit in Japan adopted an agreement, the Kyoto Protocol, to address global warming by reducing the amount of man-made GHG emitted by developed countries by ~~5.2% from 1990 levels between 2008 and~~ 2012. The United States signed the Kyoto Protocol in 1998 but it failed to receive the two-thirds vote required for ratification by the United States Senate. However, the Bush administration has committed the United States to a voluntary climate change strategy to reduce domestic GHG intensity - the ratio of emissions to economic output - by 18% through 2012. ~~The~~In addition, the EPACT established a Committee on Climate Change Technology to coordinate federal climate change activities and promote the development and deployment of GHG reducing technologies.

There are a number of initiatives to reduce GHG emissions under consideration at the federal, state and international level. At the international level, efforts to reach a new global agreement to reduce GHG emissions post-2012 have begun with the Bali Roadmap, which outlines a two-year process designed to lead to an agreement in 2009. At the federal level, members of Congress have introduced several bills seeking to reduce emissions of GHG in the United States, and the Senate Environmental and Public Works Committees passed one such bill. State activities, primarily the northeastern states participating in the Regional Greenhouse Gas Initiative and western states led by California, have coordinated efforts to develop regional strategies to control emissions of certain GHGs.

~~FirstEnergy~~On April 2, 2007, the United States Supreme Court found that the EPA has the authority to regulate CO2 emissions from automobiles as air pollutants under the Clean Air Act. Although this decision did not address CO2 emissions from electric generating plants, the EPA has similar authority under the Clean Air Act to regulate air pollutants from those and other facilities.

FES cannot currently estimate the financial impact of climate change policies, although ~~the~~ potential ~~restrictions on~~legislative or regulatory programs restricting CO2₂ emissions could require significant capital and other expenditures. The CO2₂ emissions per KWH of electricity generated by ~~FirstEnergy~~FES is lower than many regional competitors due to its diversified generation sources, which include low or non-CO2₂ emitting gas-fired and nuclear generators.

Clean Water Act

Various water quality regulations, the majority of which are the result of the federal Clean Water Act and its amendments, apply to ~~FirstEnergy's~~FES plants. In addition, Ohio, New Jersey and Pennsylvania have water quality standards applicable to ~~FirstEnergy's~~FES operations. As provided in the Clean Water Act, authority to grant federal National Pollutant Discharge Elimination System water discharge permits can be assumed by a state. Ohio, New Jersey and Pennsylvania have assumed such authority.

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On September 7, 2004, the EPA established new performance standards under Section 316(b) of the Clean Water Act for reducing impacts on fish and shellfish from cooling water intake structures at certain existing large electric generating plants. The regulations call for reductions in impingement mortality ~~when~~(when aquatic organisms are pinned against screens or other parts of a cooling water intake ~~system,~~system) and entrainment ~~which~~(which occurs when aquatic life is drawn into a facility's cooling water ~~system.~~system). On January 26, 2007, the ~~federal~~United States Court of Appeals for the Second Circuit remanded portions of the rulemaking dealing with impingement mortality and entrainment back to the EPA for further rulemaking and eliminated the restoration option from ~~EPA's~~the EPAs regulations. ~~FirstEnergy~~On July 9, 2007, the EPA suspended this rule, noting that until further rulemaking occurs, permitting authorities should continue the existing practice of applying their best professional judgment (BPJ) to minimize impacts on fish and shellfish from cooling water intake structures. FES is conducting comprehensive demonstration studies, due in 2008, to determine the operational measures or equipment, if any, necessary for compliance by its facilities with the performance standards. FirstEnergy is unable to predict the outcome of such studies or changes in these requirements from the remand to EPA.evaluating various control options and their costs and effectiveness. Depending on the outcome of such studies, ~~and EPA's~~the EPAs further rulemaking and any action taken by the states exercising BPJ, the future cost of compliance with these standards may require material capital expenditures.

Regulation of Hazardous Waste

As a result of the Resource Conservation and Recovery Act of 1976, as amended, and the Toxic Substances Control Act of 1976, federal and state hazardous waste regulations have been promulgated. Certain fossil-fuel combustion waste products, such as coal ash, were exempted from hazardous waste disposal requirements pending the EPA's evaluation of the need for future regulation. The EPA subsequently determined that regulation of coal ash as a hazardous waste is unnecessary. In April 2000, the EPA announced that it will develop national standards regulating disposal of coal ash under its authority to regulate ~~nonhazardous~~non-hazardous waste.

Under NRC regulations, FirstEnergy must ensure that adequate funds will be available to decommission its nuclear facilities. As of December 31, ~~2006, FirstEnergy~~2007, FES and the Companies had approximately ~~$1.4~~$1.5 billion invested in external trusts to be used for the decommissioning and environmental remediation of Davis-Besse, Beaver Valley and Perry. As part of the application to the NRC to transfer the ownership of these nuclear facilities to NGC in 2005, FirstEnergy agreed to contribute another $80 million to these trusts by 2010. Consistent with NRC guidance, utilizing a ~~"real"~~real rate of return on these funds of approximately 2% over inflation, these trusts are expected to exceed the minimum decommissioning funding requirements set by the NRC. Conservatively, these estimates do not include any rate of return that the trusts may earn over the 20-year plant useful life extensions that FirstEnergy ~~plans~~(and Exelon for TMI-1 as it relates to ~~seek~~the timing of the decommissioning of TMI-2) seeks for these facilities.

The Companies have been named as PRPs at waste disposal sites, which may require cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. Allegations of disposal of hazardous substances at historical sites and the liability involved are often unsubstantiated and subject to dispute; however, federal law provides that all PRPs for a particular site ~~are~~may be liable on a joint and several basis. Therefore, environmental liabilities that are considered probable have been recognized on the Consolidated Balance Sheet as of December 31, ~~2006,~~2007, based on estimates of the total costs of cleanup, the Companies' proportionate responsibility for such costs and the financial ability of other unaffiliated entities to pay. In addition, JCP&L has accrued liabilities of approximately $56 million for environmental remediation of former manufactured gas plants in New Jersey; those costs are being recovered by JCP&L through a non-bypassable SBC. ~~Total~~CEI, TE and JCP&L have recognized liabilities of ~~approximately $88~~$1.3 million, ~~(JCP&L - $59 million, CEI - $2 million, TE - $3~~$2.5 million and ~~other subsidiaries- $24 million) have been accrued through~~$64.9 million, respectively, as of December 31, ~~2006.~~2007.

(D) OTHER LEGAL PROCEEDINGS

Power Outages and Related Litigation

~~Fuel Supply~~

~~FirstEnergy currently has long-term coal contracts~~In July 1999, the Mid-Atlantic States experienced a severe heat wave, which resulted in power outages throughout the service territories of many electric utilities, including JCP&L's territory. In an investigation into the causes of the outages and the reliability of the transmission and distribution systems of all four of New Jerseys electric utilities, the NJBPU concluded that there was not a prima facie case demonstrating that, overall, JCP&L provided unsafe, inadequate or improper service to ~~provide approximately 21.3 million tons of coal for the year 2007. This contract coal is produced primarily from mines located~~its customers. Two class action lawsuits (subsequently consolidated into a single proceeding) were filed in ~~Pennsylvania, Kentucky, Wyoming, West Virginia~~New Jersey Superior Court in July 1999 against JCP&L, GPU and ~~Ohio. The contracts expire at various times through December 31, 2028. FirstEnergy estimates its 2007 coal requirements to be approximately 23.2 million tons to be met~~other GPU companies, seeking compensatory and punitive damages arising from the ~~long-term contracts as well as from spot market purchases. See "Environmental Matters" for factors pertaining to meeting environmental regulations affecting coal-fired generating units.~~

FirstEnergy is contracted for all uranium requirements through 2009 and a portion of uranium material requirements through 2014. Conversion services contracts fully cover requirements through 2010 and partially fill requirements through 2015. Enrichment services are contracted for all ofJuly 1999 service interruptions in the enrichment requirements for nuclear fuel through 2011. A portion of enrichment requirements is also contracted for through 2020. Fabrication services for fuel assemblies are contracted for both Beaver Valley units and Davis Besse through 2013 and through the operating license period for Perry (through approximately 2026). The Davis-Besse fabrication contract also has an extension provision for services for three additional consecutive reload batches through the current operating license period (approximately 2017). In addition to the existing commitments, FirstEnergy intends to make additional arrangements for the supply of uranium and for the subsequent conversion, enrichment, fabrication, and waste disposal services.JCP&L territory.

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~~On-site spent fuel storage facilities are expected~~In August 2002, the trial court granted partial summary judgment to ~~be adequate~~JCP&L and dismissed the plaintiffs' claims for ~~Perry through 2011; facilities at Beaver Valley Units 1~~consumer fraud, common law fraud, negligent misrepresentation, and ~~2 are expected~~strict product liability. In November 2003, the trial court granted JCP&L's motion to ~~be adequate through 2015~~decertify the class and ~~2008, respectively. With the plant modifications completed~~denied plaintiffs' motion to permit into evidence their class-wide damage model indicating damages in ~~2002, Davis-Besse has adequate storage through the remainder~~excess of its current operating license period. After current on-site storage capacity is exhausted, additional storage capacity will have to be obtained either through plant modifications, interim off-site disposal, or permanent waste disposal facilities. FENOC is currently taking actions to extend the storage capacity at both Perry$50 million. These class decertification and Beaver Valley Unit 2. The Federal Nuclear Waste Policy Act of 1982 provides for the construction of facilities for the permanent disposal of high-level nuclear wastes, including spent fuel from nuclear power plants operated by electric utilities. CEI, TE, OE and Penn have contracts with the U.S. Department of Energy (DOE) for the disposal of spent fuel for Beaver Valley, Davis-Besse and Perry. On February 15, 2002, President Bush approved the DOE's recommendation of Yucca Mountain for underground disposal of spent nuclear fuel from nuclear power plants and high level waste from U.S. defense programs. The approval by President Bush enables the process to proceeddamage rulings were appealed to the ~~licensing phase. Based~~Appellate Division. The Appellate Division issued a decision in July 2004, affirming the decertification of the originally certified class, but remanding for certification of a class limited to those customers directly impacted by the outages of JCP&L transformers in Red Bank, NJ, based on a common incident involving the failure of the bushings of two large transformers in the Red Bank substation resulting in planned and unplanned outages in the area during a 2-3 day period. In 2005, JCP&L renewed its motion to decertify the class based on a very limited number of class members who incurred damages and also filed a motion for summary judgment on the ~~DOE schedule published on~~remaining plaintiffs claims for negligence, breach of contract and punitive damages. In July ~~19,~~ 2006, the Yucca Mountain Repository is currently projected to start receiving spent fuel in 2017. The Companies intend to make additional arrangements for storage capacity as a contingency for further delays with the DOE acceptance of spent fuel for disposal past 2017.

~~System Capacity and Reserves~~

The 2006 net maximum hourly demand for each of the Companies was: OE-6,024 MW on August 1, 2006; Penn-1,024 MW on August 1, 2006; CEI-4,674 MW on August 1, 2006; TE-2,276 MW on July 31, 2006; JCP&L-6,702 MW on August 2, 2006; Met-Ed-2,996 MW on August 2, 2006; and Penelec-3,069 MW on August 2, 2006. ~~JCP&L's load is supplied through~~ the New Jersey ~~BGS Auction process, transferring substantially all~~Superior Court dismissed the punitive damage claim and again decertified the class based on the fact that a vast majority of ~~its load obligation~~the class members did not suffer damages and those that did would be more appropriately addressed in individual actions. Plaintiffs appealed this ruling to ~~other parties.~~the New Jersey Appellate Division which, in March 2007, reversed the decertification of the Red Bank class and remanded this matter back to the Trial Court to allow plaintiffs sufficient time to establish a damage model or individual proof of damages. JCP&L filed a petition for allowance of an appeal of the Appellate Division ruling to the New Jersey Supreme Court which was denied in May 2007. Proceedings are continuing in the Superior Court. JCP&L is defending this class action but is unable to predict the outcome of this matter. No liability has been accrued as of December 31, 2007.

~~Based~~On August 14, 2003, various states and parts of southern Canada experienced widespread power outages. The outages affected approximately 1.4 million customers in FirstEnergy's service area. The U.S. Canada Power System Outage Task Forces final report in April 2004 on ~~existing capacity plans, ongoing arrangements for firm purchase contracts,~~the outages concluded, among other things, that the problems leading to the outages began in FirstEnergy's Ohio service area. Specifically, the final report concluded, among other things, that the initiation of the August 14, 2003 power outages resulted from an alleged failure of both FirstEnergy and ~~anticipated term~~ECAR to assess and understand perceived inadequacies within the FirstEnergy system; inadequate situational awareness of the developing conditions; and a perceived failure to adequately manage tree growth in certain transmission rights of way. The Task Force also concluded that there was a failure of the interconnected grid's reliability organizations (MISO and PJM) to provide effective real-time diagnostic support. The final report is publicly available through the Department of Energys Web site (www.doe.gov). FirstEnergy believes that the final report does not provide a complete and comprehensive picture of the conditions that contributed to the August 14, 2003 power ~~sales~~outages and ~~purchases,~~that it does not adequately address the underlying causes of the outages. FirstEnergy ~~has sufficient supply resources~~remains convinced that the outages cannot be explained by events on any one utility's system. The final report contained 46 recommendations to ~~meet load obligations. The current~~prevent or minimize the scope of future blackouts. Forty-five of those recommendations related to broad industry or policy matters while one, including subparts, related to activities the Task Force recommended be undertaken by FirstEnergy, ~~capacity portfolio contains 13,578 MW~~MISO, PJM, ECAR, and other parties to correct the causes of ~~owned or leased generation, 463 MW of generation from our 20.5% ownership of OVEC,~~the August 14, 2003 power outages. FirstEnergy implemented several initiatives, both prior to and ~~approximately 1,360 MW of long-term purchases from Pennsylvania~~since the August 14, 2003 power outages, which were independently verified by NERC as complete in 2004 and New Jersey NUGs. FirstEnergy has also entered into approximately 314 MW of long-term purchase contracts for renewable energy from wind resources. Any remaining load obligations will be met through a mix of multi-year forward purchases, short-term forward purchases (less than one year)were consistent with these and ~~spot market purchases. FirstEnergy's sources of generation during 2006 were 64%~~other recommendations and ~~36% from non-nuclear and nuclear, respectively.~~

~~Regional Reliability~~

~~The Ohio Companies and Penn participate with 24 other electric companies operating in nine states in ECAR, which was organized for the purpose of furthering~~collectively enhance the reliability of ~~bulk power supply~~its electric system. FirstEnergy's implementation of these recommendations in 2004 included completion of the Task Force recommendations that were directed toward FirstEnergy. FirstEnergy is also proceeding with the implementation of the recommendations that were to be completed subsequent to 2004 and will continue to periodically assess the FERC-ordered Reliability Study recommendations for forecasted 2009 system conditions, recognizing revised load forecasts and other changing system conditions which may impact the recommendations. Thus far, implementation of the recommendations has not required, nor is expected to require, substantial investment in new or material upgrades to existing equipment. The FERC or other applicable government agencies and reliability coordinators may, however, take a different view as to recommended enhancements or may recommend additional enhancements in the ~~area through coordination~~future that could require additional material expenditures.

On February 5, 2008, the PUCO entered an order dismissing four separate complaint cases before it relating to the August 14, 2003 power outages. The dismissal was filed by the complainants in accordance with a resolution reached between the FirstEnergy companies and the complainants in those four cases. Two of those cases which were originally filed in Ohio State courts involved individual complainants and were subsequently dismissed for lack of subject matter jurisdiction. Further appeals were unsuccessful. The other two complaint cases were filed by various insurance carriers either in their own name as subrogees or in the name of their insured, seeking reimbursement from various FirstEnergy companies (and, in one case, from PJM, MISO and AEP, as well) for claims paid to insureds for damages allegedly arising as a result of the ~~planning and operation~~loss of power on August 14, 2003. (Also relating to the August 14, 2003 power outages, a fifth case, involving another insurance company was voluntarily dismissed by the ~~ECAR members of their bulk power supply facilities. The ECAR members have established principles~~claimant in April 2007; and ~~procedures regarding matters affecting~~a sixth case, involving the reliability of the bulk power supply within the ECAR region. Procedures have been adopted regarding: i) the evaluation and simulated testing of systems' performance; ii) the establishment of minimum levels of daily operating reserves; iii) the developmentclaim of a ~~program regarding emergency procedures during conditions of declining system frequency; and iv)~~non-customer seeking reimbursement for losses incurred when its store was burglarized on August 14, 2003 was dismissed by the ~~basis for uniform rating of generating equipment.~~

court.) The ~~ECAR, Mid-Atlantic Area Council, and Mid-American Interconnected Network reliability councils completed~~order dismissing the ~~consolidation of these regions into a single new regional reliability organization known as Reliability~~~~First~~ ~~Corporation. Reliability~~~~First~~ ~~began operations as a regional reliability council under NERC on January 1, 2006 and on November 29, 2006 filed a proposed Delegation Agreement with NERC~~PUCO cases, noted above, concludes all pending litigation related to ~~obtain certification consistent with~~ the ~~final rule as a "regional entity" under the ERO. All of FirstEnergy's facilities are located within the Reliability~~~~First~~ ~~region.~~

The transmission facilities of JCP&L, Met-Ed, and Penelec are controlled by PJM. PJM is the organization responsible for the control of the bulk electric power system throughout major portions of thirteen Mid-Atlantic statesAugust 14, 2003 outages and the ~~District~~resolution will not have a material adverse effect on the financial condition, results of ~~Columbia. PJM is dedicated to meeting the reliability criteria and standards~~operations or cash flows of ~~NERC and the Reliability~~~~First~~ ~~Regional Reliability Organization.~~

~~Competition~~

~~The Companies compete with other utilities for intersystem bulk power sales and for sales to municipalities and cooperatives. The Companies also compete with suppliers~~either FirstEnergy or any of natural gas and other forms of energy in connection with their industrial and commercial sales and in the home climate control market, both with respect to new customers and conversions, and with all other suppliers of electricity. To date, there has been no substantial cogeneration by the Companies' customers.its subsidiaries.

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Nuclear Plant Matters

On May 14, 2007, the Office of Enforcement of the NRC issued a Demand for Information (DFI) to FENOC, following FENOCs reply to an April 2, 2007 NRC request for information, about two reports prepared by expert witnesses for an insurance arbitration (the insurance claim was subsequently withdrawn by FirstEnergy in December 2007) related to Davis-Besse. The NRC indicated that this information was needed for the NRC to determine whether an Order or other action should be taken pursuant to 10 CFR 2.202, to provide reasonable assurance that FENOC will continue to operate its licensed facilities in accordance with the terms of its licenses and the Commissions regulations. FENOC was directed to submit the information to the NRC within 30 days. On June 13, 2007, FENOC filed a response to the NRCs Demand for Information reaffirming that it accepts full responsibility for the mistakes and omissions leading up to the damage to the reactor vessel head and that it remains committed to operating Davis-Besse and FirstEnergy's other nuclear plants safely and responsibly. FENOC submitted a supplemental response clarifying certain aspects of the DFI response to the NRC on July 16, 2007. On August 15, 2007, the NRC issued a confirmatory order imposing these commitments. FENOC must inform the NRCs Office of Enforcement after it completes the key commitments embodied in the NRCs order. FENOCs compliance with these commitments is subject to future NRC review.

As a result of actions taken by state legislative bodies over the last few years, major changes in the electric utility business have occurred in parts of the United States, including Ohio, New Jersey and Pennsylvania where FirstEnergy's utility subsidiaries operate. These changes have resulted in fundamental alterations in the way traditional integrated utilities and holding company systems, like FirstEnergy, conduct their business. In accordance with the Ohio electric utility restructuring law under which Ohio electric customers could begin choosing their electric generation suppliers starting in January 2001, FirstEnergy has further aligned its business units to accommodate its retail strategy and participate in the competitive electricity marketplace in Ohio. The organizational changes deal with the unbundling of electric utility services and new ways of conducting business. FirstEnergy's Power Supply Management Services segment participates in deregulated energy markets in Ohio, Pennsylvania, Michigan, Maryland and New Jersey.Other Legal Matters

~~Competition~~There are various lawsuits, claims (including claims for asbestos exposure) and proceedings related to normal business operations pending against FES and the Companies. The other potentially material items not otherwise discussed above are described below.

On August 22, 2005, a class action complaint was filed against OE in ~~Ohio's electric generation market began~~Jefferson County, Ohio Common Pleas Court, seeking compensatory and punitive damages to be determined at trial based on ~~January 1, 2001. Pursuant~~claims of negligence and eight other tort counts alleging damages from W.H. Sammis Plant air emissions. The two named plaintiffs are also seeking injunctive relief to eliminate harmful emissions and repair property damage and the ~~generation asset transfers on October 24, 2005~~institution of a medical monitoring program for class members. On April 5, 2007, the Court rejected the plaintiffs request to certify this case as a class action and, ~~December 16, 2005, FGCO and NGC own all~~accordingly, did not appoint the plaintiffs as class representatives or their counsel as class counsel. On July 30, 2007, plaintiffs counsel voluntarily withdrew their request for reconsideration of the fossil and nuclear generation assets, respectively, previously owned by the Ohio Companies and Penn, and continue to operate those companies' respective leasehold interests. The Ohio Companies continue to obtain their PLR requirements through power supply agreements with FES. JCP&L's obligation to provide BGS has been removed through a transitional mechanism of auctioning the obligation (see "NJBPU Rate Matters"). Met-Ed and Penelec have been purchasing a portion of their PLR requirements from FES through a partial requirements wholesale power sales agreement and various amendments. Under these agreements, FES retained the supply obligationApril 5, 2007 Court order denying class certification and the ~~supply profit and loss risk for~~Court heard oral argument on the ~~portion of power supply requirements not self-supplied by Met-Ed and Penelec.~~plaintiffs motion to amend their complaint which OE has opposed. On ~~January 17,~~August 2, 2007, ~~Met-Ed, Penelec and FES agreed~~the Court denied the plaintiffs motion to ~~restate, effective January 1, 2007,~~amend their ~~partial requirements wholesale power sales agreement.~~complaint. The ~~restated agreement incorporates~~plaintiffs have appealed the same fixed price for residual capacity and energy supplied by FES as in prior arrangements and allows Met-Ed and Penelec to sell the output of non-utility generation to the market (see "PPUC Rate Matters" for further discussion). As a result of Penn's PLR competitive solicitation process approved by the PPUC for the period January 1, 2007 through May 31, 2008, FES was selected as the winning bidder for a numberCourts denial of the ~~tranches~~motion for ~~individual customer classes. The balance of the tranches will be supplied by unaffiliated power suppliers.~~

~~Research~~certification as a class action and ~~Development~~motion to amend their complaint.

The Companies participate in funding EPRI, which was formed for the purpose of expanding electric research and development under the voluntary sponsorship of the nation's electric utility industry - public, private and cooperative. Its goal is to mutually benefit utilities and their customers by promoting the development of new and improved technologies to help the utility industry meet present and future electric energy needs in environmentally and economically acceptable ways. EPRI conducts research on all aspects of electric power production and use, including fuels, generation, delivery, energy management and conservation, environmental effects and energy analysis. The major portion of EPRI research and development projects is directed toward practical solutions and their applications to problems currently facing the electric utility industry.

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~~Executive Officers~~

~~Name~~	~~Age~~	~~Position Held During~~ ~~Past Five Years~~	~~Dates~~

~~A. J. Alexander (A)(B)~~	55	~~President and Chief Executive Officer~~	~~2004-present~~
		~~President and Chief Operating Officer~~	*-2004

~~L. M. Cavalier~~	55	~~Senior Vice President - Human Resources~~	~~2005-present~~
		~~Vice President - Human Resources~~	*-2005

~~M. T. Clark~~	56	~~Senior Vice President - Strategic Planning & Operations~~	~~2004-present~~
		~~Vice President - Business Development~~	*-2004

~~K. W. Dindo~~	57	~~Vice President and Chief Risk Officer~~	*-present

~~D. S. Elliott (B)~~	52	~~President - Pennsylvania Operations~~	~~2005-present~~
		~~Senior Vice President~~	*-2005

~~R. R. Grigg (A)(B)~~	58	~~Executive Vice President and Chief Operating Officer~~	~~2004-present~~
		~~President and Chief Executive Officer - WE Generation~~ ~~Executive Vice President - WEC~~	~~2003-2004~~ *-2003

~~A. Jamshidi~~ ~~C. E. Jones (A)(B)~~	52 51	~~Vice President - Commodity Operations (FES)~~ ~~Vice President - Energy Delivery~~ ~~Vice President & Chief Information Officer~~ ~~Senior Vice President - Energy Delivery & Customer Service~~ ~~Regional Vice President - Operations~~	~~2006-present~~ ~~2004-2006~~ -2004 ~~2003-present~~ -2003

~~C. D. Lasky~~	44	~~Vice President - Fossil Operations (FES)~~	~~2004-present~~
		~~Plant Director~~	~~2003-2004~~
		~~Assistant Plant Director~~	*-2003

~~G. R. Leidich~~	56	~~President and Chief Nuclear Officer - FENOC~~	~~2003-present~~
		~~Executive Vice President - FENOC~~	~~2002-2003~~
		~~Executive Vice President - Institute of Nuclear Power Ops~~	*-2002

~~D. C. Luff~~	59	~~Senior Vice President - Governmental Affairs~~	~~2005-present~~
		~~Vice President~~	*-2005

~~R. H. Marsh (A)(B)(C)~~	56	~~Senior Vice President and Chief Financial Officer~~	*-present

~~S. E. Morgan (C)~~	56	~~President - JCP&L~~	~~2004-present~~
		~~Vice President - Energy Delivery~~	~~2002-2004~~
		~~Regional President - Central~~	*-2002

~~J. M. Murray (A)~~	60	~~President - Ohio Operations~~ ~~Regional President - West~~	~~2005-present~~ *-2005

~~J. F. Pearson (A)(B)(C)~~	52	~~Vice President and Treasurer~~	~~2006-present~~
		~~Treasurer~~ ~~Group Controller - Strategic Planning and Operations~~	~~2005-2006~~ ~~2004-2005~~
		~~Group Controller - FES~~	~~2003-2004~~
		~~Director - FES~~	*-2003

~~G. L. Pipitone~~	56	~~President - FES~~	~~2004-present~~
		~~Senior Vice President~~	*-2004

~~D. R. Schneider~~	45	~~Vice President - Energy Delivery~~ ~~Vice President - Commodity Operations (FES)~~	~~2006-present~~ ~~2004-2006~~
		~~Vice President - Fossil Operations (FES)~~	*-2004

~~C. B. Snyder~~	61	~~Senior Vice President~~	*-present

~~L.L. Vespoli (A)(B)(C)~~	47	~~Senior Vice President and General Counsel~~	*-present

~~H. L. Wagner (A)(B)(C)~~	54	~~Vice President, Controller and Chief Accounting Officer~~	*-present

~~T. M. Welsh~~	57	~~Senior Vice President - External Affairs~~	~~2004-present~~
		~~Vice President - Communications~~	*-2004

~~(A) Denotes executive officers of OE, CEI and TE.~~

~~(B) Denotes executive officers of Met-Ed and Penelec~~

~~(C) Denotes executive officers of JCP&L.~~

*~~Indicates position held at least since January 1, 2002~~

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~~Employees~~

~~As of January 1, 2007, FirstEnergy's nonutility subsidiaries and the Companies had a total of 13,739 employees located in the United States as follows:~~

~~FESC~~	~~2,991~~
OE	~~1,234~~
~~CEI~~	~~943~~
TE	~~420~~
~~Penn~~	~~198~~
~~JCP&L~~	~~1,448~~
~~Met-Ed~~	~~701~~
~~Penelec~~	~~888~~
~~ATSI~~	36
~~FES~~	~~2,082~~
~~FENOC~~	~~2,798~~
~~Total~~	~~13,739~~

Of the above employees 6,599 (including 253 for FESC; 739 for OE; 645 for CEI; 316 for TE; 149 for Penn; 1,137 for JCP&L; 520 for Met-Ed; 619 for Penelec; 1,252 for FES; and 969 for FENOC) are covered by collective bargaining agreements.

JCP&L's bargaining unit employees filed a grievance challenging JCP&L's 2002 call-out procedure that required bargaining unit employees to respond to emergency power outages. On May 20, 2004, an arbitration panel concluded that the call-out procedure violated the parties' collective bargaining agreement. At the conclusion of the June 1, 2005 hearing, the arbitration panel decided not to hear testimony on damages and closed the proceedings. On September 9, 2005, the arbitration panel issued an opinion to award approximately $16 million to the bargaining unit employees. On February 6, 2006, a federal district court granted a union motion to dismiss, as premature, a JCP&L appeal of the award filed on October 18, 2005. A final order identifying the individual damage amounts was issued on October 31, 2007. The award appeal process was initiated. The union filed a motion with the federal court to confirm the award and JCP&L ~~intends~~filed its answer and counterclaim to ~~re-file an appeal again in federal district~~vacate the award on December 31, 2007. The court ~~once the damages associated with this case are identified~~is expected to issue a briefing schedule at ~~an individual employee level.~~its April 2008 scheduling conference. JCP&L recognized a liability for the potential $16 million award in 2005.

If it were ultimately determined that FirstEnergy ~~Web Site~~

~~Each of the registrant's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments~~or its subsidiaries have legal liability or are otherwise made subject to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are also made available free of charge on or through FirstEnergy's internet web site at www.firstenergycorp.com. These reports are posted on the web site as soon as reasonably practicable after they are electronically filed with the SEC.

~~ITEM 1A. RISK FACTORS~~

We operate in a business environment that involves significant risks, many of which are beyond our control. Below, we have identified risks we currently consider material. However, our business, financial condition, cash flows or results of operations could be affected materially and adversely by additional risks not currently known to us or that we deem immaterial at this time. Additional information on risk factors is included in "Item 1. Business" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in other sections that include forward-looking and other statements involving risks and uncertainties that could impact our business and financial results.

~~Risks Related to Business Operations~~

~~Risks Arising from the Reliability of Our Power Plants and Transmission and Distribution Equipment~~

Operation of generation, transmission and distribution facilities involves risk, including potential breakdown or failure of equipment or processes, accidents, labor disputes and performance below expected levels. In addition, weather-related incidents and other natural disasters can disrupt generation, transmission and distribution delivery systems. Because our transmission facilities are interconnected with those of third parties, the operation of those facilities could be adversely affected by unexpected or uncontrollable events occurring on the systems of such third parties.

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Operation of our power plants below expected capacity levels could result in lost revenues or increased expenses, including higher maintenance costs. Unplanned outages may require us to incur significant replacement power costs. Moreover, if we were unable to perform under contractual obligations, penalties or liability for damages could result. OE, CEI, and TE are exposed to losses under their applicable sale-leaseback arrangements for generating facilities upon the occurrence of certain contingent events that could render those facilities worthless. Although we believe these types of events are unlikely to occur, OE, CEI and TE each have a maximum exposure to loss under those provisions of approximately $1 billion.

We remain obligated to provide safe and reliable service to customers within our franchised service territories. Meeting this commitment requires the expenditure of significant capital resources. Failure to provide safe and reliable service and failure to meet regulatory reliability standards due to a number of factors, including equipment failure and weather, could adversely affect our operating results through reduced revenues and increased capital and maintenance costs and the imposition of penalties/fines or other adverse regulatory outcomes.

~~Changes in Commodity Prices Could Adversely Affect Our Profit Margins~~

While much of our generation currently serves customers under retail rates set by regulatory bodies, we also purchase and sell electricity in the competitive wholesale and retail markets. Increases in the costs of fuel for our generation facilities (particularly coal and natural gas) can affect our profit margins in both competitive and non-competitive markets. Changes in the market prices of electricity, which are affected by changes in other commodity costs and other factors, may impact our results of operations and financial position by increasing the amount we pay to purchase power to supply PLR obligations in Ohio and Pennsylvania.

~~Electricity and fuel prices may fluctuate substantially over relatively short periods of time for a variety of reasons, including:~~

·	~~changing weather conditions or seasonality;~~

·	~~changes in electricity usage by our customers;~~

·	~~liquidity in wholesale power and other markets;~~

·	~~transmission congestion or transportation constraints, inoperability or inefficiencies;~~

·	~~availability of competitively priced alternative energy sources;~~

·	~~changes in supply and demand for energy commodities;~~

·	~~changes in power production capacity;~~

·	~~outages at our power production facilities or those of our competitors;~~

·	~~changes in production and storage levels of natural gas, lignite, coal, crude oil and refined products;~~
	~~and~~

·	~~natural disasters, wars, acts of sabatage, terrorist acts, embargeos and other catastrophic events.~~

~~We Are Exposed to Operational, Price and Credit Risks Associated With Selling and Marketing Products in the Power Markets That We Do Not Always Completely Hedge Against~~

We purchase and sell power at the wholesale level under market-based tariffs authorized by the FERC, and also enter into short-term agreements to sell available energy and capacity from our generation assets. If we are unable to deliver firm capacity and energy under these agreements, we may be required to pay damages. These damages would generally be based on the difference between the market price to acquire replacement capacity or energy and the contract price of the undelivered capacity or energy. Depending on price volatility in the wholesale energy markets, such damages could be significant. Extreme weather conditions, unplanned power plant outages, transmission disruptions, and other factors could affect our ability to meet our obligations, or cause increases in the market price of replacement capacity and energy.

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We attempt to mitigate risks associated with satisfying our contractual power sales arrangements by reserving generation capacity to deliver electricity to satisfy our net firm sales contracts and, when necessary, by purchasing firm transmission service. We also routinely enter into contracts, such as fuel and power purchase and sale commitments, to hedge our exposure to fuel requirements and other energy-related commodities. We may not, however, hedge the entire exposure of our operations from commodity price volatility. To the extent we do not hedge against commodity price volatility, our results of operations and financial position could be negatively affected.

~~Our Risk Management Policies Relating to Energy and Fuel Prices, and Counterparty Credit are by Their Very Nature Risk Related, and We Could Suffer Economic Losses Despite Such Policies~~

We attempt to manage the market risk inherent in our energy and fuel and debt positions. Procedures have been implemented to enhance and monitor compliance with our risk management policies, including validation of transaction and market prices, verification of risk and transaction limits, sensitivity analysis and daily portfolio reporting of various risk measurement metrics. Nonetheless, we cannot economically hedge against all of our exposures in these areas and our risk management program may not operate as planned. For instance, actual electricity and fuel prices may be significantly different or more volatile than the historical trends and assumptions upon which we based our risk management positions. Also, our power plants might not produce the expected amount of power during a given day or time period due to weather conditions, technical problems or other unanticipated events, which could require us to make energy purchases at higher prices than the prices under our energy supply contracts. In addition, the amount of fuel required for our power plants during a given day or time period could be more than expected, which could require us to buy additional fuel at prices less favorable than the prices under our fuel contracts. As a result, we cannot always predict the impact that our risk management decisions may have on us if actual events lead to greater losses or costs than our risk management positions were intended to hedge.

We also face credit risks that parties with whom we contract could default in their performance, in which cases we could be forced to sell our power into a lower-priced market or make purchases in a higher-priced market than existed at the time of contract. Although we have established risk management policies and programs, including credit policies to evaluate counterparty credit risk, there can be no assurance that we will be able to fully meet our obligations, that we will not be required to pay damages for failure to perform or that we will not experience counterparty non-performance or that we will collect for voided contracts. If counterparties to these arrangements fail to perform, we may be forced to enter into alternative hedging arrangements or honor underlying commitments at then-current market prices. In that event, our financial results would likely be adversely affected.

~~Nuclear Generation Involves Risks that Include Uncertainties Relating to Health and Safety, Additional Capital Costs, the Adequacy of Insurance Coverage and Nuclear Plant Decommissioning~~

~~FirstEnergy is subject to the risks of nuclear generation, including but not limited to the following:~~

·	the potential harmful effects on the environment and human health resulting from certain unplanned radiological releases associated with the operation of our nuclear facilities and the storage, handling and disposal of radioactive materials;

·	~~limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with our nuclear operations or those of others in the United States;~~

·	~~uncertainties with respect to contingencies and assessments if insurance coverage is inadequate~~ ~~and~~

·	~~uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of their licensed operation.~~

The NRC has broad authority under federal law to impose licensing security and safety-related requirements for the operation of nuclear generation facilities. In the event of non-compliance, the NRC has the authority to impose fines and/or shut down a unit, depending upon its assessment of the severity of the situation, until compliance is achieved. Revised safety requirements promulgated by the NRC could necessitate substantial capital expenditures at nuclear plants, including ours.

FirstEnergy's nuclear facilities are insured under NEIL policies issued for each plant. Under these policies, up to $2.75 billion of insurance coverage is provided for property damage and decontamination and decommissioning costs. We have also obtained approximately $2.0 billion of insurance coverage for replacement power costs. Under these policies, we can be assessed a maximum of approximately $72 million for incidents at any covered nuclear facility occurring during a policy year that are in excess of accumulated funds available to the insurer for paying losses.

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The Price-Anderson Act limits the public liability which can be assessed with respect to a nuclear power plant to $10.8 billion (assuming 104 units licensed to operate in the United States) for a single nuclear incident, which amount is covered by: (i) private insurance amounting to $300.0 million; and (ii) $10.5 billion provided by an industry retrospective rating plan. Under such retrospective rating plan, in the event of a nuclear incident at any unit in the United States resulting in losses in excess of private insurance, up to $100.6 million (but not more than $15.0 million per year) must be contributed for each nuclear unit licensed to operate in the country by the licensees thereof to cover liabilities arising out of the incident. Based on our present nuclear ownership, the maximum potential assessment under these provisions would be $402.4 million per incident but not more than $60.0 million in any one year.

We Rely on Transmission and Distribution Assets that we do not Own or Control to Deliver Our Wholesale Electricity. If Transmission is Disrupted Including Our Own Transmission, or not Operated Efficiently, or if Capacity is Inadequate, Our Ability to Sell and Deliver Power may be Hindered.

We depend on transmission and distribution facilities owned and operated by utilities and other energy companies to deliver the electricity we sell. If transmission is disrupted (as a result of weather, natural disasters or other reasons) or not operated efficiently by ISOs, in applicable markets, or if capacity is inadequate, our ability to sell and deliver products and satisfy our contractual obligations may be hindered, or we may be unable to sell products on the most favorable terms.

Demand for electricity within our service areas could stress available transmission capacity requiring alternative routing or curtailing of electricity usage with consequent effects on operating costs, revenues and results of operations. In addition, as with all utilities, potential concerns over transmission capacity could result in MISO, PJM or the FERC requiring us to upgrade or expand our transmission system through additional capital expenditures.

The FERC has issued regulations that require wholesale electric transmission services to be offered on an open-access, non-discriminatory basis. Although these regulations are designed to encourage competition in wholesale market transactions for electricity, there is the potential that fair and equal access to transmission systems will not be available or that sufficient transmission capacity will not be available to transmit electricity as we desire. We cannot predict the timing of industry changes as a result of these initiatives or the adequacy of transmission facilities in specific markets or whether ISOs in applicable markets will operate the transmission networks, and provide related services, efficiently.

~~Disruptions in Our Fuel Supplies Could Occur, Which Could Adversely Affect Our Ability to Operate Our Generation Facilities~~

We purchase fuel from a number of suppliers. The lack of availability of fuel, or a disruption in the delivery of fuel, including disruptions as a result of weather, increased transportation costs or other difficulties, labor relations or environmental or other regulations affecting our fuel suppliers, could adversely affect our ability to operate our facilities, which could result in lower sales and/or higher costs and thereby adversely affect our results of operations.

Seasonal Temperature Variations, as well as Weather Conditions or other Natural Disasters Could Have a Negative Impact on Our Results of Operations Specifically with Respect to Our PLR Contracts that do not Provide for a Specific Level of Supply, and Demand Significantly Below or Above our Forecasts Could Adversely Affect our Energy Margins

Weather conditions directly influence the demand for electric power. In our service areas, demand for power peaks during the summer months, with market prices also typically peaking at that time. As a result, overall operating results may fluctuate on a seasonal and quarterly basis. In addition, we have historically sold less power, and consequently received less revenue, when weather conditions are milder. Severe weather, such as tornadoes, hurricanes, ice or snow storms or droughts or other natural disasters, may cause outages and property damage that may require us to incur additional costs that are generally not insured and that may not be recoverable from customers. The effect of the failure of our facilities to operate as planned under these conditions would be particularly burdensome during a peak demand period.

Demand that we satisfy pursuant to our PLR contracts could increase as a result of severe weather conditions, economic development or other reasons over which we have no control. We satisfy our electricity supply obligations through a portfolio approach of providing electricity from our generation assets, contractual relationships and market purchases. A significant increase in demand would adversely affect our energy margins because we are required under the terms of the PLR contracts to provide the energy supply to fulfill this increased demand at capped rates, which we expect to remain significantly below the wholesale prices at which we would have to purchase the additional supply if needed or, if we had available capacity, the prices at which we could otherwise sell the additional supply. Accordingly, any significant change in demandabove matters, it could have a material adverse effect on ~~our results of operations or financial position.~~

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~~We Are Subject to Financial Performance Risks Related to the Economic Cycles of the Electric Utility Industry~~

Our business follows the economic cycles of our customers. Sustained downturns or sluggishness in the economy generally affects the markets in which we operate and negatively influences our energy operations. Declines in demand for electricity as a result of economic downturns will reduce overall electricity sales and lessen our cash flows, especially as industrial customers reduce production, resulting in less consumption of electricity. Economic conditions also impact the rate of delinquent customer accounts receivable.

~~The Goodwill of One or More of Our Operating Subsidiaries May Become Impaired, Which Would Result in Write-Offs of the Impaired Amounts~~

There is a possibility that additional goodwill may be impaired at one or more of our operating subsidiaries. The actual timing and amounts of any goodwill impairments in future years would depend on many uncertain variables, including changing interest rates, utility sector market performance, our capital structure, market prices for power, results of future rate proceedings, operating and capital expenditure requirements and other factors.

~~We Face Certain Human Resource Risks Associated with the Availability of Trained and Qualified Labor to Meet Our Future Staffing Requirements~~

Workforce demographic issues challenge employers nationwide and are of particular concern to the electric utility industry. The median age of utility workers is significantly higher than the national average. Today, nearly one-half of the industry's workforce is age 45 or older. Consequently, we face the difficult challenge of finding ways to retain our aging skilled workforce while recruiting new talent to mitigate losses in critical knowledge and skills due to retirements. Mitigating these risks could require additional financial commitments.

~~Significant Increases in Our Operation and Maintenance Expenses, Including Our Health Care and Pension Costs, Could Adversely Affect Our Future Earnings and Liquidity~~

We continually focus on limiting, and reducing where possible, our operation and maintenance expenses. However, we expect to continue to face increased cost pressures, including health care and pension costs. We have experienced significant health care cost inflation in the last few years, and we expect our health care costs, including prescription drug coverage, to continue to increase despite measures that we have taken and expect to continue to take to require employees and retirees to bear a higher portion of the costs of their health care benefits. The measurement of our expected future health care and pension obligations, costs and liabilities is highly dependent on a variety of assumptions, many of which relate to factors beyond our control. These assumptions include investment returns, interest rates, health care cost trends, benefit improvements, salary increasesFES and the ~~demographics of plan participants. If our assumptions prove to be inaccurate, our costs could be significantly increased.~~

~~Acts of War or Terrorism Could Negatively Impact Our Business~~

The possibility that our infrastructure, or that of an interconnected company, such as electric generation, transmission and distribution facilities could be direct targets of, or indirect casualties of, an act of war or terrorism could affect our operations. Our generation plants, transmission and distribution facilities, or those of interconnected companies, may be targets of terrorist activities that could result in disruption of our ability to generate, purchase, transmit or distribute electricity. Any such disruption could result in a decrease in revenues and additional costs to purchase electricity and to replace or repair our assets, which could have a material adverse impact on ourCompanies financial condition, results of operations and ~~financial condition.~~cash flows.

~~Risks Associated With Regulation~~

~~Complex and Changing Government Regulations Could Have a Negative Impact on Our Results of Operations~~

We are subject to comprehensive regulation by various federal, state and local regulatory agencies that significantly influence our operating environment. Changes in or reinterpretations of existing laws or regulations or the imposition of new laws or regulations could require us to incur additional costs or change the way we conduct our business, and therefore could have an adverse impact on our results of operations.

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Regulatory Changes in the Electric Industry Including a Reversal, Discontinuance or Delay of the Present Trend Towards Competitive Markets Could Affect Our Competitive Position and Result in Unrecoverable Costs Adversely Affecting Our Business and Results of Operations

As a result of the actions taken by state legislative bodies over the last few years, changes in the electric utility business have occurred and are continuing to take place throughout the United States, including Ohio, Pennsylvania and New Jersey. These changes have resulted, and are expected to continue to result, in fundamental alterations in the way integrated utilities conduct their business.

Some deregulated electricity markets have experienced difficulty in transition to market. In some of these markets, both state and federal government agencies and other interested parties have made proposals to delay market restructuring or even re-regulate areas of these markets that have previously been deregulated. For example, in 2001, the FERC instituted a series of price controls designed to mitigate (or cap) prices in the entire western U.S. to address the extreme volatility in the California electricity markets. These price controls have had the effect of significantly reducing spot and forward electricity prices in the western market. In addition, the ISOs that oversee the transmission systems in certain wholesale electricity markets have from time to time been authorized to impose price limitations and other mechanisms to address volatility in the power markets. Similar types of price limitations and other mechanisms could reduce the profits that our wholesale power marketing business would have realized based on competitive market conditions absent such limitations and mechanisms. Although we expect the deregulated electricity markets to continue to be competitive, other proposals to re-regulate our industry may be made, and legislative or other action affecting the electric power restructuring process may cause the process to be delayed, discontinued or reversed in the states in which we currently, or may in the future, operate. Such delays, discontinuations or reversals of electricity market restructurings in the markets in which we operate could have an impact on our results of operations and financial condition. At a minimum, these types of actions raise uncertainty concerning the continued development of competitive power markets.

The FERC and the U.S. Congress propose changes from time to time in the structure and conduct of the electric utility industry. If the restructuring and deregulation efforts result in increased competition or unrecoverable costs, our business and results of operations may be adversely affected. We cannot predict the extent or timing of further efforts to restructure, deregulate or re-regulate our business or the industry.

~~Our Profitability is Impacted by Our Affiliated Companies' Continued Authorization to Sell Power at Market-Based Rates~~14. FIRSTENERGY INTRA-SYSTEM GENERATION ASSET TRANSFERS

In 2005, the ~~FERC granted FES,~~Ohio Companies and Penn transferred their respective undivided ownership interests in FirstEnergy's nuclear and non-nuclear generation assets to NGC and FGCO, and NGC authority to sell electricity at market-based rates. The FERC's orders that grant this market-based rate authority reserve the right to revoke or revise that authority if the FERC subsequently determines that these companies can exercise market power in transmission or generation, create barriers to entry or engage in abusive affiliate transactions. As a condition to the orders granting these generating companies market-based rate authority, every three years they are required to file a market power update to show that they continue to meet the FERC's standards with respect to generation market power and other criteria used to evaluate whether entities qualify for market-based rates. They will be required to renew this authority in 2008. If any of these companies were to lose its market-based rate authority or fail to have such authority renewed, it would be required to obtain the FERC's acceptance to sell power at cost-based rates. That company then would become subject to the accounting, record-keeping and reporting requirements that are imposed on utilities with cost-based rate schedules.

The FERC has issued a proposed rulemaking to revise the standards used to determine whether an applicant qualifies for market-based authority. In addition, the FERC is considering modifications to other aspects of its market-based rate authorizations, including whether to continue granting waivers of FERC's accounting, record-keeping and reporting requirements that are imposed on utilities with cost-based rates, whether to continue granting blanket approval for future securities issuances or assumptions of liabilities to entities with market-based rate authority, whether to adopt a uniform tariff that applies to all market-based rate sellers, and whether to modify the approach to the three-year market power update filing. The FERC has solicited comments from interested parties on these and other issues. The outcome of this proposed rulemaking proceeding could affect the regulatory requirements applicable to FES, FGCO, and NGC as market-based rate sellers.

~~The Amount We Charge Third Parties for Using Our Transmission Facilities May be Reduced and not Recovered.~~

In July 2003, the FERC issued an order directing PJM and the MISO to make compliance filings to eliminate the transaction-based charges for RTOR transmission service on transactions where the energy is delivered within the proposed MISO and PJM expanded regions (Combined Footprint). The eliminationrespectively. All of the ~~T&O rates reduces the transmission service revenues collected by the RTOs and thereby reduces the revenues received by transmission owners~~non-nuclear assets were transferred to FGCO under the ~~RTOs' revenue distribution protocols. To mitigate the impact~~purchase option terms of ~~lost RTOR revenues, the FERC approved SECA transition rates beginning in December 2004 and extending through March 2006.~~

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A hearing in the SECA case was held in May 2006 to determine whether any of the SECA revenues should be refunded. In August 2006, the ALJ issued an initial decision, finding that the rate design for the recovery of SECA charges was flawed and that a large portion of the "lost revenues" reflected in the SECA rates were not recoverable. The ALJ found that the SECA rates charged were unfair, unjust and discriminatory, and that new compliance filings and refunds should be made. The ALJ also found that unpaid SECA rates must be paid in the recommended reduced amount.

Although we believe we have meritorious arguments, management cannot predict the ultimate outcome of any future FERC proceedings or court appeals. If the FERC adopts the ALJ's decision, it could have an impact on our future results of operations and cash flows. Also, management is unable to predict whether the FERC will approve either the ALJ's decision or when, or if, the effect of the loss of RTOR/SECA transmission revenues will be recoverable in the state retail jurisdictions and/or from transmission users within the PJM region. Therefore, the final amount of our SECA obligations, if any, remains uncertain.

~~There Are Uncertainties Relating to Our Participation in the PJM and MISO Regional Transmission Organizations~~

Market rules that govern the operation of RTOs could affect our ability to sell power produced by our generating facilities to users in certain markets due to transmission constraints and attendant congestion costs. The prices in day-ahead and real-time RTO markets have been subject to price volatility. Administrative costs imposed by RTOs, including the cost of administering energy markets, have also increased. The rules governing the various regional power markets may also change from time to time which could affect our costs or revenues. We are incurring significant additional fees and increased costs to participate in an RTO, and may be limited by state retail rate caps with respect to the price at which power can be sold to retail customers. While RTO rates for transmission service are designed to be revenue neutral, our revenues from customers to whom we currently provide transmission services may not reflect all of the administrative and market-related costs imposed under the RTO tariff due to state retail rate caps. In addition, we may be required to expand our transmission system according to decisions made by an RTO rather than our internal planning process. Because it remains unclear which companies will be participating in the various regional power markets, or how RTOs will ultimately develop and operate or what region they will cover, we cannot fully assess the impact that these power markets or other ongoing RTO developments may have.

~~Costs of Compliance with Environmental Laws are Significant, and the Cost of Compliance with Future Environmental Laws Could Adversely Affect Cash Flow and Profitability~~

Certain of our subsidiaries' operations are subject to extensive federal, state and local environmental statutes, rules and regulations. Compliance with these legal requirements requires us to incur costs toward environmental monitoring, installation of pollution control equipment, emission fees, maintenance, upgrading, remediation and permitting at all of our facilities. These expenditures have been significant in the past and may increase in the future. If the cost of compliance with existing environmental laws and regulations does increase, it could adversely affect our business and results of operations, financial position and cash flows. Moreover, changes in environmental laws or regulations may materially increase our costs of compliance or accelerate the timing of capital expenditures. Because of the deregulation of generation, we may not directly recover through rates additional costs incurred for such compliance. Our compliance strategy, although reasonably based on available information, may not successfully address future relevant standards and interpretations. If FirstEnergy or its subsidiaries fail to comply with environmental laws and regulations, even if caused by factors beyond our control or new interpretations of longstanding requirements, that failure could result in the assessment of civil or criminal liability and fines. In addition, any alleged violation of environmental laws and regulations may require us to expend significant resources to defend against any such alleged violations.

Also, we are generally responsible for on-site liabilities, and in some cases off-site liabilities, associated with the environmental condition of our facilities which we have acquired or developed, regardless of when the liabilities arose and whether they are known or unknown. In connection with some acquisitions and sales of assets, we may obtain, or be required to provide, indemnification against some environmental liabilities. If we incur a material liability, or the other party to a transaction fails to meet its indemnification obligations to us, we could suffer material losses.

The EPA's final CAIR, CAMR and CAVR require significant reductions beginning in 2009 in air emissions from coal-fired power plants and the states have been given substantial discretion in developing their own rules to implement these programs. In addition, both the CAIR and the CAMR have been challenged in the United States Court of Appeals for the District of Columbia. As a result, the ultimate requirements under these air emission reduction programs may not be known for several years and may differ significantly from the current rules. If the final rules are remanded by the Court of Appeals, if states elect not to participate in the various federal programs under the rules, or if the states elect to impose additional requirements on individual units that are already subject to the CAIR, the CAMR and/or the CAVR, costs of compliance could increase significantly and could have an adverse effect on future results of operations, cash flows and financial condition. Alternatively, if the final rules are remanded by the Court and their implementation is postponed, we could be competitively disadvantaged because we are currently obligated to comply with essentially this same level of emission controls as a result of our settlement of the New Source Review Litigation related to our W. H. Sammis Plant.

28

There also is growing concern nationally and internationally about global warming. Further, many states and environmental groups have also challenged certain of the federal laws and regulations relating to air emissions as not being sufficiently strict. As a result, it is possible that state and federal regulations will be developed that will impose more stringent limitations on emissions than are currently in effect. Any such additional limitations on emissions may require us to make increased expenditures for pollution control devices which could have an adverse impact on our results of operations, cash flows and financial condition.

Various water quality regulations, the majority of which are the result of the federal Clean Water Act and its amendments, apply to FirstEnergy's plants. In addition, Ohio, New Jersey and Pennsylvania have water quality standards applicable to FirstEnergy's operations. As provided in the Clean Water Act, authority to grant federal National Pollutant Discharge Elimination System water discharge permits can be assumed by a state. Ohio, New Jersey and Pennsylvania have assumed such authority.

~~We are and may Become Subject to Legal Claims Arising from the Presence of Asbestos or Other Regulated Substances at Some of our Facilities~~

We have been named as a defendant in pending asbestos litigation involving multiple plaintiffs and multiple defendants. In addition, asbestos and other regulated substances are, and may continue to be, present at our facilities where suitable alternative materials are not available. We believe that any remaining asbestos at our facilities is contained. The continued presence of asbestos and other regulated substances at these facilities, however, could result in additional actions being brought against us.

~~The Continuing Availability and Operation of Generating Units is Dependent on Retaining the Necessary Licenses, Permits, and Operating Authority from Governmental Entities, Including the NRC~~

We are required to have numerous permits, approvals and certificates from the agencies that regulate our business. We believe the necessary permits, approvals and certificates have been obtained for our existing operations and that our business is conducted in accordance with applicable laws; however, we are unable to predict the impact on operating results from future regulatory activities of any of these agencies and we are not assured that any such permits, approvals or certifications will be renewed.

~~We May Ultimately Incur Liability in Connection with Federal Proceedings~~

On October 20, 2004, FirstEnergy was notified by the SEC that the previously disclosed informal inquiry initiated by the SEC's Division of Enforcement in September 2003 relating to the restatements in August 2003 of previously reported results by FirstEnergyMaster Facility Lease between FGCO and the Ohio Companies and Penn, under which FGCO leased, operated and maintained the Davis-Besse extended outage, have become the subject of a formal order of investigation. The SEC's formal order of investigation also encompasses issues raised during the SEC's examination of FirstEnergy and the Companies under the PUHCA. Concurrent with this notification, FirstEnergy received a subpoena asking for background documents and documents related to the restatements and Davis-Besse issues. On December 30, 2004, FirstEnergy received a subpoena asking for documents relating to issues raised during the SEC's PUHCA examination. On August 24, 2005, additional information was requested regarding Davis-Besse. FirstEnergy has cooperated fully with the informal inquiry and will continue to do so with the formal investigation.

~~Risks Associated With Financing and Capital Structure~~

~~Interest Rates and/or a Credit Ratings Downgrade Could Negatively Affect Our Financing Costs and Our Ability to Access Capital~~

We have near-term exposure to interest rates from outstanding indebtedness indexed to variable interest rates, and we have exposure to future interest rates to the extent we seek to raise debt in the capital markets to meet maturing debt obligations and fund construction or other investment opportunities. Interest rates could change in significant ways as a result of economic or other eventsassets that our risk management processes were not established to address. As a result, we cannot always predict the impact that our risk management decisions may have on us if actual events lead to greater losses or costs than our risk management positions were intended to hedge. Although we employ risk management techniques to hedge against interest rate volatility, significant and sustained increases in market interest rates could materially increase our financing costs and negatively impact our reported results.

29

We rely on access to bank and capital markets as sources of liquidity for cash requirements not satisfied by cash flows from operations. A downgrade in our credit ratings from the nationally-recognized credit rating agencies, particularly to a level below investment grade, could negatively affect our ability to access the bank and capital markets, especially in a time of uncertainty in either of those markets, and may require us to post cash collateral to support outstanding commodity positions in the wholesale market, as well as in place of letters of credit and other guarantees. A ratings downgrade would also increase the fees we pay on our various credit facilities, thus increasing the cost of our working capital. A ratings downgrade could also impact our ability to grow our businesses by substantially increasing the cost of, or limiting access to, capital. Our senior unsecured debt ratings from S&P, Moody's, and Fitch are investment grade. The current ratings outlook from S&P is stable and the ratings outlook from Moody's is positive. Fitch's ratings outlook is positive forit now owns. CEI and TE sold their interests in nuclear generation assets at net book value to NGC, while OE and ~~stable for all other subsidiaries and FirstEnergy.~~

~~A rating is not a recommendation~~Penn transferred their interests to buy, sell or hold debt, inasmuch as such rating does not comment as to market price or suitability for a particular investor. The ratings assigned to our debt address the likelihood of payment of principal and interest pursuant to their terms. A rating may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating that may be assigned to our securities.

~~We Must Rely on Cash from Our Subsidiaries~~

We are a holding company and our investments in our subsidiaries are our primary assets. Substantially all of our business is conducted by our subsidiaries. Consequently, our cash flow is dependent on the operating cash flows of our subsidiaries and their ability to upstream cash to the holding company. Our utility subsidiaries are regulated by various state utility commissions that generally possess broad powers to ensure that the needs of utility customers are being met. Those state commissions could attempt to impose restrictions on the ability of our utility subsidiaries to pay dividends or otherwise restrict cash payments to us.

~~We Cannot Assure Common Shareholders that Future Dividend Payments Will be Made, or if Made, in What Amounts they May be Paid~~

Our Board of Directors regularly evaluates our common stock dividend policy and determines the dividend rate each quarter. The level of dividends will continue to be influenced by many factors, including, among other things, our earnings, financial condition and cash flows from subsidiaries, as well as general economic and competitive conditions. We cannot assure common shareholders that dividends will be paidNGC through an asset spin-off in the ~~future, or that, if paid, dividends will be at~~form of a dividend. On December 28, 2006, the ~~same amount or with~~NRC approved the ~~same frequency as~~transfer of ownership in NGC from FirstEnergy to FES. Effective December 31, 2006, NGC is a wholly owned subsidiary of FES and second tier subsidiary of FirstEnergy. FENOC continues to operate and maintain the ~~past.~~

~~ITEM 1B. UNRESOLVED STAFF COMMENTS~~

~~None.~~

~~ITEM 2. PROPERTIES~~

The Companies' respective first mortgage indentures constitute, in the opinion of the Companies' counsel, direct first liens on substantially all of the respective Companies' physical property, subject only to excepted encumbrances, as defined in the first mortgage indentures. See the "Leases" and "Capitalization" notes to the respective financial statements for information concerning leases and financing encumbrances affecting certain of the Companies' properties.

~~FirstEnergy has access, either through ownership or lease, to the following~~nuclear generation sources as of February 27, 2007, shown in the table below. Except for the leasehold interests referenced in the footnotes to the table, substantially all of the generating units are owned by NGC (nuclear) and FGCO (non-nuclear). See "Generation Asset Transfers" under Item 1 above.assets.

3073

Net

Demonstrated

Capacity

Unit

(MW)
Plant-Location

Coal-Fired Units

Ashtabula-
Ashtabula, OH
5                          244
Bay Shore-
Toledo, OH
1-4                           631
R. E. Burger-
Shadyside, OH
3-5                          406
Eastlake-Eastlake, OH 1-5                       1,233
Lakeshore-
Cleveland, OH
18                          245
Bruce Mansfield- 1 830(a)
Shippingport, PA
2 830(b)
3 800(c)

W. H. Sammis- 1-6                       1,620
Stratton, OH
7                          600
Kyger Creek - Chesire, OH 1-5 210(d)
Clifty Creek - Madison, IN 1-6 253(d)
Total
                      7,902

Nuclear Units
Beaver Valley- 1                           868
Shippingport, PA
2 854(e)
Davis-Besse-
Oak Harbor, OH
1                           898
Perry-
N. Perry Village, OH
1                           1,258(f)
Total
                      3,878

Oil/Gas-Fired/
Pumped Storage Units
Richland-Defiance, OH 1-3                              42
4-6                           390
Seneca-Warren, PA 1-3                           443
Sumpter-Sumpter Twp, MI 1-4                           340
West Lorain 1-1                           120
Lorain, OH
2-6                           425
Yard's Creek-Blairstown
Twp., NJ
1-3 200(g)
Other                           301
Total
                     2,261
Total
                    14,041
Although the generating plant interests transferred in 2005 did not include leasehold interests of CEI, OE and TE in certain of the plants that are subject to sale and leaseback arrangements entered into in 1987 with non-affiliates, effective October 16, 2007, CEI and TE assigned their leasehold interests in the Bruce Mansfield Plant to FGCO. FGCO assumed all of CEI's and TE's obligations arising under those leases. FGCO subsequently transferred the Unit 1 portion of these leasehold interests, as well as FGCO's leasehold interests under its July 13, 2007 Bruce Mansfield Unit 1 sale and leaseback transaction, to a newly formed wholly-owned subsidiary on December 17, 2007. The subsidiary assumed all of the lessee obligations associated with the assigned interests. However, CEI and TE remain primarily liable on the 1987 leases and related agreements. FGCO remains primarily liable on the 2007 leases and related agreements, and FES remains primarily liable as a guarantor under the related 2007 guarantees, as to the lessors and other parties to the respective agreements.

These transactions above were undertaken pursuant to the Ohio Companies and Penns restructuring plans that were approved by the PUCO and the PPUC, respectively, under applicable Ohio and Pennsylvania electric utility restructuring legislation. Consistent with the restructuring plans, generation assets that had been owned by the Ohio Companies and Penn were required to be separated from the regulated delivery business of those companies through transfer or sale to a separate corporate entity. The transactions essentially completed the divestitures of owned assets contemplated by the restructuring plans by transferring the ownership interests to NGC and FGCO without impacting the operation of the plants. The transfers were intracompany transactions and, therefore, had no impact on the Company's consolidated results.

15. SUPPLEMENTAL GUARANTOR INFORMATION

As discussed in Note 6, on July 13, 2007, FGCO completed a sale and leaseback transaction for its 93.825% undivided interest in Bruce Mansfield Unit 1. FES has unconditionally and irrevocably guaranteed all of FGCO's obligations under each of the leases. The related lessor notes and pass through certificates are not guaranteed by FES or FGCO, but the notes are secured by, among other things, each lessor trusts undivided interest in Unit 1, rights and interests under the applicable lease and rights and interests under other related agreements, including FES lease guaranty.

The consolidating statements of income for the three years ended December 31 2007, consolidating balance sheets as of December 31, 2007 and December 31, 2006 and condensed consolidating statements of cash flows for the three years ended December 31, 2007 for FES (parent), FGCO and NGC (non-guarantor) are presented below. Investments in wholly owned subsidiaries are accounted for by FES using the equity method. Results of operations for FGCO and NGC are, therefore, reflected in the parent’s investment accounts and earnings as if operating lease treatment was achieved (see Note 6). The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions and the entries required to reflect operating lease treatment associated with the 2007 Bruce Mansfield Unit 1 sale and leaseback transaction.

74

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATING CONDENSED STATEMENTS OF INCOME



For the Year Ended December 31, 2007	FES			FGCO			NGC			Eliminations			Consolidated
	(In thousands)

REVENUES	$	4,345,790		$	1,982,166		$	1,062,026		$	(3,064,955	)	$	4,325,027

EXPENSES:
Fuel		26,169			942,946			117,895			-			1,087,010
Purchased power from non-affiliates		764,090			-			-			-			764,090
Purchased power from affiliates		3,038,786			186,415			73,844			(3,064,955	)		234,090
Other operating expenses		161,797			352,856			514,389			11,997			1,041,039
Provision for depreciation		2,269			99,741			92,239			(1,337	)		192,912
General taxes		20,953			41,456			24,689			-			87,098
Total expenses		4,014,064			1,623,414			823,056			(3,054,295	)		3,406,239

OPERATING INCOME		331,726			358,752			238,970			(10,660	)		918,788

OTHER INCOME (EXPENSE):
Miscellaneous income (expense), including
net income from equity investees		341,978			4,210			14,880			(308,192	)		52,876
Interest expense to affiliates		(1,320	)		(48,536	)		(15,645	)		-			(65,501	)
Interest expense - other		(9,503	)		(59,412	)		(39,458	)		16,174			(92,199	)
Capitalized interest		35			14,369			5,104			-			19,508
Total other income (expense)		331,190			(89,369	)		(35,119	)		(292,018	)		(85,316	)

INCOME BEFORE INCOME TAXES		662,916			269,383			203,851			(302,678	)		833,472

INCOME TAXES		134,052			90,801			77,467			2,288			304,608

NET INCOME	$	528,864		$	178,582		$	126,384		$	(304,966	)	$	528,864

75

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATING CONDENSED STATEMENTS OF INCOME



For the Year Ended December 31, 2006	FES			FGCO			NGC			Eliminations			Consolidated
	(In thousands)

REVENUES	$	4,023,752		$	1,767,549		$	1,028,159		$	(2,808,107	)	$	4,011,353

EXPENSES:
Fuel		18,265			983,492			103,900			-			1,105,657
Purchased power from non-affiliates		590,491			-			-			-			590,491
Purchased power from affiliates		2,804,110			180,759			80,239			(2,808,107	)		257,001
Other operating expenses		202,369			271,718			553,477			-			1,027,564
Provision for depreciation		1,779			93,728			83,656			-			179,163
General taxes		12,459			38,781			22,092			-			73,332
Total expenses		3,629,473			1,568,478			843,364			(2,808,107	)		3,233,208

OPERATING INCOME		394,279			199,071			184,795			-			778,145

OTHER INCOME (EXPENSE):
Miscellaneous income (expense), including
net income from equity investees		184,267			(596	)		35,571			(164,740	)		54,502
Interest expense to affiliates		(241	)		(117,639	)		(44,793	)		-			(162,673	)
Interest expense - other		(720	)		(9,125	)		(16,623	)		-			(26,468	)
Capitalized interest		1			4,941			6,553			-			11,495
Total other income (expense)		183,307			(122,419	)		(19,292	)		(164,740	)		(123,144	)

INCOME BEFORE INCOME TAXES		577,586			76,652			165,503			(164,740	)		655,001

INCOME TAXES		158,933			17,605			59,810			-			236,348

NET INCOME	$	418,653		$	59,047		$	105,693		$	(164,740	)	$	418,653

76

~~Notes:~~

~~(a)~~

~~Includes CEI's leasehold interest in Bruce Mansfield Unit 1 of 6.50% (54 MW).~~

~~(b)~~

~~Includes CEI's and TE's leasehold interests in Bruce Mansfield Unit 2 of 28.6% (237 MW) and~~

~~17.30% (144 MW), respectively.~~

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATING CONDENSED STATEMENTS OF INCOME



For the Year Ended December 31, 2005	FES			FGCO			NGC			Eliminations			Consolidated
	(In thousands)

REVENUES	$	3,998,410		$	1,567,597		$	671,729		$	(2,270,497	)	$	3,967,239

EXPENSES:
Fuel		37,955			866,583			101,339			-			1,005,877
Purchased power from non-affiliates		957,570			-			-			-			957,570
Purchased power from affiliates		2,516,399			60,207			2,493			(2,270,497	)		308,602
Other operating expenses		276,896			261,646			441,640			-			980,182
Provision for depreciation		1,597			95,237			80,397			-			177,231
General taxes		11,640			37,594			18,068			-			67,302
Total expenses		3,802,057			1,321,267			643,937			(2,270,497	)		3,496,764

OPERATING INCOME		196,353			246,330			27,792			-			470,475

OTHER INCOME (EXPENSE):
Investment income		4,462			6,964			67,361			-			78,787
Miscellaneous income (expense), including
net income from equity investees		79,371			(2,658	)		(28,000	)		(82,856	)		(34,143	)
Interest expense to affiliates		(4,677	)		(102,580	)		(77,060	)		-			(184,317	)
Interest expense - other		(204	)		(2,220	)		(9,614	)		-			(12,038	)
Capitalized interest		82			3,180			11,033			-			14,295
Total other income (expense)		79,034			(97,314	)		(36,280	)		(82,856	)		(137,416	)

INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES		275,387			149,016			(8,488	)		(82,856	)		333,059

INCOME TAXES (BENEFIT)		75,630			50,739			(1,870	)		-			124,499

INCOME (LOSS) FROM CONTINUING OPERATIONS		199,757			98,277			(6,618	)		(82,856	)		208,560

Discontinued operations (net of income taxes of $3,761,000)		5,410			-			-			-			5,410

INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE		205,167			98,277			(6,618	)		(82,856	)		213,970

Cumulative effect of a change in accounting principle (net
of income tax benefit of $5,507,000)		-			(8,803	)		-			-			(8,803	)

NET INCOME (LOSS)	$	205,167		$	89,474		$	(6,618	)	$	(82,856	)	$	205,167

77

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, 2007	FES		FGCO		NGC		Eliminations			Consolidated
	(In thousands)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	2	$	-	$	-	$	-		$	2
Receivables-
Customers		133,846		-		-		-			133,846
Associated companies		327,715		237,202		98,238		(286,656	)		376,499
Other		2,845		978		-		-			3,823
Notes receivable from associated companies		23,772		-		69,012		-			92,784
Materials and supplies, at average cost		195		215,986		210,834		-			427,015
Prepayments and other		67,981		21,605		2,754		-			92,340
		556,356		475,771		380,838		(286,656	)		1,126,309

PROPERTY, PLANT AND EQUIPMENT:
In service		25,513		5,065,373		3,595,964		(392,082	)		8,294,768
Less - Accumulated provision for depreciation		7,503		2,553,554		1,497,712		(166,756	)		3,892,013
		18,010		2,511,819		2,098,252		(225,326	)		4,402,755
Construction work in progress		1,176		571,672		188,853		-			761,701
		19,186		3,083,491		2,287,105		(225,326	)		5,164,456

INVESTMENTS:
Nuclear plant decommissioning trusts		-		-		1,332,913		-			1,332,913
Long-term notes receivable from associated companies		-		-		62,900		-			62,900
Investment in associated companies		2,516,838		-		-		(2,516,838	)		-
Other		2,732		37,071		201		-			40,004
		2,519,570		37,071		1,396,014		(2,516,838	)		1,435,817

DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income taxes		16,978		522,216		-		(262,271	)		276,923
Lease assignment receivable from associated companies		-		215,258		-		-			215,258
Goodwill		24,248		-		-		-			24,248
Property taxes		-		25,007		22,767		-			47,774
Pension asset		3,217		13,506		-		-			16,723
Unamortized sale and leaseback costs		-		27,597		-		43,206			70,803
Other		22,956		52,971		6,159		(38,133	)		43,953
		67,399		856,555		28,926		(257,198	)		695,682
TOTAL ASSETS	$	3,162,511	$	4,452,888	$	4,092,883	$	(3,286,018	)	$	8,422,264

LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES:
Currently payable long-term debt	$	-	$	596,827	$	861,265	$	(16,896	)	$	1,441,196
Short-term borrowings-
Associated companies		-		238,786		25,278					264,064
Other		300,000		-		-		-			300,000
Accounts payable-
Associated companies		287,029		175,965		268,926		(286,656	)		445,264
Other		56,194		120,927		-		-			177,121
Accrued taxes		18,831		125,227		28,229		(836	)		171,451
Other		57,705		131,404		11,972		36,725			237,806
		719,759		1,389,136		1,195,670		(267,663	)		3,036,902

CAPITALIZATION:
Common stockholder's equity		2,414,231		951,542		1,562,069		(2,513,611	)		2,414,231
Long-term debt		-		1,597,028		242,400		(1,305,716	)		533,712
		2,414,231		2,548,570		1,804,469		(3,819,327	)		2,947,943

NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction		-		-		-		1,060,119			1,060,119
Accumulated deferred income taxes		-		-		259,147		(259,147	)		-
Accumulated deferred investment tax credits		-		36,054		25,062		-			61,116
Asset retirement obligations		-		24,346		785,768		-			810,114
Retirement benefits		8,721		54,415		-		-			63,136
Property taxes		-		25,328		22,767		-			48,095
Lease market valuation liability		-		353,210		-		-			353,210
Other		19,800		21,829		-		-			41,629
		28,521		515,182		1,092,744		800,972			2,437,419
TOTAL LIABILITIES AND CAPITALIZATION	$	3,162,511	$	4,452,888	$	4,092,883	$	(3,286,018	)	$	8,422,264

78

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS



As of December 31, 2006	FES		FGCO		NGC		Eliminations			Consolidated
	(In thousands)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	2	$	-	$	-	$	-		$	2
Receivables-
Customers		129,843		-		-		-			129,843
Associated companies		201,281		160,965		69,751		(196,465	)		235,532
Other		2,383		1,702		-		-			4,085
Notes receivable from associated companies		460,023		-		292,896		-			752,919
Materials and supplies, at average cost		195		238,936		221,108		-			460,239
Prepayments and other		45,314		10,389		1,843		-			57,546
		839,041		411,992		585,598		(196,465	)		1,640,166

PROPERTY, PLANT AND EQUIPMENT:
In service		16,261		4,960,453		3,378,630		-			8,355,344
Less - Accumulated provision for depreciation		5,738		2,477,004		1,335,526		-			3,818,268
		10,523		2,483,449		2,043,104		-			4,537,076
Construction work in progress		345		170,063		169,478		-			339,886
		10,868		2,653,512		2,212,582		-			4,876,962

INVESTMENTS:
Nuclear plant decommissioning trusts		-		-		1,238,272		-			1,238,272
Long-term notes receivable from associated companies		-		-		62,900		-			62,900
Investment in associated companies		1,471,184		-		-		(1,471,184	)		-
Other		6,474		65,833		202		-			72,509
		1,477,658		65,833		1,301,374		(1,471,184	)		1,373,681

DEFERRED CHARGES AND OTHER ASSETS:
Goodwill		24,248		-		-		-			24,248
Property taxes		-		20,946		23,165		-			44,111
Accumulated deferred income taxes		32,939		-		-		(32,939	)		-
Other		23,544		11,542		4,753		-			39,839
		80,731		32,488		27,918		(32,939	)		108,198
TOTAL ASSETS	$	2,408,298	$	3,163,825	$	4,127,472	$	(1,700,588	)	$	7,999,007

LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES:
Currently payable long-term debt	$	-	$	608,395	$	861,265	$	-		$	1,469,660
Notes payable to associated companies		-		1,022,197		-		-			1,022,197
Accounts payable-
Associated companies		375,328		11,964		365,222		(196,465	)		556,049
Other		32,864		103,767		-		-			136,631
Accrued taxes		54,537		32,028		26,666		-			113,231
Other		49,906		41,401		9,634		-			100,941
		512,635		1,819,752		1,262,787		(196,465	)		3,398,709

CAPITALIZATION:
Common stockholder's equity		1,859,363		78,542		1,392,642		(1,471,184	)		1,859,363
Long-term debt		-		1,057,252		556,970		-			1,614,222
		1,859,363		1,135,794		1,949,612		(1,471,184	)		3,473,585

NONCURRENT LIABILITIES:
Accumulated deferred income taxes		-		25,293		129,095		(32,939	)		121,449
Accumulated deferred investment tax credits		-		38,894		26,857		-			65,751
Asset retirement obligations		-		24,272		735,956		-			760,228
Retirement benefits		10,255		92,772		-		-			103,027
Property taxes		-		21,268		23,165		-			44,433
Other		26,045		5,780		-		-			31,825
		36,300		208,279		915,073		(32,939	)		1,126,713
TOTAL LIABILITIES AND CAPITALIZATION	$	2,408,298	$	3,163,825	$	4,127,472	$	(1,700,588	)	$	7,999,007

79

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2007	FES			FGCO			NGC			Eliminations			Consolidated
	(In thousands)

NET CASH PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES	$	(18,017	)	$	55,172		$	263,468		$	(6,306	)	$	294,317

CASH FLOWS FROM FINANCING ACTIVITIES:
New financing-
Long-term debt		-			1,576,629			179,500			(1,328,919	)		427,210
Equity contribution from parent		700,000			700,000			-			(700,000	)		700,000
Short-term borrowings, net		300,000			-			25,278			(325,278	)		-
Redemptions and repayments-
Common stock		(600,000	)		-			-			-			(600,000	)
Long-term debt		-			(1,052,121	)		(495,795	)		6,306			(1,541,610	)
Short-term borrowings, net		-			(783,599	)		-			325,278			(458,321	)
Common stock dividend payments		(117,000	)		-			-			-			(117,000	)
Net cash provided from (used for) financing activities		283,000			440,909			(291,017	)		(2,022,613	)		(1,589,721	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(10,603	)		(502,311	)		(225,795	)		-			(738,709	)
Proceeds from asset sales		-			12,990			-			-			12,990
Proceeds from sale and leaseback transaction		-			-			-			1,328,919			1,328,919
Sales of investment securities held in trusts		-			-			655,541			-			655,541
Purchases of investment securities held in trusts		-			-			(697,763	)		-			(697,763	)
Loans to associated companies		441,966			-			292,896			-			734,862
Investment in subsidiary		(700,000	)		-			-			700,000			-
Other		3,654			(6,760	)		2,670			-			(436	)
Net cash provided from (used for) investing activities		(264,983	)		(496,081	)		27,549			2,028,919			1,295,404

Net change in cash and cash equivalents		-			-			-			-			-
Cash and cash equivalents at beginning of year		2			-			-			-			2
Cash and cash equivalents at end of year	$	2		$	-		$	-		$	-		$	2

80

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2006	FES			FGCO			NGC			Eliminations			Consolidated
	(In thousands)

NET CASH PROVIDED FROM OPERATING ACTIVITIES	$	250,518		$	150,510		$	470,578		$	(12,765	)	$	858,841

CASH FLOWS FROM FINANCING ACTIVITIES:
New financing-
Long-term debt		-			565,326			591,515			-			1,156,841
Short-term borrowings, net		-			46,402			-			-			46,402
Redemptions and repayments-
Long-term debt		-			(543,064	)		(594,676	)		-			(1,137,740	)
Dividend payments
Common stock		(8,454	)		-			(12,765	)		12,765			(8,454	)
Net cash provided from (used for) financing activities		(8,454	)		68,664			(15,926	)		12,765			57,049

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(948	)		(212,867	)		(363,472	)		-			(577,287	)
Proceeds from asset sales		-			34,215			-			-			34,215
Sales of investment securities held in trusts		-			-			1,066,271			-			1,066,271
Purchases of investment securities held in trusts		-			-			(1,066,271	)		-			(1,066,271	)
Loans to associated companies		(242,597	)		-			(90,433	)		-			(333,030	)
Other		1,481			(40,522	)		(747	)		-			(39,788	)
Net cash used for investing activities		(242,064	)		(219,174	)		(454,652	)		-			(915,890	)

Net change in cash and cash equivalents		-			-			-			-			-
Cash and cash equivalents at beginning of year		2			-			-			-			2
Cash and cash equivalents at end of year	$	2		$	-		$	-		$	-		$	2

81

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2005	FES			FGCO			NGC			Eliminations			Consolidated
	(In thousands)

NET CASH PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES	$	475,191		$	243,683		$	(71,526	)	$	-		$	647,348

CASH FLOWS FROM FINANCING ACTIVITIES:
New financing-
Short-term borrowings, net		-			130,876			-			(130,876	)		-
Equity contribution from parent		262,200			-			459,498			(459,498	)		262,200
Redemptions and repayments-
Short-term borrowings, net		(245,215	)		-			-			130,876			(114,339	)
Return of capital to parent		-			(197,298	)					197,298			-
Net cash provided from (used for) financing activities		16,985			(66,422	)		459,498			(262,200	)		147,861

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(1,340	)		(186,176	)		(224,044	)		-			(411,560	)
Proceeds from asset sales		15,000			43,087			-			-			58,087
Sales of investment securities held in trusts		-			-			1,097,276			-			1,097,276
Purchases of investment securities held in trusts		-			-			(1,186,381	)		-			(1,186,381	)
Loans to associated companies		(217,426	)		-			(74,200	)		-			(291,626	)
Return of capital from subsidiary		197,298			-			-			(197,298	)		-
Investment in subsidiary		(459,498	)		-			-			459,498			-
Other		(26,211	)		(34,199	)		(623	)		-			(61,033	)
Net cash used for investing activities		(492,177	)		(177,288	)		(387,972	)		262,200			(795,237	)

Net change in cash and cash equivalents		(1	)		(27	)		-			-			(28	)
Cash and cash equivalents at beginning of year		3			27			-			-			30
Cash and cash equivalents at end of year	$	2		$	-		$	-		$	-		$	2

82

16. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

~~(c)~~

~~Includes CEI's and TE's leasehold interests in Bruce Mansfield Unit 3 of 24.47% (196 MW) and~~

~~19.91% (159 MW), respectively.~~

~~(d )~~

~~Represents FGCO's 20.5% entitlement based on FirstEnergy's participation in OVEC.~~

~~(e)~~

~~Includes OE's and TE's leasehold interests in Beaver Valley Unit 2 of 21.66% (185 MW) and~~

~~18.26% (156 MW), respectively.~~

~~(f)~~

~~Includes OE's leasehold interest in Perry of 12.58% (158 MW).~~

~~(g)~~

~~Represents JCP&L's 50% ownership interest.~~

FirstEnergy's generating plants and load centers are connected by a transmission system consisting of elements having various voltage ratings ranging from 23 kV to 500 kV. The Companies' overhead and underground transmission lines aggregate 15,009 pole miles.SFAS 157 - "Fair Value Measurements"

In September 2006, the FASB issued SFAS 157 that establishes how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP. This Statement addresses the need for increased consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. The ~~Companies' electric distribution systems include 116,469 miles~~key changes to current practice are: (1) the definition of ~~overhead pole line~~fair value, which focuses on an exit price rather than entry price; (2) the methods used to measure fair value, such as emphasis that fair value is a market-based measurement, not an entity-specific measurement, as well as the inclusion of an adjustment for risk, restrictions and ~~underground conduit carrying primary, secondary~~credit standing; and ~~street lighting circuits. They own substations~~(3) the expanded disclosures about fair value measurements. This Statement and its related FSPs are effective for fiscal years beginning after November 15, 2007, and interim periods within those years. Under FSP FAS 157-2, FES and the Companies have elected to defer the election of SFAS 157 for financial assets and financial liabilities measured at fair value on a non-recurring basis for one year. FES and the Companies have evaluated the impact of this Statement and its FSPs, FAS 157-2 and FSP FAS 157-1, which excludes SFAS 13, Accounting for Leases, and its related pronouncements from the scope of SFAS 157, and are not expecting there to be a material effect on their financial statements. The majority of the FES and the Companies fair value measurements will be disclosed as level 1 or level 2 in the fair value hierarchy.

SFAS 159 - "The Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of FASB Statement No. 115"

In February 2007, the FASB issued SFAS 159, which provides companies with an option to report selected financial assets and financial liabilities at fair value. This Statement attempts to provide additional information that will help investors and other users of financial statements to more easily understand the effect of a ~~total installed transformer capacity~~company's choice to use fair value on its earnings. The Standard also requires companies to display the fair value of ~~90,948,000 kilovolt-amperes.~~those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. This guidance does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157 and SFAS 107. This Statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those years. FES and the Companies have analyzed their financial assets and financial liabilities within the scope of this Statement and no fair value elections were made as of January 1, 2008.

SFAS 141(R) - "Business Combinations"

In December 2007, the FASB issued SFAS 141(R), which requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS 141(R) attempts to reduce the complexity of existing GAAP related to business combinations. The Standard includes both core principles and pertinent application guidance, eliminating the need for numerous EITF issues and other interpretative guidance. SFAS 141(R) will impact business combinations entered into by FES and the Companies that close after January 1, 2009 and is not expected to have a material impact on FES and the Companies financial statements.

SFAS 160 - "Noncontrolling Interests in Consolidated Financial Statements an Amendment of ARB No. 51"

In December 2007, the FASB issued SFAS 160 that establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The Statement is not expected to have a material impact on FES and the Companies financial statements.

3183

~~The transmission facilities that are owned and operated by ATSI also interconnect with those~~FSP FIN 39-1 - "Amendment of AEP, DPL, Duquesne, Allegheny, Met-Ed and Penelec. The transmission facilities of JCP&L, Met-Ed and Penelec are physically interconnected and are operated on an integrated basis as part of the PJM RTO.FASB Interpretation No. 39"

~~FirstEnergy's distribution~~In April 2007, the FASB issued Staff Position (FSP) FIN 39-1, which permits an entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments that have been offset under the same master netting arrangement as the derivative instruments. This FSP is effective for fiscal years beginning after November 15, 2007, with early application permitted. The effects of applying the guidance in this FSP should be recognized as a retrospective change in accounting principle for all financial statements presented. FSP FIN 39-1 is not expected to have a material effect on FES and ~~transmission systems as~~the Companies financial statements.

EITF 06-11 - "Accounting for Income Tax Benefits of ~~December 31, 2006, consist of the following:~~Dividends or Share-based Payment Awards"

Substation

Distribution

Transmission

Transformer

Lines

Lines

Capacity

(Miles)

(kV-amperes)

OE 30,008 550 8,298,000
Penn 5,756 44 1,739,000
CEI 25,130 2,144 9,301,000
TE 1,851 223 3,677,000
JCP&L 18,966 2,135 20,964,000
Met-Ed 14,751 1,407 9,848,000
Penelec 20,007 2,690 14,190,000
ATSI* - 5,816 22,931,000
Total 116,469 15,009 90,948,000
In June 2007, the FASB released EITF 06-11, which provides guidance on the appropriate accounting for income tax benefits related to dividends earned on nonvested share units that are charged to retained earnings under SFAS 123(R). The consensus requires that an entity recognize the realized tax benefit associated with the dividends on nonvested shares as an increase to APIC. This amount should be included in the APIC pool, which is to be used when an entitys estimate of forfeitures increases or actual forfeitures exceed its estimates, at which time the tax benefits in the APIC pool would be reclassified to the income statement. The consensus is effective for income tax benefits of dividends declared during fiscal years beginning after December 15, 2007. EITF 06-11 is not expected to have a material effect on FES and the Companies' financial statements.

*

~~Represents transmission lines of 69kv and above located in the service areas of OE, Penn,~~

~~CEI and TE.~~

~~ITEM 3.~~~~LEGAL PROCEEDINGS~~

Reference is made to Note 14, Commitments, Guarantees and Contingencies, of the Notes to Consolidated Financial Statements contained in Item 8 for a description of certain legal proceedings involving FirstEnergy, OE, CEI, TE, JCP&L, Met-Ed and Penelec.

~~ITEM 4.~~~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~

~~None.~~

~~PART II~~

~~ITEM 5.~~~~MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER~~

~~MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~

The information required by Item 5 regarding FirstEnergy's market information, including stock exchange listings and quarterly stock market prices, dividends and holders of common stock is included on page 3 of FirstEnergy's 2006 Annual Report to Stockholders (Exhibit 13). Information for OE, CEI, TE, JCP&L, Met-Ed and Penelec is not required to be disclosed because they are wholly owned subsidiaries.

Information regarding compensation plans for which shares of FirstEnergy common stock may be issued is incorporated herein by reference to FirstEnergy's 2007 proxy statement filed with the SEC pursuant to Regulation 14A under the Securities Exchange Act of 1934.

~~The table below includes information on a monthly basis for the fourth quarter, regarding purchases made by FirstEnergy of its common stock during the fourth quarter of 2006.~~

Period

October 1-31,
2006

November 1-30,
2006

December 1-31,
2006

Fourth Quarter
Total Number Of Shares Purchased ^(a)
234,384 76,844 331,411 642,639
Average Price Paid per Share $58.02 $58.90 $60.58 $59.45
Total Number of Shares Purchased As Part of Publicly Announced Plans Or Programs
- - - -
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans Or Programs ^(b)
1,369,241 1,369,241 1,369,241 1,369,241

^{( a)}

Share amounts reflect purchases on the open market to satisfy FirstEnergy's obligations to deliver common stock under its Executive and Director Incentive Compensation Plan, Deferred Compensation Plan for Outside Directors, Executive Deferred Compensation Plan, Savings Plan and Stock Investment Plan. In addition, such amounts reflect shares tendered by employees to pay the exercise price or withholding taxes upon exercise of stock options granted under the Executive and Director Incentive Compensation Plan and shares purchased as part of publicly announced plans.

^(b)

~~FirstEnergy initiated a share repurchase plan on August 10, 2006.~~

3284

~~ITEM 6.~~~~SELECTED FINANCIAL DATA~~

~~ITEM 7.~~~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~17. SUMMARY OF QUARTERLY FINANCIAL ~~CONDITION AND~~

~~RESULTS OF OPERATIONS~~DATA (UNAUDITED)

~~ITEM 7A.~~ ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~The following summarizes certain consolidated operating results by quarter for 2007 and 2006.

~~ITEM 8.~~~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~

						Income (Loss)
						From Continuing
				Operating		Operations
				Income		Before		Income		Net
Three Months Ended		Revenues		(Loss)		Income Taxes		Taxes		Income
		(In millions)
FES
	March 31, 2007	$	1018.2	$	188.7	$	164.9	$	62.4	$	102.5
	March 31, 2006		956.5		89.7		56.6		19.4		37.2
	June 30, 2007		1068.7		263.8		239.1		87.7		151.4
	June 30, 2006		994.0		192.2		157.6		59.0		98.6
	September 30,2007		1170.1		272.1		248.4		93.7		154.8
	September 30,2006		1109.6		301.6		282.4		106.2		176.2
	December 31, 2007		1068.0		194.2		181.1		60.8		120.2
	December 31, 2006		951.2		194.6		158.4		51.7		106.7

OE
	March 31, 2007	$	625.6	$	65.4	$	71.5	$	17.4	$	54.0
	March 31, 2006		586.2		86.8		102.1		38.3		63.8
	June 30, 2007		596.8		70.8		73.2		27.6		45.7
	June 30, 2006		573.1		79.3		94.2		35.0		59.2
	September 30,2007		668.8		82.0		82.3		34.1		48.2
	September 30,2006		673.7		50.8		61.4		17.9		43.5
	December 31, 2007		600.3		73.1		71.4		22.2		49.3
	December 31, 2006		594.5		74.2		77.2		32.1		45.1

CEI
	March 31, 2007	$	440.8	$	115.5	$	98.3	$	34.8	$	63.5
	March 31, 2006		407.8		124.3		116.9		44.5		72.4
	June 30, 2007		449.5		128.6		111.0		42.1		68.9
	June 30, 2006		432.4		152.3		148.8		57.7		91.1
	September 30,2007		529.1		154.4		133.3		54.6		78.7
	September 30,2006		515.9		140.3		131.9		48.5		83.4
	December 31, 2007		403.5		113.7		97.2		31.9		65.3
	December 31, 2006		413.6		109.7		97.1		38.0		59.1

TE
	March 31, 2007	$	240.5	$	40.3	$	37.0	$	11.1	$	25.9
	March 31, 2006		218.0		43.2		46.2		17.2		29.0
	June 30, 2007		240.3		40.8		37.3		15.4		21.9
	June 30, 2006		225.6		49.3		52.3		19.9		32.4
	September 30,2007		269.7		47.5		43.5		18.4		25.1
	September 30,2006		262.8		43.7		46.8		17.7		29.1
	December 31, 2007		213.4		28.8		27.2		8.8		18.3
	December 31, 2006		221.6		14.3		13.9		5.1		8.8

The information required by Items 6 through 8 is incorporated herein by reference to Selected Financial Data, Management's Discussion and Analysis of Results of Operations and Financial Condition, and Financial Statements included on the pages shown in the following table in the respective company's 2006 Annual Report to Stockholders (Exhibit 13).

85

							Income (Loss)
							From Continuing
				Operating			Operations					Net
				Income			Before			Income		Income
Three Months Ended		Revenues		(Loss)			Income Taxes			Taxes		(Loss)
		(In millions)
Met-Ed
	March 31, 2007	$	370.3	$	57.9		$	55.2		$	23.6	$	31.6
	March 31, 2006		311.2		28.7			29.1			11.2		17.9
	June 30, 2007		361.7		38.0			34.3			14.8		19.5
	June 30, 2006		282.2		70.6			69.6			29.5		40.1
	September 30,2007		410.6		43.8			39.4			14.7		24.7
	September 30,2006		356.2		42.0			39.6			14.6		25.0
	December 31, 2007		367.9		45.3			34.8			15.2		19.7
	December 31, 2006 *		293.5		(300.2	)		(301.2	)		22.0		(323.2	)

Penelec
	March 31, 2007	$	355.9	$	65.7		$	56.0		$	24.3	$	31.7
	March 31, 2006		291.8		45.0			37.1			14.0		23.1
	June 30, 2007		331.4		44.5			33.8			14.4		19.5
	June 30, 2006		265.0		39.6			30.0			14.5		15.5
	September 30,2007		353.4		45.8			33.4			10.4		23.0
	September 30,2006		303.4		38.1			28.8			10.7		18.1
	December 31, 2007		361.3		48.4			33.8			14.9		18.7
	December 31, 2006		288.3		53.1			44.8			17.3		27.5

JCP&L
	March 31, 2007	$	683.7	$	89.9		$	71.0		$	32.7	$	38.3
	March 31, 2006		575.8		73.5			57.3			23.6		33.7
	June 30, 2007		780.0		110.2			89.5			39.7		49.8
	June 30, 2006		611.5		95.7			78.9			38.6		40.3
	September 30,2007		1033.2		143.3			122.1			46.3		75.8
	September 30,2006		911.1		156.0			137.7			58.3		79.4
	December 31, 2007		746.9		76.4			52.6			30.4		22.2
	December 31, 2006		569.3		78.4			63.4			26.2		37.2

*	Met-Ed recognized a $355 million non-cash goodwill impairment charge in the fourth quarter of 2006.

Item 6
Item 7
Item 7A
Item 8

FirstEnergy 3 5-51 29-32 52-105
OE 2 3-20 11-12 21-49
CEI 2 3-19 11 20-46
TE 2 3-19 11 20-45
JCP&L 2 3-15 7-9 16-40
Met-Ed 2 3-14 7-9 15-37
Penelec 2 3-14 7-9 15-37

86

ITEM 9.~~CHANGES IN~~9A(T). CONTROLS AND ~~DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING~~

~~AND FINANCIAL DISCLOSURE~~PROCEDURES -- OE, CEI, TE and Penelec (Restated)

~~None.~~

~~ITEM 9A. CONTROLS AND PROCEDURES~~

~~- FIRSTENERGY~~

Evaluation of Disclosure Controls and Procedures

~~FirstEnergy's Chief Executive Officer~~In the original Form 10-K for the year ended December 31, 2007, each registrant’s chief executive officer and ~~Chief Financial Officer have reviewed and evaluated such registrant's disclosure controls and procedures, as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e),~~chief financial officer concluded that, as of the end ~~date~~of the period covered by ~~this report. Based upon this evaluation,~~that report, the ~~Chief Executive Officer and Chief Financial Officer concluded that FirstEnergy's~~applicable registrant's disclosure controls and procedures were effective as of December 31, ~~2006.~~2007. Subsequent to the restatement of the respective registrants’ Consolidated Statements of Cash Flows discussed in the revised Note 1 to the Combined Notes to Consolidated Financial Statements included in the Form 10-K/A, each registrant's chief executive officer and chief financial officer performed an updated review and evaluated such registrant's disclosure controls and procedures. Based upon that updated evaluation and as a result of the material weakness in the internal controls over one aspect of the preparation and review of the Consolidated Statement of Cash Flows discussed below, those officers concluded that, as of the end of the period covered by this report, the applicable registrant's disclosure controls and procedures were ineffective as of December 31, 2007. Based on the modification of internal controls over the preparation and review of the Consolidated Statements of Cash Flows during the fourth quarter of 2008, management believes that it has remediated the material weakness discussed below for each of the registrants.

~~Management's~~Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. Using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control -– Integrated Framework, management conducted an evaluation of the effectiveness of ~~FirstEnergy's~~each registrant’s internal control over financial reporting under the supervision of ~~FirstEnergy's Chief Executive Officer~~such registrant’s chief executive officer and ~~Chief Financial Officer. Based on that evaluation, management~~chief financial officer. In the original Form 10-K for the year ended December 31,2007, each registrant’s chief executive officer and chief financial officer concluded that, ~~FirstEnergy's~~as of the end of the period covered by that report, the applicable registrant's internal control over financial reporting was effective as of December 31, ~~2006. Management's assessment~~2007. Subsequent to the restatement discussed in the revised Note 1 to the Combined Notes to Consolidated Financial Statements included in the Form 10-K/A, each registrant's chief executive officer and chief financial officer performed an updated review and evaluated such registrant's internal control over financial reporting. Based upon that updated evaluation and as a result of the material weakness in the internal controls discussed below, those officers concluded that, as of the end of the period covered by this report, the applicable registrant's internal control over financial reporting was ineffective as of December 31, 2007. The effectiveness of ~~FirstEnergy's~~each registrant's internal control over financial reporting, as of December 31, ~~2006,~~2007, has not been audited by ~~PricewaterhouseCoopers LLP, an~~such registrant’s independent registered public accounting ~~firm,~~firm.

As reported in this Form 10-K/A, each registrant has amended its original Form 10-K for the year ended December 31, 2007 to restate its Consolidated Statements of Cash Flows for the year ended December 31, 2007, to correct common stock dividend payments reported in cash flows from financing activities. The Consolidated Statements of Cash Flows for each registrant, as ~~stated~~originally filed, erroneously reflected the dividends declared in ~~their report~~the third quarter of 2007 applicable to future quarters' payments as dividends paid in the quarter that they were declared. The corrections resulted in a corresponding change in operating liabilities - accounts payable, included in ~~FirstEnergy's 2006 Annual Report~~cash flows from operating activities.

A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

The restatement described above resulted from a material weakness in the internal controls over one aspect of the preparation and review of the Consolidated Statements of Cash Flows. Specifically, the registrants did not have a control that was designed to ~~Stockholders~~ensure that declared but unpaid dividends to the registrants’ parent were not reported as cash used for financing activities. This control deficiency resulted in a material misstatement of the registrants’ interim and ~~incorporated by reference hereto.~~annual consolidated financial statements. Accordingly, management determined that this control deficiency constitutes a material weakness. The registrants modified their internal controls over the preparation and review of their Consolidated Statements of Cash Flows during the fourth quarter of 2008. Management has implemented a process to segregate dividend declarations with payments applicable to future reporting periods in a unique general ledger account in order to distinguish associated company dividends payable from other associated company accounts payable. Management believes that this process enhances the existing internal controls over financial reporting and remediated the material weakness discussed above for each of the registrants.

Changes in Internal Control over Financial Reporting

~~There were no changes in FirstEnergy's internal control over financial reporting during~~During the ~~fourth~~ quarter ~~of 2006 that have materially affected, or are reasonably likely to materially affect, FirstEnergy's internal control over financial reporting.~~

~~- OE, CEI, TE, JCP&L, Met-Ed and Penelec~~

~~Evaluation of Disclosure Controls and Procedures~~

Each registrant's Chief Executive Officer and Chief Financial Officer have reviewed and evaluated such registrant's disclosure controls and procedures, as defined in the Securities Exchange Act of 1934 rules 13a-15(e) and 15d-15(e), as of the end date covered by this report. Based upon this evaluation, the respective Chief Executive Officer and Chief Financial Officer concluded that such registrant's disclosure controls and procedures were effective as ofended December 31, ~~2006.~~

33

~~Changes in Internal Control over Financial Reporting~~

~~There~~2007, there were no changes in the registrants' internal control over financial reporting ~~during the fourth quarter of 2006~~ that have materially affected, or are reasonably likely to materially affect, the registrants' internal control over financial reporting.

87

PART IV

ITEM ~~9B.~~~~OTHER INFORMATION~~

~~None.~~

~~PART III~~

~~ITEM 10.~~~~DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT~~

~~FirstEnergy~~

The information required by Item 10, with respect to identification of FirstEnergy's directors and with respect to reports required to be filed under Section 16 of the Securities Exchange Act of 1934, is incorporated herein by reference to FirstEnergy's 2007 Proxy Statement filed with the SEC pursuant to Regulation 14A under the Securities Exchange Act of 1934 and, with respect to identification of executive officers, to "Part I, Item 1. Business - Executive Officers" herein.

~~The Board of Directors has determined that Ernest J. Novak, Jr., an independent director, is the audit committee financial expert.~~

~~FirstEnergy makes available on its website at~~ http://www.firstenergycorp.com/ir its Corporate Governance Policies and the charters for each of the following committees of the Board of Directors: Audit; Corporate Governance; Compensation; Finance; and Nuclear. The Corporate Governance Policies and Board committee charters are also available in print upon written request to David W. Whitehead, Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, OH 44308-1890.

FirstEnergy has adopted a Code of Business Conduct, which applies to all employees, including the Chief Executive Officer, the Chief Financial Officer and the Chief Accounting Officer. In addition, the Board of Directors has its own Code of Business Conduct. These Codes can be found on our website provided in the previous paragraph or upon written request to the Corporate Secretary.

~~Pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual, the Company submitted the Annual CEO Certification to the NYSE on May 24, 2006.~~

~~OE, CEI, TE, JCP&L, Met-Ed and Penelec~~

A. J. Alexander, R. H. Marsh and R. R. Grigg are the Directors of OE, CEI, TE, Met-Ed and Penelec. Information concerning these individuals is shown in the "Executive Officers" section of Item 1. S. E. Morgan, C. E. Jones, L. L. Vespoli, B. S. Ewing, M. A. Julian, G. E. Persson and S. C. Van Ness are the Directors of JCP&L.

~~Mr. Ewing (Age 46) has served as FirstEnergy Service Company's Vice President - Energy Delivery since 2004. From 1999 to 2004, Mr. Ewing served as Director of Operations Services - Northern Region.~~

~~Mr. Julian (Age 50) has served as FirstEnergy Service Company's Vice President - Energy Delivery since 2003. From 2001 to 2003, Mr. Julian served as Director of Energy Delivery Technical Services.~~

Mrs. Persson (Age 76) has served in the New Jersey Division of Consumer Affairs Elder Fraud Investigation Unit since 1999. She previously served as liaison (Special Assistant Director) between the New Jersey Division of Consumer Affairs and various state boards. Prior to 1995, she was owner and President of Business Dynamics Associated of Red Bank, NJ. Mrs. Persson is a member of the United States Small Business Administration National Advisory Board, the New Jersey Small Business Advisory Council, the Board of Advisors of Brookdale Community College and the Board of Advisors of Georgian Court College.

Mr. Van Ness (Age 73) has been of Counsel in the firm of Herbert, Van Ness, Cayci & Goodell, PC of Princeton, NJ since 1998. Prior to that he was affiliated with the law firm of Pico, Mack, Kennedy, Jaffe, Perrella and Yoskin of Trenton, NJ since 1990. He is also a director of The Prudential Insurance Company of America.

~~Information concerning the other Directors of JCP&L is shown in the "Executive Officers" section of Item 1 of this report.~~

34

15. EXHIBITS.

~~ITEM 11.~~Exhibit

Number

~~EXECUTIVE COMPENSATION~~

~~ITEM 12.~~

~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~

~~ITEM 13.~~

~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS~~

~~FirstEnergy, OE, CEI, TE, JCP&L, Met-Ed and Penelec~~ -

The information required by Items 11, 12 and 13 is incorporated herein by reference to FirstEnergy's 2007 Proxy Statement filed with the SEC pursuant to Regulation 14A under the Securities Exchange Act of 1934.

~~ITEM 14.~~~~PRINCIPAL ACCOUNTING FEES AND SERVICES~~

~~A summary of the audit and audit-related fees rendered by PricewaterhouseCoopers LLP for the years ended December 31, 2006 and 2005 are as follows:~~

Audit Fees⁽¹⁾

Audit-Related Fees

Company

2006

2005

2006

2005

(In thousands)

OE $ 1,495 $ 1,492 $ - $ -
CEI 726 755 - -
TE 643 610 - -
JCP&L 816 728 - -
Met-Ed 576 597 - -
Penelec 576 605 - -
Other subsidiaries 1,478 1,786 - -

Total FirstEnergy $ 6,310 $ 6,573 $ - $ -

⁽¹⁾

Professional services rendered for the audits of FirstEnergy's annual financial statements and reviews of financial statements included in FirstEnergy's Quarterly Reports on Form 10-Q and for services in connection with statutory and regulatory filings or engagements, including comfort letters and consents for financings and filings made with the SEC.

~~Tax and Other Fees~~

~~There were no other fees billed to FirstEnergy for tax or other services for the years ended December 31, 2006 and 2005.~~

~~Additional information required by this item is incorporated herein by reference to FirstEnergy's 2007 Proxy Statement filed with the SEC pursuant to Regulation 14A.~~

35

~~PART IV~~

~~ITEM 15.~~~~EXHIBITS, FINANCIAL STATEMENT SCHEDULES~~

~~(a)~~1.~~Financial Statements~~

~~Included in Part II of this report and incorporated herein by reference to the respective company's 2006 Annual Report to Stockholders (Exhibit 13 below) at the pages indicated.~~

First-
Energy

OE

CEI

TE

JCP&L

Met-Ed

Penelec

Management Reports 1 - - - - - -
Report of Independent Registered Public Accounting Firm 2 1 1 1 1 1 1
Statements of Income-Three Years Ended December 31, 2006 52 21 20 20 16 15 15
Balance Sheets-December 31, 2006 and 2005 53 22 21 21 17 16 16
Statements of Capitalization-December 31, 2006 and 2005 54-55 23-24 22 22 18 17 17
Statements of Common Stockholders' Equity-Three Years
Ended December 31, 2006
56 25 23 23 19 18 18
Statements of Preferred Stock-Three Years Ended
December 31, 2006
57 25 23 23 19 - -
Statements of Cash Flows-Three Years Ended December 31, 2006 58 26 24 24 20 19 19
Statements of Taxes-Three Years Ended December 31, 2006 27 25 25 21 20 20
Notes to Financial Statements 59-105 28-49 26-46 26-45 22-40 21-37 21-37

2.	*~~Financial Statement Schedules~~*

~~Included in Part IV of this report:~~

First-
Energy

OE

CEI

TE

JCP&L

Met-Ed

Penelec

Report of Independent Registered Public Accounting
Firm
71 72 73 74 75 76 77

Schedule - Three Years Ended December 31, 2006:
II - Consolidated Valuation and Qualifying Accounts
78 79 80 81 82 83 84

Schedules other than the schedule listed above are omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.

3.	*~~Exhibits - FirstEnergy~~*

~~Exhibit~~

~~Number~~

~~3-1~~	~~Articles of Incorporation constituting FirstEnergy Corp.'s Articles of Incorporation, dated September 17, 1996. (September 17, 1996 Form 8-K, Exhibit C)~~

~~3-1(a)~~	~~Amended Articles of Incorporation of FirstEnergy Corp. (Registration No. 333-21011, Exhibit (3)-1)~~

~~3-2~~			~~Regulations of FirstEnergy Corp. (September 17, 1996 Form 8-K, Exhibit D)~~

~~3-2(a)~~	~~FirstEnergy Corp. Amended Code of Regulations. (Registration No. 333-21011, Exhibit (3)-2)~~

~~4-1~~	~~Rights Agreement (December 1, 1997 Form 8-K, Exhibit 4.1)~~

~~4-2~~	~~FirstEnergy Corp. to The Bank of New York, Supplemental Indenture, dated November 7, 2001. (2001 Form 10-K, Exhibit 4-2)~~
OE
~~(C)10-1~~		~~FirstEnergy Corp. Executive and Director Incentive Compensation Plan, revised November 15, 1999. (1999 Form 10-K, Exhibit 10-1)~~

~~(C)10-2~~	~~Amended FirstEnergy Corp. Deferred Compensation Plan for Directors, revised November 15, 1999. (1999 Form 10-K, Exhibit 10-2)~~

~~(C)10-3~~	Form of Employment, severance and change of control agreement between FirstEnergy Corp. and the following executive officers: L.L. Vespoli, C.B. Snyder, and R.H. Marsh, through December 31, 2005. (1999 Form 10-K, Exhibit 10-3)

36

~~Exhibit~~

~~Number~~


~~(C)10-4~~	~~FirstEnergy Corp. Supplemental Executive Retirement Plan, amended January 1, 1999. (1999 Form 10-K, Exhibit 10-4)~~

~~(C)10-5~~	~~FirstEnergy Corp. Executive Incentive Compensation Plan. (1999 Form 10-K, Exhibit 10-5)~~

~~(C)10-6~~	~~Restricted stock agreement between FirstEnergy Corp. and A. J. Alexander. (1999 Form 10-K, Exhibit 10-6)~~

~~(C)10-7~~	~~FirstEnergy Corp. Executive and Director Incentive Compensation Plan. (1998 Form 10-K, Exhibit 10-1)~~

~~(C)10-8~~	~~Amended FirstEnergy Corp. Deferred Compensation Plan for Directors, amended February 15, 1999. (1998 Form 10-K, Exhibit 10-2)~~

~~(C)10-9~~	~~Restricted Stock Agreement between FirstEnergy Corp. and A. J. Alexander. (2000 Form 10-K, Exhibit 10-1)~~

~~(C)10-10~~	~~Restricted Stock Agreement between FirstEnergy Corp. and H. P. Burg. (2000 Form 10-K, Exhibit 10-2)~~

~~(C)10-11~~	~~Stock Option Agreement between FirstEnergy Corp. and officers dated November 22, 2000. (2000 Form 10-K, Exhibit 10-3)~~

~~(C)10-12~~	~~Stock Option Agreement between FirstEnergy Corp. and officers dated March 1, 2000. (2000 Form 10-K, Exhibit 10-4)~~

~~(C)10-13~~	~~Stock Option Agreement between FirstEnergy Corp. and director dated January 1, 2000. (2000 Form 10-K, Exhibit 10-5)~~

~~(C)10-14~~	~~Stock Option Agreement between FirstEnergy Corp. and two directors dated January 1, 2001. (2000 Form 10-K, Exhibit 10-6)~~

~~(C)10-15~~	~~Executive and Director Incentive Compensation Plan dated May 15, 2001. (2001 Form 10-K, Exhibit 10-1)~~

~~(C)10-16~~	~~Amended FirstEnergy Corp. Deferred Compensation Plan for Directors, revised September 18, 2000. (2001 Form 10-K, Exhibit 10-2)~~

~~(C)10-17~~	~~Stock Option Agreements between FirstEnergy Corp. and Officers dated May 16, 2001. (2001 Form 10-K, Exhibit 10-3)~~

~~(C)10-18~~	~~Form of Restricted Stock Agreements between FirstEnergy Corp. and Officers. (2001 Form 10-K, Exhibit 10-4)~~

~~(C)10-19~~	~~Stock Option Agreements between FirstEnergy Corp. and One Director dated January 1, 2002. (2001 Form 10-K, Exhibit 10-5)~~

~~(C)10-20~~	~~FirstEnergy Corp. Executive Deferred Compensation Plan. (2001 Form 10-K, Exhibit 10-6)~~

~~(C)10-21~~	~~Executive Incentive Compensation Plan-Tier 2. (2001 Form 10-K, Exhibit 10-7)~~

~~(C)10-22~~	~~Executive Incentive Compensation Plan-Tier 3. (2001 Form 10-K, Exhibit 10-8)~~

~~(C)10-23~~	~~Executive Incentive Compensation Plan-Tier 4. (2001 Form 10-K, Exhibit 10-9)~~

~~(C)10-24~~	~~Executive Incentive Compensation Plan-Tier 5. (2001 Form 10-K, Exhibit 10-10)~~

~~(C)10-25~~	~~Amendment to GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries, effective April 5, 2001. (2001 Form 10-K, Exhibit 10-11)~~

~~(C)10-26~~	Form of Amendment, effective November 7, 2001, to GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries, Deferred Remuneration Plan for Outside Directors of GPU, Inc., and Retirement Plan for Outside Directors of GPU, Inc. (2001 Form 10-K, Exhibit 10-12)

~~(C)10-27~~	~~GPU, Inc. Stock Option and Restricted Stock Plan for MYR Group, Inc. Employees. (2001 Form 10-K, Exhibit 10-13)~~

37

~~Exhibit~~

~~Number~~


~~(C)10-28~~	~~Executive and Director Stock Option Agreement dated June 11, 2002. (2002 Form 10-K, Exhibit 10-1)~~

~~(C)10-29~~	~~Director Stock Option Agreement. (2002 Form 10-K, Exhibit 10-2)~~

~~(C)10-30~~	~~Executive and Director Executive Incentive Compensation Plan, Amendment dated May 21, 2002. (2002 Form 10-K, Exhibit 10-3)~~

~~(C)10-31~~	~~Directors Deferred Compensation Plan, Revised Nov. 19, 2002. (2002 Form 10-K, Exhibit 10-4)~~

~~(C)10-32~~	~~Executive Incentive Compensation Plan 2002. (2002 Form 10-K, Exhibit 10-5)~~

~~(C)10-33~~	~~GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries as amended and restated to reflect amendments through June 3, 1999. (1999 Form 10-K, Exhibit 10-V, File No. 1-6047, GPU, Inc.)~~

~~(C)10-34~~	~~Form of 1998 Stock Option Agreement under the GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries. (1997 Form 10-K, Exhibit 10-Q, File No. 1-6047, GPU, Inc.)~~

~~(C)10-35~~	~~Form of 1999 Stock Option Agreement under the GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries. (1999 Form 10-K, Exhibit 10-W, File No. 1-6047, GPU, Inc.)~~

~~(C)10-36~~	~~Form of 2000 Stock Option Agreement under the GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries. (2000 Form 10-K, Exhibit 10-W, File No. 1-6047, GPU, Inc.)~~

~~(C)10-37~~	~~Deferred Remuneration Plan for Outside Directors of GPU, Inc. as amended and restated effective August 8, 2000. (2000 Form 10-K, Exhibit 10-O, File No. 1-6047, GPU, Inc.)~~

~~(C)10-38~~	~~Retirement Plan for Outside Directors of GPU, Inc. as amended and restated as of August 8, 2000. (2000 Form 10-K, Exhibit 10-N, File No. 1-6047, GPU, Inc.)~~

~~(C)10-39~~	~~Forms of Estate Enhancement Program Agreements entered into by certain former GPU directors. (1999 Form 10-K, Exhibit 10-JJ, File No. 1-6047, GPU, Inc.)~~

~~(C)10-40~~	~~Deferred Compensation Plan for Outside Directors, effective November 7, 2001. (Exhibit 4(f), Form S-8, File No. 333-101472)~~

~~(C)10-41~~	~~Employment Agreement between FirstEnergy and an officer dated July 20, 2004. (September 30, 2004 Form 10-Q, Exhibit 10-41)~~

~~(C)10-42~~	~~Stock Option Agreement between FirstEnergy and an officer dated August 20, 2004. (September 30, 2004 Form 10-Q, Exhibit 10-42)~~

~~(C)10-43~~	~~Restricted Stock Agreement between FirstEnergy and an officer dated August 20, 2004. (September 30, 2004 Form 10-Q, Exhibit 10-43)~~

~~(C)10-44~~	~~Executive Bonus Plan between FirstEnergy and Officers dated October 31, 2004. (September 30, 2004 Form 10-Q, Exhibit 10-44)~~

~~(C)10-45~~	~~Form of Employment, Severance, and Change of Control Agreement, between FirstEnergy and A. J. Alexander. (2004 Form 10-K, Exhibit 10-12)~~

~~(C)10-46~~	Form of Employment, Severance, and Change of Control Agreement, Tier 1, between FirstEnergy and the following executive officers: C.B. Snyder, L.L. Vespoli, and R.H. Marsh (effective January 1, 2006). (2004 Form 10-K, Exhibit 10-13)

~~(C)10-47~~	Form of Employment, Severance, and Change of Control Agreement, Tier 1, between FirstEnergy and the following executive officers: L.M. Cavalier, M.T. Clark, and R.R. Grigg. (2004 Form 10-K, Exhibit 10-14)

~~(C)10-48~~	Form of Employment, Severance, and Change of Control Agreement, Tier 2, between FirstEnergy and the following executive officers: K.J. Keough and K.W. Dindo (effective January 1, 2006). (2004 Form 10-K, Exhibit 10-15)

38

~~Exhibit~~

~~Number~~


~~(C)10-49~~	~~Form of Employment, Severance, and Change of Control Agreement, Tier 2, between FirstEnergy and G. L. Pipitone. (2004 Form 10-K, Exhibit 10-16)~~

~~(C)10-50~~	~~Executive and Director Incentive Compensation Plan, Amendment dated January 18, 2005. (2004 Form 10-K, Exhibit 10-3)~~

~~(C)10-51~~	~~Form of Restricted Stock Agreements, between FirstEnergy and Officers. (2004 Form 10-K, Exhibit 10-4)~~

~~(C)10-52~~	~~Form of Restricted Stock Unit Agreements (Performance Adjusted), between FirstEnergy and Officers. (2004 Form 10-K, Exhibit 10-5)~~

~~(C)10-53~~	~~Form of Restricted Stock Agreement, between FirstEnergy and an officer. (2004 Form 10-K, Exhibit 10-6)~~

~~10-54~~	~~Notice of Termination Tolling Agreement, Restated Partial Requirements Agreement (September 2005 10-Q, Exhibit 10-1)~~

~~10-55~~	~~Agreement by and between FirstEnergy Generation Corp. and Bechtel Power Corporation dated August 26, 2005. (September 2005 10-Q, Exhibit 10-2)~~

~~10-56~~	~~Consent Decree dated as of March 18, 2005. (Form 8-K dated March 18, 2005, Exhibit 10-1.)~~

~~10-57~~	Deferred Prosecution Agreement entered into January 20, 2006 among FirstEnergy Nuclear Operating Company, U.S. Attorney's Office for the Northern District of Ohio and the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice. (Form 8-K dated January 20, 2006, Exhibit 99-2)

~~(D)10-58~~	Form of Guaranty Agreement dated as of December 16, 2005 between FirstEnergy Corp. and FirstEnergy Solutions Corp. in Favor of Barclays Bank PLC as Adminstrative Agent for the Banks. (2005 Form 10-K, Exhibit 10-1)

~~(D)10-59~~	Form of Trust Indenture dated as of December 1, 2005 between Ohio Water Development Authority and JP Morgan Trust Company related to issuance of FirstEnergy Nuclear Generation Corp. pollution control revenue refunding bonds. (2005 Form 10-K, Exhibit 10-3)

~~10-60~~	~~GENCO Power Supply Agreement dated as of October 14, 2005 between FirstEnergy Generation Corp. (Seller) and FirstEnergy Solutions Corp. (Buyer). (2005 Form 10-K, Exhibit 10-5)~~

~~10-61~~	~~Nuclear Power Supply Agreement dated as of October 14, 2005 between FirstEnergy Nuclear Generation Corp. (Seller) and FirstEnergy Solutions Corp. (Buyer). (2005 Form 10-K, Exhibit 10-8)~~

~~(D)10-62~~	Form of Letter of Credit and Reimbursement Agreement Dated as of December 16, 2005 among FirstEnergy Nuclear Generation Corp., and the Participating Banks and Barclays Bank PLC. (2005 Form 10-K, Exhibit 10-2)

~~(D)10-63~~	Form of Waste Water Facilities and Solid Waste Facilities Loan Agreement Between Ohio Water Development Authority and FirstEnergy Nuclear Generation Corp., Dated as of December 1, 2005. (2005 Form 10-K, Exhibit 10-4)

~~10-64~~	Nuclear Sale/Leaseback Power Supply Agreement dated as of October 14, 2005 between Ohio Edison Company and The Toledo Edison Company (Sellers) and FirstEnergy Nuclear Generation Corp. (Buyer) (2005 Form 10-K, Exhibit 10-6)

~~10-65~~	Mansfield Power Supply Agreement dated as of October 14, 2005 between The Cleveland Electric Illuminating Company and The Toledo Edison Company (Sellers) and FirstEnergy Generation Corp. (Buyer) (2005 Form 10-K, Exhibit 10-7)

~~10-66~~	~~Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and the FirstEnergy Operating Companies - OE, CEI and TE (Buyers) (2005 Form 10-K, Exhibit 10-9)~~

~~10-67~~	~~Electric Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and Pennsylvania Power Company (Buyer). (2005 Form 10-K, Exhibit 10-10)~~

39

~~Exhibit~~

~~Number~~

~~(E)10-68~~	Form of Guaranty Agreement dated as of April 3, 2006 by FirstEnergy Corp. in favor of the Participating Banks, Barclays Bank PLC, as administrative agent and fronting bank, and KeyBank National Association, as syndication agent, under the related Letter of Credit and Reimbursement Agreement. (March 2006 10-Q, Exhibit 10-1)

~~(E)10-69~~	Form of Letter of Credit and Reimbursement Agreement dated as of April 3, 2006 among FirstEnergy Generation Corp., the Participating Banks, Barclays Bank PLC, as administrative agent and fronting bank, and KeyBank National Association, as syndication agent. (March 2006 10-Q, Exhibit 10-2)

~~(E)10-70~~	Form of Trust Indenture dated as of April 1, 2006 between the Ohio Water Development Authority and The Bank of New York Trust Company, N.A. as Trustee securing pollution control revenue refunding bonds issued on behalf of FirstEnergy Generation Corp. (March 2006 10-Q, Exhibit 10-3)

~~(E)10-71~~	~~Form of Waste Water Facilities Loan Agreement between the Ohio Water Development Authority and FirstEnergy Generation Corp. dated as of April 1, 2006. (March 2006 10-Q, Exhibit 10-4)~~

~~(C)10-72~~	~~Form of Restricted Stock Agreement between FirstEnergy and A. J. Alexander, dated February 27, 2006. (March 2006 10-Q, Exhibit 10-6)~~

~~(C)10-73~~	~~Form of Restricted Stock Unit Agreement (Performance Adjusted) between FirstEnergy and A.J. Alexander, dated March 1, 2006. (March 2006 10-Q, Exhibit 10-7)~~

~~(C)10-74~~	~~Form of Restricted Stock Unit Agreement (Performance Adjusted) between FirstEnergy and named executive officers, dated March 1, 2006. (March 2006 10-Q, Exhibit 10-8)~~

~~(C)10-75~~	~~Form of Restricted Stock Unit Agreement (Discretionary) between FirstEnergy and R.H. Marsh, dated March 1, 2006. (March 2006 10-Q, Exhibit 10-9)~~

~~10-76~~	~~Confirmation dated August 9, 2006 between FirstEnergy Corp and JP Morgan Chase Bank National Association (September 2006 10-Q, Exhibit 10-1)~~

~~(A)(F)10-77~~	Form of Trust Indenture dated as of December 1, 2006 between the Ohio Water Development Authority and The Bank of New York Trust Company, N.A. as Trustee securing State of Ohio Pollution Control Revenue Refunding Bonds (FirstEnergy Nuclear Generation Corp. Project) (Form 8-K dated December 5, 2006)

~~(A)(G)10-78~~	Form of Supplemental Letter of Credit Agreement, dated as of December 5, 2006 among FirstEnergy Corp., FirstEnergy Generation Corp. and Barclays Bank PLC, as Fronting Bank (FirstEnergy Generation Corp. Project) (Form 8-K dated December 5, 2006)

~~(A)10-79~~	Form of Letter of Credit and Reimbursement Agreement dated as of December 28, 2006 among FirstEnergy Corp., as Obligor, The Lenders Named Herein, as Lender, and Wachovia Fixed Income Structured Trading Solutions, LLC as Administrative Agent and as Fronting Bank (Form 8-K dated December 5, 2006)

~~(A)(F)10-80~~	Form of Waste Water Facilities and Solid Waste Facilities Loan Agreement between the Ohio Water Development Authority and FirstEnergy Nuclear Generation Corp. dated as of December 1, 2006. (Form 8-K dated December 5, 2006)

~~(A)(C)10-81~~	~~Amendment to Employment Agreement for Richard R. Grigg dated January 16, 2007. (Form 8-K dated January 16, 2007)~~

40

~~Exhibit~~

~~Number~~

~~(A)12.1~~	~~Consolidated fixed charge ratios.~~

~~(A)13~~	~~FirstEnergy 2006 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed 'filed' with the SEC.)~~

~~(A)21~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)~~23	Consent of Independent Registered Public Accounting Firm.

~~(A)~~31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. ~~Section 1350.~~§1350.

~~(A)~~	~~Provided herein in electronic format as an exhibit.~~

~~(C)~~	~~Management contract or compensatory plan contract or arrangement filed pursuant to Item 601 of Regulation S-K.~~
CEI

~~(D)~~	Four substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to four other series of pollution control revenue refunding bonds issued by the Ohio Water Development Authority, the Ohio Air Quality Authority and Beaver County Industrial Development Authority, Pennsylvania, relating to pollution control notes of FirstEnergy Nuclear Generation Corp.

~~(E)~~	Three substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to three other series of pollution control revenue refunding bonds issued by the Ohio Water Development Authority and the Beaver County Industrial Development Authority relating to pollution control notes of FirstEnergy Generation Corp. and FirstEnergy Nuclear Generation Corp.

~~(F)~~	Seven substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to one other series of pollution control revenue refunding bonds issued by the Ohio Water Development Authority, three other series of pollution control bonds issued by the Ohio Air Quality Development Authority and the three other series of pollution control bonds issued by the Beaver County Industrial Development Authority, relating to pollution control notes of FirstEnergy Generation Corp. and FirstEnergy Nuclear Generation Corp.

~~(G)~~	Two substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to two other series of pollution control revenue refunding bonds issued by the Ohio Air Quality Development Authority, and the Beaver County Industrial Development Authority relating to pollution control notes of FirstEnergy Generation Corp.

~~(B)~~3.~~Exhibits - OE~~

~~2-1~~	~~Agreement and Plan of Merger, dated as of September 13, 1996, between Ohio Edison Company (OE) and Centerior Energy Corporation. (September 17, 1996 Form 8-K, Exhibit 2-1)~~

~~3-1~~	~~Amended Articles of Incorporation, Effective June 21, 1994, constituting OE's Articles of Incorporation. (1994 Form 10-K, Exhibit 3-1).~~

~~3-2~~	~~Amendment to Articles of Incorporation, Effective November 12, 1999 (2004 Form 10-K, Exhibit 3-2).~~

~~3-3~~	~~Amended and Restated Code of Regulations, amended March 15, 2002. (2001 Form 10-K, Exhibit 3-2).~~

~~(B)4-1~~	~~Indenture dated as of August 1, 1930 between OE and Bankers Trust Company (now the Bank of New York), as Trustee, as amended and supplemented by Supplemental Indentures:~~

41

~~Exhibit~~

~~Number~~

		~~Incorporated by~~
		~~Reference to~~
~~Dated as of~~	~~File Reference~~	~~Exhibit No.~~
~~March 3, 1931~~	~~2-1725~~	~~B1, B-1(a),B-1(b)~~
~~November 1, 1935~~	~~2-2721~~	~~B-4~~
~~January 1, 1937~~	~~2-3402~~	~~B-5~~
~~September 1, 1937~~	~~Form 8-A~~	~~B-6~~
~~June 13, 1939~~	~~2-5462~~	~~7(a)-7~~
~~August 1, 1974~~	~~Form 8-A, August 28, 1974~~	~~2(b)~~
~~July 1, 1976~~	~~Form 8-A, July 28, 1976~~	~~2(b)~~
~~December 1, 1976~~	~~Form 8-A, December 15, 1976~~	~~2(b)~~
~~June 15, 1977~~	~~Form 8-A, June 27, 1977~~	~~2(b)~~

*~~Supplemental Indentures:~~*
~~September 1, 1944~~	~~2-61146~~	~~2(b)(2)~~
~~April 1, 1945~~	~~2-61146~~	~~2(b)(2)~~
~~September 1, 1948~~	~~2-61146~~	~~2(b)(2)~~
~~May 1, 1950~~	~~2-61146~~	~~2(b)(2)~~
~~January 1, 1954~~	~~2-61146~~	~~2(b)(2)~~
~~May 1, 1955~~	~~2-61146~~	~~2(b)(2)~~
~~August 1, 1956~~	~~2-61146~~	~~2(b)(2)~~
~~March 1, 1958~~	~~2-61146~~	~~2(b)(2)~~
~~April 1, 1959~~	~~2-61146~~	~~2(b)(2)~~
~~June 1, 1961~~	~~2-61146~~	~~2(b)(2)~~
~~September 1, 1969~~	~~2-34351~~	~~2(b)(2)~~
~~May 1, 1970~~	~~2-37146~~	~~2(b)(2)~~
~~September 1, 1970~~	~~2-38172~~	~~2(b)(2)~~
~~June 1, 1971~~	~~2-40379~~	~~2(b)(2)~~
~~August 1, 1972~~	~~2-44803~~	~~2(b)(2)~~
~~September 1, 1973~~	~~2-48867~~	~~2(b)(2)~~
~~May 15, 1978~~	~~2-66957~~	~~2(b)(4)~~
~~February 1, 1980~~	~~2-66957~~	~~2(b)(5)~~
		~~Incorporated by~~
		~~Reference to~~
~~Dated as of~~	~~File Reference~~	~~Exhibit No.~~
~~April 15, 1980~~	~~2-66957~~	~~2(b)(6)~~
~~June 15, 1980~~	~~2-68023~~	~~(b)(4)(b)(5)~~
~~October 1, 1981~~	~~2-74059~~	~~(4)(d)~~
~~October 15, 1981~~	~~2-75917~~	~~(4)(e)~~
~~February 15, 1982~~	~~2-75917~~	~~(4)(e)~~
~~July 1, 1982~~	~~2-89360~~	~~(4)(d)~~
~~March 1, 1983~~	~~2-89360~~	~~(4)(e)~~
~~March 1, 1984~~	~~2-89360~~	~~(4)(f)~~
~~September 15, 1984~~	~~2-92918~~	~~(4)(d)~~
~~September 27, 1984~~	~~33-2576~~	~~(4)(d)~~
~~November 8, 1984~~	~~33-2576~~	~~(4)(d)~~
~~December 1, 1984~~	~~33-2576~~	~~(4)(d)~~
~~December 5, 1984~~	~~33-2576~~	~~(4)(e)~~
~~January 30, 1985~~	~~33-2576~~	~~(4)(e)~~
~~February 25, 1985~~	~~33-2576~~	~~(4)(e)~~
~~July 1, 1985~~	~~33-2576~~	~~(4)(e)~~
~~October 1, 1985~~	~~33-2576~~	~~(4)(e)~~
~~January 15, 1986~~	~~33-8791~~	~~(4)(d)~~
~~May 20, 1986~~	~~33-8791~~	~~(4)(d)~~
~~June 3, 1986~~	~~33-8791~~	~~(4)(e)~~
~~October 1, 1986~~	~~33-29827~~	~~(4)(d)~~
~~August 25, 1989~~	~~33-34663~~	~~(4)(d)~~
~~February 15, 1991~~	~~33-39713~~	~~(4)(d)~~
~~May 1, 1991~~	~~33-45751~~	~~(4)(d)~~
~~May 15, 1991~~	~~33-45751~~	~~(4)(d)~~
~~September 15, 1991~~	~~33-45751~~	~~(4)(d)~~
~~April 1, 1992~~	~~33-48931~~	~~(4)(d)~~
~~June 15, 1992~~	~~33-48931~~	~~(4)(d)~~
~~September 15, 1992~~	~~33-48931~~	~~(4)(e)~~
~~April 1, 1993~~	~~33-51139~~	~~(4)(d)~~

42

~~Exhibit~~

~~Number~~

~~June 15, 1993~~		~~33-51139~~	~~(4)(d)~~
~~September 15, 1993~~		~~33-51139~~	~~(4)(d)~~
~~November 15, 1993~~		~~1-2578~~	~~(4)(2)~~
~~April 1, 1995~~		~~1-2578~~	~~(4)(2)~~
~~May 1, 1995~~		~~1-2578~~	~~(4)(2)~~
~~July 1, 1995~~		~~1-2578~~	~~(4)(2)~~
~~June 1, 1997~~		~~1-2578~~	~~(4)(2)~~
~~April 1, 1998~~		~~1-2578~~	~~(4)(2)~~
~~June 1, 1998~~		~~1-2578~~	~~(4)(2)~~
~~September 29, 1999~~		~~1-2578~~	~~(4)(2)~~
~~April 1, 2000~~		~~1-2578~~	~~(4)(2)(a)~~
~~April 1, 2000~~		~~1-2578~~	~~(4)(2)(b)~~
~~June 1, 2001~~		~~1-2578~~
~~February 1, 2003~~		~~1-2578~~	~~4(2)~~
~~March 1, 2003~~		~~1-2578~~	~~4(2)~~
~~August 1, 2003~~		~~1-2578~~	~~4(2)~~
~~June 1, 2004~~		~~1-2578~~	~~4(2)~~
~~June 1, 2004~~		~~1-2578~~	~~4(2)~~
~~December 1, 2004~~		~~1-2578~~	~~4(2)~~
~~April 1, 2005~~		~~1-2578~~	~~4(2)~~
~~April 15, 2005~~		~~1-2578~~	~~4(2)~~
~~June 1, 2005~~		~~1-2578~~	~~4(2)~~

~~(B) 4-2~~	General Mortgage Indenture and Deed of Trust dated as of January 1, 1998 between OE and the Bank of New York, as Trustee, as amended and supplemented by Supplemental Indentures; (Registration No. 333-05277, Exhibit 4(g)).

~~February 1, 2003~~	~~1-2578~~	~~4-2~~
~~March 1, 2003~~	~~1-2578~~	~~4-2~~
~~August 1, 2003~~	~~1-2578~~	~~4-2~~
~~June 1, 2004~~	~~1-2578~~	~~4-2~~
~~June 1, 2004~~	~~1-2578~~	~~4-2~~
~~December 1, 2004~~	~~1-2578~~	~~4-2~~
~~April 1, 2005~~	~~1-2578~~	~~4(2)~~
~~April 15, 2005~~	~~1-2578~~	~~4(2)~~
~~June 1, 2005~~	~~1-2578~~	~~4(2)~~

~~4-3~~	~~Indenture dated as of April 1, 2003 between OE and The Bank of New York, as Trustee.~~

~~4-4~~	~~Officer's Certificate (including the forms of the 6.40% Senior Notes due 2016 and the 6.875% Senior Notes due 2036), dated June 21, 2006. (Form 8-K dated June 26, 2006, Exhibit 4)~~

~~10-1~~	~~Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-43102, Exhibit 5(c)(2))~~

~~10-2~~	~~Amendment No. 1 dated January 4, 1974 to Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-68906, Exhibit 5(c)(3))~~

~~10-3~~	~~Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-43102, Exhibit 5(c)(3))~~

~~10-4~~	~~Amendment No. 1 dated as of January 1, 1993 to Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (1993 Form 10-K, Exhibit 10-4)~~

~~10-5~~	~~Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group. (Registration No. 2-68906, Exhibit 10-4)~~

~~10-6~~	~~Amendment dated as of December~~ 23 ~~1993 to Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group. (1993 Form 10-K, Exhibit 10-6)~~

~~10-7~~	~~CAPCO Basic Operating Agreement, as amended September 1, 1980. (Registration No. 2-68906, Exhibit 10-5)~~

43

~~Exhibit~~

~~Number~~


~~10-8~~	Amendment No. 1 dated August 1, 1981, and Amendment No. 2 dated September 1, 1982 to CAPCO Basic Operating Agreement, as amended September 1, 1980. (September 30, 1981 Form 10-Q, Exhibit 20-1 and 1982 Form 10-K, Exhibit 19-3, respectively)

~~10-9~~	~~Amendment No. 3 dated July 1, 1984 to CAPCO Basic Operating Agreement, as amended September 1, 1980. (1985 Form 10-K, Exhibit 10-7)~~

~~10-10~~	~~Basic Operating Agreement between the CAPCO Companies as amended October 1, 1991. (1991 Form 10-K, Exhibit 10-8)~~

~~10-11~~	~~Basic Operating Agreement between the CAPCO Companies as amended January 1, 1993. (1993 Form 10-K, Exhibit 10-11)~~

~~10-12~~	~~Memorandum of Agreement effective as of September 1, 1980 among the CAPCO Group. (1982 Form 10-K, Exhibit 19-2)~~

~~10-13~~	~~Operating Agreement for Beaver Valley Power Station Units Nos. 1 and 2 as Amended and Restated September 15, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 10-15)~~

~~10-14~~	~~Construction Agreement with respect to Perry Plant between the CAPCO Group dated as of July 22, 1974. (Registration No. 2-52251 of Toledo Edison Company, Exhibit 5(yy))~~

~~10-15~~	Amendment No. 3 dated as of October 31, 1980 to the Bond Guaranty dated as of October 1, 1973, as amended, with respect to the CAPCO Group. (Registration No. 2-68906 of Pennsylvania Power Company, Exhibit 10-16)

~~10-16~~	~~Amendment No. 4 dated as of July 1, 1985 to the Bond Guaranty dated as October 1, 1973, as amended, by the CAPCO Companies to National City Bank as Bond Trustee. (1985 Form 10-K, Exhibit 10-30)~~

~~10-17~~	~~Amendment No. 5 dated as of May 1, 1986, to the Bond Guaranty by the CAPCO Companies to National City Bank as Bond Trustee. (1986 Form 10-K, Exhibit 10-33)~~

~~10-18~~	Amendment No. 6A dated as of December 1, 1991, to the Bond Guaranty dated as of October 1, 1973, by The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-33)

~~10-19~~	Amendment No. 6B dated as of December 30, 1991, to the Bond Guaranty dated as of October 1, 1973 by The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-34)

~~10-20~~	Bond Guaranty dated as of December 1, 1991, by The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-35)

~~10-21~~	~~Memorandum of Understanding dated March 31, 1985 among the CAPCO Companies. (1985 Form 10-K, Exhibit 10-35)~~

~~(C)10-22~~	~~Ohio Edison System Executive Supplemental Life Insurance Plan. (1995 Form 10-K, Exhibit 10-44)~~

~~(C)10-23~~	~~Ohio Edison System Executive Incentive Compensation Plan. (1995 Form 10-K, Exhibit 10-45.)~~

~~(C)10-24~~	~~Ohio Edison System Restated and Amended Executive Deferred Compensation Plan. (1995 Form 10-K, Exhibit 10-46.)~~

~~(C)10-25~~	~~Ohio Edison System Restated and Amended Supplemental Executive Retirement Plan. (1995 Form 10-K, Exhibit 10-47.)~~

44

~~Exhibit~~

~~Number~~

~~(C)10-28~~	~~Severance pay agreement between Ohio Edison Company and A. J. Alexander. (1995 Form 10-K, Exhibit 10-50.)~~

~~(D)10-30~~	Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 Hereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1986 Form 10-K, Exhibit 28-1.)

~~(D)10-31~~	Amendment No. 1 dated as of September 1, 1987 to Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 thereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company (now The Bank of New York), as Indenture Trustee, and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-46.)

~~(D)10-32~~	Amendment No. 3 dated as of May 16, 1988 to Participation Agreement dated as of March 16, 1987, as amended among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-47.)

~~(D)10-33~~	Amendment No. 4 dated as of November 1, 1991 to Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-47.)

~~(D)10-34~~	Amendment No. 5 dated as of November 24, 1992 to Participation Agreement dated as of March 16, 1987, as amended, among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company as Lessee. (1992 Form 10-K, Exhibit 10-49.)

~~(D)10-35~~	Amendment No. 6 dated as of January 12, 1993 to Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-50.)

~~(D)10-36~~	Amendment No. 7 dated as of October 12, 1994 to Participation Agreement dated as of March 16, 1987 as amended, among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-54.)

~~(D)10-37~~	Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited Partnership, Lessor, and Ohio Edison Company, Lessee. (1986 Form 10-K, Exhibit 28-2.)

~~(D)10-38~~	Amendment No. 1 dated as of September 1, 1987 to Facility Lease dated as of March 16, 1997 between The First National Bank of Boston, as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-49.)

~~(D)10-39~~	Amendment No. 2 dated as of November 1, 1991, to Facility Lease dated as of March 16, 1987, between The First National Bank of Boston, as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-50.)

~~(D)10-40~~	Amendment No. 3 dated as of November 24, 1992 to Facility Lease dated as March 16, 1987 as amended, between The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited partnership, as Owner Participant and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-54.)

45

~~Exhibit~~

~~Number~~


~~(D)10-41~~	Amendment No. 4 dated as of January 12, 1993 to Facility Lease dated as of March 16, 1987 as amended, between, The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-59.)

~~(D)10-42~~	Amendment No. 5 dated as of October 12, 1994 to Facility Lease dated as of March 16, 1987 as amended, between, The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-60.)

~~(D)10-43~~	Letter Agreement dated as of March 19, 1987 between Ohio Edison Company, Lessee, and The First National Bank of Boston, Owner Trustee under a Trust dated March 16, 1987 with Chase Manhattan Realty Leasing Corporation, required by Section 3(d) of the Facility Lease. (1986 Form 10-K, Exhibit 28-3.)

~~(D)10-44~~	Ground Lease dated as of March 16, 1987 between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with the Owner Participant, Tenant. (1986 Form 10-K, Exhibit 28-4.)

~~(D)10-45~~	~~Trust Agreement dated as of March 16, 1987 between Perry One Alpha Limited Partnership, as Owner Participant, and The First National Bank of Boston. (1986 Form 10-K, Exhibit 28-5.)~~

~~(D)10-46~~	Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of March 16, 1987 with Perry One Alpha Limited Partnership, and Irving Trust Company, as Indenture Trustee. (1986 Form 10-K, Exhibit 28-6.)

~~(D)10-47~~	Supplemental Indenture No. 1 dated as of September 1, 1987 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston as Owner Trustee and Irving Trust Company (now The Bank of New York), as Indenture Trustee. (1991 Form 10-K, Exhibit 10-55.)

~~(D)10-48~~	Supplemental Indenture No. 2 dated as of November 1, 1991 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee and The Bank of New York, as Indenture Trustee. (1991 Form 10-K, Exhibit 10-56.)

~~(D)10-49~~	Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee. (1986 Form 10-K, Exhibit 28-7.)

~~(D)10-50~~	Amendment No. 1 dated as of November 1, 1991 to Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership and Ohio Edison Company. (1991 Form 10-K, Exhibit 10-58.)

~~(D)10-51~~	Amendment No. 2 dated as of January 12, 1993 to Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-69.)

~~(D)10-52~~	Amendment No. 3 dated as of October 12, 1994 to Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-70.)

~~(D)10-53~~	Partial Mortgage Release dated as of March 19, 1987 under the Indenture between Ohio Edison Company and Bankers Trust Company, as Trustee, dated as of the 1st day of August 1930. (1986 Form 10-K, Exhibit 28-8.)

~~(D)10-54~~	Assignment, Assumption and Further Agreement dated as of March 16, 1987 among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company and Toledo Edison Company. (1986 Form 10-K, Exhibit 28-9.)

46

~~Exhibit~~

~~Number~~

~~(D)10-55~~	Additional Support Agreement dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, and Ohio Edison Company. (1986 Form 10-K, Exhibit 28-10.)

~~(D)10-56~~	Bill of Sale, Instrument of Transfer and Severance Agreement dated as of March 19, 1987 between Ohio Edison Company, Seller, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership. (1986 Form 10-K, Exhibit 28-11.)

~~(D)10-57~~	Easement dated as of March 16, 1987 from Ohio Edison Company, Grantor, to The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, Grantee. (1986 Form 10-K, File Exhibit 28-12.)

~~10-58~~	Participation Agreement dated as of March 16, 1987 among Security Pacific Capital Leasing Corporation, as Owner Participant, the Original Loan Participants listed in Schedule 1 Hereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1986 Form 10-K, as Exhibit 28-13.)

~~10-59~~	Amendment No. 1 dated as of September 1, 1987 to Participation Agreement dated as of March 16, 1987 among Security Pacific Capital Leasing Corporation, as Owner Participant, The Original Loan Participants Listed in Schedule 1 thereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-65.)

~~10-60~~	Amendment No. 4 dated as of November 1, 1991, to Participation Agreement dated as of March 16, 1987 among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-66.)

~~10-61~~	Amendment No. 5 dated as of November 24, 1992 to Participation Agreement dated as of March 16, 1987 as amended among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNNP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-71.)

~~10-62~~	Amendment No. 6 dated as of January 12, 1993 to Participation Agreement dated as of March 16, 1987 as amended among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-80.)

~~10-63~~	Amendment No. 7 dated as of October 12, 1994 to Participation Agreement dated as of March 16, 1987 as amended among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-81.)

~~10-64~~	Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, Lessor, and Ohio Edison Company, as Lessee. (1986 Form 10-K, Exhibit 28-14.)

~~10-65~~	Amendment No. 1 dated as of September 1, 1987 to Facility Lease dated as of March 16, 1987 between The First National Bank of Boston as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-68.)

47

~~Exhibit~~

~~Number~~

~~10-66~~	Amendment No. 2 dated as of November 1, 1991 to Facility Lease dated as of March 16, 1987 between The First National Bank of Boston as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-69.)

~~10-67~~	Amendment No. 3 dated as of November 24, 1992 to Facility Lease dated as of March 16, 1987, as amended, between, The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, as Owner Participant and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-75.)

~~10-68~~	Amendment No. 4 dated as of January 12, 1993 to Facility Lease dated as of March 16, 1987 as amended between, The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-76.)

~~10-69~~	Amendment No. 5 dated as of October 12, 1994 to Facility Lease dated as of March 16, 1987 as amended between, The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-87.)

~~10-70~~	Letter Agreement dated as of March 19, 1987 between Ohio Edison Company, as Lessee, and The First National Bank of Boston, as Owner Trustee under a Trust, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, required by Section 3(d) of the Facility Lease. (1986 Form 10-K, Exhibit 28-15.)

~~10-71~~	Ground Lease dated as of March 16, 1987 between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, Tenant. (1986 Form 10-K, Exhibit 28-16.)

~~10-72~~	~~Trust Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation, as Owner Participant, and The First National Bank of Boston. (1986 Form 10-K, Exhibit 28-17.)~~

~~10-73~~	Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, and Irving Trust Company, as Indenture Trustee. (1986 Form 10-K, Exhibit 28-18.)

~~10-74~~	Supplemental Indenture No. 1 dated as of September 1, 1987 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee and Irving Trust Company (now The Bank of New York), as Indenture Trustee. (1991 Form 10-K, Exhibit 10-74.)

~~10-75~~	Supplemental Indenture No. 2 dated as of November 1, 1991 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee and The Bank of New York, as Indenture Trustee. (1991 Form 10-K, Exhibit 10-75.)

~~10-76~~	Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1986 Form 10-K, Exhibit 28-19.)

~~10-77~~	Amendment No. 1 dated as of November 1, 1991 to Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation and Ohio Edison Company. (1991 Form 10-K, Exhibit 10-77.)

~~10-78~~	Amendment No. 2 dated as of January 12, 1993 to Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-96.)

~~10-79~~	Amendment No. 3 dated as of October 12, 1994 to Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-97.)

48

~~Exhibit~~

~~Number~~


~~10-80~~	Assignment, Assumption and Further Agreement dated as of March 16, 1987 among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company and Toledo Edison Company. (1986 Form 10-K, Exhibit 28-20.)

~~10-81~~	Additional Support Agreement dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, and Ohio Edison Company. (1986 Form 10-K, Exhibit 28-21.)

~~10-82~~	Bill of Sale, Instrument of Transfer and Severance Agreement dated as of March 19, 1987 between Ohio Edison Company, Seller, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, Buyer. (1986 Form 10-K, Exhibit 28-22.)

~~10-83~~	Easement dated as of March 16, 1987 from Ohio Edison Company, Grantor, to The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, Grantee. (1986 Form 10-K, Exhibit 28-23.)

~~10-84~~	Refinancing Agreement dated as of November 1, 1991 among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee, The Bank of New York, as Collateral Trust Trustee, The Bank of New York, as New Collateral Trust Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-82.)

~~10-85~~	Refinancing Agreement dated as of November 1, 1991 among Security Pacific Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee, The Bank of New York, as Collateral Trust Trustee, The Bank of New York as New Collateral Trust Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-83.)

~~10-86~~	Ohio Edison Company Master Decommissioning Trust Agreement for Perry Nuclear Power Plant Unit One, Perry Nuclear Power Plant Unit Two, Beaver Valley Power Station Unit One and Beaver Valley Power Station Unit Two dated July 1, 1993. (1993 Form 10-K, Exhibit 10-94.)

~~10-87~~	~~Nuclear Fuel Lease dated as of March 31, 1989, between OES Fuel, Incorporated, as Lessor, and Ohio Edison Company, as Lessee. (1989 Form 10-K, Exhibit 10-62.)~~

~~10-89~~	~~Guarantee Agreement entered into by Ohio Edison Company dated as of January 17, 1991. (1990 Form 10-K, Exhibit 10-64.)~~

~~(E)10-90~~	Participation Agreement dated as of September 15, 1987, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company as Lessee. (1987 Form 10-K, Exhibit 28-1.)

~~(E)10-91~~	Amendment No. 1 dated as of February 1, 1988, to Participation Agreement dated as of September 15, 1987, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-2.)

~~(E)10-92~~	Amendment No. 3 dated as of March 16, 1988 to Participation Agreement dated as of September 15, 1987, as amended, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, BVPS Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-99.)

49

~~Exhibit~~

~~Number~~


~~(E)10-93~~	Amendment No. 4 dated as of November 5, 1992 to Participation Agreement dated as of September 15, 1987, as amended, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-100.)

~~(E)10-94~~	Amendment No. 5 dated as of September 30, 1994 to Participation Agreement dated as of September 15, 1987, as amended, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-118.)

~~(E)10-95~~	Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, Lessor, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-3.)

~~(E)10-96~~	Amendment No. 1 dated as of February 1, 1988, to Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, Lessor, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-4.)

~~(E)10-97~~	Amendment No. 2 dated as of November 5, 1992, to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-103.)

~~(E)10-98~~	Amendment No. 3 dated as of September 30, 1994 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-122.)

~~(E)10-99~~	Ground Lease and Easement Agreement dated as of September 15, 1987, between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, Tenant. (1987 Form 10-K, Exhibit 28-5.)

~~(E)10-100~~	~~Trust Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Limited Partnership, as Owner Participant, and The First National Bank of Boston. (1987 Form 10-K, Exhibit 28-6.)~~

~~(E)10-101~~	Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-7.)

~~(E)10-102~~	Supplemental Indenture No. 1 dated as of February 1, 1988 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with Beaver Valley Two Pi Limited Partnership and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-8.)

~~(E)10-103~~	Tax Indemnification Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-9.)

~~(E)10-104~~	Amendment No. 1 dated as of November 5, 1992 to Tax Indemnification Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-128.)

~~(E)10-105~~	Amendment No. 2 dated as of September 30, 1994 to Tax Indemnification Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-129.)

50

~~Exhibit~~

~~Number~~


~~(E)10-106~~	~~Tax Indemnification Agreement dated as of September 15, 1987, between HG Power Plant, Inc., as Limited Partner and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-10.)~~

~~(E)10-107~~	Amendment No. 1 dated as of November 5, 1992 to Tax Indemnification Agreement dated as of September 15, 1987, between HG Power Plant, Inc., as Limited Partner and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-131.)

~~(E)10-108~~	Amendment No. 2 dated as of September 30, 1994 to Tax Indemnification Agreement dated as of September 15, 1987, between HG Power Plant, Inc., as Limited Partner and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-132.)

~~(E)10-109~~	Assignment, Assumption and Further Agreement dated as of September 15, 1987, among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company and Toledo Edison Company. (1987 Form 10-K, Exhibit 28-11.)

~~(E)10-110~~	Additional Support Agreement dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, and Ohio Edison Company. (1987 Form 10-K, Exhibit 28-12.)

~~(F)10-111~~	Participation Agreement dated as of September 15, 1987, among Chrysler Consortium Corporation, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-13.)

~~(F)10-112~~	Amendment No. 1 dated as of February 1, 1988, to Participation Agreement dated as of September 15, 1987, among Chrysler Consortium Corporation, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-14.)

~~(F)10-113~~	Amendment No. 3 dated as of March 16, 1988 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-114.)

~~(F)10-114~~	Amendment No. 4 dated as of November 5, 1992 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-115.)

~~(F)10-115~~	Amendment No. 5 dated as of January 12, 1993 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-139.)

~~(F)10-116~~	Amendment No. 6 dated as of September 30, 1994 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-140.)

~~(F)10-117~~	Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, Lessor, and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-15.)

51

~~Exhibit~~

~~Number~~


~~(F)10-118~~	Amendment No. 1 dated as of February 1, 1988, to Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, Lessor, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-16.)

~~(F)10-119~~	Amendment No. 2 dated as of November 5, 1992 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-118.)

~~(F)10-120~~	Amendment No. 3 dated as of January 12, 1993 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-119.)

~~(F)10-121~~	Amendment No. 4 dated as of September 30, 1994 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-145.)

~~(F)10-122~~	Ground Lease and Easement Agreement dated as of September 15, 1987, between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation, Tenant. (1987 Form 10-K, Exhibit 28-17.)

~~(F)10-123~~	~~Trust Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and The First National Bank of Boston. (1987 Form 10-K, Exhibit 28-18.)~~

~~(F)10-124~~	Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-19.)

~~(F)10-125~~	Supplemental Indenture No. 1 dated as of February 1, 1988 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with Chrysler Consortium Corporation and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-20.)

~~(F)10-126~~	~~Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-21.)~~

~~(F)10-127~~	Amendment No. 1 dated as of November 5, 1992 to Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-151.)

~~(F)10-128~~	Amendment No. 2 dated as of January 12, 1993 to Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-152.)

~~(F)10-129~~	Amendment No. 3 dated as of September 30, 1994 to Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-153.)

~~(F)10-130~~	Assignment, Assumption and Further Agreement dated as of September 15, 1987, among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, and Toledo Edison Company. (1987 Form 10-K, Exhibit 28-22.)

~~(F)10-131~~	Additional Support Agreement dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation, and Ohio Edison Company. (1987 Form 10-K, Exhibit 28-23.)

52

~~Exhibit~~

~~Number~~


~~10-132~~	~~Operating Agreement dated March 10, 1987 with respect to Perry Unit No. 1 between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-24.)~~

~~10-133~~	~~Operating Agreement for Bruce Mansfield Units Nos. 1, 2 and 3 dated as of June 1, 1976, and executed on September 15, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-25.)~~

~~10-134~~	~~Operating Agreement for W. H. Sammis Unit No. 7 dated as of September 1, 1971 by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-26.)~~


~~10-135~~	Electric Power Supply Agreement, between the Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, the Toledo Edison Company, and First Energy Solutions Corp. (f.k.a. FirstEnergy Services Corp.), dated January 1, 2001. (Form 10-K, Exhibit 10-145)

~~10-136~~	Revised Electric Power Supply Agreement, between FirstEnergy Solutions Corp., the Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, and the Toledo Edison Company, dated October 1, 2003. (Form 10-K, Exhibit 10-146)

~~10-137~~	~~OE Nuclear Capital Contribution Agreement by and between Ohio Edison Company and FirstEnergy Nuclear Generation Corp. (June 2005 10-Q, Exhibit 10.1)~~

~~10-138~~	~~OE Fossil Purchase and Sale Agreement by and between Ohio Edison Company (Seller) and FirstEnergy Generation Corp. (Purchaser). (June 2005 10-Q, Exhibit 10.2)~~

~~10-139~~	~~Consent Decree dated as of March 18, 2005. (Form 8-K dated March 18, 2005, Exhibit 10.1)~~

~~10-140~~	Nuclear Sale/Leaseback Power Supply Agreement dated as of October 14, 2005 between Ohio Edison Company and The Toledo Edison Company (Sellers) and FirstEnergy Nuclear Generation Corp. (Buyer). (2005 Form 10-K, Exhibit 10-6)

~~10-141~~	~~Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and the FirstEnergy Operating Companies - OE, CEI and TE (Buyers). (2005 Form 10-K, Exhibit 10-9)~~

~~(A)12.2~~	~~Consolidated Fixed Charged Ratios.~~

~~(A)13.1~~	~~OE 2006 Annual Report to Stockholders (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)~~

~~(A)21.1~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)23.1~~	Consent of Independent Registered Public Accounting Firm.

~~(A)~~31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. ~~Section 1350.~~

~~(A)~~	~~Provided herein in electronic format as an exhibit.~~

~~(B)~~	Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K, OE has not filed as an exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount of securities authorized thereunder does not exceed 10% of the total assets of OE and its subsidiaries on a consolidated basis, but hereby agrees to furnish to the SEC on request any such instruments.

~~(C)~~	~~Management contract or compensatory plan contract or arrangement filed pursuant to Item 601 of Regulation S-K.~~

~~(D)~~	~~Substantially similar documents have been entered into relating to three additional Owner Participants.~~

53

~~Exhibit~~

~~Number~~


~~(E)~~	~~Substantially similar documents have been entered into relating to five additional Owner Participants.~~

~~(F)~~	~~Substantially similar documents have been entered into relating to two additional Owner Participants.~~

3.~~Exhibits - Common Exhibits for CEI and TE~~

~~Exhibit~~

~~Number~~

~~2(a)~~	~~Agreement and Plan of Merger between Ohio Edison and Centerior Energy dated as of September 13, 1996 (Exhibit (2)-1, Form S-4 File No. 333-21011, filed by FirstEnergy).~~

~~2(b)~~	~~Merger Agreement by and among Centerior Acquisition Corp., FirstEnergy and Centerior (Exhibit (2)-3, Form S-4 File No. 333-21011, filed by FirstEnergy).~~

~~4(a)~~	~~Rights Agreement (Exhibit 4, June 25, 1996 Form 8-K, File Nos. 1-9130, 1-2323 and 1-3583).~~

~~4(b)(1)~~	Form of Note Indenture between Cleveland Electric, Toledo Edison and The Chase Manhattan Bank, as Trustee dated as of June 13, 1997 (Exhibit 4(c), Form S-4 File No. 333-35931, filed by Cleveland Electric and Toledo Edison).

~~4(b)(2)~~	Form of First Supplemental Note Indenture between Cleveland Electric, Toledo Edison and The Chase Manhattan Bank, as Trustee dated as of June 13, 1997 (Exhibit 4(d), Form S-4 File No. 333-35931, filed by Cleveland Electric and Toledo Edison).

~~10b(1)(a)~~	CAPCO Administration Agreement dated November 1, 1971, as of September 14, 1967, among the CAPCO Group members regarding the organization and procedures for implementing the objectives of the CAPCO Group (Exhibit 5(p), Amendment No. 1, File No. 2-42230, filed by Cleveland Electric).

~~10b(1)(b)~~	~~Amendment No. 1, dated January 4, 1974, to CAPCO Administration Agreement among the CAPCO Group members (Exhibit 5(c)(3), File No. 2-68906, filed by Ohio Edison).~~

~~10b(2)~~	CAPCO Transmission Facilities Agreement dated November 1, 1971, as of September 14, 1967, among the CAPCO Group members regarding the installation, operation and maintenance of transmission facilities to carry out the objectives of the CAPCO Group (Exhibit 5(q), Amendment No. 1, File No. 2-42230, filed by Cleveland Electric).

~~10b(2)(1)~~	Amendment No. 1 to CAPCO Transmission Facilities Agreement, dated December 23, 1993 and effective as of January 1, 1993, among the CAPCO Group members regarding requirements for payment of invoices at specified times, for payment of interest on non-timely paid invoices, for restricting adjustment of invoices after a four-year period, and for revising the method for computing the Investment Responsibility charge for use of a member's transmission facilities (Exhibit 10b(2)(1), 1993 Form 10-K, File Nos. 1-9130, 1-2323 and 1-3583).

~~10b(3)~~	CAPCO Basic Operating Agreement As Amended January 1, 1993 among the CAPCO Group members regarding coordinated operation of the members' systems (Exhibit 10b(3), 1993 Form 10-K, File Nos. 1-9130, 1-2323 and 1-3583).

~~10b(4)~~	Agreement for the Termination or Construction of Certain Agreement By and Among the CAPCO Group members, dated December 23, 1993 and effective as of September 1, 1980 (Exhibit 10b(4), 1993 Form 10-K, File Nos. 1-9130, 1-2323 and 1-3583).

~~10b(5)~~	~~Construction Agreement, dated July 22, 1974, among the CAPCO Group members and relating to the Perry Nuclear Plant (Exhibit 5 (yy), File No. 2-52251, filed by Toledo Edison).~~

~~10b(6)~~	~~Contract, dated as of December 5, 1975, among the CAPCO Group members for the construction of Beaver Valley Unit No. 2 (Exhibit 5 (g), File No. 2-52996, filed by Cleveland Electric).~~

54

~~Exhibit~~

~~Number~~

~~10b(7)~~	Amendment No. 1, dated May 1, 1977, to Contract, dated as of December 5, 1975, among the CAPCO Group members for the construction of Beaver Valley Unit No. 2 (Exhibit 5(d)(4), File No. 2-60109, filed by Ohio Edison).

~~10d(1)(a)~~	Form of Collateral Trust Indenture among CTC Beaver Valley Funding Corporation, Cleveland Electric, Toledo Edison and Irving Trust Company, as Trustee (Exhibit 4(a), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(1)(b)~~	Form of Supplemental Indenture to Collateral Trust Indenture constituting Exhibit 10d(1)(a) above, including form of Secured Lease Obligation bond (Exhibit 4(b), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(1)(c)~~	Form of Collateral Trust Indenture among Beaver Valley II Funding Corporation, The Cleveland Electric Illuminating Company and The Toledo Edison Company and The Bank of New York, as Trustee (Exhibit (4)(a), File No. 33-46665, filed by Cleveland Electric and Toledo Edison).

~~10d(1)(d)~~	Form of Supplemental Indenture to Collateral Trust Indenture constituting Exhibit 10d(1)(c) above, including form of Secured Lease Obligation Bond (Exhibit (4)(b), File No. 33-46665, filed by Cleveland Electric and Toledo Edison).

~~10d(2)(a)~~	Form of Collateral Trust Indenture among CTC Mansfield Funding Corporation, Cleveland Electric, Toledo Edison and IBJ Schroder Bank & Trust Company, as Trustee (Exhibit 4(a), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(2)(b)~~	Form of Supplemental Indenture to Collateral Trust Indenture constituting Exhibit 10d(2)(a) above, including forms of Secured Lease Obligation bonds (Exhibit 4(b), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(3)(a)~~	Form of Facility Lease dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the limited partnership Owner Participant named therein, Lessor, and Cleveland Electric and Toledo Edison, Lessee (Exhibit 4(c), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(3)(b)~~	~~Form of Amendment No. 1 to Facility Lease constituting Exhibit 10d(3)(a) above (Exhibit 4(e), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).~~

~~10d(4)(a)~~	Form of Facility Lease dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the corporate Owner Participant named therein, Lessor, and Cleveland Electric and Toledo Edison, Lessees (Exhibit 4(d), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).
~~10d(4)(b)~~	~~Form of Amendment No. 1 to Facility Lease constituting Exhibit 10d(4)(a) above (Exhibit 4(f), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).~~

~~10d(5)(a)~~	Form of Facility Lease dated as of September 30, 1987 between Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Lessor, and Cleveland Electric and Toledo Edison, Lessees (Exhibit 4(c), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(5)(b)~~	~~Form of Amendment No. 1 to the Facility Lease constituting Exhibit 10d(5)(a) above (Exhibit 4(f), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).~~

~~10d(6)(a)~~	Form of Participation Agreement dated as of September 15, 1987 among the limited partnership Owner Participant named therein, the Original Loan Participants listed in Schedule 1 thereto, as Original Loan Participants, CTC Beaver Valley Fund Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Cleveland Electric and Toledo Edison, as Lessees (Exhibit 28(a), File No. 33-18755, filed by Cleveland Electric And Toledo Edison).

~~10d(6)(b)~~	~~Form of Amendment No. 1 to Participation Agreement constituting Exhibit 10d(6)(a) above (Exhibit 28(c), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).~~

55

~~Exhibit~~

~~Number~~

~~10d(7)(a)~~	Form of Participation Agreement dated as of September 15, 1987 among the corporate Owner Participant named therein, the Original Loan Participants listed in Schedule 1 thereto, as Owner Loan Participants, CTC Beaver Valley Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Cleveland Electric and Toledo Edison, as Lessees (Exhibit 28(b), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(7)(b)~~	~~Form of Amendment No. 1 to Participation Agreement constituting Exhibit 10d(7)(a) above (Exhibit 28(d), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).~~

~~10d(8)(a)~~	Form of Participation Agreement dated as of September 30, 1987 among the Owner Participant named therein, the Original Loan Participants listed in Schedule II thereto, as Owner Loan Participants, CTC Mansfield Funding Corporation, Meridian Trust Company, as Owner Trustee, IBJ Schroder Bank & Trust Company, as Indenture Trustee, and Cleveland Electric and Toledo Edison, as Lessees (Exhibit 28(a), File No. 33-0128, filed by Cleveland Electric and Toledo Edison).

~~10d(8)(b)~~	~~Form of Amendment No. 1 to the Participation Agreement constituting Exhibit 10d(8)(a) above (Exhibit 28(b), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).~~

~~10d(9)~~	Form of Ground Lease dated as of September 15, 1987 between Toledo Edison, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, Tenant (Exhibit 28(e), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(10)~~	Form of Site Lease dated as of September 30, 1987 between Toledo Edison, Lessor, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Tenant (Exhibit 28(c), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(11)~~	Form of Site Lease dated as of September 30, 1987 between Cleveland Electric, Lessor, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Tenant (Exhibit 28(d), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(12)~~	~~Form of Amendment No. 1 to the Site Leases constituting Exhibits 10d(10) and 10d(11) above (Exhibit 4(f), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).~~

~~10d(13)~~	Form of Assignment, Assumption and Further Agreement dated as of September 15, 1987 among The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, Cleveland Electric, Duquesne, Ohio Edison, Pennsylvania Power and Toledo Edison (Exhibit 28(f), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(14)~~	Form of Additional Support Agreement dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, and Toledo Edison (Exhibit 28(g), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

~~10d(15)~~	Form of Support Agreement dated as of September 30, 1987 between Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Toledo Edison, Cleveland Electric, Duquesne, Ohio Edison and Pennsylvania Power (Exhibit 28(e), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(16)~~	Form of Indenture, Bill of Sale, Instrument of Transfer and Severance Agreement dated as of September 30, 1987 between Toledo Edison, Seller, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, Buyer (Exhibit 28(h), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

56

~~Exhibit~~

~~Number~~

~~10d(17)~~	Form of Bill of Sale, Instrument of Transfer and Severance Agreement dated as of September 30, 1987 between Toledo Edison, Seller, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Buyer (Exhibit 28(f), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(18)~~	Form of Bill of Sale, Instrument of Transfer and Severance Agreement dated as of September 30, 1987 between Cleveland Electric, Seller, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Buyer (Exhibit 28(g), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

~~10d(19)~~	Forms of Refinancing Agreement, including exhibits thereto, among the Owner Participant named therein, as Owner Participant, CTC Beaver Valley Funding Corporation, as Funding Corporation, Beaver Valley II Funding Corporation, as New Funding Corporation, The Bank of New York, as Indenture Trustee, The Bank of New York, as New Collateral Trust Trustee, and The Cleveland Electric Illuminating Company and The Toledo Edison Company, as Lessees (Exhibit (28)(e)(i), File No. 33-46665, filed by Cleveland Electric and Toledo Edison).

~~10d(20)(a)~~	~~Form of Amendment No. 2 to Facility Lease among Citicorp Lescaman, Inc., Cleveland Electric and Toledo Edison (Exhibit 10(a), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~10d(20)(b)~~	~~Form of Amendment No. 3 to Facility Lease among Citicorp Lescaman, Inc., Cleveland Electric and Toledo Edison (Exhibit 10(b), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~10d(21)(a)~~	~~Form of Amendment No. 2 to Facility Lease among US West Financial Services, Inc., Cleveland Electric and Toledo Edison (Exhibit 10(c), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~10d(21)(b)~~	~~Form of Amendment No. 3 to Facility Lease among US West Financial Services, Inc., Cleveland Electric and Toledo Edison (Exhibit 10(d), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~10d(22)~~	~~Form of Amendment No. 2 to Facility Lease among Midwest Power Company, Cleveland Electric and Toledo Edison (Exhibit 10(e), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~10e(1)~~	~~Centerior Energy Corporation Equity Compensation Plan (Exhibit 99, Form S-8, File No. 33-59635).~~

3.~~Exhibits - CEI~~

3a	~~Amended Articles of Incorporation of CEI, as amended, effective May 28, 1993 (Exhibit 3a, 1993 Form 10-K, File No. 1-2323).~~
	§1350.
3bTE			~~Regulations of CEI, dated April 29, 1981, as amended effective October 1, 1988 and April 24, 1990 (Exhibit 3b, 1990 Form 10-K, File No. 1-2323).~~

3c	~~Amended and Restated Code of Regulations, dated March 15, 2002, incorporated by reference to Exhibit 3-2, 2001 Form 10-K, File No. 1-02323.~~

~~(B)4b(1)~~	~~Mortgage and Deed of Trust between CEI and Guaranty Trust Company of New York (now The Chase Manhattan Bank (National Association)), as Trustee, dated July 1, 1940 (Exhibit 7(a), File No. 2-4450).~~

		~~Supplemental Indentures between CEI and the Trustee, supplemental to Exhibit 4b(1), dated as follows:~~

~~4b(2)~~	~~July 1, 1940 (Exhibit 7(b), File No. 2-4450).~~
~~4b(3)~~	~~August 18, 1944 (Exhibit 4(c), File No. 2-9887).~~
~~4b(4)~~	~~December 1, 1947 (Exhibit 7(d), File No. 2-7306).~~
~~4b(5)~~	~~September 1, 1950 (Exhibit 7(c), File No. 2-8587).~~
~~4b(6)~~	~~June 1, 1951 (Exhibit 7(f), File No. 2-8994).~~
~~4b(7)~~	~~May 1, 1954 (Exhibit 4(d), File No. 2-10830).~~

57

~~Exhibit~~

~~Number~~

~~4b(8)~~	~~March 1, 1958 (Exhibit 2(a)(4), File No. 2-13839).~~
~~4b(9)~~	~~April 1, 1959 (Exhibit 2(a)(4), File No. 2-14753).~~
~~4b(10)~~	~~December 20, 1967 (Exhibit 2(a)(4), File No. 2-30759).~~
~~4b(11)~~	~~January 15, 1969 (Exhibit 2(a)(5), File No. 2-30759).~~
~~4b(12)~~	~~November 1, 1969 (Exhibit 2(a)(4), File No. 2-35008).~~
~~4b(13)~~	~~June 1, 1970 (Exhibit 2(a)(4), File No. 2-37235).~~
~~4b(14)~~	~~November 15, 1970 (Exhibit 2(a)(4), File No. 2-38460).~~
~~4b(15)~~	~~May 1, 1974 (Exhibit 2(a)(4), File No. 2-50537).~~
~~4b(16)~~	~~April 15, 1975 (Exhibit 2(a)(4), File No. 2-52995).~~
~~4b(17)~~	~~April 16, 1975 (Exhibit 2(a)(4), File No. 2-53309).~~
~~4b(18)~~	~~May 28, 1975 (Exhibit 2(c), June 5, 1975 Form 8-A, File No. 1-2323).~~
~~4b(19)~~	~~February 1, 1976 (Exhibit 3(d)(6), 1975 Form 10 K, File No. 1-2323).~~
~~4b(20)~~	~~November~~ 23 ~~1976 (Exhibit 2(a)(4), File No. 2-57375).~~
~~4b(21)~~	~~July 26, 1977 (Exhibit 2(a)(4), File No. 2-59401).~~
~~4b(22)~~	~~September 7, 1977 (Exhibit 2(a)(5), File No. 2-67221).~~
~~4b(23)~~	~~May 1, 1978 (Exhibit 2(b), June 30, 1978 Form 10-Q, File No. 1-2323).~~
~~4b(24)~~	~~September 1, 1979 (Exhibit 2(a), September 30, 1979 Form 10-Q, File No. 1-2323).~~
~~4b(25)~~	~~April 1, 1980 (Exhibit 4(a)(2), September 30, 1980 Form 10-Q, File No. 1-2323).~~
~~4b(26)~~	~~April 15, 1980 (Exhibit 4(b), September 30, 1980 Form 10-Q, File No. 1-2323).~~
~~4b(27)~~	~~May 28, 1980 (Exhibit 2(a)(4), Amendment No. 1, File No. 2-67221).~~
~~4b(28)~~	~~June 9, 1980 (Exhibit 4(d), September 30, 1980 Form 10-Q, File No. 1-2323).~~
~~4b(29)~~	~~December 1, 1980 (Exhibit 4(b)(29), 1980 Form 10-K, File No. 1-2323).~~
~~4b(30)~~	~~July 28, 1981 (Exhibit 4(a), September 30, 1981, Form 10-Q, File No. 1-2323).~~
~~4b(31)~~	~~August 1, 1981 (Exhibit 4(b), September 30, 1981, Form 10-Q, File No. 1-2323).~~
~~4b(32)~~	~~March 1, 1982 (Exhibit 4(b)(3), Amendment No. 1, File No. 2-76029).~~
~~4b(33)~~	~~July 15, 1982 (Exhibit 4(a), September 30, 1982 Form 10-Q, File No. 1-2323).~~
~~4b(34)~~	~~September 1, 1982 (Exhibit 4(a)(1), September 30, 1982 Form 10-Q, File No. 1-2323).~~
~~4b(35)~~	~~November 1, 1982 (Exhibit (a)(2), September 30, 1982 Form 10-Q, File No. 1-2323).~~
~~4b(36)~~	~~November 15, 1982 (Exhibit 4(b)(36), 1982 Form 10-K, File No. 1-2323).~~
~~4b(37)~~	~~May 24, 1983 (Exhibit 4(a), June 30, 1983 Form 10-Q, File No. 1-2323).~~
~~4b(38)~~	~~May 1, 1984 (Exhibit 4, June 30, 1984 Form 10-Q, File No. 1-2323).~~
~~4b(39)~~	~~May 23, 1984 (Exhibit 4, May 22, 1984 Form 8-K, File No. 1-2323).~~
~~4b(40)~~	~~June 27, 1984 (Exhibit 4, June 11, 1984 Form 8-K, File No. 1-2323).~~
~~4b(41)~~	~~September 4, 1984 (Exhibit 4b(41), 1984 Form 10-K, File No. 1-2323).~~
~~4b(42)~~	~~November 14, 1984 (Exhibit 4b(42), 1984 Form 10 K, File No. 1-2323).~~
~~4b(43)~~	~~November 15, 1984 (Exhibit 4b(43), 1984 Form 10-K, File No. 1-2323).~~
~~4b(44)~~	~~April 15, 1985 (Exhibit 4(a), May 8, 1985 Form 8-K, File No. 1-2323).~~
~~4b(45)~~	~~May 28, 1985 (Exhibit 4(b), May 8, 1985 Form 8-K, File No. 1-2323).~~
~~4b(46)~~	~~August 1, 1985 (Exhibit 4, September 30, 1985 Form 10-Q, File No. 1-2323).~~
~~4b(47)~~	~~September 1, 1985 (Exhibit 4, September 30, 1985 Form 8-K, File No. 1-2323).~~
~~4b(48)~~	~~November 1, 1985 (Exhibit 4, January 31, 1986 Form 8-K, File No. 1-2323).~~
~~4b(49)~~	~~April 15, 1986 (Exhibit 4, March 31, 1986 Form 10-Q, File No. 1-2323).~~
~~4b(50)~~	~~May 14, 1986 (Exhibit 4(a), June 30, 1986 Form 10-Q, File No. 1-2323).~~
~~4b(51)~~	~~May 15, 1986 (Exhibit 4(b), June 30, 1986 Form 10-Q, File No. 1-2323).~~
~~4b(52)~~	~~February 25, 1987 (Exhibit 4b(52), 1986 Form 10-K, File No. 1-2323).~~
~~4b(53)~~	~~October 15, 1987 (Exhibit 4, September 30, 1987 Form 10-Q, File No. 1-2323).~~
~~4b(54)~~	~~February 24, 1988 (Exhibit 4b(54), 1987 Form 10-K, File No. 1-2323).~~
~~4b(55)~~	~~September 15, 1988 (Exhibit 4b(55), 1988 Form 10-K, File No. 1-2323).~~
~~4b(56)~~	~~May 15, 1989 (Exhibit 4(a)(2)(i), File No. 33-32724).~~
~~4b(57)~~	~~June 13, 1989 (Exhibit 4(a)(2)(ii), File No. 33-32724).~~
~~4b(58)~~	~~October 15, 1989 (Exhibit 4(a)(2)(iii), File No. 33-32724).~~
~~4b(59)~~	~~January 1, 1990 (Exhibit 4b(59), 1989 Form 10-K, File No. 1-2323).~~
~~4b(60)~~	~~June 1, 1990 (Exhibit 4(a). September 30, 1990 Form 10-Q, File No. 1-2323).~~
~~4b(61)~~	~~August 1, 1990 (Exhibit 4(b), September 30, 1990 Form 10-Q, File No. 1-2323).~~
~~4b(62)~~	~~May 1, 1991 (Exhibit 4(a), June 30, 1991 Form 10-Q, File No. 1-2323).~~
~~4b(63)~~	~~May 1, 1992 (Exhibit 4(a)(3), File No. 33-48845).~~
~~4b(64)~~	~~July 31, 1992 (Exhibit 4(a)(3), File No. 33-57292).~~
~~4b(65)~~	~~January 1, 1993 (Exhibit 4b(65), 1992 Form 10-K, File No. 1-2323).~~
~~4b(66)~~	~~February 1, 1993 (Exhibit 4b(66), 1992 Form 10-K, File No. 1-2323).~~
~~4b(67)~~	~~May 20, 1993 (Exhibit 4(a), July 14, 1993 Form 8-K, File No. 1-2323).~~
~~4b(68)~~	~~June 1, 1993 (Exhibit 4(b), July 14, 1993 Form 8-K, File No. 1-2323).~~
~~4b(69)~~	~~September 15, 1994 (Exhibit 4(a), September 30, 1994 Form 10-Q, File No. 1-2323).~~
~~4b(70)~~	~~May 1, 1995 (Exhibit 4(a), September 30, 1995 Form 10-Q, File No. 1-2323).~~

58

~~Exhibit~~

~~Number~~

~~4b(71)~~	~~May 2, 1995 (Exhibit 4(b), September 30, 1995 Form 10-Q, File No. 1-2323).~~
~~4b(72)~~	~~June 1, 1995 (Exhibit 4(c), September 30, 1995 Form 10-Q, File No. 1-2323).~~
~~4b(73)~~	~~July 15, 1995 (Exhibit 4b(73), 1995 Form 10-K, File No. 1-2323).~~
~~4b(74)~~	~~August 1, 1995 (Exhibit 4b(74), 1995 Form 10-K, File No. 1-2323).~~
~~4b(75)~~	~~June 15, 1997 (Exhibit 4(a), Form S-4 File No. 333-35931, filed by Cleveland Electric and Toledo Edison).~~
~~4b(76)~~	~~October 15, 1997 (Exhibit 4(a), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~
~~4b(77)~~	~~June 1, 1998 (Exhibit 4b(77), Form S-4 File No. 333-72891).~~
~~4b(78)~~	~~October 1, 1998 (Exhibit 4b(78), Form S-4 File No. 333-72891).~~
~~4b(79)~~	~~October 1, 1998 (Exhibit 4b(79), Form S-4 File No. 333-72891).~~
~~4b(80)~~	~~February 24, 1999 (Exhibit 4b(80), Form S-4 File No. 333-72891).~~
~~4b(81)~~	~~September 29, 1999. (Exhibit 4b(81), 1999 Form 10-K, File No. 1-2323).~~
~~4b(82)~~	~~January 15, 2000. (Exhibit 4b(82), 1999 Form 10-K, File No. 1-2323).~~
~~4b(83)~~	~~May 15, 2002 (Exhibit 4b(83), 2002 Form 10-K, File No. 1-2323).~~
~~4b(84)~~	~~October 1, 2002 (Exhibit 4b(84), 2002 Form 10-K, File No. 1-2323).~~
~~4b(85)~~	~~Supplemental Indenture dated as of September 1, 2004 (Exhibit 4-1(85), September 2004 10-Q, File No. 1-2323).~~
~~4b(86)~~	~~Supplemental Indenture dated as of October 1, 2004 (Exhibit 4-1(86), September 2004 10-Q, File No. 1-2323).~~
~~4b(87)~~	~~Supplemental Indenture dated as of April 1, 2005 (Exhibit 4.1, June 2005 10-Q, File No. 1-2323)~~
~~4b(88)~~	~~Supplemental Indenture dated as of July 1, 2005 (Exhibit 4.2, June 2005 10-Q, File No. 1-2323)~~

4d	~~Form of Note Indenture between Cleveland Electric and The Chase Manhattan Bank, as Trustee dated as of October 24, 1997 (Exhibit 4(b), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~4d(1)~~	Form of Supplemental Note Indenture between Cleveland Electric and The Chase Manhattan Bank, as Trustee dated as of October 24, 1997 (Exhibit 4(c), Form S-4 File No. 333-47651, filed by Cleveland Electric).

~~4-1~~	~~Indenture dated as of December 1, 2003 between CEI and JPMorgan Chase Bank, as Trustee, Incorporated by reference to Exhibit 4-8, 2003 Annual Report on Form 10-K, SEC File No. 1-02323.~~

~~4-2~~	~~Officer's Certificate (including the form of 5.95% Senior Notes due 2036), dated as of December 11, 2006. (Form 8-K dated December 11, 2006, Exhibit 4)~~

~~10-1~~	~~Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-43102, Exhibit 5(c)(2).)~~

~~10-2~~	~~Amendment No. 1 dated January 4, 1974 to Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-68906, Exhibit 5(c)(3).)~~

~~10-3~~	~~Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-43102, Exhibit 5(c)(3).)~~

~~10-4~~	~~Amendment No. 1 dated as of January 1, 1993 to Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (1993 Form 10-K, Exhibit 10-4.)~~

~~10-5~~	~~Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980, October 15, 1997 (Exhibit 4(a), Form S-4 File No. 333-47651, filed by Cleveland Electric).~~

~~10-6~~	Electric Power Supply Agreement, between the Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, the Toledo Edison Company, and First Energy Solutions Corp. (f.k.a. FirstEnergy Services Corp.), dated January 1, 2001. (Filed as Ohio Edison Exhibit 10-145 in 2004 Form 10-K)

~~10-7~~	Revised Electric Power Supply Agreement, between FirstEnergy Solutions Corp., the Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, and the Toledo Edison Company, dated October 1, 2003. (Filed as Ohio Edison Exhibit 10-146 in 2004 Form 10-K)

59

~~Exhibit~~

~~Number~~

~~10-8~~	Master Facility Lease, between Ohio Edison Company, Pennsylvania Power Company, the Cleveland Electric Illuminating Company, the Toledo Edison Company, and FirstEnergy Generation Corp., dated January 1, 2001. (Filed as Ohio Edison Exhibit 10-147 in 2004 Form 10-K)

~~10-9~~	~~CEI Nuclear Purchase and Sale Agreement by and between The Cleveland Electric Illuminating Company and FirstEnergy Nuclear Generation Corp. (June 2005 10-Q, Exhibit 10.1)~~

~~10-10~~	~~CEI Fossil Purchase and Sale Agreement by and between The Cleveland Electric Illuminating Company (Seller) and FirstEnergy Generation Corp. (Purchaser). (June 2005 10-Q, Exhibit 10.2)~~

~~10-11~~	Nuclear Sale/Leaseback Power Supply Agreement dated as of October 14, 2005 between Ohio Edison Company and The Toledo Edison Company (Sellers) and FirstEnergy Nuclear Generation Corp. (Buyer) (2005 Form 10-K, Exhibit 10-6)

~~10-12~~	~~Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and the FirstEnergy Operating Companies - OE, CEI and TE (Buyers) (2005 Form 10-K, Exhibit 10-9)~~

~~10-13~~	Mansfield Power Supply Agreement dated as of October 14, 2005 between The Cleveland Electric Illuminating Company and The Toledo Edison Company (Sellers) and FirstEnergy Generation Corp. (Buyer) (2005 Form 10-K, Exhibit 10-7)

~~(A)12.3~~	~~Consolidated fixed charge ratios.~~

~~(A)13.2~~	~~CEI 2006 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)~~

~~(A)21.2~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)23.2~~	Consent of Independent Registered Public Accounting Firm.

~~(A)~~31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. ~~Section 1350.~~§1350.

~~(A)~~	~~Provided herein in electronic format as an exhibit.~~

~~(B)~~	Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K, CEI has not filed as an exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount of securities authorized thereunder does not exceed 10% of the total assets of CEI, but hereby agrees to furnish to the Commission on request any such instruments.

3.

Penelec~~Exhibits - TE~~

3a	~~Amended Articles of Incorporation of TE, as amended effective October 2, 1992 (Exhibit 3a, 1992 Form 10-K, File No. 1-3583).~~

3b	~~Amended and Restated Code of Regulations, dated March 15, 2002. (2001 Form 10-K, Exhibit 3b)~~

~~(B)4b(1)~~	~~Indenture, dated as of April 1, 1947, between TE and The Chase National Bank of the City of New York (now The Chase Manhattan Bank (National Association)) (Exhibit 2(b), File No. 2-26908).~~
~~4b(2)~~	~~September 1, 1948 (Exhibit 2(d), File No. 2-26908).~~
~~4b(3)~~	~~April 1, 1949 (Exhibit 2(e), File No. 2-26908).~~
~~4b(4)~~	~~December 1, 1950 (Exhibit 2(f), File No. 2-26908).~~
~~4b(5)~~	~~March 1, 1954 (Exhibit 2(g), File No. 2-26908).~~
~~4b(6)~~	~~February 1, 1956 (Exhibit 2(h), File No. 2-26908).~~
~~4b(7)~~	~~May 1, 1958 (Exhibit 5(g), File No. 2-59794).~~
~~4b(8)~~	~~August 1, 1967 (Exhibit 2(c), File No. 2-26908).~~

60

~~Exhibit~~

~~Number~~

~~4b(9)~~	~~November 1, 1970 (Exhibit 2(c), File No. 2-38569).~~
~~4b(10)~~	~~August 1, 1972 (Exhibit 2(c), File No. 2-44873).~~
~~4b(11)~~	~~November 1, 1973 (Exhibit 2(c), File No. 2-49428).~~
~~4b(12)~~	~~July 1, 1974 (Exhibit 2(c), File No. 2-51429).~~
~~4b(13)~~	~~October 1, 1975 (Exhibit 2(c), File No. 2-54627).~~
~~4b(14)~~	~~June 1, 1976 (Exhibit 2(c), File No. 2-56396).~~
~~4b(15)~~	~~October 1, 1978 (Exhibit 2(c), File No. 2-62568).~~
~~4b(16)~~	~~September 1, 1979 (Exhibit 2(c), File No. 2-65350).~~
~~4b(17)~~	~~September 1, 1980 (Exhibit 4(s), File No. 2-69190).~~
~~4b(18)~~	~~October 1, 1980 (Exhibit 4(c), File No. 2-69190).~~
~~4b(19)~~	~~April 1, 1981 (Exhibit 4(c), File No. 2-71580).~~
~~4b(20)~~	~~November 1, 1981 (Exhibit 4(c), File No. 2-74485).~~
~~4b(21)~~	~~June 1, 1982 (Exhibit 4(c), File No. 2-77763).~~
~~4b(22)~~	~~September 1, 1982 (Exhibit 4(x), File No. 2-87323).~~
~~4b(23)~~	~~April 1, 1983 (Exhibit 4(c), March 31, 1983, Form 10-Q, File No. 1-3583).~~
~~4b(24)~~	~~December 1, 1983 (Exhibit 4(x), 1983 Form 10-K, File No. 1-3583).~~
~~4b(25)~~	~~April 1, 1984 (Exhibit 4(c), File No. 2-90059).~~
~~4b(26)~~	~~October 15, 1984 (Exhibit 4(z), 1984 Form 10-K, File No. 1-3583).~~
~~4b(27)~~	~~October 15, 1984 (Exhibit 4(aa), 1984 Form 10-K, File No. 1-3583).~~
~~4b(28)~~	~~August 1, 1985 (Exhibit 4(dd), File No. 33-1689).~~
~~4b(29)~~	~~August 1, 1985 (Exhibit 4(ee), File No. 33-1689).~~
~~4b(30)~~	~~December 1, 1985 (Exhibit 4(c), File No. 33-1689).~~
~~4b(31)~~	~~March 1, 1986 (Exhibit 4b(31), 1986 Form 10-K, File No. 1-3583).~~
~~4b(32)~~	~~October 15, 1987 (Exhibit 4, September 30, 1987 Form 10-Q, File No. 1-3583).~~
~~4b(33)~~	~~September 15, 1988 (Exhibit 4b(33), 1988 Form 10-K, File No. 1-3583).~~
~~4b(34)~~	~~June 15, 1989 (Exhibit 4b(34), 1989 Form 10-K, File No. 1-3583).~~
~~4b(35)~~	~~October 15, 1989 (Exhibit 4b(35), 1989 Form 10-K, File No. 1-3583).~~
~~4b(36)~~	~~May 15, 1990 (Exhibit 4, June 30, 1990 Form 10-Q, File No. 1-3583).~~
~~4b(37)~~	~~March 1, 1991 (Exhibit 4(b), June 30, 1991 Form 10-Q, File No. 1-3583).~~
~~4b(38)~~	~~May 1, 1992 (Exhibit 4(a)(3), File No. 33-48844).~~
~~4b(39)~~	~~August 1, 1992 (Exhibit 4b(39), 1992 Form 10-K, File No. 1-3583).~~
~~4b(40)~~	~~October 1, 1992 (Exhibit 4b(40), 1992 Form 10-K, File No. 1-3583).~~
~~4b(41)~~	~~January 1, 1993 (Exhibit 4b(41), 1992 Form 10-K, File No. 1-3583).~~
~~4b(42)~~	~~September 15, 1994 (Exhibit 4(b), September 30, 1994 Form 10-Q, File No. 1-3583).~~
~~4b(43)~~	~~May 1, 1995 (Exhibit 4(d), September 30, 1995 Form 10-Q, File No. 1-3583).~~
~~4b(44)~~	~~June 1, 1995 (Exhibit 4(e), September 30, 1995 Form 10-Q, File No. 1-3583).~~
~~4b(45)~~	~~July 14, 1995 (Exhibit 4(f), September 30, 1995 Form 10-Q, File No. 1-3583).~~
~~4b(46)~~	~~July 15, 1995 (Exhibit 4(g), September 30, 1995 Form 10-Q, File No. 1-3583).~~
~~4b(47)~~	~~August 1, 1997 (Exhibit 4b(47), 1998 Form 10-K, File No. 1-3583).~~
~~4b(48)~~	~~June 1, 1998 (Exhibit 4b (48), 1998 Form 10-K, File No. 1-3583).~~
~~4b(49)~~	~~January 15, 2000 (Exhibit 4b(49), 1999 Form 10-K, File No. 1-3583).~~
~~4b(50)~~	~~May 1, 2000 (Exhibit 4b(50), 2000 Form 10-K, File No. 1-3583).~~
~~4b(51)~~	~~September 1, 2000 (Exhibit 4b(51), 2002 Form 10-K, File No. 1-3583).~~
~~4b(52)~~	~~October 1, 2002 (Exhibit 4b(52), 2002 Form 10-K, File No. 1-3583).~~
~~4b(53)~~	~~April 1, 2003 (Exhibit 4b(53).~~
~~4b(55)~~	~~April 1, 2005 (Exhibit 4.1, June 2005 10-Q, File No. 1-3583).~~

~~4-1~~	~~Officer's Certificate (including the form of 6.15% Senior Notes due 2037), dated November 16, 2006. (Form 8-K dated November 16, 2006, Exhibit 4)~~

~~(A) 4-2~~	~~Indenture dated as of November 1, 2006, between TE and The Bank of New York Trust Company, N.A.~~


~~10-1~~23	~~TE Nuclear Purchase and Sale Agreement by and between The Toledo Edison Company (Seller) and FirstEnergy Nuclear Generation Corp. (Purchaser). (June 2005 10-Q, Exhibit 10.1)~~Consent of Independent Registered Public Accounting Firm.

~~10-2~~	~~TE Fossil Purchase and Sale Agreement by and between The Toledo Edison Company (Seller) and FirstEnergy Generation Corp. (Purchaser). (June 2005 10-Q, Exhibit 10.2)~~

~~10-3~~	Nuclear Sale/Leaseback Power Supply Agreement dated as of October 14, 2005 between Ohio Edison Company and The Toledo Edison Company (Sellers) and FirstEnergy Nuclear Generation Corp. (Buyer) (2005 Form 10-K, Exhibit 10-6)

61

~~Exhibit~~

~~Number~~

~~10-4~~	~~Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and the FirstEnergy Operating Companies - OE, CEI and TE (Buyers) (2005 Form 10-K, Exhibit 10-9)~~

~~10-5~~	Mansfield Power Supply Agreement dated as of October 14, 2005 between The Cleveland Electric Illuminating Company and The Toledo Edison Company (Sellers) and FirstEnergy Generation Corp. (Buyer) (2005 Form 10-K, Exhibit 10-7)

~~(A)12.4~~	~~Consolidated fixed charge ratios.~~

~~(A)13.3~~	~~TE 2006 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)~~

~~(A)21.3~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)~~31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).

~~(A)~~32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. ~~Section 1350.~~

~~(A)~~	~~Provided herein in electronic format as an exhibit.~~

~~(B)~~	Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K, TE has not filed as an exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount of securities authorized thereunder does not exceed 10% of the total assets of TE, but hereby agrees to furnish to the Commission on request any such instruments.

3.~~Exhibits - JCP&L~~

~~3-A~~	~~Restated Certificate of Incorporation of JCP&L, as amended - Incorporated by reference to Exhibit 3-A, 1990 Annual Report on Form 10-K, SEC File No. 1-3141.~~

~~3-A-1~~	~~Certificate of Amendment to Restated Certificate of Incorporation of JCP&L, dated June 19, 1992 - Incorporated by reference to Exhibit A-2(a), Certificate Pursuant to Rule 24, SEC File No. 70-7949.~~

~~3-A-2~~	~~Certificate of Amendment to Restated Certificate of Incorporation of JCP&L, dated June 19, 1992 - Incorporated by reference to Exhibit A-2(a)(i), Certificate Pursuant to Rule 24, SEC File No. 70-7949.~~

~~3-B~~	~~By-Laws of JCP&L, as amended May 25, 1993 - Incorporated by reference to Exhibit 3-B, 1993 Annual Report on Form 10-K, SEC File No. 1-3141.~~

~~4-A~~	Indenture of JCP&L, dated March 1, 1946, between JCP&L and United States Trust Company of New York, Successor Trustee, as amended and supplemented by eight supplemental indentures dated December 1, 1948 through June 1, 1960 - Incorporated by reference to JCP&L's Instruments of Indebtedness Nos. 1 to 7, inclusive, and 9 and 10 filed as part of Amendment No. 1 to 1959 Annual Report of GPU on Form U5S, SEC File Nos. 30-126 and 1-3292.

~~4-A-1~~	~~Ninth Supplemental Indenture of JCP&L, dated November 1, 1962 - Incorporated by reference to Exhibit 2-C, Registration No. 2-20732.~~

~~4-A-2~~	~~Tenth Supplemental Indenture of JCP&L, dated October 1, 1963 - Incorporated by reference to Exhibit 2-C, Registration No. 2-21645.~~

~~4-A-3~~	~~Eleventh Supplemental Indenture of JCP&L, dated October 1, 1964 - Incorporated by reference to Exhibit 5-A-3, Registration No. 2-59785.~~

~~4-A-4~~	~~Twelfth Supplemental Indenture of JCP&L, dated November 1, 1965 - Incorporated by reference to Exhibit 5-A-4, Registration No. 2-59785.~~

~~4-A-5~~	~~Thirteenth Supplemental Indenture of JCP&L, dated August 1, 1966 - Incorporated by reference to Exhibit 4-C, Registration No. 2-25124.~~

62

~~Exhibit~~

~~Number~~


~~4-A-6~~	~~Fourteenth Supplemental Indenture of JCP&L, dated September 1, 1967 - Incorporated by reference to Exhibit 5-A-6, Registration No. 2-59785.~~

~~4-A-7~~	~~Fifteenth Supplemental Indenture of JCP&L, dated October 1, 1968 - Incorporated by reference to Exhibit 5-A-7, Registration No. 2-59785.~~

~~4-A-8~~	~~Sixteenth Supplemental Indenture of JCP&L, dated October 1, 1969 - Incorporated by reference to Exhibit 5-A-8, Registration No. 2-59785.~~

~~4-A-9~~	~~Seventeenth Supplemental Indenture of JCP&L, dated June 1, 1970 - Incorporated by reference to Exhibit 5-A-9, Registration No. 2-59785.~~

~~4-A-10~~	~~Eighteenth Supplemental Indenture of JCP&L, dated December 1, 1970 - Incorporated by reference to Exhibit 5-A-10, Registration No. 2-59785.~~

~~4-A-11~~	~~Nineteenth Supplemental Indenture of JCP&L, dated February 1, 1971 - Incorporated by reference to Exhibit 5-A-11, Registration No. 2-59785.~~

~~4-A-12~~	~~Twentieth Supplemental Indenture of JCP&L, dated November 1, 1971 - Incorporated by reference to Exhibit 5-A-12, Registration No. 2-59875.~~

~~4-A-13~~	~~Twenty-first Supplemental Indenture of JCP&L, dated August 1, 1972 - Incorporated by reference to Exhibit 5-A-13, Registration No. 2-59785.~~

~~4-A-14~~	~~Twenty-second Supplemental Indenture of JCP&L, dated August 1, 1973 - Incorporated by reference to Exhibit 5-A-14, Registration No. 2-59785.~~

~~4-A-15~~	~~Twenty-third Supplemental Indenture of JCP&L, dated October 1, 1973 - Incorporated by reference to Exhibit 5-A-15, Registration No. 2-59785.~~

~~4-A-16~~	~~Twenty-fourth Supplemental Indenture of JCP&L, dated December 1, 1973 - Incorporated by reference to Exhibit 5-A-16, Registration No. 2-59785.~~

~~4-A-17~~	~~Twenty-fifth Supplemental Indenture of JCP&L, dated November 1, 1974 - Incorporated by reference to Exhibit 5-A-17, Registration No. 2-59785.~~

~~4-A-18~~	~~Twenty-sixth Supplemental Indenture of JCP&L, dated March 1, 1975 - Incorporated by reference to Exhibit 5-A-18, Registration No. 2-59785.~~

~~4-A-19~~	~~Twenty-seventh Supplemental Indenture of JCP&L, dated July 1, 1975 - Incorporated by reference to Exhibit 5-A-19, Registration No. 2-59785.~~

~~4-A-20~~	~~Twenty-eighth Supplemental Indenture of JCP&L, dated October 1, 1975 - Incorporated by reference to Exhibit 5-A-20, Registration No. 2-59785.~~

~~4-A-21~~	~~Twenty-ninth Supplemental Indenture of JCP&L, dated February 1, 1976 - Incorporated by reference to Exhibit 5-A-21, Registration No. 2-59785.~~

~~4-A-22~~	~~Supplemental Indenture No. 29A of JCP&L, dated May 31, 1976 - Incorporated by reference to Exhibit 5-A-22, Registration No. 2-59785.~~

~~4-A-23~~	~~Thirtieth Supplemental Indenture of JCP&L, dated June 1, 1976 - Incorporated by reference to Exhibit 5-A-23, Registration No. 2-59785.~~

~~4-A-24~~	~~Thirty-first Supplemental Indenture of JCP&L, dated May 1, 1977 - Incorporated by reference to Exhibit 5-A-24, Registration No. 2-59785.~~

~~4-A-25~~	~~Thirty-second Supplemental Indenture of JCP&L, dated January 20, 1978 - Incorporated by reference to Exhibit 5-A-25, Registration No. 2-60438.~~

~~4-A-26~~	~~Thirty-third Supplemental Indenture of JCP&L, dated January 1, 1979 - Incorporated by reference to Exhibit A-20(b), Certificate Pursuant to Rule 24, SEC File No. 70-6242.~~

63

~~Exhibit~~

~~Number~~


~~4-A-27~~	~~Thirty-fourth Supplemental Indenture of JCP&L, dated June 1, 1979 - Incorporated by reference to Exhibit A-28, Certificate Pursuant to Rule 24, SEC File No. 70-6290.~~

~~4-A-28~~	~~Thirty-sixth Supplemental Indenture of JCP&L, dated October 1, 1979 - Incorporated by reference to Exhibit A-30, Certificate Pursuant to Rule 24, SEC File No. 70-6354.~~

~~4-A-29~~	~~Thirty-seventh Supplemental Indenture of JCP&L, dated September 1, 1984 - Incorporated by reference to Exhibit A-1(cc), Certificate Pursuant to Rule 24, SEC File No. 70-7001.~~

~~4-A-30~~	~~Thirty-eighth Supplemental Indenture of JCP&L, dated July 1, 1985 - Incorporated by reference to Exhibit A-1(dd), Certificate Pursuant to Rule 24, SEC File No. 70-7109.~~

~~4-A-31~~	~~Thirty-ninth Supplemental Indenture of JCP&L, dated April 1, 1988 - Incorporated by reference to Exhibit A-1(a), Certificate Pursuant to Rule 24, SEC File No. 70-7263.~~

~~4-A-32~~	~~Fortieth Supplemental Indenture of JCP&L, dated June 14, 1988 - Incorporated by reference to Exhibit A-1(ff), Certificate Pursuant to Rule 24, SEC File No. 70-7603.~~

~~4-A-33~~	~~Forty-first Supplemental Indenture of JCP&L, dated April 1, 1989 - Incorporated by reference to Exhibit A-1(gg), Certificate Pursuant to Rule 24, SEC File No. 70-7603.~~

~~4-A-34~~	~~Forty-second Supplemental Indenture of JCP&L, dated July 1, 1989 - Incorporated by reference to Exhibit A-1(hh), Certificate Pursuant to Rule 24, SEC File No. 70-7603.~~

~~4-A-35~~	~~Forty-third Supplemental Indenture of JCP&L, dated March 1, 1991 - Incorporated by reference to Exhibit 4-A-35, Registration No. 33-45314.~~

~~4-A-36~~	~~Forty-fourth Supplemental Indenture of JCP&L, dated March 1, 1992 - Incorporated by reference to Exhibit 4-A-36, Registration No. 33-49405.~~

~~4-A-37~~	~~Forty-fifth Supplemental Indenture of JCP&L, dated October 1, 1992 - Incorporated by reference to Exhibit 4-A-37, Registration No. 33-49405.~~

~~4-A-38~~	~~Forty-sixth Supplemental Indenture of JCP&L, dated April 1, 1993 - Incorporated by reference to Exhibit C-15, 1992 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-A-39~~	~~Forty-seventh Supplemental Indenture of JCP&L, dated April 10, 1993 - Incorporated by reference to Exhibit C-16, 1992 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-A-40~~	~~Forty-eighth Supplemental Indenture of JCP&L, dated April 15, 1993 - Incorporated by reference to Exhibit C-17, 1992 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-A-41~~	~~Forty-ninth Supplemental Indenture of JCP&L, dated October 1, 1993 - Incorporated by reference to Exhibit C-18, 1993 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-A-42~~	~~Fiftieth Supplemental Indenture of JCP&L, dated August 1, 1994 - Incorporated by reference to Exhibit C-19, 1994 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-A-43~~	~~Fifty-first Supplemental Indenture of JCP&L, dated August 15, 1996 - Incorporated by reference to Exhibit 4-A-43, 1996 Annual Report on Form 10-K, SEC File No. 1-6047.~~

~~4-A-44~~	~~Fifty-second Supplemental Indenture of JCP&L, dated July 1, 1999 - Incorporated by reference to Exhibit 4-B-44, Registration No. 333-88783.~~

~~4-A-45~~	~~Fifty-third Supplemental Indenture of JCP&L, dated November 1, 1999 - Incorporated by reference to Exhibit 4-A-45, 1999 Annual Report on Form 10-K, SEC File No. 1-3141.~~

~~4-A-46~~	~~Subordinated Debenture Indenture of JCP&L, dated May 1, 1995 - Incorporated by reference to Exhibit A-8(a), Certificate Pursuant to Rule 24, SEC File No. 70-8495.~~

~~4-A-47~~	~~Fifty-fourth Supplemental Indenture of JCP&L, dated May 1, 2001, Incorporated by reference to Exhibit 4-4, 2001 Annual Report on Form 10-K, SEC File No. 1-3141.~~

64

~~Exhibit~~

~~Number~~


~~4-A-48~~	~~Fifty-fifth Supplemental Indenture of JCP&L, dated April 23, 2004. (2004 Form 10-K, Exhibit 4-A-48).~~

~~4-D~~	~~Amended and Restated Limited Partnership Agreement of JCP&L Capital, L.P., dated May 11, 1995 - Incorporated by reference to Exhibit A-5(a), Certificate Pursuant to Rule 24, SEC File No. 70-8495.~~

~~4-E~~	~~Action Creating Series A Preferred Securities of JCP&L Capital, L.P., dated May 11, 1995 - Incorporated by reference to Exhibit A-6(a), Certificate Pursuant to Rule 24, SEC File No. 70-8495.~~

~~4-F~~	~~Payment and Guarantee Agreement of JCP&L, dated May 18, 1995 - Incorporated by reference to Exhibit B-1(a), Certificate Pursuant to Rule 24, SEC File No. 70-8495.~~

~~4-G~~	~~Indenture dated as of August 10, 2006 between JCP&L Transition Funding II LLC as Issuer and The Bank of New York as Trustee. (Form 8-K dated August 10, 2006, Exhibit 4-1)~~

~~4-H~~	~~2006-A Series Supplement dated as of August 10, 2006 between JCP&L Transition Funding II LLC as Issuer and The Bank of New York as Trustee. (Form 8-K dated August 10, 2006, Exhibit 4-2)~~

~~10-1~~	~~Form of Jersey Central Power & Light Company 6.40% Senior Note due 2036. (Form 8-K dated May 12, 2006, Exhibit 10-1)~~

~~10-2~~	Registration Rights Agreement, dated as of May 12, 2006, among Jersey Central Power & Light Company and UBS Securities LLC and Greenwich Capital Markets, Inc., as representatives of the several initial purchasers named in the Purchase Agreement. (Form 8-K dated May 12, 2006, Exhibit 10-3)

~~10-3~~	Bondable Transition Property Sale Agreement dated as of August 10, 2006 between JCP&L Transition Funding II LLC as Issuer and Jersey Central Power & Light Company as Seller. (Form 8-K dated August 10, 2006, Exhibit 10-1)

~~10-4~~	Bondable Transition Property Service Agreement dated as of August 10, 2006 between JCP&L Transition Funding II LLC as Issuer and Jersey Central Power & Light Company as Servicer. (Form 8-K dated August 10, 2006, Exhibit 10-2)

~~10-5~~	~~Administration Agreement dated as of August 10, 2006 between JCP&L Transition Funding II LLC as Issuer and FirstEnergy Service Company as Administrator. (Form 8-K dated August 10, 2006, Exhibit 10-3)~~
~~(A)12.5~~	~~Consolidated fixed charge ratios.~~

~~(A)13.4~~	~~JCP&L 2006 Annual Report to Stockholders (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with SEC.)~~

~~(A)21.4~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)31.1~~	~~Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).~~

~~(A)31.2~~	~~Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).~~

~~(A)32~~	~~Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350.~~

~~(A)~~	~~Provided herein electronic format as an exhibit.~~

~~3. Exhibits - Met-Ed~~

~~3-C~~	~~Restated Articles of Incorporation of Met-Ed, dated March 8, 1999 - Incorporated by reference to Exhibit 3-E, 1999 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~3-D~~	~~By-Laws of Met-Ed as amended May 16, 2000, Incorporated by reference to Exhibit 3-F, 2000 Annual Report on Form 10-K, SEC File No. 1-06047.~~

65

~~Exhibit~~

~~Number~~


~~4-B~~	Indenture of Met-Ed, dated November 1, 1944, between Met-Ed and United States Trust Company of New York, Successor Trustee, as amended and supplemented by fourteen supplemental indentures dated February 1, 1947 through May 1, 1960 - Incorporated by reference to Met-Ed's Instruments of Indebtedness Nos. 1 to 14 inclusive, and 16, filed as part of Amendment No. 1 to 1959 Annual Report of GPU on Form U5S, SEC File Nos. 30-126 and 1-3292.

~~4-B-1~~	~~Supplemental Indenture of Met-Ed, dated December 1, 1962 - Incorporated by reference to Exhibit 2-E(1), Registration No. 2-59678.~~

~~4-B-2~~	~~Supplemental Indenture of Met-Ed, dated March 20, 1964 - Incorporated by reference to Exhibit 2-E(2), Registration No. 2-59678.~~

~~4-B-3~~	~~Supplemental Indenture of Met-Ed, dated July 1, 1965 - Incorporated by reference to Exhibit 2-E(3), Registration No. 2-59678.~~

~~4-B-4~~	~~Supplemental Indenture of Met-Ed, dated June 1, 1966 - Incorporated by reference to Exhibit 2-B-4, Registration No. 2-24883.~~

~~4-B-5~~	~~Supplemental Indenture of Met-Ed, dated March 22, 1968 - Incorporated by reference to Exhibit 4-C-5, Registration No. 2-29644.~~

~~4-B-6~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1968 - Incorporated by reference to Exhibit 2-E(6), Registration No. 2-59678.~~

~~4-B-7~~	~~Supplemental Indenture of Met-Ed, dated August 1, 1969 - Incorporated by reference to Exhibit 2-E(7), Registration No. 2-59678.~~

~~4-B-8~~	~~Supplemental Indenture of Met-Ed, dated November 1, 1971 - Incorporated by reference to Exhibit 2-E(8), Registration No. 2-59678.~~

~~4-B-9~~	~~Supplemental Indenture of Met-Ed, dated May 1, 1972 - Incorporated by reference to Exhibit 2-E(9), Registration No. 2-59678.~~

~~4-B-10~~	~~Supplemental Indenture of Met-Ed, dated December 1, 1973 - Incorporated by reference to Exhibit 2-E(10), Registration No. 2-59678.~~

~~4-B-11~~	~~Supplemental Indenture of Met-Ed, dated October 30, 1974 - Incorporated by reference to Exhibit 2-E(11), Registration No. 2-59678.~~

~~4-B-12~~	~~Supplemental Indenture of Met-Ed, dated October 31, 1974 - Incorporated by reference to Exhibit 2-E(12), Registration No. 2-59678.~~

~~4-B-13~~	~~Supplemental Indenture of Met-Ed, dated March 20, 1975 - Incorporated by reference to Exhibit 2-E(13), Registration No. 2-59678.~~
~~4-B-14~~	~~Supplemental Indenture of Met-Ed, dated September 25, 1975 - Incorporated by reference to Exhibit 2-E(15), Registration No. 2-59678.~~

~~4-B-15~~	~~Supplemental Indenture of Met-Ed, dated January 12, 1976 - Incorporated by reference to Exhibit 2-E(16), Registration No. 2-59678.~~

~~4-B-16~~	~~Supplemental Indenture of Met-Ed, dated March 1, 1976 - Incorporated by reference to Exhibit 2-E(17), Registration No. 2-59678.~~

~~4-B-17~~	~~Supplemental Indenture of Met-Ed, dated September 28, 1977 - Incorporated by reference to Exhibit 2-E(18), Registration No. 2-62212.~~

~~4-B-18~~	~~Supplemental Indenture of Met-Ed, dated January 1, 1978 - Incorporated by reference to Exhibit 2-E(19), Registration No. 2-62212.~~

~~4-B-19~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1978 - Incorporated by reference to Exhibit 4-A(19), Registration No. 33-48937.~~

66

~~Exhibit~~

~~Number~~


~~4-B-20~~	~~Supplemental Indenture of Met-Ed, dated June 1, 1979 - Incorporated by reference to Exhibit 4-A(20), Registration No. 33-48937.~~

~~4-B-21~~	~~Supplemental Indenture of Met-Ed, dated January 1, 1980 - Incorporated by reference to Exhibit 4-A(21), Registration No. 33-48937.~~

~~4-B-22~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1981 - Incorporated by reference to Exhibit 4-A(22), Registration No. 33-48937.~~

~~4-B-23~~	~~Supplemental Indenture of Met-Ed, dated September 10, 1981 - Incorporated by reference to Exhibit 4-A(23), Registration No. 33-48937.~~

~~4-B-24~~	~~Supplemental Indenture of Met-Ed, dated December 1, 1982 - Incorporated by reference to Exhibit 4-A(24), Registration No. 33-48937.~~

~~4-B-25~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1983 - Incorporated by reference to Exhibit 4-A(25), Registration No. 33-48937.~~

~~4-B-26~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1984 - Incorporated by reference to Exhibit 4-A(26), Registration No. 33-48937.~~

~~4-B-27~~	~~Supplemental Indenture of Met-Ed, dated March 1, 1985 - Incorporated by reference to Exhibit 4-A(27), Registration No. 33-48937.~~

~~4-B-28~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1985 - Incorporated by reference to Exhibit 4-A(28), Registration No. 33-48937.~~

~~4-B-29~~	~~Supplemental Indenture of Met-Ed, dated June 1, 1988 - Incorporated by reference to Exhibit 4-A(29), Registration No. 33-48937.~~

~~4-B-30~~	~~Supplemental Indenture of Met-Ed, dated April 1, 1990 - Incorporated by reference to Exhibit 4-A(30), Registration No. 33-48937.~~

~~4-B-31~~	~~Amendment dated May 22, 1990 to Supplemental Indenture of Met-Ed, dated April 1, 1990 - Incorporated by reference to Exhibit 4-A(31), Registration No. 33-48937.~~

~~4-B-32~~	~~Supplemental Indenture of Met-Ed, dated September 1, 1992 - Incorporated by reference to Exhibit 4-A(32)(a), Registration No. 33-48937.~~

~~4-B-33~~	~~Supplemental Indenture of Met-Ed, dated December 1, 1993 - Incorporated by reference to Exhibit C-58, 1993 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-B-34~~	~~Supplemental Indenture of Met-Ed, dated July 15, 1995 - Incorporated by reference to Exhibit 4-B-35, 1995 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~4-B-35~~	~~Supplemental Indenture of Met-Ed, dated August 15, 1996 - Incorporated by reference to Exhibit 4-B-35, 1996 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~4-B-36~~	~~Supplemental Indenture of Met-Ed, dated May 1, 1997 - Incorporated by reference to Exhibit 4-B-36, 1997 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~4-B-37~~	~~Supplemental Indenture of Met-Ed, dated July 1, 1999 - Incorporated by reference to Exhibit 4-B-38, 1999 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~4-B-38~~	~~Indenture between Met-Ed and United States Trust Company of New York, dated May 1, 1999 - Incorporated by reference to Exhibit A-11(a), Certificate Pursuant to Rule 24, SEC File No. 70-9329.~~

~~4-B-39~~	Senior Note Indenture between Met-Ed and United States Trust Company of New York, dated July 1, 1999 Incorporated by reference to Exhibit C-154 to GPU, Inc.'s Annual Report on Form U5S for the year 1999, SEC File No. 30-126.

67

~~Exhibit~~

~~Number~~

~~4-B-40~~	First Supplemental Indenture between Met-Ed and United States Trust Company of New York, dated August 1, 2000 - Incorporated by reference to Exhibit 4-A, June 30, 2000 Quarterly Report on Form 10-Q, SEC File No. 1-446.

~~4-B-41~~	~~Supplemental Indenture of Met-Ed, dated May 1, 2001 - Incorporated by reference to Exhibit 4-5, 2001 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~4-B-42~~	~~Supplemental Indenture of Met-Ed, dated March 1,2003 - Incorporated by reference to Exhibit 4-10, 2003 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~4-G~~	~~Payment and Guarantee Agreement of Met-Ed, dated May 28, 1999 - Incorporated by reference to Exhibit B-1(a), Certificate Pursuant to Rule 24, SEC No. 70-9329.~~

~~4-H~~	~~Amendment No. 1 to Payment and Guarantee Agreement of Met-Ed, dated November 23, 1999 - Incorporated by reference to Exhibit 4-H, 1999 Annual Report on Form 10-K, SEC File No. 1-446.~~

~~(A)12.6~~	~~Consolidated fixed charge ratios.~~

~~(A)13.5~~	~~Met-Ed 2006 Annual Report to Stockholders (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with SEC.)~~

~~(A)21.5~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)31.1~~	~~Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).~~

~~(A)31.2~~	~~Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).~~

~~(A)32~~	~~Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350.~~

~~(A)~~	~~Provided herein electronic format as an exhibit.~~

~~3. Exhibits - Penelec~~

~~3-E~~	~~Restated Articles of Incorporation of Penelec, dated March 8, 1999 - Incorporated by reference to Exhibit 3-G, 1999 Annual Report on Form 10-K, SEC File No. 1-3522.~~

~~3-F~~	~~By-Laws of Penelec as amended May 16, 2000, Incorporated by reference to Exhibit 3-F, 2000 Annual Report on Form 10-K, SEC File No. 1-03522.~~

~~4-C~~	Mortgage and Deed of Trust of Penelec, dated January 1, 1942, between Penelec and United States Trust Company of New York, Successor Trustee, and indentures supplemental thereto dated March 7, 1942 through May 1, 1960 - Incorporated by reference to Penelec's Instruments of Indebtedness Nos. 1-20, inclusive, filed as a part of Amendment No. 1 to 1959 Annual Report of GPU on Form U5S, SEC File Nos. 30-126 and 1-3292.

~~4-C-1~~	~~Supplemental Indentures to Mortgage and Deed of Trust of Penelec, dated May 1, 1961 through December 1, 1977 - Incorporated by reference to Exhibit 2-D(1) to 2-D(19), Registration No. 2-61502.~~
~~4-C-2~~	~~Supplemental Indenture of Penelec, dated June 1, 1978 - Incorporated by reference to Exhibit 4-A(2), Registration No. 33-49669.~~

~~4-C-3~~	~~Supplemental Indenture of Penelec, dated June 1, 1979 - Incorporated by reference to Exhibit 4-A(3), Registration No. 33-49669.~~

~~4-C-4~~	~~Supplemental Indenture of Penelec, dated September 1, 1984 - Incorporated by reference to Exhibit 4-A(4), Registration No. 33-49669.~~

~~4-C-5~~	~~Supplemental Indenture of Penelec, dated December 1, 1985 - Incorporated by reference to Exhibit 4-A(5), Registration No. 33-49669.~~

~~4-C-6~~	~~Supplemental Indenture of Penelec, dated December 1, 1986 - Incorporated by reference to Exhibit 4-A(6), Registration No. 33-49669.~~

68

~~Exhibit~~

~~Number~~


~~4-C-7~~	~~Supplemental Indenture of Penelec, dated May 1, 1989 - Incorporated by reference to Exhibit 4-A(7), Registration No. 33-49669.~~

~~4-C-8~~	~~Supplemental Indenture of Penelec, dated December 1, 1990-Incorporated by reference to Exhibit 4-A(8), Registration No. 33-45312.~~

~~4-C-9~~	~~Supplemental Indenture of Penelec, dated March 1, 1992 - Incorporated by reference to Exhibit 4-A(9), Registration No. 33-45312.~~

~~4-C-10~~	~~Supplemental Indenture of Penelec, dated June 1, 1993 - Incorporated by reference to Exhibit C-73, 1993 Annual Report of GPU on Form U5S, SEC File No. 30-126.~~

~~4-C-11~~	~~Supplemental Indenture of Penelec, dated November 1, 1995 - Incorporated by reference to Exhibit 4-C-11, 1995 Annual Report on Form 10-K, SEC File No. 1-3522.~~

~~4-C-12~~	~~Supplemental Indenture of Penelec, dated August 15, 1996 - Incorporated by reference to Exhibit 4-C-12, 1996 Annual Report on Form 10-K, SEC File No. 1-3522.~~

~~4-C-13~~	Senior Note Indenture between Penelec and United States Trust Company of New York, dated April 1, 1999 - Incorporated by reference to Exhibit 4-C-13, 1999 Annual Report on Form 10-K, SEC File No. 1-3522.

~~4-C-14~~	~~Supplemental Indenture of Penelec, dated May 1, 2001.~~

~~4-C-15~~	~~Supplemental Indenture No. 1 of Penelec, dated May 1, 2001.~~

~~4-I~~	~~Payment and Guarantee Agreement of Penelec, dated June 16, 1999 - Incorporated by reference to Exhibit B-1(a), Certificate Pursuant to Rule 24, SEC File No. 70-9327.~~

~~4-J~~	~~Amendment No. 1 to Payment and Guarantee Agreement of Penelec, dated November 23, 1999 - Incorporated by reference to Exhibit 4-J, 1999 Annual Report on Form 10-K, SEC File No. 1-3522.~~

~~10.1~~	Term Loan Agreement, dated as of March 15, 2005, among Pennsylvania Electric Company, Union Bank of California, N.A., as Administrative Agent, Lead Arranger and Lender, and National City Bank as Arranger, Syndication Agent and Lender. (March 18, 2005 Form 8-K, Exhibit 10.1).

~~(A)12.7~~	~~Consolidated fixed charge ratios.~~

~~(A)13.6~~	~~Penelec 2006 Annual Report to Stockholders (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with SEC.)~~

~~(A)21.6~~	~~List of Subsidiaries of the Registrant at December 31, 2006.~~

~~(A)23.3~~	~~Consent of Independent Registered Public Accounting Firm.~~

~~(A)31.1~~	~~Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).~~

~~(A)31.2~~	~~Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).~~

~~(A)32~~	~~Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350.~~

~~(A)~~	~~Provided here in electronic format as an exhibit.~~

~~3. Exhibits - Common Exhibits for Met-Ed and Penelec~~

~~10-1~~	~~First Amendment to Restated Partial Requirements Agreement, between Met-Ed, Penelec, and FES, dated January 1, 2003. (2004 Form 10-K, Exhibit 10-1).~~

~~10-2~~	~~Notice of Termination Tolling Agreement, Restated Partial Requirements Agreement (September 2005 10-Q, Exhibit 10-1).~~

69

~~Exhibit~~

~~Number~~


~~10-3~~	Notice of Termination Tolling Agreement dated as of April 7, 2006; Restated Partial Requirements Agreement, dated January 1, 2003, by and among, Metropolitan Edison Company, Pennsylvania Electric Company, The Waverly Electric Power and Light Company and FirstEnergy Solutions Corp., as amended by a First Amendment to Restated Requirements Agreement, dated August 29, 2003 and by a Second Amendment to Restated Requirements Agreement, dated June 8, 2004 ("Partial Requirements Agreement"). (March 2006 10-Q, Exhibit 10-5)

~~(A)10-4~~	~~Second Restated Partial Requirements Agreement, between Met-Ed, Penelec and FES, dated January 1, 2007. (Form 8-K dated January 17, 2007)~~

~~(A)~~	~~Provided here in electronic format as an exhibit.~~

~~3. Exhibits - Common Exhibits for FirstEnergy, OE, CEI, TE, JCP&L, Met-Ed and Penelec~~

~~10-1~~

$2,750,000,000 Credit Agreement dated as of August 24, 2006 among FirstEnergy Corp.,FirstEnergy Solutions Corp., American Transmission Systems, Inc., Ohio Edison Company, Pennsylvania Power Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, as Borrowers, the banks party thereto, the fronting banks party thereto and the swing line lenders party thereto. (Form 8-K dated August 24, 2006, Exhibit 10-1)

§1350.

7088

SIGNATURES

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~FirstEnergy Corp.:~~

Our audits of the consolidated financial statements, of management's assessment of the effectiveness of internal control over financial reporting and of the effectiveness of internal control over financial reporting referred to in our report dated February 27, 2007 appearing in the 2006 Annual Report to Stockholders of FirstEnergy Corp. (which report, consolidated financial statements and assessment are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

71

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~Ohio Edison Company:~~

Our audit of the consolidated financial statements, referred to in our report dated February 27, 2007 appearing in the 2006 Annual Report to Stockholders of Ohio Edison Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

72

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~The Cleveland Electric Illuminating Company:~~

~~Our audit of the consolidated financial statements, referred to in our report dated February 27, 2007~~appearing in the 2006 Annual Report to Stockholders of The Cleveland Electric Illuminating Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

73

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~The Toledo Edison Company:~~

~~Our audit of the consolidated financial statements, referred to in our report dated February 27, 2007~~appearing in the 2006 Annual Report to Stockholders of The Toledo Edison Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

74

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~Jersey Central Power~~

~~& Light Company:~~

~~Our audit of the consolidated financial statements, referred to in our report dated February 27, 2007~~appearing in the 2006 Annual Report to Stockholders of Jersey Central Power & Light Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

75

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~Metropolitan Edison Company:~~

~~Our audit of the consolidated financial statements, referred to in our report dated February 27, 2007~~appearing in the 2006 Annual Report to Stockholders of Metropolitan Edison Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

76

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

on

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~Pennsylvania Electric Company:~~

~~Our audit of the consolidated financial statements, referred to in our report dated February 27, 2007~~appearing in the 2006 Annual Report to Stockholders of Pennsylvania Electric Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~PricewaterhouseCoopers LLP~~

~~Cleveland, Ohio~~

~~February 27, 2007~~

77

~~SCHEDULE II~~

FIRSTENERGY CORP.


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts - customers $ 37,733 $ 60,461 $ 34,259 (a) $ 89,239
(b)
$ 43,214
- other $ 26,566 $ 3,956 $ 2,554 (a) $ 9,112 (b) $ 23,964

Loss carryforward
tax valuation reserve $ 402,142 $ - $ 13,389 $ - $ 415,531

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts - customers $ 34,476 $ 52,653 $ 33,216 (a) $ 82,612 (b) $ 37,733
- other $ 26,069 $ (49 ) $ 11,098 (a) $ 10,552
(b)
$ 26,566

Loss carryforward
tax valuation reserve $ 419,978 $ (4,758 ) $ (13,078 ) $ - $ 402,142

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts - customers $ 50,247 $ 38,492 $ 22,102 (a) $ 76,365 (b) $ 34,476
- other $ 18,283 $ 1,038 $ 15,836 (a) $ 9,087 (b) $ 26,070

Loss carryforward
tax valuation reserve $ 470,813 $ (34,803 ) $ (16,032 ) $ - $ 419,978

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

78

~~SCHEDULE II~~

OHIO EDISON COMPANY


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts - customers $ 7,619 $ 22,466 $ 11,817 (a) $ 26,869 (b) $ 15,033
- other $ 4 $ 2,218 $ 473 (a) $ 710 (b) $ 1,985

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts - customers $ 6,302 $ 17,250 $ 8,548 (a) $ 24,481 (b) $ 7,619
- other $ 64 $ 182 $ 90 (a) $ 332 (b) $ 4

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts - customers $ 8,747 $ 17,477 $ 7,275 (a) $ 27,197 (b) $ 6,302
- other $ 2,282 $ 376 $ 215 (a) $ 2,809 (b) $ 64

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

79

~~SCHEDULE II~~

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts - customers $ 5,180 $ 14,890 $ 10,067 (a) $ 23,354 (b) $ 6,783
- other $ - $ 22 $ 138 (a) $ 160 (b) $ -

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts - customers $ - $ 12,238 $ 13,704 (a) $ 20,762 (b) $ 5,180
- other $ 293 $ 92 $ (12 ) (a) $ 373 (b) $ -

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts - other $ 1,765 $ (1,181 ) $ 12 (a) $ 303 (b) $ 293

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

80

~~SCHEDULE II~~

THE TOLEDO EDISON COMPANY


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts $ - $ 440 $ 118 (a) $ 128 (b) $ 430

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts $ 2 $ - $ (2 ) (a) $ - $ -

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts $ 34 $ (33 ) $ 2 (a) $ 1 (b) $ 2

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

81

~~SCHEDULE II~~

JERSEY CENTRAL POWER & LIGHT COMPANY


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts - customers $ 3,830 $ 4,945 $ 4,643 (a) $ 9,894 (b) $ 3,524
- other $ 204 $ (201 ) $ 866 (a) $ 869 (b) $ -

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts - customers $ 3,881 $ 5,997 $ 2,783 (a) $ 8,831 (b) $ 3,830
- other $ 162 $ 112 $ 949 (a) $ 1,019 (b) $ 204

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts - customers $ 4,296 $ 6,515 $ 3,664 (a) $ 10,594 (b) $ 3,881
- other $ 1,183 $ (111 ) $ (354 ) (a) $ 556 (b) $ 162

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

82

~~SCHEDULE II~~

METROPOLITAN EDISON COMPANY


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts - customers $ 4,352 $ 7,070 $ 4,108 (a) $ 11,377 (b) $ 4,153
- other $ - $ 15 $ 36 (a) $ 49 (b) $ 2

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts - customers $ 4,578 $ 8,704 $ 3,503 (a) $ 12,433 (b) $ 4,352
- other $ - $ - $ - $ - $ -

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts - customers $ 4,943 $ 7,841 $ 5,128 (a) $ 13,334 (b) $ 4,578
- other $ 68 $ (68 ) $ - $ - $ -

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

83

~~SCHEDULE II~~

PENNSYLVANIA ELECTRIC COMPANY


CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004



Additions


Charged


Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

Year Ended December 31, 2006:


Accumulated provision for
uncollectible accounts - customers $ 4,184 $ 6,381 $ 4,368 (a) $ 11,119 (b) $ 3,814
- other $ 2 $ 105 $ 173 (a) $ 277 (b) $ 3

Year Ended December 31, 2005:

Accumulated provision for
uncollectible accounts - customers $ 4,712 $ 8,464 $ 3,296 (a) $ 12,288 (b) $ 4,184
- other $ 4 $ 70 $ 2 (a) $ 74 (b) $ 2

Year Ended December 31, 2004:

Accumulated provision for
uncollectible accounts - customers $ 5,833 $ 5,977 $ 5,351 (a) $ 12,449 (b) $ 4,712
- other $ 399 $ (324 ) $ 24 (a) $ 95 (b) $ 4

(a) Represents recoveries and reinstatements of accounts previously written off.
(b) Represents the write-off of accounts considered to be uncollectible.

84

~~SIGNATURES~~

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, ~~the registrant~~each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

November 25, 2008

	~~FIRSTENERGY CORP.~~ OHIO EDISON COMPANY
	Registrant

	THE CLEVELAND ELECTRIC
	~~BY:/s/Anthony J. Alexander~~ ILLUMINATING COMPANY
	~~Anthony J. Alexander~~
	~~President and Chief Executive Officer~~

~~Date: February 27, 2007~~

85

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:



~~/s/George M. Smart~~		~~/s/Anthony J. Alexander~~
~~George M. Smart~~		~~Anthony J. Alexander~~
~~Chairman of the Board~~		~~President and Chief Executive Officer~~
		~~and Director (Principal Executive Officer)~~



~~/s/Richard H. Marsh~~		~~/s/Harvey L. Wagner~~
~~Richard H. Marsh~~		~~Harvey L. Wagner~~
~~Senior Vice President and Chief Financial~~		~~Vice President, Controller and Chief Accounting~~
~~Officer (Principal Financial Officer)~~		~~Officer (Principal Accounting Officer)~~



~~/s/Paul T. Addison~~		~~/s/Ernest J. Novak, Jr.~~
~~Paul T. Addison~~		~~Ernest J. Novak, Jr.~~
~~Director~~		~~Director~~



~~/s/Michael J. Anderson~~		~~/s/Catherine A. Rein~~
~~Michael J. Anderson~~		~~Catherine A. Rein~~
~~Director~~		~~Director~~



~~/s/Carol A. Cartwright~~		~~/s/Robert C. Savage~~
~~Carol A. Cartwright~~		~~Robert C. Savage~~
~~Director~~		~~Director~~



~~/s/William T. Cottle~~		~~/s/Wes M. Taylor~~
~~William T. Cottle~~		~~Wes M. Taylor~~
~~Director~~		~~Director~~



~~/s/Robert B. Heisler, Jr.~~		~~/s/Jesse T. Williams, Sr.~~
~~Robert B. Heisler, Jr.~~		~~Jesse T. Williams, Sr.~~
~~Director~~		~~Director~~



~~/s/Russell W. Maier~~
~~Russell W. Maier~~
~~Director~~

~~Date: February 27, 2007~~

86

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~OHIO EDISON COMPANY~~ Registrant

	THE TOLEDO EDISON COMPANY
	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: February 27, 2007~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

~~/s/Anthony J. Alexander~~		~~/s/Richard R. Grigg~~
~~Anthony J. Alexander~~		~~Richard R. Grigg~~
~~President and Director~~		~~Executive Vice President and Chief~~
~~(Principal Executive Officer)~~		~~Operating Officer and Director~~




~~/s/Richard H. Marsh~~		~~/s/Harvey L. Wagner~~
~~Richard H. Marsh~~		~~Harvey L. Wagner~~
~~Senior Vice President and Chief~~		~~Vice President and Controller~~
~~Financial Officer and Director~~		~~(Principal Accounting Officer)~~
~~(Principal Financial Officer)~~

~~Date: February 27, 2007~~

87

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~THE CLEVELAND ELECTRIC ILLUMINATING COMPANY~~ Registrant

	PENNSYLVANIA ELECTRIC COMPANY
	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~Registrant

~~Date: February 27, 2007~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

~~/s/Anthony J. Alexander~~		~~/s/Richard R. Grigg~~
~~Anthony J. Alexander~~		~~Richard R. Grigg~~
~~President and Director~~		~~Executive Vice President and Chief~~
~~(Principal Executive Officer)~~		~~Operating Officer and Director~~




~~/s/Richard H. Marsh~~		~~/s/Harvey L. Wagner~~
~~Richard H. Marsh~~		~~Harvey L. Wagner~~
~~Senior Vice President and Chief~~		~~Vice President and Controller~~
~~Financial Officer and Director~~		~~(Principal Accounting Officer)~~
~~(Principal Financial Officer)~~

~~Date: February 27, 2007~~

88

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~THE TOLEDO EDISON COMPANY~~ /s/ Harvey L. Wagner
	Harvey L. Wagner

	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	Vice President and Controller

~~Date: February 27, 2007~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

~~/s/Anthony J. Alexander~~		~~/s/Richard R. Grigg~~
~~Anthony J. Alexander~~		~~Richard R. Grigg~~
~~President and Director~~		~~Executive Vice President and Chief~~
~~(Principal Executive Officer)~~		~~Operating Officer and Director~~




~~/s/Richard H. Marsh~~		~~/s/Harvey L. Wagner~~
~~Richard H. Marsh~~		~~Harvey L. Wagner~~
~~Senior Vice President and Chief~~		~~Vice President and Controller~~
~~Financial Officer and Director~~		~~(Principal Accounting Officer)~~
~~(Principal Financial Officer)~~

~~Date: February 27, 2007~~

89

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~JERSEY CENTRAL POWER & LIGHT COMPANY~~


	~~BY:/s/Stephen E. Morgan~~
	~~Stephen E. Morgan~~
	~~President~~

~~Date: February 27, 2007~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

~~/s/Stephen E. Morgan~~		~~/s/Richard H. Marsh~~
~~Stephen E. Morgan~~		~~Richard H. Marsh~~
~~President and Director~~ ~~(Principal Executive Officer)~~		~~Senior Vice President and~~ ~~Chief Financial Officer~~
		~~(Principal Financial Officer)~~



~~/s/Harvey L. Wagner~~		~~/s/Leila L. Vespoli~~
~~Harvey L. Wagner~~		~~Leila L. Vespoli~~
~~Vice President and Controller~~ ~~(Principal Accounting Officer)~~		~~Senior Vice President and~~ ~~General Counsel and Director~~



~~/s/Bradley S. Ewing~~		~~/s/Gelorma E. Persson~~
~~Bradley S. Ewing~~		~~Gelorma E. Persson~~
~~Director~~		~~Director~~


~~/s/Charles E. Jones~~		~~/s/Stanley C. Van Ness~~
~~Charles E. Jones~~		~~Stanley C. Van Ness~~
~~Director~~		~~Director~~



~~/s/Mark A. Julian~~
~~Mark A. Julian~~
~~Director~~

~~Date: February 27, 2007~~

90

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~METROPOLITAN EDISON COMPANY~~


	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: February 27, 2007~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

~~/s/Anthony J. Alexander~~		~~/s/Richard R. Grigg~~
~~Anthony J. Alexander~~		~~Richard R. Grigg~~
~~President and Director~~		~~Executive Vice President and Chief~~
~~(Principal Executive Officer)~~		~~Operating Officer and Director~~




~~/s/Richard H. Marsh~~		~~/s/Harvey L. Wagner~~
~~Richard H. Marsh~~		~~Harvey L. Wagner~~
~~Senior Vice President and Chief~~		~~Vice President and Controller~~
~~Financial Officer and Director~~		~~(Principal Accounting Officer)~~
~~(Principal Financial Officer)~~

~~Date: February 27, 2007~~

91

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	~~PENNSYLVANIA ELECTRIC COMPANY~~


	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: February 27, 2007~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

~~/s/Anthony J. Alexander~~		~~/s/Richard R. Grigg~~
~~Anthony J. Alexander~~		~~Richard R. Grigg~~
~~President and Director~~		~~Executive Vice President and Chief~~
~~(Principal Executive Officer)~~		~~Operating Officer and Director~~




~~/s/Richard H. Marsh~~		~~/s/Harvey L. Wagner~~
~~Richard H. Marsh~~		~~Harvey L. Wagner~~
~~Senior Vice President and Chief~~		~~Vice President and Controller~~
~~Financial Officer and Director~~		~~(Principal Accounting Officer)~~
~~(Principal Financial Officer)~~

~~Date: February 27, 2007~~

92

Commission	Registrant; State of Incorporation;	I.R.S. Employer
File Number	Address; and Telephone Number	Identification No.

~~333-21011~~ 1-2578	~~FIRSTENERGY CORP.~~ OHIO EDISON COMPANY	~~34-1843785~~ 34-0437786
	(An Ohio Corporation)
	~~76 South Main Street~~ c/o FirstEnergy Corp.
	~~Akron, OH 44308~~ 76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

~~1-2578~~ 1-2323	~~OHIO EDISON~~THE CLEVELAND ELECTRIC ILLUMINATING COMPANY	~~34-0437786~~ 34-0150020
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

~~1-2323~~ 1-3583	THE ~~CLEVELAND ELECTRIC ILLUMINATING~~TOLEDO EDISON COMPANY	~~34-0150020~~ 34-4375005
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

~~1-3583~~ 1-3522	~~THE TOLEDO EDISON~~PENNSYLVANIA ELECTRIC COMPANY	~~34-4375005~~ 25-0718085
	(~~An Ohio~~A Pennsylvania Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

~~1-3141~~	~~JERSEY CENTRAL POWER & LIGHT COMPANY~~	~~21-0485010~~
	~~(A New Jersey Corporation)~~
	~~c/o FirstEnergy Corp.~~
	~~76 South Main Street~~
	~~Akron, OH 44308~~
	~~Telephone (800)736-3402~~

~~1-446~~	~~METROPOLITAN EDISON COMPANY~~	~~23-0870160~~
	~~(A Pennsylvania Corporation)~~
	~~c/o FirstEnergy Corp.~~
	~~76 South Main Street~~
	~~Akron, OH 44308~~
	~~Telephone (800)736-3402~~

~~1-3522~~	~~PENNSYLVANIA ELECTRIC COMPANY~~	~~25-0718085~~
	~~(A Pennsylvania Corporation)~~
	~~c/o FirstEnergy Corp.~~
	~~76 South Main Street~~
	~~Akron, OH 44308~~
	~~Telephone (800)736-3402~~

		~~Name of Each Exchange~~
~~Registrant~~	~~Title of Each Class~~	~~on Which Registered~~

~~FirstEnergy Corp.~~	~~Common Stock, $0.10 par value~~	~~New York Stock Exchange~~
~~The Cleveland Electric Illuminating Company~~	~~9% Cumulative Trust Preferred Securities,~~ ~~$25 per preferred security~~	~~New York Stock Exchange~~

Yes ~~(X) No~~ ( )	~~FirstEnergy Corp.~~
~~Yes ( )~~ No (X)	Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company ~~Jersey Central Power & Light Company, Metropolitan Edison Company,~~ and Pennsylvania Electric Company

Yes (X) No ( )	~~Ohio Edison Company,~~ The Cleveland Electric Illuminating Company and The Toledo Edison Company ~~Jersey Central Power & Light Company, Metropolitan~~
Yes ( ) No (X)	Ohio Edison Company and Pennsylvania Electric Company
~~Yes ( ) No (X)~~	~~FirstEnergy Corp.~~

Yes (X) No ( )	~~FirstEnergy Corp.,~~ Ohio ~~Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan~~ Edison Company and Pennsylvania Electric Company
Yes ( ) No (X)	The Cleveland Electric Illuminating Company and The Toledo Edison Company

~~( )~~	~~FirstEnergy Corp.~~
(X)	Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company ~~Jersey Central Power & Light Company, Metropolitan Edison Company~~ and Pennsylvania Electric ~~Company.~~Company

Large Accelerated Filer ~~(X)~~( )	~~FirstEnergy Corp.~~N/A
Accelerated Filer ( )	N/A
Non-accelerated Filer (do not check if a Smaller Reporting Company) (X)	Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company ~~Jersey Central Power & Light Company, Metropolitan Edison Company,~~ and Pennsylvania Electric Company

		OUTSTANDING
CLASS		~~As of February 27, 2007~~ AS OF FEBRUARY 28, 2008

~~FirstEnergy Corp., $0.10 par value~~		~~319,205,517~~
Ohio Edison Company, no par value		60
The Cleveland Electric Illuminating Company, no par value		67,930,743
The Toledo Edison Company, $5 par value		29,402,054
~~Jersey Central Power & Light Company, $10 par value~~		~~15,009,335~~
~~Metropolitan Edison Company, no par value~~		~~859,500~~
Pennsylvania Electric Company, $20 par value		~~5,290,596~~4,427,577

		PART OF FORM 10-K INTO WHICH
DOCUMENT		DOCUMENT IS INCORPORATED

FirstEnergy Corp. Annual Report to Stockholders for
the fiscal year ended December 31, ~~2006 (Pages 3-104)~~2007		Part II

Proxy Statement for ~~2007~~2008 Annual Meeting of Stockholders
to be held May ~~15, 2007~~20, 2008		Part III

Contents		Page

Glossary of Terms		ii-iv

Part II. Item 8. Financial Statements and Supplementary Data.		1

Ohio Edison Company

	Report of Independent Registered Public Accounting Firm	2
	Consolidated Statements of Income	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Capitalization	5
	Consolidated Statements of Common Stockholder’s Equity	6
	Consolidated Statements of Cash Flows	7

The Cleveland Electric Illuminating Company

	Report of Independent Registered Public Accounting Firm	8
	Consolidated Statements of Income	9
	Consolidated Balance Sheets	10
	Consolidated Statements of Capitalization	11
	Consolidated Statements of Common Stockholder’s Equity	12
	Consolidated Statements of Cash Flows	13

The Toledo Edison Company

	Report of Independent Registered Public Accounting Firm	14
	Consolidated Statements of Income	15
	Consolidated Balance Sheets	16
	Consolidated Statements of Capitalization	17
	Consolidated Statements of Common Stockholder’s Equity	18
	Consolidated Statements of Cash Flows	19

Pennsylvania Electric Company

	Report of Independent Registered Public Accounting Firm	20
	Consolidated Statements of Income	21
	Consolidated Balance Sheets	22
	Consolidated Statements of Capitalization	23
	Consolidated Statements of Common Stockholder’s Equity	24
	Consolidated Statements of Cash Flows	25

Combined Notes to Consolidated Financial Statements		26-86

Item 9A(T). Controls and Procedures.		87

Item 15. Exhibits.		88

ATSI	American Transmission Systems, Inc., owns and operates transmission facilities
CEI	The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary
Centerior	Centerior Energy Corporation, former parent of CEI and TE, which merged with OE to form FirstEnergy on November 8, 1997
Companies	OE, CEI, TE, Penn, JCP&L, Met-Ed and Penelec
FENOC	FirstEnergy Nuclear Operating Company, operates nuclear generating facilities
FES	FirstEnergy Solutions Corp., provides energy-related products and services
FESC	FirstEnergy Service Company, provides legal, financial and other corporate support services
FGCO	FirstEnergy Generation Corp., owns and operates ~~nonnuclear~~non-nuclear generating facilities
FirstEnergy	FirstEnergy Corp., a public utility holding company
~~FSG~~	~~FirstEnergy Facilities Services Group, LLC, the parent company of several heating,~~ ~~ventilation, air conditioning and energy management companies~~
GPU	GPU, Inc., former parent of JCP&L, Met-Ed and Penelec, which merged with FirstEnergy on November 7, 2001
JCP&L	Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
JCP&L Transition Funding	JCP&L Transition Funding LLC, a Delaware limited liability company and issuer of transition bonds
JCP&L Transition Funding II	JCP&L Transition Funding II LLC, a Delaware limited liability company and issuer of transition bonds
Met-Ed	Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary
MYR	MYR Group, Inc., a utility infrastructure construction service company
NGC	FirstEnergy Nuclear Generation Corp., owns nuclear generating facilities
OE	Ohio Edison Company, an Ohio electric utility operating subsidiary
Ohio Companies	CEI, OE and TE
Pennsylvania Companies	Met-Ed, Penelec and Penn
Penelec	Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary
Penn	Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE
PNBV	PNBV Capital Trust, a special purpose entity created by OE in 1996
Shippingport	Shippingport Capital Trust, a special purpose entity created by CEI and TE in 1997
TE	The Toledo Edison Company, an Ohio electric utility operating subsidiary

The following abbreviations and acronyms are used to identify frequently used terms in this report:

AEP	American Electric Power Company, Inc.
ALJ	Administrative Law Judge
~~Bechtel~~AOCI	~~Bechtel Power Corporation~~Accumulated Other Comprehensive Income
AOCL	Accumulated Other Comprehensive Loss
APIC	Additional Paid-In Capital
AQC	Air Quality Control
ARB	Accounting Research Bulletin
ARO	Asset Retirement Obligation
BGS	Basic Generation Service
~~B&W~~BPJ	~~Babcock & Wilcox Company~~Best Professional Judgment
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
~~CAL~~	~~Confirmatory Action Letter~~
CAMR	Clean Air Mercury Rule
CAVR	Clean Air Visibility Rule
CAT	Commercial Activity Tax
CBP	Competitive Bid Process
CO2₂	Carbon Dioxide
CTC	Competitive Transition Charge
DFI	Demand for Information
DOE	United States Department of Energy
DOJ	United States Department of Justice
~~DPL~~	~~Dayton Power & Light Company~~
DRA	Division of ~~the Rate Payer~~Ratepayer Advocate
ECAR	East Central Area Reliability Coordination Agreement
ECO	Electro-Catalytic Oxidation

EIS	Energy Independence Strategy
EITF	Emerging Issues Task Force
EITF 06-11	EITF 06-11, “Accounting for Income Tax Benefits of Dividends or Share-based Payment Awards”
EMP	Energy Master Plan
EPA	Environmental Protection Agency ~~only in various other terms~~
EPACT	Energy Policy Act of 2005
~~EPRI~~FASB	~~Electric Power Research Institute~~
~~ERO~~	~~Electric Reliability Organization~~Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FIN	FASB Interpretation
FIN 39-1	FIN 39-1, “Amendment of FASB Interpretation No. 39”
FIN 46R	FIN 46 (revised December 2003), "Consolidation of Variable Interest Entities"
FIN 47	FIN 47, "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB Statement No. 143"
FIN 48	FIN 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109”
FMB	First Mortgage Bonds
FSP	FASB Staff Position
FSP SFAS 115-1 and SFAS 124-1	FSP SFAS 115-1 and SFAS 124-1, “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments”
FTR	Financial Transmission Rights
GAAP	Accounting Principles Generally Accepted in the United States
GHG	Greenhouse Gases
HVAC	Heating, Ventilation and Air-conditioning
IRS	Internal Revenue Service
ISO	Independent System Operator
kv	Kilovolt
KWH	Kilowatt-hours
LOC	Letter of Credit
MEIUG	Met-Ed Industrial Users Group
MISO	Midwest Independent Transmission System Operator, Inc.
~~MOU~~MTC	~~Memorandum of Understanding~~Market Transition Charge
MW	Megawatts
NAAQS	National Ambient Air Quality Standards
NERC	North American Electric Reliability Corporation
~~NEIL~~	~~Nuclear Electric Insurance Limited~~
NJBPU	New Jersey Board of Public Utilities
NOPR	Notice of Proposed Rulemaking
NOV	~~Notices~~Notice of Violation
NOX_X	Nitrogen Oxide
NRC	Nuclear Regulatory Commission
NSR	New Source Review
NUG	Non-Utility ~~Generator~~Generation
NUGC	Non-Utility Generation Charge

~~NYSE~~OCA	~~New York Stock Exchange~~Office of Consumer Advocate
~~OCC~~OCI	~~Ohio Consumers' Counsel~~Other Comprehensive Income
~~OVEC~~OPEB	~~Ohio Valley Electric Corporation~~Other Post-Employment Benefits
PICA	Penelec Industrial Customer Alliance
PJM	PJM Interconnection ~~L.L.C.~~L. L. C.
PLR	Provider of Last ~~Resort~~Resort; an electric utility’s obligation to provide generation service to customers whose alternative supplier fails to deliver service
PPUC	Pennsylvania Public Utility Commission
PRP	Potentially Responsible Party
PSA	Power Supply Agreement
PUCO	Public Utilities Commission of Ohio
PUHCA	Public Utility Holding Company Act of 1935
RCP	Rate Certainty Plan
REC	Renewable Energy Certificate
RECB	Regional Expansion Criteria and Benefits
RFP	Request ~~For~~for Proposal
ROP	Reactor Oversight Process
RSP	Rate Stabilization Plan
RTC	Regulatory Transition Charge
RTO	Regional Transmission Organization

S&P	Standard & Poor’s Ratings Service
SBC	Societal Benefits Charge
SCR	Selective Catalytic Reduction
SEC	U.S. Securities and Exchange Commission
SECA	Seams Elimination Cost Adjustment
SERP	Supplemental Executive Retirement Plan
SFAS	Statement of Financial Accounting Standards
SFAS 13	SFAS No. 13, “Accounting for Leases”
SFAS 71	SFAS No. 71, "Accounting for the Effects of Certain Types of Regulation"
SFAS 101	SFAS No. 101, "Accounting for Discontinuation of Application of SFAS 71"
SFAS 107	SFAS No. 107, “Disclosure about Fair Value of Financial Instruments”
SFAS 109	SFAS No. 109, “Accounting for Income Taxes”
SFAS 115	SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
SFAS 123(R)	SFAS No. 123(R), "Share-Based Payment"
SFAS 133	SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”
SFAS 141(R)	SFAS No. 141(R), “Business Combinations”
SFAS 142	SFAS No. 142, "Goodwill and Other Intangible Assets"
SFAS 143	SFAS No. 143, "Accounting for Asset Retirement Obligations"
SFAS 144	SFAS No. 144, "Accounting for the Impairment ofor Disposal of Long-Lived Assets"
SFAS 157	SFAS No. 157, “Fair Value Measurements”
SFAS 158	SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132(R)”
SFAS 159	SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”
SFAS 160	SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51”
SIP	State Implementation Plan(s) Under the Clean Air Act
SNCR	Selective Non-Catalytic Reduction
SO2₂	Sulfur Dioxide
TBC	Transition Bond Charge
TMI-1	Three Mile Island Unit 1
TMI-2	Three Mile Island Unit 2
VIE	Variable Interest Entity

	~~Page~~
~~Part I~~
~~Item 1.Business~~	1
~~The Company~~	1
~~Generation Asset Transfers~~	2
~~Divestitures~~	2
~~Utility Regulation~~	2
~~Regulatory Accounting~~	3
~~Reliability Initiatives~~	3
~~PUCO Rate Matters~~	5
~~PPUC Rate Matters~~	6
~~NJBPU Rate Matters~~	8
~~FERC Rate Matters~~	10
~~Capital Requirements~~	11
~~Nuclear Regulation~~	14
~~Nuclear Insurance~~	14
~~Environmental Matters~~	15
~~Clean Air Act Compliance~~	15
~~National Ambient Air Quality Standards~~	16
~~Mercury Emissions~~	16
~~W. H. Sammis Plant~~	17
~~Climate Change~~	17
~~Clean Water Act~~	17
~~Regulation of Hazardous Waste~~	18
~~Fuel Supply~~	18
~~System Capacity and Reserves~~	19
~~Regional Reliability~~	19
~~Competition~~	19
~~Research and Development~~	20
~~Executive Officers~~	21
~~Employees~~	22
~~FirstEnergy Website~~	22

~~Item 1A.Risk Factors~~	22

~~Item 1B.Unresolved Staff Comments~~	30

~~Item 2. Properties~~	30

~~Item 3. Legal Proceedings~~	32

~~Item 4. Submission of Matters to a Vote of Security Holders~~	32

~~Part II~~
~~Item 5. Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities~~	32

~~Item 6. Selected Financial Data~~	33

~~Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations~~	33

~~Item 7A.Quantitative and Qualitative Disclosures About Market Risk~~	33

~~Item 8. Financial Statements and Supplementary Data~~	33

~~Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure~~	33

~~Item 9A.Controls and Procedures~~	33

~~Item 9B.Other Information~~	34

~~Part III~~
~~Item 10.Directors and Executive Officers of the Registrant~~	34

~~Item 11.Executive Compensation~~	35

~~Item 12.Security Ownership of Certain Beneficial Owners and Management and Related~~ ~~Stockholder Matters~~	35

~~Item 13.Certain Relationships and Related Transactions~~	35

~~Item 14.Principal Accounting Fees and Services~~	35

~~Part IV~~
~~Item 15.Exhibits, Financial Statement Schedules~~	36

Regulatory Assets *	OE			CEI			TE			JCP&L			Met-Ed
December 31, 2007	(In millions)
Regulatory transition costs	$	197		$	227		$	71		$	1,630		$	237
Customer shopping incentives		91			393			32			-			-
Customer receivables (payables) for future income taxes		101			18			(1	)		51			126
Loss (Gain) on reacquired debt		23			2			(3	)		25			10
Employee postretirement benefit costs		-			8			4			17			10
Nuclear decommissioning, decontamination
and spent fuel disposal costs		-			-			-			-			(115	)
Asset removal costs		(6	)		(18	)		(11	)		(148	)		-
Property losses and unrecovered plant costs		-			-			-			9			-
MISO/PJM transmission costs		56			34			24			-			226
Fuel costs RCP		111			77			33			-			-
Distribution costs RCP		148			122			51			-			-
Other		16			8			4			12			1
Total	$	737		$	871		$	204		$	1,596		$	495

December 31, 2006
Regulatory transition costs	$	280		$	360		$	134		$	2,207		$	285
Customer shopping incentives		174			368			61			-			-
Customer receivables (payables) for future income taxes		81			3			(4	)		22			116
Societal benefits charge		-			-			-			11			-
Loss (Gain) on reacquired debt		24			-			(3	)		11			11
Employee postretirement benefit costs		-			10			5			20			12
Nuclear decommissioning, decontamination
and spent fuel disposal costs		-			-			-			(1	)		(144	)
Asset removal costs		(2	)		(12	)		(5	)		(148	)		-
Property losses and unrecovered plant costs		-			-			-			19			-
MISO/PJM transmission costs		44			26			16			-			127
Fuel costs RCP		57			39			17			-			-
Distribution costs RCP		74			57			24			-			-
Other		9			4			3			11			2
Total	$	741		$	855		$	248		$	2,152		$	409

Amortization
Period	OE		CEI		TE
	(In millions)
2008	$	207	$	126	$	113
2009		-		212		-
2010		-		273		-
Total Amortization	$	207	$	611	$	113

Customer Receivables	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
December 31, 2007	(In millions)
Billed	$	107	$	143	$	144	$	-	$	162	$	80	$	75
Unbilled		27		106		107		-		159		63		62
Total	$	134	$	249	$	251	$	-	$	321	$	143	$	137
December 31, 2006
Billed	$	104	$	127	$	137	$	1	$	128	$	70	$	69
Unbilled		26		108		108		-		126		57		58
Total	$	130	$	235	$	245	$	1	$	254	$	127	$	127

	Annual Composite
	Depreciation Rate
	2007			2006			2005
OE		2.9	%		2.8	%		2.1	%
CEI		3.6			3.2			2.9
TE		3.9			3.8			3.1
Penn		2.3			2.6			2.4
JCP&L		2.1			2.1			2.2
Met-Ed		2.3			2.3			2.4
Penelec		2.3			2.3			2.6
FGCO		4.0			4.1			N/A
NGC		2.8			2.7			N/A

Accumulated Other Comprehensive Income (Loss)	FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
Net liability for unfunded retirement benefits including the implementation of SFAS 158	$	(4	)	$	(9	)	$	(104	)	$	(42	)	$	(42	)	$	(25	)	$	(7	)
Unrealized gain on investments		126			12			-			5			-			-			-
Unrealized gain (loss) on derivative hedges		(10	)		-			-			-			(2	)		(1	)		-
AOCI (AOCL) Balance, December 31, 2006	$	112		$	3		$	(104	)	$	(37	)	$	(44	)	$	(26	)	$	(7	)

Net liability for unfunded retirement benefits including the implementation of SFAS 158	$	(11	)	$	32		$	(69	)	$	(18	)	$	(18	)	$	(14	)	$	5
Unrealized gain on investments		168			16			-			7			-			-			-
Unrealized gain (loss) on derivative hedges		(16	)		-			-			-			(2	)		(1	)		-
AOCI (AOCL) Balance, December 31, 2007	$	141		$	48		$	(69	)	$	(11	)	$	(20	)	$	(15	)	$	5

Affiliated Company Transactions - 2007	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
Revenues:
Electric sales to affiliates	$	2,901	$	73	$	92	$	167	$	-	$	-	$	-
Ground lease with ATSI		-		12		7		2		-		-		-

Expenses:
Purchased power from affiliates		234		1,261		770		392		-		290		285
Support services		560		146		70		55		100		54		58

Investment Income:
Interest income from affiliates		-		30		17		18		1		1		1
Interest income from FirstEnergy		28		29		2		-		-		-		-

Interest Expense:
Interest expense to affiliates		31		1		1		-		1		1		1
Interest expense to FirstEnergy		34		-		1		10		11		10		11

Affiliated Company Transactions - 2006	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
Revenues:
Electric sales to affiliates	$	2,609	$	80	$	95	$	170	$	14	$	-	$	-
Ground lease with ATSI		-		12		7		2		-		-		-

Expenses:
Purchased power from affiliates		257		1,264		727		363		25		178		154
Support services		602		143		63		63		93		51		55

Investment Income:
Interest income from affiliates		-		75		58		32		1		1		1
Interest income from FirstEnergy		12		25		-		-		-		-		-

Interest Expense:
Interest expense to affiliates		109		-		-		-		-		-		-
Interest expense to FirstEnergy		53		-		7		7		11		5		11

Affiliated Company Transactions - 2005	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
Revenues:
Electric sales to affiliates	$	2,425	$	355	$	362	$	300	$	33	$	-	$	-
Generating units rent from FES		-		146		49		12		-		-		-
Ground lease with ATSI		-		12		7		2		-		-		-

Expenses:
Purchased power from affiliates		308		938		557		295		78		348		321
Support services		64		314		257		171		94		45		51

Investment Income:
Interest income from affiliates		-		25		7		22		-		-		-
Interest income from FirstEnergy		-		22		-		-		-		-		-

Interest Expense:
Interest expense to affiliates		129		-		-		-		-		-		-
Interest expense to FirstEnergy		55		1		-		11		4		2		4

Obligations and Funded Status	Pension Benefits						Other Benefits
As of December 31	2007			2006			2007			2006
	(In millions)
Change in benefit obligation
Benefit obligation as of January 1	$	5,031		$	4,911		$	1,201		$	1,884
Service cost		88			87			21			34
Interest cost		294			276			69			105
Plan participants' contributions		-			-			23			20
Plan amendments		-			-			-			(620	)
Medicare retiree drug subsidy		-			-			-			6
Actuarial (gain) loss		(381	)		38			(30	)		(119	)
Benefits paid		(282	)		(281	)		(102	)		(109	)
Benefit obligation as of December 31	$	4,750		$	5,031		$	1,182		$	1,201

Change in fair value of plan assets
Fair value of plan assets as of January 1	$	4,818		$	4,525		$	607		$	573
Actual return on plan assets		438			567			43			69
Company contribution		311			7			47			54
Plan participants' contribution		-			-			23			20
Benefits paid		(282	)		(281	)		(102	)		(109	)
Fair value of plan assets as of December 31	$	5,285		$	4,818		$	618		$	607

Qualified plan	$	700		$	(43	)
Non qualified plans		(165	)		(170	)
Funded status	$	535		$	(213	)	$	(564	)	$	(594	)

Accumulated benefit obligation	$	4,397		$	4,585

Amounts Recognized in the Statement of
Financial Position
Noncurrent assets	$	700		$	-		$	-		$	-
Current liabilities		(7	)		(7	)		-			-
Noncurrent liabilities		(158	)		(206	)		(564	)		(594	)
Net asset (liability) as of December 31	$	535		$	(213	))	$	(564	)	$	(594	)

Amounts Recognized in
Accumulated Other Comprehensive Income
Prior service cost (credit)	$	83		$	97		$	(1,041	)	$	(1,190	)
Actuarial loss		623			1,039			635			702
Net amount recognized	$	706		$	1,136		$	(406	)	$	(488	)

Assumptions Used to Determine
Benefit Obligations As of December 31
Discount rate		6.50	%		6.00	%		6.50	%		6.00	%
Rate of compensation increase		5.20	%		3.50	%

Allocation of Plan Assets
As of December 31
Asset Category
Equity securities		61	%		64	%		69	%		72	%
Debt securities		30			29			27			26
Real estate		7			5			2			1
Private equities		1			1			-			-
Cash		1			1			2			1
Total		100	%		100	%		100	%		100	%

	Pension Benefits					Other Benefits
Net Pension and OPEB Asset (Liability)	2007		2006			2007			2006
	(In millions)
FES	$	42	$	(157	)	$	(102	)	$	(81	)
OE		229		68			(178	)		(167	)
CEI		62		(13	)		(93	)		(110	)
TE		29		(3	)		(63	)		(74	)
JCP&L		93		15			8			(8	)
Met-Ed		51		7			(8	)		(19	)
Penelec		66		11			(40	)		(49	)

Estimated Items to be Amortized in 2008
Net Periodic Pension Cost from	Pension		Other
Accumulated Other Comprehensive Income	Benefits		Benefits
	(In millions)
Prior service cost (credit)	$	13	$	(149	)
Actuarial loss	$	8	$	47

		Pension Benefits									Other Benefits
Components of Net Periodic Benefit Costs			2007			2006			2005			2007			2006			2005
	(In millions)
Service cost		$	88		$	87		$	80		$	21		$	34		$	40
Interest cost			294			276			262			69			105			111
Expected return on plan assets			(449	)		(396	)		(345	)		(50	)		(46	)		(45	)
Amortization of prior service cost			13			13			10			(149	)		(76	)		(45	)
Recognized net actuarial loss			45			62			39			45			56			40
Net periodic cost		$	(9	)	$	42		$	46		$	(64	)	$	73		$	101

Weighted-Average Assumptions Used
to Determine Net Periodic Benefit Cost		Pension Benefits									Other Benefits
for Years Ended December 31		2007			2006			2005			2007			2006			2005
Discount rate			6.00	%		5.75	%		6.00	%		6.00	%		5.75	%		6.00	%
Expected long-term return on plan assets			9.00	%		9.00	%		9.00	%		9.00	%		9.00	%		9.00	%
Rate of compensation increase			3.50	%		3.50	%		3.50	%

	Pension Benefits									Other Benefits
Net Periodic Pension and OPEB Costs	2007			2006			2005			2007			2006		2005
	(In millions)
FES	$	21		$	40		$	33		$	(10	)	$	14	$	23
OE		(16	)		(6	)		0			(11	)		17		28
CEI		1			4			1			4			11		15
TE		-			1			1			5			8		9
JCP&L		(9	)		(5	)		(1	)		(16	)		2		7
Met-Ed		(7	)		(7	)		(4	)		(10	)		3		1
Penelec		(10	)		(5	)		(5	)		(13	)		7		8

Assumed Health Care Cost Trend Rates
As of December 31	2007			2006
Health care cost trend rate assumed for next
year (pre/post-Medicare)		9-11	%		9-11	%
Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)		5	%		5	%
Year that the rate reaches the ultimate trend
rate (pre/post-Medicare)		2015-2017			2011-2013

	1-Percentage-		1-Percentage-
	Point Increase		Point Decrease
	(In millions)
Effect on total of service and interest cost	$	5	$	(4	)
Effect on accumulated postretirement benefit obligation	$	48	$	(42	)

	2007				2006
	Debt		Equity		Debt		Equity
	Securities		Securities		Securities		Securities
	(In millions)
FES	$	417	$	916	$	365	$	873
OE		45		82		38		80
TE		67		-		61		-
JCP&L(1)		248		102		235		97
Met-Ed		115		172		106		164
Penelec(2)		167		83		151		72

(1)	Excludes $2 million and $3 million of cash in 2007 and 2006, respectively
(2)	Excludes $1 million and $2 million of cash in 2007 and 2006, respectively

	2007								2006
	Cost		Unrealized		Unrealized		Fair		Cost		Unrealized		Unrealized		Fair
	Basis		Gains		Losses		Value		Basis		Gains		Losses		Value
Debt securities	(In millions)
FES	$	402	$	15	$	-	$	417	$	360	$	5	$	-	$	365
OE		43		2		-		45		38		-		-		38
TE		63		4		-		67		61		-		-		61
JCP&L		249		3		4		248		237		2		4		235
Met-Ed		112		3		-		115		105		1		-		106
Penelec		166		1		-		167		150		1		-		151

Equity securities
FES	$	631	$	285	$	-	$	916	$	652	$	221	$	-	$	873
OE		59		23		-		82		61		19		-		80
JCP&L		89		13		-		102		73		24		-		97
Met-Ed		136		36		-		172		114		50		-		164
Penelec		80		3		-		83		55		17		-		72

Capital Leases	FES		OE		CEI		TE
	(In millions)
2008	$	0.1	$	0.1	$	1.0	$	-
2009		-		0.2		1.0		0.1
2010		0.1		0.1		1.0		-
2011		-		0.2		1.0		-
2012		-		0.1		0.6		-
Years thereafter		-		-		-		-
Total minimum lease payments		0.2		0.7		4.6		0.1
Executory costs		-		-		-		-
Net minimum lease payments		0.2		0.7		4.6		0.1
Interest portion		-		0.4		0.9		-
Present value of net minimum
lease payments		0.2		0.3		3.7		0.1
Less current portion		0.1		0.1		0.6		-
Noncurrent portion	$	0.1	$	0.2	$	3.1	$	0.1

Operating Leases	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
2008	$	172.7	$	147.8	$	5.7	$	64.9	$	8.9	$	4.2	$	5.5
2009		175.9		148.8		6.2		65.0		9.4		4.7		5.8
2010		176.8		149.5		6.1		65.0		8.9		4.6		5.6
2011		171.8		148.5		5.8		64.9		7.9		4.2		5.1
2012		215.0		148.3		5.2		64.8		7.0		3.8		4.5
Years thereafter		2,544.6		615.8		29.6		275.2		64.3		47.1		15.0
Total minimum lease payments	$	3,456.8	$	1,358.7	$	58.6	$	599.8	$	106.4	$	68.6	$	41.5