FES was organized under the laws of the State of Ohio in 1997 and provides energy-related products and services, and through its FGCO subsidiary, owns and operates FirstEnergy’s non-nuclear generation businesses (see Generation Asset Transfers below). FENOC was organized under the laws of the State of Ohio in 1998 and operates nuclear generating facilities. FSG is the parent company of several HVAC and energy management companies; MYR is a utility infrastructure construction service company. FESC provides legal, financial and other corporate support services to affiliated FirstEnergy companies.

~~NGC was organized under~~

Report of Independent Registered Public Accounting Firm

To the ~~laws~~Stockholder and Board of

Directors of Ohio Edison Company:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, capitalization, common stockholder’s equity, and cash flows present fairly, in all material respects, the financial position of Ohio Edison Company and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the State of Ohio for the purpose of owning the nuclear generation assets transferred from the Ohio Companies and Penn in furtherance of those subsidiaries’ restructuring plans that were approved by the PUCO and,three years in the ~~case~~period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of ~~Penn,~~America. These financial statements are the PPUC. The intra-system transfer of nuclear generating assets was completed on December 16, 2005. The nuclear generating plant interests transferred do not include leasehold interests of OE and TE in certainresponsibility of the ~~nuclear plants~~Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are ~~subject to sale~~free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and ~~leaseback arrangements with non-affiliates. NGC will sell all capacity, energy~~disclosures in the financial statements, assessing the accounting principles used and ~~ancillary services available from~~significant estimates made by management, and evaluating the ~~transferred nuclear assets, as well as those related~~overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in the notes to the OEconsolidated financial statements, the Company changed the manner in which it accounts for uncertain tax positions as of January 1, 2007 (Note 8), defined benefit pension and ~~TE leasehold interests~~other postretirement plans as of December 31, 2006 (Note 4) and ~~supplied~~conditional asset retirement obligations as of December 31, 2005 (Note 2(G) and Note 11).

As discussed in Note 1 to ~~NGC pursuant~~the consolidated financial statements, the Company has restated its 2007 financial statements to correct an error.

PricewaterhouseCoopers LLP

Cleveland, Ohio

February 28, 2008, except as to the error correction described in Note 1,

which is as of November 24, 2008.

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF INCOME



For the Years Ended December 31,	2007			2006			2005
	(In thousands)
REVENUES (Note 3):
Electric sales	$	2,375,306		$	2,312,956		$	2,861,043
Excise and gross receipts tax collections		116,223			114,500			114,510
Total revenues		2,491,529			2,427,456			2,975,553

EXPENSES (Note 3):
Fuel		11,691			11,047			53,113
Purchased power		1,359,783			1,275,975			939,193
Nuclear operating costs		174,696			186,377			337,901
Other operating costs		381,339			378,717			404,763
Provision for depreciation		77,405			72,982			108,583
Amortization of regulatory assets		191,885			190,245			457,205
Deferral of new regulatory assets		(177,633	)		(159,465	)		(151,032	)
General taxes		181,104			180,446			193,284
Total expenses		2,200,270			2,136,324			2,343,010

OPERATING INCOME		291,259			291,132			632,543

OTHER INCOME (EXPENSE) (Note 3):
Investment income		85,848			130,853			99,269
Miscellaneous income (expense)		4,409			1,751			(25,190	)
Interest expense		(83,343	)		(90,355	)		(75,388	)
Capitalized interest		266			2,198			10,849
Subsidiary's preferred stock dividend requirements		-			(597	)		(1,689	)
Total other income		7,180			43,850			7,851

INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE		298,439			334,982			640,394

INCOME TAXES		101,273			123,343			309,996

INCOME BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE		197,166			211,639			330,398

Cumulative effect of a change in accounting principle
(net of income tax benefit of $9,223,000) (Note 2(G))		-			-			(16,343	)

NET INCOME		197,166			211,639			314,055

PREFERRED STOCK DIVIDEND REQUIREMENTS
AND REDEMPTION PREMIUM		-			4,552			2,635

EARNINGS ON COMMON STOCK	$	197,166		$	207,087		$	311,420


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

OHIO EDISON COMPANY

CONSOLIDATED BALANCE SHEETS

As of December 31,	2007		2006
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	732	$	712
Receivables-
Customers (less accumulated provisions of $8,032,000 and $15,033,000, respectively,
for uncollectible accounts)		248,990		234,781
Associated companies		185,437		141,084
Other (less accumulated provisions of $5,639,000 and $1,985,000, respectively,
for uncollectible accounts)		12,395		13,496
Notes receivable from associated companies		595,859		458,647
Prepayments and other		10,341		13,606
		1,053,754		862,326
UTILITY PLANT:
In service		2,769,880		2,632,207
Less - Accumulated provision for depreciation		1,090,862		1,021,918
		1,679,018		1,610,289
Construction work in progress		50,061		42,016
		1,729,079		1,652,305
OTHER PROPERTY AND INVESTMENTS:
Long-term notes receivable from associated companies		258,870		1,219,325
Investment in lease obligation bonds (Note 6)		253,894		291,393
Nuclear plant decommissioning trusts		127,252		118,209
Other		36,037		38,160
		676,053		1,667,087
DEFERRED CHARGES AND OTHER ASSETS:
Regulatory assets		737,326		741,564
Pension assets		228,518		68,420
Property taxes		65,520		60,080
Unamortized sale and leaseback costs		45,133		50,136
Other		48,075		18,696
		1,124,572		938,896
	$	4,583,458	$	5,120,614
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	333,224	$	159,852
Short-term borrowings-
Associated companies		50,692		113,987
Other		2,609		3,097
Accounts payable-
Associated companies		174,088		115,252
Other		19,881		13,068
Accrued taxes		89,571		187,306
Accrued interest		22,378		24,712
Other		65,163		64,519
		757,606		681,793
CAPITALIZATION (See Consolidated Statements of Capitalization):
Common stockholder's equity		1,576,175		1,972,385
Long-term debt and other long-term obligations		840,591		1,118,576
		2,416,766		3,090,961
NONCURRENT LIABILITIES:
Accumulated deferred income taxes		781,012		674,288
Accumulated deferred investment tax credits		16,964		20,532
Asset retirement obligations		93,571		88,223
Retirement benefits		178,343		167,379
Deferred revenues - electric service programs		46,849		86,710
Other		292,347		310,728
		1,409,086		1,347,860
COMMITMENTS AND CONTINGENCIES (Notes 6 and 13)
	$	4,583,458	$	5,120,614


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

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF CAPITALIZATION

As of December 31,	2007			2006
	(In thousands)
COMMON STOCKHOLDER'S EQUITY:
Common stock, without par value, 175,000,000 shares authorized,
60 and 80 shares outstanding, respectively	$	1,220,512		$	1,708,441
Accumulated other comprehensive income (Note 2(F))		48,386			3,208
Retained earnings (Note 10(A))		307,277			260,736
Total		1,576,175			1,972,385

LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS (Note 10(C)):
Ohio Edison Company-
Secured notes:
5.375% due 2028		13,522			13,522
* 3.780% due 2029		-			100,000
* 3.750% due 2029		-			6,450
7.008% weighted average interest rate due 2007-2010		3,900			8,253
Total		17,422			128,225

Unsecured notes:
4.000% due 2008		175,000			175,000
* 3.400% due 2014		50,000			50,000
5.450% due 2015		150,000			150,000
6.400% due 2016		250,000			250,000
* 3.850% due 2018		33,000			33,000
* 3.800% due 2018		23,000			23,000
* 3.750% due 2023		50,000			50,000
6.875% due 2036		350,000			350,000
Total		1,081,000			1,081,000

Pennsylvania Power Company-
First mortgage bonds:
9.740% due 2007-2019		11,721			12,695
7.625% due 2023		6,500			6,500
Total		18,221			19,195

Secured notes:
5.400% due 2013		1,000			1,000
5.375% due 2028		1,734			1,734
Total		2,734			2,734

Unsecured notes:
5.390% due 2010 to associated company		62,900			62,900
Total		62,900			62,900

Capital lease obligations (Note 6)		329			362
Net unamortized discount on debt		(8,791	)		(15,988	)
Long-term debt due within one year		(333,224	)		(159,852	)
Total long-term debt and other long-term obligations		840,591			1,118,576
TOTAL CAPITALIZATION	$	2,416,766		$	3,090,961

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

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

OHIO EDISON 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					100		$	2,098,729		$	(47,118	)	$	442,198
Net income	$	314,055												314,055
Minimum liability for unfunded retirement
benefits, net of $49,027,000 of income taxes		69,463									69,463
Unrealized loss on investments, net of
$13,068,000 of income tax benefits		(18,251	)								(18,251	)
Comprehensive income	$	365,267
Affiliated company asset transfers								198,147						(106,774	)
Restricted stock units								32
Preferred stock redemption adjustment								345
Cash dividends on preferred stock														(2,635	)
Cash dividends on common stock														(446,000	)
Balance, December 31, 2005					100			2,297,253			4,094			200,844
Net income	$	211,639												211,639
Unrealized gain on investments, net of
$4,455,000 of income taxes		7,954									7,954
Comprehensive income	$	219,593
Net liability for unfunded retirement benefits
due to the implementation of SFAS 158, net
of $22,287,000 of income tax benefits (Note 4)											(8,840	)
Affiliated company asset transfers								(87,893	)
Restricted stock units								58
Stock based compensation								82
Repurchase of common stock					(20	)		(500,000	)
Preferred stock redemption adjustments								(1,059	)					604
Preferred stock redemption premiums														(2,928	)
Cash dividends on preferred stock														(1,423	)
Cash dividends on common stock														(148,000	)
Balance, December 31, 2006					80			1,708,441			3,208			260,736
Net income	$	197,166												197,166
Unrealized gain on investments, net of
$2,784,000 of income taxes		3,874									3,874
Pension and other postretirement benefits, net
of $37,820,000 of income taxes (Note 4)		41,304									41,304
Comprehensive income	$	242,344
Restricted stock units								129
Stock based compensation								17
Repurchase of common stock					(20	)		(500,000	)
Consolidated tax benefit allocation								11,925
FIN 48 cumulative effect adjustment														(625	)
Cash dividends on common stock														(150,000	)
Balance, December 31, 2007					60		$	1,220,512		$	48,386		$	307,277

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

OHIO 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	$	197,166		$	211,639		$	314,055
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		77,405			72,982			108,583
Amortization of regulatory assets		191,885			190,245			457,205
Deferral of new regulatory assets		(177,633	)		(159,465	)		(151,032	)
Nuclear fuel and lease amortization		33			735			45,769
Amortization of lease costs		(7,425	)		(7,928	)		(6,365	)
Deferred income taxes and investment tax credits, net		423			(68,259	)		(29,750	)
Accrued compensation and retirement benefits		(46,313	)		5,004			14,506
Cumulative effect of a change in accounting principle		-			-			16,343
Pension trust contributions		(20,261	)		-			(106,760	)
Decrease (increase) in operating assets-
Receivables		(57,461	)		103,925			84,688
Materials and supplies		-			-			(3,367	)
Prepayments and other current assets		3,265			1,275			(1,778	)
Increase (decrease) in operating liabilities-
Accounts payable		15,649			(53,798	)		45,149
Accrued taxes		(81,079	)		23,436			10,470
Accrued interest		(2,334	)		16,379			(3,659	)
Electric service prepayment programs		(39,861	)		(34,983	)		121,692
Other		6,096			5,882			(464	)
Net cash provided from operating activities		59,555			307,069			915,285

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		-			592,180			146,450
Short-term borrowings, net		-			-			26,404
Redemptions and Repayments-
Common stock		(500,000	)		(500,000	)		-
Preferred stock		-			(78,480	)		(37,750	)
Long-term debt		(112,497	)		(613,002	)		(414,020	)
Short-term borrowings, net		(114,475	)		(186,511	)		-
Dividend Payments-
Common stock		(100,000	)		(148,000	)		(446,000	)
Preferred stock		-			(1,423	)		(2,635	)
Net cash used for financing activities		(826,972	)		(935,236	)		(727,551	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(145,311	)		(123,210	)		(266,823	)
Sales of investment securities held in trusts		37,736			39,226			283,816
Purchases of investment securities held in trusts		(43,758	)		(41,300	)		(315,356	)
Loan repayments from (loans to) associated companies, net		(79,115	)		78,101			(35,553	)
Collection of principal on long-term notes receivable		960,327			553,734			199,848
Cash investments		37,499			112,584			(49,270	)
Other		59			8,815			(4,697	)
Net cash provided from (used for) investing activities		767,437			627,950			(188,035	)

Net increase (decrease) in cash and cash equivalents		20			(217	)		(301	)
Cash and cash equivalents at beginning of year		712			929			1,230
Cash and cash equivalents at end of year	$	732		$	712		$	929

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid During the Year-
Interest (net of amounts capitalized)	$	80,958		$	57,243		$	67,239
Income taxes	$	133,170		$	156,610		$	285,819

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

Report of Independent Registered Public Accounting Firm

To the Stockholder and Board of Directors of

The Cleveland Electric Illuminating Company:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, capitalization, common stockholder’s equity, and cash flows present fairly, in all material respects, the financial position of The Cleveland Electric Illuminating Company and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a ~~power supply agreement~~test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in the notes to the consolidated financial statements, the Company changed the manner in which it accounts for uncertain tax positions as of January 1, 2007 (Note 8), defined benefit pension and other postretirement plans as of December 31, 2006 (Note 4) and conditional asset retirement obligations as of December 31, 2005 (Note 2(G) and Note 11).

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2007 financial statements to correct an error.

PricewaterhouseCoopers LLP

Cleveland, Ohio

February 28, 2008, except as to the error correction described in Note 1,

which is as of November 24, 2008.

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.

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.

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.

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.

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.

Report of Independent Registered Public Accounting Firm

To the Stockholder and Board of

Directors of The Toledo Edison Company:

As discussed in the notes to the consolidated financial statements, the Company changed the manner in which it accounts for uncertain tax positions as of January 1, 2007 (Note 8) and defined benefit pension and other postretirement plans as of December 31, 2006 (Note 4).

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2007 financial statements to correct an error.

PricewaterhouseCoopers LLP

Cleveland, Ohio

February 28, 2008, except as to the error correction described in Note 1,

which is as of November 24, 2008.

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.

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.

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.

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.

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.

Report of Independent Registered Public Accounting Firm

To the Stockholder and Board of

Directors of Pennsylvania Electric Company:

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2007 financial statements to correct an error.

PricewaterhouseCoopers LLP

Cleveland, Ohio

February 28, 2008, except as to the error correction described in Note 1,

which is as of November 24, 2008.

PENNSYLVANIA ELECTRIC COMPANY

CONSOLIDATED STATEMENTS OF INCOME



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

REVENUES:
Electric sales	$	1,336,517		$	1,086,781		$	1,063,841
Gross receipts tax collections		65,508			61,679			58,184
Total revenues		1,402,025			1,148,460			1,122,025

EXPENSES:
Purchased power (Note 3)		790,354			626,367			620,509
Other operating costs (Note 3)		234,949			203,868			257,869
Provision for depreciation		49,558			48,003			49,410
Amortization of regulatory assets		55,863			52,477			50,348
Deferral of new regulatory assets		(9,102	)		(30,590	)		(3,239	)
General taxes		76,050			72,612			68,984
Total expenses		1,197,672			972,737			1,043,881

OPERATING INCOME		204,353			175,723			78,144

OTHER INCOME (EXPENSE):
Miscellaneous income		6,501			8,986			5,013
Interest expense (Note 3)		(54,840	)		(45,278	)		(39,900	)
Capitalized interest		939			1,290			908
Total other expense		(47,400	)		(35,002	)		(33,979	)

INCOME BEFORE INCOME TAXES		156,953			140,721			44,165

INCOME TAX EXPENSE		64,015			56,539			16,612

INCOME BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE		92,938			84,182			27,553

Cumulative effect of a change in accounting principle
(net of income tax benefit of $566,000) (Note 2(G))		-			-			(798	)

NET INCOME	$	92,938		$	84,182		$	26,755

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

PENNSYLVANIA ELECTRIC COMPANY

CONSOLIDATED BALANCE SHEETS

As of December 31,	2007		2006
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	46	$	44
Receivables-
Customers (less accumulated provisions of $3,905,000 and $3,814,000,
respectively, for uncollectible accounts)		137,455		126,639
Associated companies		22,014		49,728
Other		19,529		16,367
Notes receivable from associated companies		16,313		19,548
Prepayments and other		3,077		4,236
		198,434		216,562
UTILITY PLANT:
In service		2,219,002		2,141,324
Less - Accumulated provision for depreciation		838,621		809,028
		1,380,381		1,332,296
Construction work in progress		24,251		22,124
		1,404,632		1,354,420
OTHER PROPERTY AND INVESTMENTS:
Nuclear plant decommissioning trusts		137,859		125,216
Non-utility generation trusts		112,670		99,814
Other		531		531
		251,060		225,561
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill		777,904		860,716
Pension assets		66,111		11,474
Other		33,893		36,059
		877,908		908,249
	$	2,732,034	$	2,704,792
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Short-term borrowings-
Associated companies	$	214,893	$	199,231
Accounts payable-
Associated companies		83,359		92,020
Other		51,777		47,629
Accrued taxes		15,111		11,670
Accrued interest		13,167		7,224
Other		25,311		21,178
		403,618		378,952
CAPITALIZATION (See Consolidated Statements of Capitalization):
Common stockholder's equity		1,072,057		1,378,058
Long-term debt and other long-term obligations		777,243		477,304
		1,849,300		1,855,362
NONCURRENT LIABILITIES:
Regulatory liabilities		73,559		96,151
Accumulated deferred income taxes		210,776		193,662
Retirement benefits		41,298		50,394
Asset retirement obligations		81,849		76,924
Other		71,634		53,347
		479,116		470,478
COMMITMENTS AND CONTINGENCIES (Notes 6 and 13)
	$	2,732,034	$	2,704,792

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

PENNSYLVANIA ELECTRIC COMPANY

CONSOLIDATED STATEMENTS OF CAPITALIZATION

As of December 31,	2007			2006
	(In thousands)
COMMON STOCKHOLDER'S EQUITY:
Common stock, $20 par value, 5,400,000 shares authorized,
4,427,577 and 5,290,596 shares outstanding, respectively	$	88,552		$	105,812
Other paid-in capital		920,616			1,189,434
Accumulated other comprehensive income (loss) (Note 2(F))		4,946			(7,193	)
Retained earnings (Note 10(A))		57,943			90,005
Total		1,072,057			1,378,058



LONG-TERM DEBT (Note 10(C)):
First mortgage bonds-
5.350% due 2010		12,310			12,310
5.350% due 2010		12,000			12,000
Total		24,310			24,310

Unsecured notes-
6.125% due 2009		100,000			100,000
7.770% due 2010		35,000			35,000
5.125% due 2014		150,000			150,000
6.050% due 2017		300,000			-
6.625% due 2019		125,000			125,000
* 4.250% due 2020		20,000			20,000
* 4.350% due 2025		25,000			25,000
Total		755,000			455,000


Net unamortized discount on debt		(2,067	)		(2,006	)
Total long-term debt		777,243			477,304
TOTAL CAPITALIZATION	$	1,849,300		$	1,855,362


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

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

PENNSYLVANIA ELECTRIC COMPANY

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY



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

Balance, January 1, 2005				5,290,596		$	105,812		$	1,205,948		$	(52,813	)	$	46,068
Net income	$	26,755														26,755
Net unrealized gain on investments, net
of $4,000 of income taxes		3											3
Net unrealized gain on derivative instruments, net
of $24,000 of income taxes		40											40
Minimum liability for unfunded retirement benefits,
net of $37,206,000 of income taxes		52,461											52,461
Comprehensive income	$	79,259
Restricted stock units										20
Cash dividends on common stock																(47,000	)
Purchase accounting fair value adjustment										(3,417	)
Balance, December 31, 2005				5,290,596			105,812			1,202,551			(309	)		25,823
Net income	$	84,182														84,182
Net unrealized gain on investments, net
of $4,000 of income taxes		2											2
Net unrealized gain on derivative instruments, net
of $27,000 of income taxes		38											38
Comprehensive income	$	84,222
Net liability for unfunded retirement benefits
due to the implementation of SFAS 158, net
of $17,340,000 of income tax benefits (Note 4)													(6,924	)
Restricted stock units										46
Stock based compensation										21
Cash dividends on common stock																(20,000	)
Purchase accounting fair value adjustment										(13,184	)
Balance, December 31, 2006				5,290,596			105,812			1,189,434			(7,193	)		90,005
Net income	$	92,938														92,938
Net unrealized gain on investments net of
of $12,000 of income tax benefits		21											21
Net unrealized gain on derivative instruments, net
of $16,000 of income taxes		49											49
Pension and other postretirement benefits, net
of $15,413,000 of income taxes (Note 4)		12,069											12,069
Comprehensive income	$	105,077
Restricted stock units										107
Stock based compensation										7
Consolidated tax benefit allocation										1,261
Repurchase of common stock				(863,019	)		(17,260	)		(182,740	)
Cash dividends on common stock																(125,000	)
Purchase accounting fair value adjustment										(87,453	)
Balance, December 31, 2007				4,427,577		$	88,552		$	920,616		$	4,946		$	57,943

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

PENNSYLVANIA ELECTRIC 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	$	92,938		$	84,182		$	26,755
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation		49,558			48,003			49,410
Amortization of regulatory assets		55,863			52,477			50,348
Deferral of new regulatory assets		(9,102	)		(30,590	)		(3,239	)
Deferred costs recoverable as regulatory assets		(71,939	)		(80,942	)		(59,224	)
Deferred income taxes and investment tax credits, net		10,713			28,568			8,823
Accrued compensation and retirement benefits		(20,830	)		5,125			3,596
Cumulative effect of a change in accounting principle		-			-			798
Pension trust contributions		(13,436	)		-			(20,000	)
Decrease (increase) in operating assets-
Receivables		18,771			14,299			70,330
Prepayments and other current assets		1,159			683			(737	)
Increase (decrease) in operating liabilities-
Accounts payable		(59,513	)		67,602			(10,067	)
Accrued taxes		4,743			(1,524	)		19,905
Accrued interest		5,943			(638	)		(790	)
Other		13,125			8,363			7,158
Net cash provided from operating activities		77,993			195,608			143,066

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt		296,899			-			45,000
Short-term borrowings, net		15,662			-			19,663
Redemptions and Repayments-
Common Stock		(200,000	)		-			-
Long-term debt		-			-			(56,538	)
Short-term borrowings, net		-			(61,928	)		-
Dividend Payments-
Common stock		(70,000	)		(20,000	)		(47,000	)
Net cash provided from (used for) financing activities		42,561			(81,928	)		(38,875	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions		(94,991	)		(106,980	)		(107,602	)
Loan repayments from (loans to) associated companies, net		3,235			(1,924	)		3,730
Sales of investment securities held in trusts		175,222			99,469			92,623
Purchases of investment securities held in trusts		(199,375	)		(99,469	)		(92,623	)
Other, net		(4,643	)		(4,767	)		(320	)
Net cash used for investing activities		(120,552	)		(113,671	)		(104,192	)

Net increase (decrease) in cash and cash equivalents		2			9			(1	)
Cash and cash equivalents at beginning of year		44			35			36
Cash and cash equivalents at end of year	$	46		$	44		$	35

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid During the Year-
Interest (net of amounts capitalized)	$	44,503		$	41,976		$	35,387
Income taxes (refund)	$	2,996		$	29,189		$	(42,324	)


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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

FES ~~pursuant to a power sale agreement for subsequent resale to wholesale~~ and ~~retail customers. FENOC operates~~the Companies are wholly owned subsidiaries of FirstEnergy. FES’ consolidated financial statements include its wholly owned subsidiaries, FGCO and ~~maintains the nuclear assets owned by~~ NGC. ~~NGC is a direct~~OE’s consolidated financial statements include its wholly owned subsidiary, ~~of FirstEnergy.~~

~~Reference is made to Note 16, Segment Information, of the Notes to Consolidated Financial Statements contained in Item 8 for information regarding FirstEnergy's reportable segments.~~

~~Generation Asset Transfers~~

~~On May 13, 2005, Penn, and on May 18, 2005, the Ohio Companies entered into certain agreements implementing a series of intra-system generation asset transfers that were completed in~~Penn. In the fourth quarter ~~2005. The asset transfers resulted in the respective undivided ownership interests~~ of the Ohio Companies and Penn in FirstEnergy’s nuclear and non-nuclear generation assets being owned by NGC, and FGCO, respectively. The generating plant interests transferred do not include leasehold interests of CEI, TE and OE in certain of the plants that are currently subject to sale and leaseback arrangements with non-affiliates.

~~On October 24,~~ 2005, the Ohio Companies and Penn completed the intra-system ~~transfer~~transfers of their non-nuclear and nuclear generation assets to ~~FGCO. Prior~~FGCO and NGC, respectively (see Note 14).

FES’ consolidated financial statements as of December 31, 2007 and 2006 and for the three years ended December 31, 2007 represent the financial position, results of operations and cash flows as if the intra-system generation asset transfers had occurred as of December 31, 2003. Certain financial results, net assets and net cash flows related to the ~~transfer, FGCO, as lessee under a Master Facility Lease with~~ownership of the Ohio Companies and Penn ~~leased, operated and maintained~~of the ~~non-nuclear~~transferred generation assets ~~that it now owns. The~~prior to the asset transfers ~~were consummated pursuant to FGCO’s purchase option under the Master Facility Lease.~~are reflected in FES’ consolidated financial statements.

On December ~~16, 2005,~~28, 2006, the ~~Ohio Companies and Penn completed~~NRC approved the ~~intra-system~~ transfer of ~~their respective interests~~ownership in ~~the nuclear generation assets~~NGC from FirstEnergy to FES. Effective December 31, 2006, NGC ~~through, in the case~~is a wholly owned subsidiary of OEFES and ~~Penn,~~ a ~~spin-off by way~~second tier subsidiary of ~~dividend and, in the case of CEI and TE, a sale at net book value.~~FirstEnergy. FENOC continues to operate and maintain the nuclear generation assets. FES’ consolidated financial statements assume that this corporate restructuring occurred as of December 31, 2003, with the FES’ and NGC’s financial position, results of operations and cash flows combined at the end of 2003 and associated company transactions and balances eliminated in consolidation.

~~These~~FES and the Companies follow GAAP and comply with the regulations, orders, policies and practices prescribed by the SEC, FERC and, as applicable, the PUCO, PPUC and NJBPU. The preparation of financial statements in conformity with GAAP requires management to make periodic estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from these estimates. The reported results of operations are not indicative of results of operations for any future period.

FES and the Companies consolidate all majority-owned subsidiaries over which they exercise control and, when applicable, entities for which they have a controlling financial interest. Intercompany transactions ~~were undertaken pursuant~~and balances are eliminated in consolidation. FES and the Companies consolidate a VIE (see Note 7) when they are determined to be the VIE's primary beneficiary. Investments in non-consolidated affiliates over which FES and the Companies have the ability to exercise significant influence, but not control (20-50% owned companies, joint ventures and partnerships) are accounted for under the equity method. Under the equity method, the interest in the entity is reported as an investment in the Consolidated Balance Sheets and the percentage share of the entity’s earnings is reported in the Consolidated Statements of Income.

Certain prior year amounts have been reclassified to conform to the ~~Ohio Companies’~~current year presentation. These reclassifications did not change previously reported earnings for 2006 and ~~Penn’s restructuring plans that were approved by~~2005. Unless otherwise indicated, defined terms used herein have the ~~PUCO and~~meanings set forth in 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 businessaccompanying Glossary of those companies through transfer 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 operationTerms.

Restatement of the ~~plants.~~Consolidated Statements of Cash Flows

~~Divestitures~~OE, CEI, TE and Penelec are restating their respective 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, 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.

~~In 2005, FirstEnergy sold three FSG subsidiaries - Pennsylvania-based Elliott-Lewis Corporation, Ohio-based Spectrum Control Systems, Inc.~~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 ~~Maryland-based L. H. Cranston and Sons, Inc. - and a MYR subsidiary - Power Piping Company, resulting~~consolidated statements of common stockholder's equity as of December 31, 2007 contained in ~~an aggregate after-tax gain of $13 million. All of these sales, with~~ the ~~exception of L. H. Cranston and Sons, Inc. met~~combined Form 10-K for the ~~discontinued operations criteria.~~fiscal year ended December 31, 2007, as originally filed on February 29, 2008.

~~In March 2005, FES completed~~The effects of the ~~sale~~corrections on OE’s, CEI’s, TE’s and Penelec’s Consolidated Statements of ~~its retail natural gas business~~Cash Flows for an after-tax gain of $5 million. Also in March 2005, FirstEnergy sold 51% of its interest in FirstCom, resulting in an after-tax gain of $4 million. FirstEnergy accounts for its remaining 31.85% interest in FirstCom on the ~~equity basis.~~year ended December 31, 2007 are as follows:

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

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

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	$	-		$	-

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~Utility Regulation~~(A) ACCOUNTING FOR THE EFFECTS OF REGULATION

On August 8, 2005 President Bush signed into law the EPACT. This law has far reaching implications that will affect various aspects of electric generation, transmission and distribution. One of the most significant provisions of the new legislation gives the FERC authority to certify ERO that will establish and enforce mandatory bulk power liability standards, subject to FERC review and approval. The EPACT repealed PUHCA effective February 2006. PUHCA imposed financial and operational restrictions on many aspects of our business. Some of PUHCA’s consumer protection authority will be transferred to FERC and state utility commissions. FERC will now exercise authority over the issuance of certain securities and the assumption of certain liabilities. The EPACT also provides for tax credits for the development of certain clean coal and emissions technologies.

Each of the Companies’ retail rates, conditions of service, issuance of securities and other matters are also subject to regulation in the state in which each operates - Ohio by the PUCO, New Jersey by the NJBPU and in Pennsylvania by the PPUC. With respect to their wholesale and interstate electric operations and rates, the Companies are subject to regulation, including regulation of their accounting policies and practices, by the FERC. Under Ohio law, municipalities may regulate rates, subject to appeal to the PUCO if not acceptable to the utility.

~~Regulatory Accounting~~

The Companies and ATSI recognize, as regulatory assets, costs which the FERC, PUCO, PPUC and NJBPU have authorized for recovery from customers in future periods or for which authorization is probable. Without the probability of such authorization, costs currently recorded as regulatory assets would have been charged to income as incurred. All regulatory assets are expected to be recovered from customers under the Companies' respective transition and regulatory plans. Based on those plans, the Companies continue to bill and collect cost-based rates for their transmission and distribution services, which remain regulated; accordingly, it is appropriate that the Companies continue the application of SFAS 71 to those operations.

~~FirstEnergy accounts~~account for the effects of regulation through the application of SFAS 71 ~~to its operating utilities~~ since their rates:

▪

are established by a third-party regulator with the authority to set rates that bind customers;


· ▪	are cost-based; and


· ▪	can be charged to and collected from customers.

An enterprise meeting all of these criteria capitalizes costs that would otherwise be charged to expense if the rate actions of its regulator make it probable that those costs will be recovered in future revenue. SFAS 71 is applied only to the parts of the business that meet the above criteria. If a portion of the business applying SFAS 71 no longer meets those requirements, previously recorded net regulatory assets are removed from the balance sheet in accordance with the guidance in SFAS 101.

In Ohio, ~~Pennsylvania~~New Jersey and ~~New Jersey,~~Pennsylvania, laws applicable to electric industry restructuring contain similar provisions that are reflected in the ~~Companies’~~Companies' respective state regulatory plans. These provisions include:

▪

restructuring the electric generation business and allowing the ~~Companies’~~Companies' customers to select a competitive electric generation supplier other than the Companies;


· ▪	establishing or defining the PLR obligations to customers in the ~~Companies’~~Companies' service areas;


· ▪	providing the Companies with the opportunity to recover potentially stranded investment (or transition costs) not otherwise recoverable in a competitive generation market;


· ▪	itemizing (unbundling) the price of electricity into its component elements - including generation, transmission, distribution and stranded costs recovery charges;


· ▪	continuing regulation of the ~~Companies’~~Companies' transmission and distribution systems; and


· ▪	requiring corporate separation of regulated and unregulated business activities.

Regulatory Assets

The Companies recognize, as regulatory assets, costs which the FERC, PUCO, PPUC and NJBPU have authorized for recovery from customers in future periods or for which authorization is probable. Without the probability of such authorization, costs currently recorded as regulatory assets would have been charged to income as incurred. Regulatory assets that do not earn a current return totaled approximately $140 million as of December 31, 2007 (JCP&L - $84 million, Met-Ed - $54 million and Penelec - $2 million). Regulatory assets not earning a current return will be recovered by 2014 for JCP&L and by 2020 for Met-Ed and Penelec.

331

Regulatory assets on the Companies' Consolidated Balance Sheets are comprised of the following:

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

Penn had net regulatory liabilities of approximately $67 million and $68 million as of December 31, 2007 and 2006, respectively. Penelec had net regulatory liabilities of approximately $74 million and $96 million as of December 31, 2007 and 2006, respectively. These net regulatory liabilities are included in Other Non-current Liabilities on the Consolidated Balance Sheets.

In accordance with the RCP, recovery of the aggregate of the regulatory transition costs and the Extended RTC (deferred customer shopping incentives and interest costs) amounts are expected to be complete for OE and TE by December 31, 2008. CEI's recovery of regulatory transition costs is projected to be complete by April 2009 at which time recovery of its Extended RTC will begin, with recovery estimated to be complete as of December 31, 2010. At the end of their respective recovery periods, any remaining unamortized regulatory transition costs and Extended RTC balances will be reduced by applying any remaining cost of removal regulatory liability balances -- any remaining regulatory transition costs and Extended RTC balances will be written off. The RCP allows the Ohio Companies to defer and capitalize certain distribution costs during the period January 1, 2006 through December 31, 2008, not to exceed $150 million in each of the years 2006, 2007 and 2008. These deferrals will be recovered in distribution rates effective on or after January 1, 2009. In addition, the Ohio Companies deferred certain fuel costs through December 31, 2007 that were incurred above the amount collected through a fuel recovery mechanism in accordance with the RCP (see Note 9(B)).

~~Reliability Initiatives~~Transition Cost Amortization

The Ohio Companies amortize transition costs using the effective interest method. Extended RTC amortization is equal to the related revenue recovery that is recognized. The following table provides the estimated net amortization of regulatory transition costs and Extended RTC amounts (including associated carrying charges) under the RCP for the period 2008 through 2010:

Amortization
Period	OE		CEI		TE
	(In millions)
2008	$	207	$	126	$	113
2009		-		212		-
2010		-		273		-
Total Amortization	$	207	$	611	$	113

JCP&L's and Met-Ed's regulatory transition costs include the deferral of above-market costs for power supplied from NUGs of $875 million for JCP&L (recovered through BGS and MTC revenues) and $185 million for Met-Ed (recovered through CTC revenues). The liability for JCP&L's projected above-market NUG costs and corresponding regulatory asset are adjusted to fair value at the end of each quarter. Recovery of the remaining regulatory transition costs is expected to continue pursuant to various regulatory proceedings in New Jersey and Pennsylvania (See Note 9).

(B) REVENUES AND RECEIVABLES

Electric service provided to FES and the Companies' retail customers is metered on a cycle basis. Electric revenues are recorded based on energy delivered through the end of the calendar month. An estimate of unbilled revenues is calculated to recognize electric service provided between the last meter reading and the end of the month. This estimate includes many factors including historical customer usage, load profiles, estimated weather impacts, customer shopping activity and prices in effect for each class of customer. In each accounting period, FES and the Companies accrue the estimated unbilled amount receivable as revenue and reverse the related prior period estimate.

Receivables from customers include sales to residential, commercial and industrial customers and sales to wholesale customers. There was no material concentration of receivables as of December 31, 2007 with respect to any particular segment of customers. Billed and unbilled customer receivables for FES and the Companies as of December 31, 2007 and 2006 are shown below.

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

FES holds emission allowances for SO2 and NOX in order to comply with programs implemented by the EPA designed to regulate emissions of SO2 and NOX produced by power plants. Emission allowances are either granted by the EPA at zero cost or are purchased at fair value as needed to meet emission requirements. Emission allowances are not purchased with the intent of resale. Emission allowances eligible to be used in the current year are recorded in materials and supplies inventory at the lesser of weighted average cost or market value. Emission allowances eligible for use in future years are recorded as other investments. FES recognizes emission allowance costs as fuel expense during the periods that emissions are produced by its generating facilities. Excess emission allowances that are not needed to meet emission requirements may be sold and are reported as a reduction to other operating expenses.

(D) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment reflects original cost (except for nuclear generating assets which were adjusted to fair value in accordance with SFAS 144), including payroll and related costs such as taxes, employee benefits, administrative and general costs, and interest costs incurred to place the assets in service. The costs of normal maintenance, repairs and minor replacements are expensed as incurred. FES' accounting policy for planned major maintenance projects is to recognize liabilities as they are incurred.

FES and the Companies provide for depreciation on a straight-line basis at various rates over the estimated lives of property included in plant in service. The respective annual composite rates for FES and the Companies electric plant in 2007, 2006 and 2005 are shown in the following table:

	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

Jointly-Owned Generating Stations

JCP&L holds a 50% ownership interest in Yards Creek Pumped Storage Facility with a net book value of approximately $19.5 million as of December 31, 2007.

Asset Retirement Obligations

FES and the Companies recognize liabilities for retirement obligations associated with tangible assets in accordance with SFAS 143 and FIN 47. These standards require recognition of the fair value of a liability for an ARO in the period in which it is incurred. The associated asset retirement costs are capitalized as part of the carrying value of the long-lived asset and depreciated over time, as described further in Note 11.

Nuclear Fuel

FES property, plant and equipment includes nuclear fuel recorded at original cost, which includes material, enrichment, fabrication and interest costs incurred prior to reactor load. Nuclear fuel is amortized based on the units of production method.

(E) ASSET IMPAIRMENTS

Long-Lived Assets

FES and the Companies evaluate the carrying value of their long-lived assets when events or circumstances indicate that the carrying amount may not be recoverable. In accordance with SFAS 144, the carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, a loss is recognized for the amount by which the carrying value of the long-lived asset exceeds its estimated fair value. Fair value is estimated by using available market valuations or the long-lived asset's expected future net discounted cash flows. The calculation of expected cash flows is based on estimates and assumptions about future events.

Goodwill

In a business combination, the excess of the purchase price over the estimated fair values of assets acquired and liabilities assumed is recognized as goodwill. Based on the guidance provided by SFAS 142, FES and the Companies evaluate their goodwill for impairment at least annually and make such evaluations more frequently if indicators of impairment arise. In accordance with the accounting standard, if the fair value of a reporting unit is less than its carrying value (including goodwill), the goodwill is tested for impairment. If an impairment is indicated, a loss is recognized - calculated as the difference between the implied fair value of goodwill and the carrying value of goodwill. FES' and the Companies' 2007 annual review was completed in the third quarter of 2007 with no impairment indicated. In the third quarter of 2007, JCP&L, Met-Ed and Penelec adjusted goodwill due to the realization of tax benefits that had been reserved in purchase accounting.

FES' and the Companies' 2006 annual review was completed in the third quarter of 2006 with no impairment indicated. On January 11, 2007, the PPUC issued its order related to the comprehensive rate filing made by Met-Ed and Penelec on April 10, 2006 (see Note 9). The rate increase granted was substantially lower than the amounts Met-Ed and Penelec had requested. Prior to issuing the order, the PPUC conducted an informal, nonbinding polling of Commissioners at its public meeting on December 21, 2006 that indicated the rate increase ultimately granted would be substantially below the amounts requested. As a result of the polling, Met-Ed and Penelec determined that an interim review of goodwill would be required. As a result, Met-Ed recognized an impairment charge of $355 million in the fourth quarter of 2006. No impairment was indicated for Penelec.

The forecasts used in the evaluations of goodwill reflect operations consistent with FES' and the Companies' general business assumptions. Unanticipated changes in those assumptions could have a significant effect on future evaluations of goodwill. The impairment analysis includes a significant source of cash representing the Companies' recovery of transition costs as described in Note 9. The Companies estimate that the completion of their transition cost recovery will not result in an impairment of goodwill.

A summary of the changes in FES' and the Companies' goodwill for the three years ended December 31, 2007 is shown below.

Goodwill	FES			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
Balance as of January 1, 2005	$	26		$	1,694		$	505		$	1,998		$	870		$	888
Non-core sset sales		(2	)		-			-			-			-			-
Adjustments related to GPU acquisition											(12	)		(6	)		(6	)
Adjustments related to Centerior acquisition					(5	)		(4	)
Balance as of December 31, 2005		24			1,689			501			1,986			864			882
Impairment charges														(355	)
Adjustments related to Centerior acquisition
Adjustments related to GPU acquisition											(24	)		(13	)		(21	)
Balance as of December 31, 2006		24			1,689			501			1,962			496			861
Adjustments related to GPU acquisition											(136	)		(72	)		(83	)
Balance as of December 31, 2007	$	24		$	1,689		$	501		$	1,826		$	424		$	778

Investments

At the end of each reporting period, FES and the Companies evaluate their investments for impairment. In accordance with SFAS 115 and FSP SFAS 115-1 and SFAS 124-1, investments classified as available-for-sale securities are evaluated to determine whether a decline in fair value below the cost basis is other-than-temporary. FES and the Companies first consider their intent and ability to hold the investment until recovery and then consider, among other factors, the duration and the extent to which the security's fair value has been less than cost and the near-term financial prospects of the security issuer when evaluating investments for impairment. If the decline in fair value is determined to be other-than-temporary, the cost basis of the investment is written down to fair value. Upon adoption of FSP SFAS 115-1 and SFAS 124-1, FES, OE and TE began recognizing in earnings the unrealized losses on available-for-sale securities held in their nuclear decommissioning trusts since the trust arrangements, as they are currently defined, do not meet the required ability and intent to hold criteria in consideration of other-than-temporary impairment. The fair value and unrealized gains and losses of FES' and the Companies' investments are disclosed in Note 5.

(F) COMPREHENSIVE INCOME

Comprehensive income includes net income as reported on the Consolidated Statements of Income and all other changes in common stockholder's equity except those resulting from transactions with stockholders and from the adoption of SFAS 158. Accumulated other comprehensive income (loss), net of tax, included on FES' and the Companies' Consolidated Balance Sheets as of December 31, 2007 and 2006 is comprised of the following components:

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

Other comprehensive income (loss) reclassified to net income in the three years ended December 31, 2007 is as follows:

2007	FES			OE			CEI		TE			JCP&L			Met-Ed			Penelec
	(In millions)
Pension and other postretirement benefits	$	(5	)	$	(14	)	$	5	$	2		$	(8	)	$	(6	)	$	(11	)
Loss on investments		(13	)		(3	)		-		-			-			-			-
Loss on derivative hedges		(12	)		-			-		-			-			-			-
Reclassification to net income		(30	)		(17	)		5		2			(8	)		(6	)		(11	)
Income taxes (benefits) related to reclassification to net income		(13	)		(6	)		2		1			(4	)		(3	)		(5	)
Reclassification to net income, net of income taxes (benefits)	$	(17	)	$	(11	)	$	3	$	1		$	(4	)	$	(3	)	$	(6	)

2006
Gain (Loss) on investments	$	28		$	-		$	-	$	(1	)	$	-		$	-		$	-
Loss on derivative hedges		(9	)		-			-		-			-			-			-
Reclassification to net income		19			-			-		(1	)		-			-			-
Income taxes related to reclassification to net income		7			-			-		-			-			-			-
Reclassification to net income, net of income taxes	$	12		$	-		$	-	$	(1	)	$	-		$	-		$	-

2005
Gain on investments	$	1		$	18		$	28	$	20		$	-		$	-		$	-
Gain on derivative hedges		3			-			-		-			-			-			-
Reclassification to net income		4			18			28		20			-			-			-
Income taxes related to reclassification to net income		2			7			11		8			-			-			-
Reclassification to net income, net of income taxes	$	2		$	11		$	17	$	12		$	-		$	-		$	-

(G) CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE

Results in 2005 included after-tax charges of $8.8 million for FES, $16.3 million for OE, $3.7 million for CEI, $0.3 million for Met-Ed and $0.8 million for Penelec recorded as the cumulative effect of a change in accounting principle upon the adoption of FIN 47 in December 2005. Applicable legal obligations as defined under FIN 47 were identified at FES' active and retired generating units and the Companies' substation control rooms, service center buildings, line shops and office buildings, with asbestos remediation recognized as the primary conditional ARO. See Note 11 for further discussion of FES' and the Companies' asset retirement obligations.

(H) DIVESTITURES AND DISCONTINUED OPERATIONS

On October 1, 2007, Met-Ed sold 100% of its interest in York Haven Power Company for $5 million. The sale was subject to regulatory accounting and did not have a material impact on Met-Ed's earnings.

On March 31, 2005, FES completed the sale of its retail natural gas business for an after-tax gain of $5 million. The net results of $5 million (including the gain on the sale of assets) associated with the divested business are reported as discontinued operations on its Consolidated Statements of Income for 2005. Revenues and pre-tax operating results associated with discontinued operations in 2005 were $146 million and $1 million, respectively.

3. TRANSACTIONS WITH AFFILIATED COMPANIES

FES' and the Companies' operating revenues, operating expenses, investment income and interest expense include transactions with affiliated companies. These affiliated company transactions include PSAs between FES and the Companies, support service billings from FESC, FENOC and interest on associated company notes. In the fourth quarter of 2005, the Ohio Companies and Penn completed the intra-system transfers of their non-nuclear and nuclear generation assets to FGCO and NGC, respectively, excluding the leasehold interests of the Ohio Companies in certain of the plants that are currently subject to sale and leaseback arrangements with non-affiliated entities (see Note 14). This resulted in the elimination of the fossil generating units lease arrangement and the nuclear generation PSA between FES and the Ohio Companies with the exception of those arrangements related to the leasehold interests not included in the transfer. The Ohio Companies continue to have a PSA with FES to meet their PLR and default service obligations. Met-Ed and Penelec also have a partial requirements PSA with FES to meet a portion of their PLR and default service obligations (see Note 9(C)). FES was a supplier to JCP&L as a result of the BGS auction process through May 31, 2006. FES is incurring interest expense through FGCO and NGC on associated company notes payable to the Ohio Companies and Penn related to the intra-system generation asset transfers. The primary affiliated company transactions for FES and the Companies for the three years ended December 31, 2007 are as follows:

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

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

In the three years ended December 31, 2007, TE sold 150 MW of its Beaver Valley Unit 2 leased capacity entitlement to CEI ($98 million in 2007, $102 million in 2006 and $105 million in 2005). This sale agreement was terminated at the end of 2007.

4. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

FirstEnergy provides noncontributory defined benefit pension plans that cover substantially all of its employees and non-qualified plans that cover certain employees. The trusteed plans provide defined benefits based on years of service and compensation levels. FirstEnergy's funding policy is based on actuarial computations using the projected unit credit method. On January 2, 2007, FirstEnergy made a $300 million voluntary cash contribution to its qualified pension plan. Projections indicated that additional cash contributions will not be required before 2017.

FirstEnergy provides a minimum amount of noncontributory life insurance to retired employees in addition to optional contributory insurance. Health care benefits, which include certain employee contributions, deductibles and co-payments, are also available upon retirement to employees hired prior to January 1, 2005, their dependents and, under certain circumstances, their survivors. FES and the Companies recognize the expected cost of providing other postretirement benefits to employees and their beneficiaries and covered dependents from the time employees are hired until they become eligible to receive those benefits. During 2006, FirstEnergy amended the OPEB plan effective in 2008 to cap the monthly contribution for many of the retirees and their spouses receiving subsidized healthcare coverage. In addition, FirstEnergy has obligations to former or inactive employees after employment, but before retirement for disability related benefits.

Pension and OPEB costs are affected by employee demographics (including age, compensation levels, and employment periods), the level of contributions made to the plans and earnings on plan assets. Such factors may be further affected by business combinations which impact employee demographics, plan experience and other factors. Pension and OPEB costs may also be affected by changes in key assumptions, including anticipated rates of return on plan assets, the discount rates and health care trend rates used in determining the projected benefit obligations and pension and OPEB costs. FirstEnergy uses a December 31 measurement date for its pension and OPEB plans. The fair value of the plan assets represents the actual market value as of December 31, 2007.

In December 2006, FirstEnergy adopted SFAS 158. This Statement requires employers to recognize an asset or liability for the overfunded or underfunded status of their pension and other postretirement benefit plans. For a pension plan, the asset or liability is the difference between the fair value of the plan's assets and the projected benefit obligation. For any other postretirement benefit plan, the asset or liability is the difference between the fair value of the plan's assets and the accumulated postretirement benefit obligation. The Statement required employers to recognize all unrecognized prior service costs and credits and unrecognized actuarial gains and losses in AOCL, net of tax. Such amounts will be adjusted as they are subsequently recognized as components of net periodic benefit cost or income pursuant to the current recognition and amortization provisions. The incremental impact of adopting SFAS 158 was a decrease of $1.0 billion in pension assets, a decrease of $383 million in pension liabilities and a decrease in AOCL of $327 million, net of tax.

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	%

FES' and the Companies' share of the net pension and OPEB asset (liability) as of December 31, 2007 and 2006 is as follows:

	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	%

FES' and the Companies' share of the net periodic pension and OPEB cost for the three years ended December 31, 2007 is as follows:

	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

In selecting an assumed discount rate, FirstEnergy considers currently available rates of return on high-quality fixed income investments expected to be available during the period to maturity of the pension and other postretirement benefit obligations. The assumed rates of return on pension plan assets consider historical market returns and economic forecasts for the types of investments held by FirstEnergy's pension trusts. The long-term rate of return is developed considering the portfolio's asset allocation strategy.

FirstEnergy employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return on plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalization funds. Other assets such as real estate are used to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives are not used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on a continuing basis through periodic investment portfolio reviews, annual liability measurements, and periodic asset/liability studies.

FES and the Companies have assessed the impact of recent market developments, including a series of rating agency downgrades of subprime mortgage-related assets, on the value of the assets held in their pension and other postretirement benefit trusts. Based on this assessment, FES and the Companies believe that the fair value of their investments as of December 31, 2007 will not be materially affected by the subprime credit crisis due to their relatively small exposure to subprime assets.

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

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	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	)

Taking into account estimated employee future service, FirstEnergy expects to make the following pension benefit payments from plan assets and other benefit payments, net of the Medicare subsidy:

	Pension		Other
	Benefits		Benefits
	(In millions)
2008	$	300	$	83
2009		300		86
2010		307		90
2011		313		94
2012		322		95
Years 2013- 2017		1,808		495

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

All borrowings with initial maturities of less than one year are defined as short-term financial instruments under GAAP and are reported on the Consolidated Balance Sheets at cost, which approximates their fair market value, in the caption "short-term borrowings." The following table provides the approximate fair value and related carrying amounts of long-term debt and other long-term obligations as shown in the Consolidated Statements of Capitalization as of December 31:

	2007				2006
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
	(In millions)
FES	$	1,975	$	1,971	$	3,084	$	3,084
OE		1,182		1,197		1,294		1,337
CEI		1,666		1,706		1,919		2,000
TE		304		283		389		388
JCP&L		1,597		1,560		1,366		1,388
Met-Ed		542		535		592		572
Penelec		779		779		479		490

The fair values of long-term debt and other long-term obligations reflect the present value of the cash outflows relating to those securities based on the current call price, the yield to maturity or the yield to call, as deemed appropriate at the end of each respective year. The yields assumed were based on securities with similar characteristics offered by corporations with credit ratings similar to those of FES and the Companies.

(B) INVESTMENTS

All temporary cash investments purchased with an initial maturity of three months or less are reported as cash equivalents on the Consolidated Balance Sheets at cost, which approximates their fair market value. Investments other than cash and cash equivalents include held-to-maturity securities and available-for-sale securities. FES and the Companies periodically evaluate their investments for other-than-temporary impairment. They first consider their intent and ability to hold the investment until recovery and then consider, among other factors, the duration and the extent to which the securitys fair value has been less than cost and the near-term financial prospects of the security issuer when evaluating investments for impairment.

FES and the Companies have assessed the impact of recent market developments, including a series of rating agency downgrades of subprime mortgage-related assets, on the value of the assets held in their nuclear decommissioning trusts. Based on this assessment, FES and the Companies believe that the fair value of their investments as of December 31, 2007 will not be materially affected by the subprime credit crisis due to their relatively small exposure to subprime assets.

Available-For-Sale Securities

FES and the Companies hold debt and equity securities within their nuclear decommissioning trusts, nuclear fuel disposal trusts and NUG trusts. These trust investments are classified as available-for-sale with the fair value representing quoted market prices. FES and the Companies have no securities held for trading purposes.

The following table provides the carrying value, which approximates fair value, of investments in available-for-sale securities as of December 31, 2007 and 2006. The fair value was determined using the specific identification method.

	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

The following table summarizes the amortized cost basis, unrealized gains and losses and fair values of investments in available-for-sale securities as of December 31:

	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

Proceeds from the sale of investments in available-for-sale securities, realized gains and losses on those sales, and interest and dividend income for the three years ended December 31, 2007 were as follows:

	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
2007
Proceeds from sales	$	656	$	38	$	-	$	45	$	196	$	185	$	175
Realized gains		29		1		-		1		23		30		19
Realized losses		42		4		-		1		3		2		1
Interest and dividend income		42		4		-		3		13		8		10

2006
Proceeds from sales	$	1,066	$	39	$	-	$	53	$	217	$	176	$	99
Realized gains		118		1		-		-		1		1		-
Realized losses		90		1		-		1		5		4		4
Interest and dividend income		36		3		-		3		13		7		7

2005
Proceeds from sales	$	1,097	$	284	$	490	$	366	$	165	$	167	$	93
Realized gains		109		35		49		35		4		6		4
Realized losses		39		7		20		15		5		7		6
Interest and dividend income		32		13		12		9		13		6		7

Upon adoption of FSP SFAS 115-1 and SFAS 124-1, FES, OE and TE began expensing unrealized losses on available-for-sale securities held in its nuclear decommissioning trusts since the trust arrangements, as they are currently defined, do not meet the required ability and intent to hold criteria in consideration of other-than-temporary impairment.

Unrealized gains applicable to OE's, TE's and the majority of FES' decommissioning trusts are recognized in OCI in accordance with SFAS 115, as fluctuations in fair value will eventually impact earnings. The decommissioning trusts of JCP&L, Met-Ed and Penelec are subject to regulatory accounting in accordance with SFAS 71. Net unrealized gains and losses are recorded as regulatory assets or liabilities since the difference between investments held in trust and the decommissioning liabilities will be recovered from or refunded to customers.

The investment policy for the nuclear decommissioning trust funds restricts or limits the ability to hold certain types of assets including private or direct placements, warrants, securities of FirstEnergy, investments in companies owning nuclear power plants, financial derivatives, preferred stocks, securities convertible into common stock and securities of the trust fund's custodian or managers and their parents or subsidiaries.

Held-To-Maturity Securities

The following table provides the amortized cost basis (carrying value), unrealized gains and losses and fair values of investments in held-to-maturity securities with maturity dates ranging from 2008 to 2017 excluding; restricted funds, whose carrying value is assumed to approximate market value, notes receivable, whose fair value represents the present value of the cash inflows based on the yield to maturity, and other investments of $87 million and $127 million in 2007 and 2006, respectively, excluded by SFAS 107, "Disclosures about Fair Values of Financial Instruments," as of December 31:

	2007						2006
	Cost		Unrealized	Unrealized		Fair	Cost		Unrealized	Unrealized		Fair
	Basis		Gains	Losses		Value	Basis		Gains	Losses		Value
Debt securities	(In millions)
OE		254	28		-	282		291	34		-	325
CEI		463	68		-	531		523	65		-	588
JCP&L		1	-		-	1		-	-		-	-

Equity securities
OE		2	-		-	2		3	-		-	3

The following table provides the approximate fair value and related carrying amounts of notes receivable as of December 31:

	2007			2006
	Carrying		Fair	Carrying		Fair
	Value		Value	Value		Value
Notes receivable	(In millions)
FES		65	63		69	66
OE		259	299		1,219	1,251
CEI		1	1		487	487
TE		192	223		298	327

The fair value of notes receivable represents the present value of the cash inflows based on the yield to maturity. The yields assumed were based on financial instruments with similar characteristics and terms. The maturity dates range from 2008 to 2040.

FES and the Companies are exposed to financial risks resulting from the fluctuation of interest rates and commodity prices, including prices for electricity, natural gas, coal and energy transmission. To manage the volatility relating to these exposures, they use a variety of derivative instruments, including forward contracts, options, futures contracts and swaps. The derivatives are used principally for hedging purposes. FirstEnergy's Risk Policy Committee, comprised of members of senior management, provides general management oversight for risk management activities throughout FES and the Companies. They are responsible for promoting the effective design and implementation of sound risk management programs. They also oversee compliance with corporate risk management policies and established risk management practices.

FES and the Companies account for derivative instruments on their Consolidated Balance Sheets at their fair value unless they meet the normal purchase and normal sales criteria. Derivatives that meet that criteria are accounted for using traditional accrual accounting. The changes in the fair value of derivative instruments that do not meet the normal purchase and normal sales criteria are recorded as other expense, as AOCL, or as part of the value of the hedged item, depending on whether or not it is designated as part of a hedge transaction, the nature of the hedge transaction and hedge effectiveness.

FES hedges anticipated transactions using cash flow hedges. Such transactions include hedges of anticipated electricity and natural gas purchases. FES maximum hedge terms are typically two years. The effective portion of such hedges are initially recorded in equity as other comprehensive income or loss and are subsequently included in net income as the underlying hedged commodities are delivered. Gains and losses from any ineffective portion of cash flow hedges are included directly in earnings. The ineffective portion of cash flow hedge was immaterial during this period.

FES net deferred losses of $16 million included in AOCL as of December 31, 2007, for derivative hedging activity, as compared to $10 million as of December 31, 2006, resulted from a net $14 million increase related to current hedging activity and an $8 million decrease due to net hedge losses reclassified to earnings during 2007. Based on current estimates, approximately $15 million (after tax) of the net deferred losses on derivative instruments in AOCL as of December 31, 2007 is expected to be reclassified to earnings during the next twelve months as hedged transactions occur. The fair value of these derivative instruments fluctuate from period to period based on various market factors.

LEASES

FES and the Companies lease certain generating facilities, office space and other property and equipment under cancelable and noncancelable leases.

On July 13, 2007, FGCO completed a sale and leaseback transaction for its 93.825% undivided interest in Bruce Mansfield Unit 1, representing 779 MW of net demonstrated capacity. The purchase price of approximately $1.329 billion (net after-tax proceeds of approximately $1.2 billion) for the undivided interest was funded through a combination of equity investments by affiliates of AIG Financial Products Corp. and Union Bank of California, N.A. in six lessor trusts and proceeds from the sale of $1.135 billion aggregate principal amount of 6.85% pass through certificates due 2034. A like principal amount of secured notes maturing June 1, 2034 were issued by the lessor trusts to the pass through trust that issued and sold the certificates. The lessor trusts leased the undivided interest back to FGCO for a term of approximately 33 years under substantially identical leases. FES has unconditionally and irrevocably guaranteed all of FGCOs obligations under each of the leases. This transaction, which is classified as an operating lease under GAAP for FES and a financing for FGCO, generated tax capital gains of approximately $742 million, all of which were offset by existing tax capital loss carryforwards.

In 1987, OE sold portions of its ownership interests in Perry Unit 1 and Beaver Valley Unit 2 and entered into operating leases on the portions sold for basic lease terms of approximately 29 years. In that same year, CEI and TE also sold portions of their ownership interests in Beaver Valley Unit 2 and Bruce Mansfield Units 1, 2 and 3 and entered into similar operating leases for lease terms of approximately 30 years. During the terms of their respective leases, OE, CEI and TE continue to be responsible, to the extent of their leasehold interests, for costs associated with the units including construction expenditures, operation and maintenance expenses, insurance, nuclear fuel, property taxes and decommissioning. They have the right, at the expiration of the respective basic lease terms, to renew their respective leases. They also have the right to purchase the facilities at the expiration of the basic lease term or any renewal term at a price equal to the fair market value of the facilities. The basic rental payments are adjusted when applicable federal tax law changes.

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 FGCOs 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.

The rentals for capital and operating leases are charged to operating expenses on the Consolidated Statements of Income. Such costs for the three years ended December 31, 2007 are summarized as follows:

	FES		OE		CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
2007
Operating leases
Interest element	$	29.8	$	82.8	$	23.8	$	38.2	$	2.9	$	2.1	$	0.8
Other		14.6		62.2		37.6		62.8		5.4		1.6		3.9
Capital leases
Interest element		-		0.1		0.4		-		-		-		-
Other		0.1		-		0.6		-		-		-		-
Total rentals	$	44.5	$	145.1	$	62.4	$	101.0	$	8.3	$	3.7	$	4.7

2006
Operating leases
Interest element	$	-	$	87.1	$	26.3	$	41.1	$	2.8	$	2.0	$	0.6
Other		-		57.5		48.1		68.2		4.5		1.4		3.8
Capital leases
Interest element		-		0.3		0.4		-		-		-		-
Other		-		1.3		0.6		-		-		-		-
Total rentals	$	-	$	146.2	$	75.4	$	109.3	$	7.3	$	3.4	$	4.4

2005
Operating leases
Interest element	$	-	$	93.4	$	28.4	$	43.9	$	2.6	$	1.9	$	0.7
Other		-		52.3		40.9		62.3		3.2		1.0		2.1
Capital leases
Interest element		-		0.8		0.5		-		-		-		-
Other		-		1.9		0.5		-		-		-		-
Total rentals	$	-	$	148.4	$	70.3	$	106.2	$	5.8	$	2.9	$	2.8

Established by OE in 1996, PNBV purchased a portion of the lease obligation bonds issued on behalf of lessors in OE's Perry Unit 1 and Beaver Valley Unit 2 sale and leaseback transactions. Similarly, CEI and TE established Shippingport in 1997 to purchase the lease obligation bonds issued on behalf of lessors in their Bruce Mansfield Units 1, 2 and 3 sale and leaseback transactions.

The future minimum capital lease payments as of December 31, 2007 are as follows:

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

The future minimum operating lease payments as of December 31, 2007 are as follows:

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

CEI and TE had recorded above-market lease liabilities for Beaver Valley Unit 2 and the Bruce Mansfield Plant associated with the 1997 merger between OE and Centerior. The total above-market lease obligation of $722 million associated with Beaver Valley Unit 2 has been amortized on a straight-line basis (approximately $31 million and $6 million per year for CEI and TE, respectively). Effective December 31, 2007, TE terminated the sale of its 150 MW of Beaver Valley Unit 2 leased capacity entitlement to CEI. The remaining above-market lease liability for Beaver Valley Unit 2 of $347 million as of December 31, 2007, of which $37 million is classified as current, will be amortized by TE on straight-line basis through the end of the lease term in 2017. The total above-market lease obligation of $755 million associated with the Bruce Mansfield Plant has been amortized on a straight-line basis (approximately $29 million and $19 million per year for CEI and TE, respectively). Effective October 16, 2007, CEI and TE assigned their leasehold interests in the Bruce Mansfield Plant to FGCO. The remaining above-market lease liability for the Bruce Mansfield Plant of $399 million as of December 31, 2007, of which $46 million is classified as current, will be amortized by FGCO on straight-line basis through the end of the lease term in 2016.

7.	VARIABLE INTEREST ENTITIES

FIN 46R addresses the consolidation of VIEs, including special-purpose entities, that are not controlled through voting interests or in which the equity investors do not bear the entity's residual economic risks and rewards. FES and the Companies consolidate VIEs when they are determined to be the VIE's primary beneficiary as defined by FIN 46R.

Trusts

PNBV and Shippingport were created in 1996 and 1997, respectively, to refinance debt originally issued in connection with sale and leaseback transactions. PNBV and Shippingport financial data are included in the consolidated financial statements of OE and CEI, respectively.

PNBV was established to purchase a portion of the lease obligation bonds issued in connection with OE's 1987 sale and leaseback of its interests in the Perry Plant and Beaver Valley Unit 2. OE used debt and available funds to purchase the notes issued by PNBV. Ownership of PNBV includes a 3% equity interest by an unaffiliated third party and a 3% equity interest held by OE's Ventures, a wholly owned subsidiary of OE. Shippingport was established to purchase all of the lease obligation bonds issued in connection with CEI's and TE's Bruce Mansfield Plant sale and leaseback transaction in 1987. CEI and TE used debt and available funds to purchase the notes issued by Shippingport.

Loss Contingencies

FES and the Ohio Companies are exposed to losses under their applicable sale-leaseback agreements upon the occurrence of certain contingent events that each company considers unlikely to occur. The maximum exposure under these provisions represents the net amount of casualty value payments due upon the occurrence of specified casualty events that render the applicable plant worthless. Net discounted lease payments would not be payable if the casualty loss payments are made. The following table shows each companys net exposure to loss based upon the casualty value provisions mentioned above:

	Maximum Exposure		Discounted Lease Payments, net		Net Exposure
	(In millions)
FES	$	1,338	$	1,198	$	140
OE		837		610		227
CEI		753		85		668
TE		753		449		304

Effective October 16, 2007, CEI and TE assigned their leasehold interests in the Bruce Mansfield Plant under their 1987 sale and leaseback transactions 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 FGCOs leasehold interests under its July 13, 2007 Bruce Mansfield Unit 1 sale and leaseback transaction discussed above, 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 assignments terminate automatically upon the termination of the underlying leases.

Power Purchase Agreements

In accordance with FIN 46R, FES and the Companies evaluated their power purchase agreements and determined that certain NUG entities may be VIEs to the extent they own a plant that sells substantially all of its output to FES and the Companies and the contract price for power is correlated with the plants variable costs of production. JCP&L, Met-Ed and Penelec, maintain approximately 30 long-term power purchase agreements with NUG entities. The agreements were entered into pursuant to the Public Utility Regulatory Policies Act of 1978. JCP&L, Met-Ed and Penelec were not involved in the creation of, and have no equity or debt invested in, these entities.

Management has determined that for all but eight of these entities, neither JCP&L, Met-Ed nor Penelec have variable interests in the entities or the entities are governmental or not-for-profit organizations not within the scope of FIN 46R. JCP&L, Met-Ed or Penelec may hold variable interests in the remaining eight entities, which sell their output at variable prices that correlate to some extent with the operating costs of the plants. As required by FIN 46R, management periodically requests from these eight entities the information necessary to determine whether they are VIEs or whether JCP&L, Met-Ed or Penelec is the primary beneficiary. Management has been unable to obtain the requested information, which in most cases was deemed by the requested entity to be proprietary. As such, JCP&L, Met-Ed and Penelec applied the scope exception that exempts enterprises unable to obtain the necessary information to evaluate entities under FIN 46R.

Since JCP&L, Met-Ed and Penelec have no equity or debt interests in the NUG entities, their maximum exposure to loss relates primarily to the above-market costs they incur for power. JCP&L, Met-Ed and Penelec expect any above-market costs they incur to be recovered from customers. Purchased power costs from these entities during the three years ended December 31, 2007 are shown in the following table:

	2007		2006		2005
	(In millions)
JCP&L	$	90	$	81	$	101
Met-Ed		56		60		50
Penelec		30		29		28

8. TAXES

Income Taxes

FES and the Companies record income taxes in accordance with the liability method of accounting. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and loss carryforwards and the amounts recognized for tax purposes. Investment tax credits, which were deferred when utilized, are being amortized over the recovery period of the related property. Deferred income tax liabilities related to temporary tax and accounting basis differences and tax credit carryforward items are recognized at the statutory income tax rates in effect when the liabilities are expected to be paid. Deferred tax assets are recognized based on income tax rates expected to be in effect when they are settled. Details of income taxes for the three years ended December 31, 2007 are shown below:


PROVISION FOR INCOME TAXES	FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
2007
Currently payable-
Federal	$	528		$	105		$	166		$	73		$	138		$	26		$	41
State		111			(4	)		20			7			42			7			12
		639			101			186			80			180			33			53
Deferred, net-
Federal		(288	)		-			(23	)		(27	)		(25	)		30			10
State		(42	)		4			2			2			(5	)		6			1
		(330	)		4			(21	)		(25	)		(30	)		36			11
Investment tax credit amortization		(4	)		(4	)		(2	)		(1	)		(1	)		(1	)		-
Total provision for income taxes	$	305		$	101		$	163		$	54		$	149		$	68		$	64

2006
Currently payable-
Federal	$	102		$	162		$	174		$	83		$	79		$	21		$	21
State		18			30			32			14			24			6			7
		120			192			206			97			103			27			28
Deferred, net-
Federal		110			(58	)		(14	)		(35	)		34			40			26
State		11			(7	)		1			(1	)		11			11			3
		121			(65	)		(13	)		(36	)		45			51			29
Investment tax credit amortization		(5	)		(4	)		(4	)		(1	)		(1	)		(1	)		-
Total provision for income taxes	$	236		$	123		$	189		$	60		$	147		$	77		$	57

2005
Currently payable-
Federal	$	29		$	275		$	90		$	62		$	78		$	24		$	7
State		1			74			23			18			22			8			1
		30			349			113			80			100			32			8
Deferred, net-
Federal		94			(60	)		28			(19	)		27			2			11
State		5			37			17			15			10			(3	)		(1	)
		99			(23	)		45			(4	)		37			(1	)		10
Investment tax credit amortization		(5	)		(16	)		(5	)		(2	)		(1	)		(1	)		(1	)
Total provision for income taxes	$	124		$	310		$	153		$	74		$	136		$	30		$	17

FES and the Companies are all party to an intercompany income tax allocation agreement with FirstEnergy and its other subsidiaries that provides for the allocation of consolidated tax liabilities. Net tax benefits attributable to FirstEnergy, excluding any tax benefits derived from interest expense associated with acquisition indebtedness from the merger with GPU, is reallocated to the subsidiaries of FirstEnergy that have taxable income. That allocation is accounted for as a capital contribution to the company receiving the tax benefit.

The following tables provide a reconciliation of federal income tax expense at FES and the Companies statutory rate to their total provision for income taxes for the three years ended December 31, 2007.


	FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
2007
Book income before provision for income taxes	$	833		$	298		$	440		$	145		$	335		$	164		$	157
Federal income tax expense at statutory rate	$	292		$	104		$	154		$	51		$	117		$	57		$	55
Increases (reductions) in taxes resulting from-
Amortization of investment tax credits		(4	)		(4	)		(2	)		(1	)		(1	)		(1	)		-
State income taxes, net of federal tax benefit		45			-			14			6			24			9			8
Manufacturing deduction		(6	)		(2	)		(1	)		-			-			-			-
Other, net		(22	)		3			(2	)		(2	)		9			3			1
Total provision for income taxes	$	305		$	101		$	163		$	54		$	149		$	68		$	64

2006
Book income before provision for income taxes	$	655		$	335		$	495		$	159		$	337		$	(163	)	$	141
Federal income tax expense at statutory rate	$	229		$	117		$	173		$	56		$	118		$	(57	)	$	49
Increases (reductions) in taxes resulting from-
Amortization of investment tax credits		(5	)		(4	)		(4	)		(1	)		(1	)		(1	)		-
State income taxes, net of federal tax benefit		18			15			22			8			23			11			6
Goodwill impairment		-			-			-			-			-			124			-
Other, net		(6	)		(5	)		(2	)		(3	)		7			-			2
Total provision for income taxes	$	236		$	123		$	189		$	60		$	147		$	77		$	57

2005
Book income before provision for income taxes	$	333		$	640		$	384		$	150		$	319		$	76		$	44
Federal income tax expense at statutory rate	$	117		$	224		$	134		$	52		$	112		$	27		$	16
Increases (reductions) in taxes resulting from-
Amortization of investment tax credits		(5	)		(16	)		(5	)		(2	)		(1	)		(1	)		(1	)
State income taxes, net of federal tax benefit		4			72			26			22			21			3			-
Penalties		10			3			-			-			-			-			-
Other, net		(2	)		27			(2	)		2			4			1			2
Total provision for income taxes	$	124		$	310		$	153		$	74		$	136		$	30		$	17

Accumulated deferred income taxes as of December 31, 2007 and 2006 are as follows:


ACCUMULATED DEFERRED INCOME TAXES	FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)

AS OF DECEMBER 31, 2007
Property basis differences	$	281		$	463		$	372		$	154		$	439		$	266		$	319
Regulatory transition charge		-			139			156			116			235			60			-
Customer receivables for future income taxes		-			22			1			-			14			49			62
Deferred customer shopping incentive		-			61			172			29			-			-			-
Deferred sale and leaseback gain		(455	)		(49	)		-			-			(20	)		(11	)		-
Nonutility generation costs		-			-			-			-			-			22			(112	)
Unamortized investment tax credits		(23	)		(6	)		(7	)		(4	)		(2	)		(6	)		(5	)
Other comprehensive income		84			25			(39	)		(8	)		(20	)		(16	)		(2	)
Retirement benefits		(13	)		(14	)		25			(1	)		39			16			(17	)
Lease market valuation liability		(148	)		-			-			(135	)		-			-			-
Oyster Creek securitization (Note 10(C))		-			-			-			-			149			-			-
Asset retirement obligations		34			(2	)		(3	)		7			(48	)		(57	)		(64	)
Deferred gain for asset sales - affiliated companies		-			45			30			10			-			-			-
Allowance for equity funds used during construction		-			21			-			-			-			-			-
PJM transmission costs		-			-			-			-			-			97			13
All other		(37	)		76			19			(65	)		14			19			17
Net deferred income tax liability (asset)	$	(277	)	$	781		$	726		$	103		$	800		$	439		$	211

AS OF DECEMBER 31, 2006
Property basis differences	$	112		$	497		$	534		$	243		$	436		$	277		$	329
Regulatory transition charge		-			(28	)		116			33			254			82			-
Customer receivables for future income taxes		-			31			3			(3	)		4			44			62
Deferred customer shopping incentive		-			68			132			18			-			-			-
Deferred sale and leaseback gain		-			(55	)		-			-			(20	)		(11	)		-
Nonutility generation costs		-			-			-			-			-			1			(123	)
Unamortized investment tax credits		(24	)		(8	)		(9	)		(3	)		(3	)		(7	)		(5	)
Other comprehensive income		60			(15	)		(70	)		(24	)		(44	)		(28	)		(18	)
Retirement benefits		(28	)		30			11			8			36			12			(19	)
Lease market valuation liability		-			-			(235	)		(96	)		-			-			-
Oyster Creek securitization (Note 10(C))		-			-			-			-			162			-			-
Asset retirement obligations		29			10			2			4			(16	)		(42	)		(59	)
Deferred gain for asset sales - affiliated companies		-			47			31			10			-			-			-
Allowance for equity funds used during construction		-			23			-			-			-			-			-
PJM transmission costs		-			-			-			-			-			53			13
All other		(28	)		74			(44	)		(29	)		(5	)		6			14
Net deferred income tax liability	$	121		$	674		$	471		$	161		$	804		$	387		$	194

On January 1, 2007, FES and the Companies adopted FIN 48, which provides guidance for accounting for uncertainty in income taxes in a companys financial statements in accordance with SFAS 109. This interpretation prescribes a financial statement recognition threshold and measurement attribute for tax positions taken or expected to be taken on a companys tax return. FIN 48 also provides guidance on derecognition, classification, interest, penalties, accounting in interim periods, disclosure and transition. The evaluation of a tax position in accordance with this interpretation is a two-step process. The first step is to determine if it is more likely than not that a tax position will be sustained upon examination, based on the merits of the position, and should therefore be recognized. The second step is to measure a tax position that meets the more likely than not recognition threshold to determine the amount of income tax benefit to recognize in the financial statements.

As of January 1, 2007, the total amount of FirstEnergy's unrecognized tax benefits was $268 million (see table below for amounts included for FES and the Companies). FirstEnergy recorded a $2.7 million (OE - $0.6 million, CEI - $0.2 million, FES - $0.5 million and other subsidiaries of FirstEnergy - $1.4 million) cumulative effect adjustment to the January 1, 2007 balance of retained earnings to increase reserves for uncertain tax positions. Of the total amount of unrecognized income tax benefits, $92 million would favorably affect FirstEnergy's effective tax rate upon recognition. The majority of items that would not have affected the effective tax rate resulted from purchase accounting adjustments that would reduce goodwill upon recognition through December 31, 2008.

A reconciliation of the change in the unrecognized tax benefits for the year ended December 31, 2007 is as follows:

	FES			OE			CEI			TE			JCP&L			Met-Ed		Penelec
	(In millions)
Balance as of January 1, 2007	$	14		$	(19	)	$	(15	)	$	(3	)	$	44		$	18	$	20
Increase for tax positions related to the current year		-			1			-			-			-			-		-
Increase for tax positions related to prior years		4			10			2			2			-			6		-
Decrease for tax positions of prior years		(4	)		(4	)		(4	)		-			(6	)		-		(4	)
Balance as of December 31, 2007	$	14		$	(12	)	$	(17	)	$	(1	)	$	38		$	24	$	16

As of December 31, 2007, FES and the Companies expect that $7 million of the unrecognized benefits will be resolved within the next twelve months and are included in the caption Accrued taxes, with the remaining amount included in Other assets and Other non-current liabilities on the Consolidated Balance Sheets as follows:

Balance Sheet Classifications	FES		OE			CEI			TE			JCP&L		Met-Ed		Penelec
	(In millions)
Current-
Accrued taxes	$	3	$	4		$	-		$	-		$	-	$	-	$	-

Non-Current-
Other asset				(16	)		(17	)		(1	)
Other non-current liabilities		11		-			-			-			38		24		16
Net liabilities (assets)	$	14	$	(12	)	$	(17	)	$	(1	)	$	38	$	24	$	16

FIN 48 also requires companies to recognize interest expense or income related to uncertain tax positions. That amount is computed by applying the applicable statutory interest rate to the difference between the tax position recognized in accordance with FIN 48 and the amount previously taken or expected to be taken on the tax return. FES and the Companies include net interest and penalties in the provision for income taxes, consistent with their policy prior to implementing FIN 48.

The following table summarizes the net interest expense (income) recognized by FES and the Companies for the three years ended December 31, 2007 and the cumulative net interest payable (receivable) as of December 31, 2007 and 2006:

	Net Interest Expense (Income)									Net Interest Payable
	For the Years Ended									(Receivable)
	December 31,									As of December 31,
	2007			2006			2005			2007			2006
	(In millions)									(In millions)
FES	$	-		$	1		$	-		$	2		$	3
OE		1			1			(8	)		(5	)		(6	)
CEI		(1	)		1			(3	)		(2	)		(3	)
TE		-			1			(1	)		-			-
JCP&L		1			(2	)		5			10			9
Met-Ed		2			-			2			5			3
Penelec		-			(1	)		3			4			4

FES and the Companies have tax returns that are under review at the audit or appeals level by the IRS and state tax authorities. All state jurisdictions are open from 2001-2006. The IRS began reviewing returns for the years 2001-2003 in July 2004 and several items are under appeal. The federal audit for years 2004 and 2005 began in June 2006 and are not expected to close before December 2008. The IRS began auditing the year 2006 in April 2006 and the year 2007 in February 2007 under its Compliance Assurance Process experimental program. Neither audits are expected to close before December 2008. Management believes that adequate reserves have been recognized and final settlement of these audits is not expected to have a material adverse effect on FES or the Companies financial condition or results of operations.

On July 13, 2007, FGCO completed a sale and leaseback transaction for its 93.825% undivided interest in Bruce Mansfield Unit 1, representing 779 MW of net demonstrated capacity (see Note 6). This transaction generated tax capital gains of approximately $742 million, all of which were offset by existing tax capital loss carryforwards. Accordingly, FirstEnergy reduced its tax loss carryforward valuation allowance in the third quarter of 2007, with a corresponding reduction to goodwill (see Note 2(E)).

FES, Met-Ed and Penelec have pre-tax net operating loss carryforwards for state and local income tax purposes. These losses expire as follows:

Expiration Period	FES		Met-Ed		Penelec
	(In millions)
2008-2012	$	-	$	-	$	-
2013-2017		-		-		-
2018-2022		22		5		229
2023-2027		16		-		14
	$	38	$	5	$	243

General Taxes

Details of general taxes for the three years ended December 31, 2007 are shown below:


GENERAL TAXES	FES		OE			CEI		TE		JCP&L		Met-Ed		Penelec
	(In millions)
2007
Kilowatt-hour excise	$	1	$	99		$	69	$	29	$	52	$	-	$	-
State gross receipts		18		17			-		-		-		73		66
Real and personal property		53		59			65		19		5		2		2
Social security and unemployment		14		8			6		3		9		5		5
Other		1		(2	)		2		-		-		-		3
Total general taxes	$	87	$	181		$	142	$	51	$	66	$	80	$	76


2006
Kilowatt-hour excise	$	-	$	95		$	68	$	28	$	50	$	-	$	-
State gross receipts		10		19			-		-		-		67		62
Real and personal property		49		55			61		20		5		2		1
Social security and unemployment		13		7			5		2		9		4		5
Other		1		4			1		1		-		4		5
Total general taxes	$	73	$	180		$	135	$	51	$	64	$	77	$	73

2005
Kilowatt-hour excise	$	-	$	94		$	69	$	29	$	52	$	-	$	-
State gross receipts		9		20			-		-		-		63		58
Real and personal property		44		67			78		25		5		2		1
Social security and unemployment		12		8			5		2		8		4		5
Other		2		4			1		1		-		5		5
Total general taxes	$	67	$	193		$	153	$	57	$	65	$	74	$	69

Commercial Activity Tax

On June 30, 2005, tax legislation was enacted in the State of Ohio that created a new CAT tax, which is based on qualifying taxable gross receipts and does not consider any expenses or costs incurred to generate such receipts, except for items such as cash discounts, returns and allowances, and bad debts. The CAT tax was effective July 1, 2005, and replaces the Ohio income-based franchise tax and the Ohio personal property tax. The CAT tax is phased-in while the current income-based franchise tax is phased-out over a five-year period at a rate of 20% annually, beginning with the year ended 2005, and the personal property tax is phased-out over a four-year period at a rate of approximately 25% annually, beginning with the year ended 2005. During the phase-out period the Ohio income-based franchise tax was or will be computed consistent with the prior tax law, except that the tax liability as computed was multiplied by 80% in 2005; 60% in 2006; 40% in 2007 and 20% in 2008, therefore eliminating the current income-based franchise tax over a five-year period. As a result of the new tax structure, all net deferred tax benefits that were not expected to reverse during the five-year phase-in period were written-off as of June 30, 2005.

The increase (decrease) to income taxes associated with the adjustment to net deferred taxes in 2005 is summarized below (in millions):

FES	$ (7	)
OE	$32
CEI	$ 4
TE	$18

Income tax expenses were reduced during 2005 by the initial phase-out of the Ohio income-based franchise tax and phase-in of the CAT tax as summarized below (in millions):

FES	$1
OE	$3
CEI	$5
TE	$1

9. REGULATORY MATTERS

(A) RELIABILITY INITIATIVES

In late 2003 and early 2004, a series of letters, reports and recommendations were issued from various entities, including governmental, industry and ad hoc reliability entities (PUCO, FERC, NERC and the U.S. - Canada Power System Outage Task Force) regarding enhancements to regional reliability. The proposed enhancements were divided into two groups: enhancements that were to be completed in 2004; and enhancements that were to be completed after 2004. In 2004, FirstEnergy completed ~~implementation~~all of ~~all actions and initiatives related to enhancing area reliability, improving voltage and reactive management, operator readiness and training and emergency response preparedness~~the enhancements that were recommended for completion in 2004. Subsequently, FirstEnergy has worked systematically to complete all of the enhancements that were identified for completion after 2004, and FirstEnergy expects to complete this work prior to the summer of 2008. The FERC and the other affected government agencies and reliability entities may review FirstEnergy's work and, on the basis of any such review, may recommend additional enhancements in the future, which could require additional, material expenditures.

As a result of outages experienced in JCP&L's service area in 2002 and 2003, the NJBPU performed a review of JCP&L's service reliability. On June 9, 2004, the NJBPU approved a stipulation that addresses a third-party consultants recommendations on appropriate courses of action necessary to ensure system-wide reliability. The stipulation incorporates the consultants focused audit of, and recommendations regarding, JCP&L's Planning and Operations and Maintenance programs and practices. On June 1, 2005, the consultant completed his work and issued his final report to the NJBPU. On July 14, 2006, JCP&L filed a comprehensive response to the 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 stipulation.

In 2005, Congress amended the Federal Power Act to provide for federally-enforceable mandatory reliability standards. The mandatory reliability standards apply to the bulk power system and impose certain operating, record-keeping and reporting requirements on the Companies and ATSI. The NERC is charged with establishing and enforcing these reliability standards, although it has delegated day-to-day implementation and enforcement of its responsibilities to eight regional entities, including the ReliabiltyFirst Corporation. All of FirstEnergy's facilities are located within the ReliabiltyFirst region. FirstEnergy actively participates in the NERC and ReliabiltyFirst stakeholder processes, and otherwise monitors and manages its companies in response to the ongoing development, implementation and enforcement of the reliability standards.

FirstEnergy believes that it is in compliance with all currently-effective and enforceable reliability standards. Nevertheless, it is clear that NERC, ReliabiltyFirst and the FERC will continue to refine existing reliability standards as well as to develop and adopt new reliability standards. The financial impact of complying with new or amended standards cannot be determined at this time. However, the 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.

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.

(B) OHIO

On September 9, 2005, the Ohio Companies filed their 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 January 4, 2006, the PUCO issued an order which approved the stipulations clarifying certain provisions. Several parties subsequently filed appeals to the Supreme Court of Ohio 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 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 other respects. On September 10, 2007 the Ohio Companies filed an Application with the PUCO that requested the implementation of two generation-related fuel cost riders to 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 proposed fuel cost rider to recover increased fuel costs to be incurred commencing January 1, 2008 through December 31, 2008, which is expected to be approximately $167 million. The fuel cost rider became effective January 11, 2008 and will be adjusted and reconciled quarterly. In addition, the PUCO ordered the Ohio Companies to file a 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 separate fuel rider, with alternative options for the recovery period ranging from five to twenty-five years. This second application is currently pending before the 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 are necessary, such adjustments, with carrying costs, will be incorporated into the 2008 transmission rider filing.

The Ohio Companies filed an application and rate request for an increase in electric distribution rates with the PUCO on 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 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 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 Staff Reports and on January 10, 2008, the Ohio Companies filed supplemental testimony. Evidentiary hearings began on January 29, 2008 and continued through February 2008. During the evidentiary hearings, the PUCO 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 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 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.

On July 10, 2007, the Ohio Companies filed an application with the PUCO 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 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 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 bill were submitted, including those from Ohios investor-owned electric utilities. A substitute version of the bill, which incorporated certain of the proposed amendments, was introduced into the Senate Energy & Public Utilities Committee on October 25, 2007 and was passed by the Ohio Senate on October 31, 2007. The 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 interested parties, including the Chairman of the PUCO, consumer groups, utility executives and others. At this time, the Ohio Companies cannot predict the outcome of this process nor determine the impact, if any, such legislation may have on their operations.

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. Based on the outcome of the 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 notice prior to the end of the year. The restated agreement also allows Met-Ed and Penelec to sell the output of NUG energy to the market and requires FES to provide energy at fixed prices to replace any NUG energy sold to the extent needed for Met-Ed and Penelec to satisfy their PLR and default service obligations. The fixed price under the restated 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 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 had been approved, annual revenues would have increased 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 power procured through a CBP as the amount of supply provided under the then existing FES agreement was to be phased out. Met-Ed and Penelec also requested approval of a January 12, 2005 petition for the deferral of transmission-related costs incurred during 2006. In this rate filing, Met-Ed and Penelec 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. Changes in the recovery of NUG expenses and the recovery of Met-Ed's non-NUG stranded costs were also included in the filing. On May 4, 2006, the PPUC consolidated the remand of the FirstEnergy and GPU merger proceeding, related to the quantification and allocation of merger savings, with the comprehensive transition rate filing case.

The PPUC entered its opinion and order in the comprehensive rate filing proceeding on January 11, 2007. The order approved the recovery of transmission costs, including the transmission-related deferral for January 1, 2006 through January 10, 2007, and determined that no merger savings from prior years should be considered in determining customers rates. The request for increases in generation supply rates was denied as were the requested changes to 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 costs. Met-Ed's and 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 (including congestion), transmission deferrals and rate design issues. 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 March 8, 2007, 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.

On March 30, 2007, MEIUG and PICA filed a Petition for Review with the Commonwealth Court of Pennsylvania asking the court to review the PPUC's determination on transmission (including congestion) and the transmission deferral. Met-Ed and Penelec filed a Petition for Review on April 13, 2007 on the issues of consolidated tax savings and the 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, 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) and the FirstEnergy/GPU Merger Settlement Stipulation were $512 million and $55 million, respectively. 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 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 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 for authorization to reflect the stranded cost accounting methodology modification effective January 1, 1999. Hearings on this petition were held in February 2007 and briefing was completed on March 28, 2007. 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 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 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 will be presented to the PPUC for its consideration by March 13, 2008.

On February 1, 2007, the Governor of Pennsylvania proposed an EIS. The EIS includes four pieces of 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 energy growth, a requirement that electric distribution companies acquire power that results in the lowest reasonable rate on a long-term basis, the utilization of micro-grids and a three year phase-in of rate increases. On July 17, 2007 the 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 been introduced to address generation procurement, expiration of rate caps, conservation and renewable energy. The final form of this pending legislation is uncertain. Consequently, the Pennsylvania Companies are unable to predict what impact, if any, such legislation may have on their operations.

(D) NEW JERSEY

In accordance with an April 28, 2004 NJBPU order, JCP&L filed testimony on June 7, 2004 supporting 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 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 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. The NJBPU Staff circulated revised drafts of the proposal to interested 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 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:

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

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

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Reduce air pollution related to energy use;

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Encourage and maintain economic growth and development;

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

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Maintain unit prices for electricity 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

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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 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 2008. At this time, JCP&L cannot predict the outcome of this process nor determine the impact, if any, such legislation may have on its operations.

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 MATTERS

Transmission Service between MISO and PJM

On November 18, 2004, the FERC issued an order eliminating the 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 rate mechanism to recover lost transmission revenues created by elimination of this charge (referred to as the Seams Elimination Cost Adjustment or SECA) during a 16-month transition period. The FERC issued orders in 2005 setting the SECA for hearing. The presiding judge issued an initial decision on August 10, 2006, rejecting the compliance filings made by MISO, PJM, and the transmission owners, and directing new compliance filings. This decision is subject to review and approval by the FERC. Briefs addressing the initial decision were filed on September 11, 2006 and October 20, 2006. A final order could be issued by the FERC in the first quarter of 2008.

PJM Transmission Rate Design

On January 31, 2005, certain PJM transmission owners made 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. Hearings were held and numerous parties appeared and litigated various issues concerning PJM rate design; notably AEP, which proposed to create a "postage stamp", or average rate for all high voltage transmission facilities across PJM and a zonal transmission rate for facilities below 345 kV. This proposal would have the effect of shifting recovery of the costs of high voltage transmission lines to other transmission zones, including those where JCP&L, Met-Ed, and Penelec serve load. The ALJ issued an initial 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. Numerous parties, including FirstEnergy, submitted briefs opposing the ALJ's decision and recommendations. On April 19, 2007, the FERC 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 design was just and reasonable and ordered that the current license plate rates for existing transmission 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 collected from all transmission zones 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, in a related order that also was issued on April 19, 2007, directed that hearings be held for the purpose of establishing a just and reasonable cost allocation methodology for inclusion in PJM's tariff.

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.

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.

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.

(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 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		-		$	-

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

Securitized Transition Bonds

JCP&L's consolidated financial statements include the 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 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 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 most restrictive of the debt covenants relate to the nonpayment of interest and/or principal on debt and 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 $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.

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 approximately $236 million of the 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 credit agreement to a trust. The trust then issued and sold trust certificates to institutional investors that were designed to be the credit equivalent of an investment directly in OE.

11. ASSET RETIREMENT OBLIGATIONS

FES and the Companies have recognized applicable legal obligations under SFAS 143 for nuclear power plant decommissioning, reclamation of a sludge disposal pond and closure of two coal ash disposal sites. In addition, FES and the Companies have recognized conditional retirement obligations (primarily for asbestos remediation) in accordance with FIN 47, which was implemented on December 31, 2005.

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 adopting FIN 47 in December 2005, after-tax charges of $8.8 million for FES, $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 cumulative effect of a change in accounting principle.

The following table describes the changes to the ARO balances during 2007 and 2006.

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

12. SHORT-TERM BORROWINGS AND BANK LINES OF CREDIT

FirstEnergy, FES and the Companies are parties to a $2.75 billion five-year revolving credit facility. FirstEnergy may request an increase in the total commitments available under this facility up to a maximum of $3.25 billion. Commitments under the facility are available until August 24, 2012, unless the lenders agree, at the request of the borrowers, to an unlimited number of additional one-year extensions. Generally, borrowings under the facility must be repaid within 364 days. Available amounts for each borrower are subject to a specified sub-limit, as well as applicable regulatory and other limitations. The annual facility fee is 0.125%

On December 28, 2007, the FERC issued an order authorizing JCP&L, Penn, Met-Ed and 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 remaining assets could be available to its parent company. The receivables financing borrowing capacity by company are shown in the following table. There were no outstanding borrowings as of December 31, 2007.

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 short-term borrowings outstanding as of December 31, 2007 and 2006 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 Price-Anderson Act limits the public liability relative to a single incident at a nuclear power plant to $10.8 billion. The amount is covered by a combination of private insurance and an industry retrospective rating plan. The maximum potential assessment under the industry retrospective rating plan would be $402 million per incident but not more than $60 million in any one year for each incident.

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 Companies have also obtained approximately $2.0 billion of insurance coverage for replacement power costs. Under these policies, FES and the Companies can be assessed a maximum of approximately $80.9 million for incidents at any covered nuclear facility occurring during a policy year which are in excess of accumulated funds available to the insurer for paying losses.

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, repair and replacement costs and other such costs arising from a nuclear incident at any of 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 their insurance policies, or to the extent such insurance becomes unavailable in the future, FES and the Companies would remain at risk for such costs.

(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 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.

Various federal, state and local authorities regulate FES with regard to air and water quality and other environmental matters. The effects of compliance on FES with regard to environmental matters could have a material adverse effect on 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. FES estimates capital expenditures for environmental compliance of approximately $1.4 billion for the period 2008-2012.

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 FES determination of environmental liabilities and are accrued in the period that they become both probable and reasonably estimable.

Clean Air Act Compliance

FES is required to meet federally-approved SO2 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 SO2 regulations in Ohio that allows for compliance based on a 30-day averaging period. 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.

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. 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.

FES complies with SO2 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 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 reductions at FES facilities. The EPA's NOX Transport Rule imposes uniform reductions of NOX emissions (an approximate 85% reduction in utility plant NOX 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 emissions are contributing significantly to ozone levels in the eastern United States. FES believes its facilities are also complying with the NOX budgets established under SIPs through combustion controls and post-combustion controls, including Selective Catalytic Reduction and 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.

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 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 requires reductions of NOX and SO2 emissions in two phases (Phase I in 2009 for NOX, 2010 for SO2 and Phase II in 2015 for both NOX and SO2). FES' Michigan, Ohio and Pennsylvania fossil generation facilities will be subject to caps on SO2 and NOX emissions. According to the EPA, SO2 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 SO2 emissions in affected states to just 2.5 million tons annually. NOX 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 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 may depend on the outcome of this litigation and how CAIR is ultimately 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, capping national mercury emissions at 38 tons by 2010 (as a "co-benefit" from implementation of SO2 and NOX emission caps under the EPA's CAIR program) and 15 tons per year by 2018. Several states and environmental groups appealed CAMR to the United States Court of Appeals for the District of 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 mercury regulations may be substantial and will depend on the action taken by the EPA and on how they are ultimately implemented.

Pennsylvania has submitted a new mercury rule for EPA approval that does not provide a cap-and-trade approach as in the CAMR, but rather follows a command-and-control approach imposing emission limits on individual sources. It is anticipated that compliance with these regulations, if approved by the EPA and implemented, 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 Plant

In 1999 and 2000, the EPA issued an NOV and the DOJ filed a civil complaint against OE and Penn based on operation and maintenance of the W.H. Sammis Plant (Sammis NSR Litigation) and filed similar complaints involving 44 other U.S. 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 Sammis NSR litigation. This settlement agreement, which is in the form of a consent decree, was approved by the court on July 11, 2005, and requires reductions of NOX and SO2 emissions at the Sammis, Burger, Eastlake and 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 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, FGCO, 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 $1.3 billion for 2008-2012 ($650 million of which is expected to be spent during 2008, with the largest portion of the remaining $650 million expected to be spent in 2009). This amount is included in the estimated capital expenditures for environmental compliance referenced above.

The Sammis NSR Litigation consent decree also requires FirstEnergy 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 AQC systems for the reduction of SO2 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 SO2 emissions. SCR systems for the reduction of NOX emissions are also being installed at the Sammis Plant under a 1999 Agreement with B&W.

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 determine whether an emissions increase triggers NSR. Subsequently, on May 8, 2007, the EPA proposed to change the NSR regulations to utilize changes in the 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 compliance with those regulations may be substantial and will depend on how they are ultimately implemented.

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 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. 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.

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 potential legislative or regulatory programs restricting CO2 emissions could require significant capital and other expenditures. The CO2 emissions per KWH of electricity generated by FES is lower than many regional competitors due to its diversified generation sources, which include low or non-CO2 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 FES plants. In addition, Ohio, New Jersey and Pennsylvania have water quality standards applicable to 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.

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 aquatic organisms are pinned against screens or other parts of a cooling water intake system) and entrainment (which occurs when aquatic life is drawn into a facility's cooling water system). On January 26, 2007, the 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 the EPAs regulations. 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 evaluating various control options and their costs and effectiveness. Depending on the outcome of such studies, 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 non-hazardous waste.

Under NRC regulations, FirstEnergy must ensure that adequate funds will be available to decommission its nuclear facilities. As of December 31, 2007, FES and the Companies had approximately $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 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 (and Exelon for TMI-1 as it relates to 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 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, 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. CEI, TE and JCP&L have recognized liabilities of $1.3 million, $2.5 million and $64.9 million, respectively, as of December 31, 2007.

(D) OTHER LEGAL PROCEEDINGS

Power Outages and Related Litigation

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 its customers. Two class action lawsuits (subsequently consolidated into a single proceeding) were filed in New Jersey Superior Court in July 1999 against JCP&L, GPU and other GPU companies, seeking compensatory and punitive damages arising from the July 1999 service interruptions in the JCP&L territory.

In August 2002, the trial court granted partial summary judgment to JCP&L and dismissed the plaintiffs' claims for consumer fraud, common law fraud, negligent misrepresentation, and strict product liability. In November 2003, the trial court granted JCP&L's motion to decertify the class and denied plaintiffs' motion to permit into evidence their class-wide damage model indicating damages in excess of $50 million. These class decertification and damage rulings were appealed to the 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 remaining plaintiffs claims for negligence, breach of contract and punitive damages. In July 2006, the New Jersey Superior Court dismissed the punitive damage claim and again decertified the class based on the fact that a vast majority of the class members did not suffer damages and those that did would be more appropriately addressed in individual actions. Plaintiffs appealed this ruling to 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.

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 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 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 outages and that it does not adequately address the underlying causes of the outages. FirstEnergy remains convinced that the outages cannot be explained by events on any one utility's system. The final report contained 46 recommendations to 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, MISO, PJM, ECAR, and other parties to correct the causes of the August 14, 2003 power outages. FirstEnergy implemented several initiatives, both prior to and since the August 14, 2003 power outages, which were independently verified by NERC as complete in 2004 and were consistent with these and other recommendations and collectively enhance the reliability of its electric system. FirstEnergy's implementation of these recommendations in 2004 included completion of the Task Force recommendations that ~~FirstEnergy had implemented the various initiatives to be completed by June 30 or summer 2004, with minor exceptions noted by FirstEnergy, which exceptions are now essentially complete.~~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 future ~~as the result of adoption of mandatory reliability standards pursuant to the EPACT~~ that could require additional material expenditures. ~~Finally,~~

On February 5, 2008, the PUCO ~~is continuing~~entered an order dismissing four separate complaint cases before it relating to ~~review~~the August 14, 2003 power outages. The dismissal was filed by the complainants in accordance with a resolution reached between the FirstEnergy ~~filing that addressed upgrades to control room computer hardware~~companies and ~~software~~the complainants in those four cases. Two of those cases which were originally filed in Ohio State courts involved individual complainants and ~~enhancements to the training~~were subsequently dismissed for lack of ~~control room operators, before determining the next steps, if any,~~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 ~~proceeding.~~

As a result of outages experienced in JCP&L’s service area in 2002 and 2003, the NJBPU had implemented reviews into 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 that incorporates the final report of a Special Reliability Master who made recommendations on appropriate courses of action necessary to ensure system-wide reliability. The Stipulation also incorporates the Executive Summary and Recommendation portions of the final report of a focused audit of JCP&L’s Planning and Operations and Maintenance programs and practices (Focused Audit). A final order in the Focused Audit docket was issued by the NJBPU on July 23, 2004. On February 11, 2005, JCP&L met with the Ratepayer Advocate to discuss reliability improvements. JCP&L continues to file compliance reports reflecting activities associated with the MOU and Stipulation.

In May 2004, the PPUC issued an order approving revised reliability benchmarks and standards, including revised benchmarks and standards for Met-Ed, Penelec and Penn. Met-Ed, Penelec and Penn filed a Petition for Amendment of Benchmarks with the PPUC on May 26, 2004, due to their implementation of automated outage management systems following restructuring. On December 30, 2005 the ALJ recommended that the PPUC adopt the Joint Petition for Settlement among the parties involved in the three Companies’ request to amend the distribution reliability benchmarks, thereby eliminating the need for full litigation. The ALJ’s recommendation, adopting the revised benchmarks and standards was approved by the PPUC on February 9, 2006.

The EPACT provides for the creation of an ERO to establish and enforce reliability standards for the bulk power system, subject to FERC review. On February 3, 2006, the FERC adopted a rule establishing certification requirements for the ERO, as well as regional entities envisioned to assume monitoring responsibility for the new reliability standards.

The NERC has been preparing the implementation aspects of reorganizing its structure to meet the FERC’s certification requirements for the ERO. The NERC will make a filing with the FERC to obtain certification as the ERO and to obtain FERC approval of delegation agreements with regional entities. The new FERC rule referred to above, further provides for reorganizing regional reliability organizations (regional entities) that would replace the current regional councils and for rearranging the relationship with the ERO. The “regional entity” may be delegated authority by the ERO, subject to FERC approval, for enforcing reliability standards adopted by the ERO and approved by the FERC. NERC also intends to make a parallel filing with the FERC seeking approval of mandatory reliability standards. These reliability standards are expected to be based on the current NERC Version 0 reliability standards with some additional standards. The two filings are expected to be made in the second quarter of 2006.

The ECAR, Mid-Atlantic Area Council, and Mid-American Interconnected Network reliability councils have completed the consolidation of these regions into a single new regional reliability organization known as ReliabilityFirst Corporation. ReliabilityFirst began operations as a regional reliability council under NERC on January 1, 2006 and intends to file and obtain certification consistent with the final rule as a “regional entity” under the ERO during 2006. All of FirstEnergy’s facilities are located within the ReliabilityFirst region.

On a parallel path, the NERC is establishing working groups to develop reliability standards to be filed for approval with the FERC following the NERC’s certification as an ERO. These reliability standards are expected to build on the current NERC Version 0 reliability standards. It is expected that the proposed reliability standards will be filed with the FERC in early 2006.

We believe that we are in compliance with all current NERC reliability standards. However, it is expected that the FERC will adopt stricter reliability standards than those contained in the current NERC Version 0 standards. The financial impact of complying with the new standards cannot be determined at this time. However, the EPACT required that all prudent costs incurred to comply with the new reliability standards be recovered in rates.

~~PUCO Rate Matters~~

On August 5, 2004, the Ohio Companies accepted the RSP as modified and approved by the PUCO in an August 4, 2004 Entry on Rehearing, subject to a competitive bid process. The RSP was intended to establish generation service rates beginning January 1, 2006, in response to PUCO concerns about price and supply uncertainty following the end of the Ohio Companies' transition plan market development period. In October 2004, the OCC and NOAC filed appeals with the Supreme Court of Ohio to overturn the original June 9, 2004 PUCO order in this proceeding as well as the associated entries on rehearing. On September 28, 2005, the Ohio Supreme Court heard oral arguments on the appeals and it is expected that the Court will issue its opinion in 2006. On November 1, 2005, the Ohio Companies filed tariffs in compliance with the approved RSP, which were approved by the PUCO on December 7, 2005.

On May 27, 2005, the Ohio Companies filed an application with the PUCO to establish a GCAF rider under the RSP. The GCAF application sought recovery of increased fuel costs from 2006 through 2008 applicable to the Ohio Companies' retail customers through a tariff rider to be implemented January 1, 2006. The application reflected projected increases in fuel costs in 2006 compared to 2002 baseline costs. The new rider, after adjustments made in testimony, sought to recover all costs above the baseline (approximately $88 million in 2006). Various parties including the OCC intervened in this case and the case was consolidated with the RCP application discussed below.

On September 9, 2005, the Ohio Companies filed an application with the PUCO that supplemented their existing RSP with an RCP which was designed to provide customers with more certain rate levels than otherwise available under the RSP during the plan period. Major provisions of the RCP include:

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

Defer and capitalize for future recovery 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;

·	~~Adjust 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 as of December 31, 2010 for CEI;~~

·	Reduce 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

Recover increased fuel costs 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 increased fuel costs above the amount collected through the fuel recovery mechanism (in lieu of implementation of the GCAF rider).

On November 4, 2005, a supplemental stipulation was filed with the PUCO which was in addition to a stipulation filed with the September 9, 2005 application. On January 4, 2006, the PUCO approved the RCP filing with modifications. On January 10, 2006, the Ohio Companies filed a Motion for Clarification of the PUCO order approving the RCP. The Ohio Companies sought clarity on issues related to distribution deferrals, including requirements of the review process, timing for recognizing certain deferrals and definitions of the types of qualified expenditures. The Ohio Companies also sought confirmation that the list of deferrable distribution expenditures originally included in the revised stipulation fall within the PUCO order definition of qualified expenditures. 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 Commission granted the Ohio Companies’ requests to: 1) recognize fuel and distribution deferrals commencing January 1, 2006; 2) recognize distribution deferrals on a monthly basis prior to review by the Commission Staff; 3) clarify that the types of distribution expenditures included in the Supplemental Stipulation may be deferred; and 4) clarify that distribution expenditures do not have to be “accelerated” in order to be deferred. The Commission granted the Ohio Companies’ methodology for determining distribution deferral amounts, but denied the Motion in that the Commission Staff must verify the level of distribution expenditures contained in current rates, as opposed to simply accepting the amounts contained in the Companies’ Motion. On February 3, 2006, several other parties filed applications for rehearing on the PUCO's January 4, 2006 Order. The Ohio Companies responded to the application for rehearing on February 13, 2006.

Under provisions of the RSP, the PUCO may require the Ohio Companies to undertake, no more often than annually, a competitive bid process to secure generation for the years 2007 and 2008. On July 22, 2005, FirstEnergy filed a competitive bid process for the period beginning in 2007 that is similar to the competitive bid process approved by the PUCO for the Ohio Companies in 2004, which resulted in the PUCO accepting no bids. Any acceptance of future competitive bid results would terminate the RSP pricing, with no accounting impacts to the RSP, and not until twelve months after the PUCO authorizes such termination. On September 28, 2005, the PUCO issued an Entry that essentially approved the Ohio Companies' filing but delayed the proposed timing of the competitive bid process by four months, calling for the auction to be held on March 21, 2006. OCC filed an application for rehearing of the September 28, 2005 Entry, which the PUCO denied on November 22, 2005. On February 23, 2006, the auction manager notified the PUCO that there was insufficient interest in the auction process to allow it to proceed in 2006.

On December 30, 2004, the Ohio Companies filed with the PUCO two applications related to the recovery of transmission 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 PUCO approved the settlement stipulation on August 31, 2005. The incremental transmission and ancillary service revenues expected to be recovered from January through June 2006 are approximately $66 million. This amount includes the recovery of the 2005 deferred MISO expenses as described below. In May 2006, the Companies will file a modification to the rider to determine revenues from July 2006 through June 2007.

The second application sought authority to defer costs associated with transmission and ancillary service related costs incurred during the period from 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. All briefs have been filed. A motion to dismiss filed on behalf of the PUCO is currently pending. Unless the court grants the motion, the appeal will be set for oral argument, which should be heard in the third or fourth quarter of 2006.

On January 20, 2006 the OCC sought rehearing of the PUCO approval of the rider recovery during the period January 1, 2006 through June 30, 2006, as that amount pertains to recovery of the deferred costs. The PUCO denied the OCC's application on February 6, 2006. The OCC has sixty days from that date to appeal the PUCO's approval of the rider.

~~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 October 2, 2003, the PPUC issued an order concluding that the Commonwealth Court reversed the PPUC’s June 2001 order in its entirety. In accordance with the PPUC's direction, Met-Ed and Penelec filed supplements to their tariffs that became effective in October 2003 and that reflected the CTC rates and shopping credits in effect prior to the June 2001 order.

Met-Ed and Penelec had been negotiating with interested parties in an attempt to resolve the merger savings issues that are the subject of remand from the Commonwealth Court. Met-Ed’s and Penelec’s combined portion of total merger savings during 2001 - 2004 is estimated to be approximately $51 million. In late 2005, settlement discussions broke off as unsuccessful. A procedural schedule was established by the ALJ on January 17, 2006. The companies’ initial testimony is due on March 1, 2006 with testimony of the other parties and additional testimony by the companies to be filed through October, 2006. Hearings are scheduled for the end of October 2006 with the ALJ’s recommended decision to be issued in February 2007. The companies are unable to predict the outcome of this proceeding.

In an October 16, 2003 order, the PPUC approved September 30, 2004 as the date for Met-Ed's and Penelec's NUG trust fund refunds. The PPUC order also denied their accounting treatment request regarding the CTC rate/shopping credit swap by requiring Met-Ed and Penelec to treat the stipulated CTC rates that were in effect from January 1, 2002 on a retroactive basis. On October 22, 2003, Met-Ed and Penelec filed an Objection with the Commonwealth Court asking that the Court reverse this PPUC finding; a Commonwealth Court judge subsequently denied their Objection on October 27, 2003 without explanation. On October 31, 2003, Met-Ed and Penelec filed an Application for Clarification of the Court order with the judge, a Petition for Review of the PPUC's October 2 and October 16, 2003 Orders, and an application for reargument, if the judge, in his clarification order, indicates that Met-Ed's and Penelec's Objection was intended to be denied on the merits. The Reargument Brief before the Commonwealth Court was filed on January 28, 2005.

As of December 31, 2005, Met-Ed's and Penelec's regulatory deferrals pursuant to the 1998 Restructuring Settlement (including the Phase 2 Proceedings) and the FirstEnergy/GPU Merger Settlement Stipulation are $333 million and $48 million, respectively. Penelec's $48 million is subject to the pending resolution of taxable income issues associated with NUG Trust Fund proceeds.

~~Met-Ed and Penelec purchase a portion~~name of their ~~PLR requirements~~insured, seeking reimbursement from ~~FES through a wholesale power sales agreement~~various FirstEnergy companies (and, in one case, from PJM, MISO and a portion from contracts with unaffiliated third party suppliers, including NUGs. Assuming continuation of these existing contractual arrangements, the available supply represents approximately 100% of the combined retail sales obligations of Met-Ed and Penelec in 2006 and 2007; almost 100%AEP, as well) for ~~2008; and approximately 85%~~claims paid to insureds for 2009 and 2010. Met-Ed and Penelec are authorized to defer any excess of NUG contract costs over current market prices. Under the terms of the wholesale agreement with FES, FES retains 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 under their contracts with NUGs and other unaffiliated suppliers. This arrangement reduces Met-Ed's and Penelec's exposure to high wholesale power prices by providing power at a fixed price for their uncommitted PLR energy costs during the term of the agreement with FES. The wholesale agreement with FES is automatically extended for each successive calendar year unless any party elects to cancel the agreement by November 1 of the preceding year. On November 1, 2005, FES and the other parties thereto amended the agreement to provide FES the right over the next year to terminate the agreement at any time upon 60 days notice. If the wholesale power agreement were terminated or modified, Met-Ed and Penelec would need to satisfy the portion of their PLR obligations currently supplied by FES from unaffiliated suppliers at prevailing prices, which are likely to be higher than the current price charged by FES under the agreement and, as a result, Met-Ed’s and Penelec’s purchased power costs could materially increase. If Met-Ed and Penelec were to replace the 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 support an investment grade rating for its fixed income securities. Met-Ed and Penelec are in the process of preparing a comprehensive rate filing that will address a number of transmission, distribution and supply issues and is expected to be filed with the PPUC in the second quarter of 2006. That filing will include, among other things, a request for appropriate regulatory action to mitigate adverse consequences from any future reduction, in whole or in part, in the availability to Met-Ed and Penelec of supply under the existing FES agreement. There can be no assurance, however, that if FES ultimately determines to terminate, or significantly modify the agreement, timely regulatory relief will be granted by the PPUC or, to the extent granted, adequate to mitigate such adverse consequences.

On January 12, 2005, Met-Ed and Penelec filed, before the PPUC, a request for deferral of transmission-related costs beginning January 1, 2005, estimated to be approximately $8 million per month. The OCA, OSBA, OTS, MEIUG, PICA, Allegheny Electric Cooperative and Pennsylvania Rural Electric Association have all intervened in the case. To date, no hearing schedule has been established, and neither company has yet implemented deferral accounting for these costs.

On October 11, 2005, Penn filed a plan with the PPUC to secure electricity supply for its customers at set rates following the end of its transition period on December 31, 2006. Penn is recommending that the RFP process cover the period January 1, 2007 through May 31, 2008. Hearings were held on January 10, 2006 with Main Briefs filed on January 27, 2006 and Reply Briefs on February 3, 2006. On February 17, 2006, the ALJ issued a Recommended Decision to adopt Penn's RFP process with modifications. A PPUC vote is expected in April 2006. Under Pennsylvania's electric competition law, Penn is required to secure generation supply for customers who do not choose alternative suppliers for their electricity.

~~NJBPU Rate Matters~~

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 MTC rates and market sales of NUG energy and capacity. As of December 31, 2005, the accumulated deferred cost balance totaled approximately $541 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. JCP&L is in discussions with the NJBPU staffdamages allegedly arising as a result of the stipulated settlement agreements (as further discussed below) which recommended that the NJBPU issue an order regarding JCP&L's application. On July 20, 2005, JCP&L requested the NJBPU to set a procedural schedule for this matter and is awaiting NJBPU action. On February 1, 2006, the NJBPU selected Bear Stearns as the financial advisor. On December 2, 2005, JCP&L filed a request for recoveryloss of ~~$165 million of actual above-market NUG costs incurred from~~power on August 1, 2005 through October 31, 2005 and forecasted above-market NUG costs for November and December 2005. The filing also includes a request for recovery of $49 million for above-market NUG costs incurred prior to August 1, 2003,14, 2003. (Also relating to the ~~extent those costs are not recoverable through securitization.~~

~~The~~August 14, 2003 NJBPU decision on JCP&L's base electric rate proceeding (the Phase I Order) disallowed certain regulatory assets and provided for an interim return on equity of 9.5% on JCP&L's rate base. The Phase I order also provided forpower outages, a ~~Phase II proceeding~~fifth case, involving another insurance company was voluntarily dismissed by the claimant in which the NJBPU would review whether JCP&L is in compliance with current service reliability and quality standards and determine whether the expenditures and projects undertaken by JCP&L to increase its system's reliability are prudent and reasonable for rate recovery. Depending on its assessment of JCP&L's service reliability, the NJBPU could have increased JCP&L’s return on equity to 9.75% or decreased it to 9.25%.

~~On July 16, 2004, JCP&L filed the Phase II petition and testimony with the NJBPU, requesting an increase in base rates of $36 million for the recovery of system reliability costs~~April 2007; and a ~~9.75% return on equity. The filing also requested an increase to~~sixth case, involving the ~~MTC deferred balance recovery of approximately $20 million annually.~~

On May 25, 2005, the NJBPU approved two stipulated settlement agreements. The first stipulation between JCP&L and the NJBPU staff resolves all of the issues associated with JCP&L's motion for reconsideration of the Phase I Order. The second stipulation between JCP&L, the NJBPU staff and the Ratepayer Advocate resolves all of the issues associated with JCP&L's Phase II proceeding. The stipulated settlements provide for, among other things, the following:

·	~~An annual increase in distribution revenues of $23 million effective June 1, 2005, associated with the Phase I Order reconsideration;~~

·	~~An annual increase in distribution revenues of $36 million effective June 1, 2005, related to JCP&L's Phase II Petition;~~

·	An annual reduction in both rates and amortization expense of $8 million, effective June 1, 2005, in anticipation of an NJBPU order regarding JCP&L's request to securitize up to $277 million of its deferred cost balance;

·	~~An increase in JCP&L's authorized return on common equity from 9.5% to 9.75%; and~~

A commitment by JCP&L, through December 31, 2006 or until related legislation is adopted, whichever occurs first, to maintain a target level of customer service reliability with a reduction in JCP&L's authorized return on common equity from 9.75% to 9.5% if the target is not met for two consecutive quarters. The authorized return on common equity would then be restored to 9.75% if the target is met for two consecutive quarters.

The Phase II stipulation included an agreement that the distribution revenue increase also reflects a three-year amortization of JCP&L's one-time service reliability improvement costs incurred in 2003-2005. This resulted in the creationclaim of a ~~regulatory asset associated with accelerated tree trimming and other reliability costs which were expensed in~~non-customer seeking reimbursement for losses incurred when its store was burglarized on August 14, 2003 and 2004. The establishment of the new regulatory asset of approximately $28 million resulted in an increase to net income of approximately $16 million ($0.05 per share of common stock) in the second quarter of 2005.

JCP&L sells all self-supplied energy (NUGs and owned generation) to the wholesale market with offsetting credits to its deferred energy balance with the exception of 300 MW from JCP&L's NUG committed supply currently being used to serve BGS customers pursuant to NJBPU order for the period June 1, 2005 through May 31, 2006. New BGS tariffs reflecting the results of a February 2005 auction for the BGS supply became effective June 1, 2005.

~~The NJBPU decision approving the BGS procurement proposal for the period beginning June 1, 2006~~ was issued on October 12, 2005. JCP&L submitted a compliance filing on October 26, 2005, which was approved on November 10, 2005. The written Order was dated December 8, 2005. The auction took place in early February 2006 and the results have been approveddismissed by the ~~NJBPU.~~

~~In accordance with an April 28, 2004 NJBPU~~court.) The 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 Ratepayer Advocate filed comments on February 28, 2005. On March 18, 2005, JCP&L filed a response to those comments. A schedule for further 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 recent repeal of PUHCA under the EPACT. An NJBPU proposed rulemaking to address the issues was published in the NJ Register on December 19, 2005. The proposal 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. A public hearing was held on February 7, 2006 and comments may be submitted to the NJBPU by February 17, 2006. JCP&L is not able to predict the outcome of this proceeding at this time.

~~FERC Rate Matters~~

On November 1, 2004, ATSI requested authority from the FERC to defer approximately $54 million of vegetation management costs estimated to be incurred from 2004 through 2007. On March 4, 2005, the FERC approved ATSI's request to defer those costs ($26 million deferred as of December 31, 2005). ATSI expects to file an application with the FERC in 2006 that would include recovery of the deferred costs beginning June 1, 2006.

On January 24, 2006, ATSI and MISO filed an application with the FERC to modify the Attachment O formula rate mechanism to permit ATSI to accelerate recovery of revenues lost due to the FERC's elimination of through and out rates between MISO and PJM, and the elimination of other ATSI rates in the MISO tariff. Revenues formerly collected under these rates are currently used to reduce the ATSI zonal transmission rate in the Attachment O formula. The revenue shortfall created by elimination of these rates would not be fully reflected in ATSI's formula rate until June 1, 2006, unless the proposed Revenue Credit Collection is approved by the FERC. The Revenue Credit Collection mechanism is designed to collect approximately $40 million in revenues on an annualized basis beginning June 1, 2006. FERC is expected to act on this filing on or before April 1, 2006.

ATSI, JCP&L, Met-Ed, Penelec, and FES continue to be involved in FERC hearings concerning the calculation and imposition of Seams Elimination Cost Adjustment (SECA) charges to various load serving entities. Pursuant to its January 30, 2006 Order, the FERC has compressed both phases of this proceeding into a single hearing scheduled to begin May 1, 2006, with an initial decision on or before August 11, 2006.

On January 31, 2005, certain PJM transmission owners made three filings 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 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. Second, the FERC approved the proposed Schedule 12 rate harmonization. Third, the FERC accepted the proposed formula rate, subject to referral and hearing procedures. On June 30, 2005, the PJM transmission owners filed a request for rehearing of the May 31, 2005 order. The rate design and formula rate proceedings are currently being litigated before the FERC. If FERC accepts AEP’s proposal to create a “postage stamp” rate for high voltage transmission facilities across PJM, significant additional transmission revenues would be imposed on JCP&L, Met-Ed, Penelec, and other transmission zones within PJM.

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 bydismissing 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 competitive bid process results in a lower price for retail customers. A similar power sales agreement between FES and Penn permits Penn to obtain its PLR power requirements from FES at a fixed price equal to the retail generation price during 2006. Penn has filed a plan with the PPUC to use an RFP process to obtain its power supply requirements after 2006.

On December 29, 2005, the FERC issued an order setting the two power sales agreements for hearing. The order criticizes the Ohio competitive bid process, and requires FES to submit additional evidence in support of the reasonableness of the prices charged in the Ohio and Pennsylvania Contracts. A pre-hearing conference was held on January 18, 2006 to determine the hearing schedule in this case. FES expects an initial decision to be issued in this case in the fall of 2006. The outcome of this proceeding cannot be predicted. FES has sought rehearing of the December 29, 2005 order.

~~Capital Requirements~~

Capital expenditures for the Companies, FES and FirstEnergy’s other subsidiaries for the years 2006 through 2010 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.

2005

Capital Expenditures Forecast

Actual

2006

2007-2010

Total

(In millions)

OE $ 147 $ 100 $ 444 $ 544
Penn 78 19 72 91
CEI 142 107 493 600
TE 62 54 174 228
JCP&L 205 174 750 924
Met-Ed 83 81 284 365
Penelec 111 83 386 469
ATSI 66 45 237 282
FES 182 215 2,042 2,257
NGC 20 208 591 799
Other subsidiaries 48 45 136 181
Total $ 1,144 $ 1,131 $ 5,609 $ 6,740

~~During the 2006-2010 period, maturities of, and sinking fund requirements for, long-term debt of FirstEnergy and its subsidiaries are:~~

Long-Term Debt Redemption Schedule

2006

2007-2010

Total

(In millions)

OE $ 3 $ 185 $ 188
Penn* 1 4 5
CEI** - 395 395
TE - 30 30
JCP&L 207 78 285
Met-Ed 100 150 250
Penelec - 159 159
FirstEnergy 1,000 - 1,000
Other subsidiaries 13 26 39
Total $ 1,324 $ 1,027 $ 2,351

* Penn has an additional $54 million of pollution control notes to be redeemed in January and February 2006 through the use of restricted cash and an additional $63 million due to associated companies in 2007-2010.
** CEI has an additional $54 million due to associated companies in 2007-2010.

FirstEnergy's investments for additional nuclear fuel during the 2006-2010 period are estimated to be approximately $711 million, of which about $169 million applies to 2006. During the same period, its nuclear fuel investments are expected to be reduced by approximately $560 million and $92 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 2006-2010 period.

Net

Operating Lease Commitments

2006

2007-2010

Total

(In millions)

OE $ 80 $ 378 $ 458
CEI 15 38 53
TE 82 291 373
JCP&L 2 7 9
Met-Ed 1 7 8
Total $ 180 $ 721 $ 901

FirstEnergy had approximately $731 million of short-term indebtedness as of December 31, 2005, comprised of $439 million in borrowings from a $2 billion revolving line of credit, $280 million in borrowings through $550 million of available accounts receivables financing and $12 million of other bank borrowings. Total short-term bank lines available to FirstEnergy and the Companies as of December 31, 2005 were approximately $2.6 billion.

On June 14, 2005, FirstEnergy, OE, Penn, CEI, TE, JCP&L, Met-Ed, Penelec, FES and ATSI, as Borrowers, entered into a syndicated $2 billion five-year revolving credit facility that expires in June 2010. Borrowings under the facility are available to each Borrower separately and mature on the earlier of 364 days from the date of borrowing or the commitment termination date, as the same may be extended. As of December 31, 2005, FirstEnergy was the only borrower on this revolver with an outstanding balance of $439 million. The annual facility fees are 0.15% to 0.50%.

FirstEnergy may borrow under these facilities and could transfer any of its borrowings to its subsidiaries. These revolving credit facilities, combined with an aggregate $550 million of accounts receivable financing facilities for OE, CEI, TE, Met-Ed, Penelec and Penn, are intended to provide liquidity to meet our short-term working capital requirements and those of our subsidiaries. Total unused borrowing capability under existing facilities and accounts receivable financing facilities totaled $1.75 billion as of December 31, 2005. An additional source of ongoing cash for FirstEnergy, as a holding company, is cash dividends from its subsidiaries. In 2005, the holding company received $1.3 billion of cash dividends on common stock from its subsidiaries.

Based on their present plans, the Companies could provide for their cash requirements in 2006 from the following sources: funds to be received from operations; available cash and temporary cash investments as of December 31, 2005 (Company’s non-utility subsidiaries - $63 million, and OE - $1 million); the issuance of long-term debt (for refunding purposes); and funds available under revolving credit arrangements.

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 and preferred stock 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, 2005, the Ohio Companies and Penn had the aggregate capability to issue approximately $1.2 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 and CEI 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 and CEI to incur additional secured debt not otherwise permitted by a specified exception of up to $651 million and $582 million, respectively, as of December 31, 2005. Under the provisions of its senior note indenture, JCP&L may issue additional FMB only as collateral for senior notes. As of December 31, 2005, JCP&L had the capability to issue $715 million of additional senior notes upon the basis of FMB collateral.

OE’s, Penn’s, TE’s and JCP&L’s respective articles of incorporation prohibit the sale of preferred stock unless applicable gross income, calculated as provided in the articles of incorporation, is equal to at least 1-1/2 times the aggregate of the annual interest requirements on indebtedness and annual dividend requirements on preferred stock outstanding immediately thereafter. Based upon applicable earnings coverage tests in their respective charters, OE, Penn, TE and JCP&L could issue a total of $5.5 billion of preferred stock (assuming no additional debt was issued) as of the end of 2005. CEI, Met-Ed and Penelec do not have similar restriction tests and could issue up to the number of preferred stock shares authorized under their respective charters (see Note 11(B) to FirstEnergy's Consolidated Financial Statements).

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, 2005, approximately $1.0 billion was remaining under FirstEnergy’s shelf registration statement, filed with the SEC in 2003, to support future securities issues. 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.

~~Nuclear Regulation~~

On January 20, 2006, FENOC announced that it has 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 NRC Bulletin 2001-01, “Reactor Pressure Vessel Head Degradation and Reactor Coolant Pressure Boundary Integrity” at the Davis-Besse Nuclear Power Station. Under the agreement, which expires on December 31, 2006, the United States also acknowledged FENOC's extensive corrective actions at Davis-Besse, FENOC's cooperation during the investigations by the DOJ and the NRC, FENOC's pledge of continued cooperation, FENOC's acknowledgement of responsibility for the behavior of its employees, and its agreement to pay a monetary penalty. The DOJ will refrain from seeking an indictment or otherwise initiating criminal prosecution of FENOC forcases, noted above, concludes all ~~conduct~~pending litigation related to the Statement of Facts attached to the deferred prosecution agreement, as long as FENOC remains in compliance with the agreement. As part of the agreement, FENOC paid a penalty of $28 million (which is not deductible for income tax purposes) which reduced FirstEnergy's earnings by $0.09 per common share in the fourth quarter of 2005. As part of the deferred prosecution agreement entered into with the DOJ, $4.35 million of that amount will be directed to community service projects.

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 SeptemberAugust 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 and that “the NRC does not anticipate taking further enforcement action in this matter, relative to FENOC, absent the DOJ developing new additional information.” FENOC 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.

Effective July 1, 2005 the NRC oversight panel for Davis-Besse was terminated and Davis-Besse returned to the standard NRC reactor oversight process. At that time, NRC inspections were augmented to include inspections to support the NRC's Confirmatory Order dated March 8, 2004 that was issued at the time of startup and to address an NRC White Finding related to the performance of the emergency sirens. By letter dated December 8, 2005, the NRC advised FENOC that the White Finding had been closed.

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 years2003 outages and the licensee's failure to take prompt and corrective action. FENOC operates the Perry Nuclear Power Plant. In an April 4, 2005 public meeting discussing FENOC’s performance at Perry, the NRC stated that , overall the Perry Plant operated "in a manner that preserved public health and safety" even though it remained under heightened NRC oversight. The NRC indicated that additional inspectionsresolution will continue and that the plant must improve performance to be removed from the Multiple/Repetitive Degraded Cornerstone Column of the Action Matrix. By an inspection report dated January 18, 2006, the NRC closed one of the white findings (related to emergency preparedness) which led to the multiple degraded cornerstones.

On May 26, 2005, the NRC held a public meeting to discuss its oversight of the Perry Plant. While the NRC stated that the plant continued to operate safely, the NRC also stated that the overall performance had not substantially improved since the heightened inspection was initiated. The NRC reiterated this conclusion in its mid-year assessment letter dated August 30, 2005. On September 28, 2005, the NRC sent a CAL to FENOC describing commitments that FENOC had made to improve the performance of Perry 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. 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. Although unable to predict a potential impact, its ultimate disposition could have a material adverse effect on ~~FirstEnergy's or its subsidiaries'~~the financial condition, results of operations ~~and~~or cash ~~flows.~~

Asflows of ~~December 16, 2005, NGC, a wholly owned subsidiary~~either FirstEnergy or any of FirstEnergy, acquired ownership of the nuclear generation assets transferred from OE, CEI, TE and Penn with the exception of leasehold interests of OE and TE in certain of the nuclear plants that are subject to sale and leaseback arrangements with non-affiliates.

~~Nuclear Insurance~~

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) for a single nuclear incident, which amount is covered by: (i) 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's maximum potential assessment under these provisions would be $402.4 million (OE - $34.4 million, NGC - $349.6 million, and TE - $18.4 million) per incident but not more than $60.0 million (OE - $5.1 million, NGC - $52.1 million, and TE - $2.8 million) in any one year for each incident.subsidiaries.

In addition to the public liability insurance provided pursuant to the Price-Anderson Act, FirstEnergy has also obtained 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 $1.730 billion (OE - $150 million, NGC - $1.506 billion, TE - $74 million) for replacement power costs incurred during an outage after an initial 20-week waiting period. Members 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 for incidents at any covered nuclear facility occurring during a policy year would be approximately $13.2 million (OE - $1.1 million, NGC - $11.6 million, and TE - $0.5 million).

1272

FirstEnergy is insured under property damage insurance provided by NEIL to the operating company 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 $66.7 million (OE - $7.0 million, NGC - $55.3 million, TE - $3.6 million, Met Ed - $0.4 million, Penelec - $0.2 million and JCP&L - $0.2 million) during a policy year.Nuclear Plant Matters

~~FirstEnergy intends to maintain insurance against nuclear risks as described above as long as it is available. To~~On May 14, 2007, the ~~extent that replacement power, property damage, decontamination, decommissioning, repair and replacement costs and other such costs arising from a nuclear incident at any~~Office of ~~FirstEnergy's plants exceed the policy limits~~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 ~~effect~~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 ~~respect~~the terms of its licenses and the Commissions regulations. FENOC was directed to ~~that plant,~~submit the information to the ~~extent~~NRC within 30 days. On June 13, 2007, FENOC filed a ~~nuclear incident is determined not to be covered by FirstEnergy's insurance policies, or~~response to the ~~extent such insurance becomes unavailable~~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 ~~FirstEnergy would remain at risk for such costs.~~NRC review.

Other Legal Matters

There are various lawsuits, claims (including claims for asbestos exposure) and proceedings related to normal business operations pending against FES and the Companies. The NRC requires nuclear power plant licensees to obtain minimum property insurance coverage of $1.06 billion or the amount generally available from private sources, whichever is less. The proceeds of this insuranceother potentially material items not otherwise discussed above are ~~required~~described below.

On August 22, 2005, a class action complaint was filed against OE in Jefferson County, Ohio Common Pleas Court, seeking compensatory and punitive damages to be used first to ensure that the licensed reactor is in a safe and stable condition 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.

~~Environmental Matters~~

Various federal, state and local authorities regulate the Companies with regard to air and water quality and other environmental matters. The effects of compliance on the Companies with regard to environmental matters could have a material adverse effect on FirstEnergy’s earnings and competitive position. These environmental regulations affect FirstEnergy’s 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. FirstEnergy estimates additional capital expenditures for environmental compliance of approximately $1.8 billion for 2006 through 2010.

The Companies accrue environmental liabilities only when they conclude that it is probable that they have an obligation for such costs and can reasonably estimate the amount of such costs. Unasserted claims are reflected in the Companies’ determination of environmental liabilities and are accrued in the period that they are both probable and reasonably estimable.

On December 1, 2005, FirstEnergy issued a comprehensive report to shareholders regarding air emissions regulations and an assessment of its future risks and mitigation efforts. The report is available on FirstEnergy’s web sitedetermined at ~~www.firstenergycorp.com/environmental.~~

~~Clean Air Act Compliance~~

~~FirstEnergy is required to meet federally approved SO~~₂ regulations. Violations of such regulations can result in 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 SO₂ ~~regulations in Ohio that allows for compliance~~trial based on ~~a 30-day averaging period.~~claims of negligence and eight other tort counts alleging damages from W.H. Sammis Plant air emissions. The ~~Companies cannot predict what action the EPA may take in the future with respect to the interim enforcement policy.~~

~~FirstEnergy believes it is complying with SO~~₂ ~~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. NO~~_x ~~reductions required by the 1990 Amendments~~two named plaintiffs 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 NO~~_x ~~reductions from FirstEnergy’s facilities. The EPA’s NO~~_x ~~Transport Rule imposes uniform reductions of NO~~_x ~~emissions (an approximate 85% reduction in utility plant NO~~_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 NO~~_x ~~emissions are contributing significantly to ozone levels in the eastern United States. FirstEnergy believes its facilities are~~ also ~~complying with the NO~~_x budgets established under State Implementation Plans through combustion controls and post-combustion controls, including Selective Catalytic Reduction and Selective Non-Catalytic Reduction systems, and/or using emission allowances.

FirstEnergy, GPU and Met-Ed, along with the current owner of the Portland Generation Station, Reliant, and the purchaser of Portland Station in 1999, Sithe Energy, all received a notification letter from New Jersey's Attorney General (NJAG) dated November 16, 2005 alleging Clean Air Act violations at the Portland Station. Specifically, the NJAG alleges that "modifications" at Portland Units 1 and 2 occurred between 1979 and 1995 without preconstruction new source review or permitting required by the CAA's prevention of significant deterioration (PSD) program and states that unless the Companies abate the alleged violations, New Jersey may commence an action seeking injunctive relief ~~penalties~~to eliminate harmful emissions and ~~mitigation~~repair property damage and the 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, 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 ~~harm caused by excess emissions. Although it remains liable~~April 5, 2007 Court order denying class certification and the Court heard oral argument on the plaintiffs motion to ~~Sithe Energy under~~amend their complaint which OE has opposed. On August 2, 2007, the Court denied the plaintiffs motion to amend their complaint. The plaintiffs have appealed the Courts denial of the motion for certification as a ~~1998 purchase agreement for civil penalties~~class action and fines, Met-Ed did not indemnify or remain responsible for any permitting or other environmental representations or warranties which the 1998 agreement specifically provides did not survive closing. No liability has been accrued as of December 31, 2005.motion to amend their complaint.

~~National Ambient Air Quality Standards~~

In July 1997, the EPA promulgated changes in the NAAQS for ozone and proposed a new NAAQS for fine particulate matter. On March 10, 2005, the EPA finalized the “Clean Air Interstate Rule” (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 provides each affected state until 2006 to develop implementing regulations to achieve additional reductions of NO_x ~~and SO~~₂ ~~emissions in two phases (Phase I in 2009 for NO~~_x~~, 2010 for SO~~₂ ~~and Phase II in 2015 for both NO~~_x ~~and SO~~₂~~). FirstEnergy’s Michigan, Ohio and Pennsylvania fossil-fired generation facilities will be subject to the caps on SO~~₂ ~~and NO~~_x ~~emissions, whereas their New Jersey fossil-fired generation facilities will be subject to a cap on NO~~_x ~~emissions only. According to the EPA, SO~~₂ ~~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 SO~~₂ ~~emissions in affected states to just 2.5 million tons annually. NO~~_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 NO~~_x cap of 1.3 million tons annually. The future cost of compliance with these regulations may be substantial and will depend on how they are ultimately implemented by the states in which FirstEnergy operates affected facilities.

~~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. On March 14, 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, mercury emissions will be capped nationally at 38 tons by 2010 (as a “co-benefit” from implementation of SO₂ ~~and NO~~_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 15 tons per year by 2018. However, the final rules give states substantial discretion in developing 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. FirstEnergy’s future cost of compliance with these regulations may be substantial and will depend on how they are ultimately implemented by the states in which we operate affected facilities.

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. We would prefer an output-based generation-neutral methodology in which allowances are allocated based on megawatts of power produced. Since this approach is based on output, new and non-emitting generating facilities, including renewables and nuclear, would be entitled to their proportionate share of the allowances. Consequently, we would be disadvantaged if these model rules were implemented because our substantial reliance on non-emitting (largely nuclear) generation is not recognized under input-based allocation.

~~W. H. Sammis Plant~~

In 1999 and 2000, the EPA issued NOV or Compliance Orders to nine utilities alleging violations of the Clean Air Act based on operation and maintenance of 44 power plants, including the W. H. Sammis Plant, which was owned at that time by OE and Penn. In addition, the DOJ filed eight civil complaints against various investor-owned utilities, including a complaint against OE and Penn in the U.S. District Court for the Southern District of Ohio. These cases are referred to as New Source Review 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 W. H. Sammis Plant New Source Review litigation. ~~This settlement agreement was approved by the Court on July 11, 2005, and requires reductions of NO~~_x ~~and SO~~₂ emissions at the W. H. Sammis Plant and other 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 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, FirstEnergy could be exposed to penalties under the settlement agreement. Capital expenditures necessary to meet those requirements are currently estimated to be $1.5 billion (the primary portion of which is expected to be spent in the 2008 to 2011 time period). On August 26, 2005, FGCO entered into an agreement with Bechtel Power Corporation (Bechtel), under which Bechtel will engineer, procure, and construct air quality control systems for the reduction of sulfur dioxide emissions. The settlement agreement also requires OE and Penn to spend up to $25 million toward environmentally beneficial projects, which include wind energy purchased power agreements over a 20-year term. OE and Penn agreed to pay a civil penalty of $8.5 million. Results in 2005 included the penalties payable by OE and Penn of $7.8 million and $0.7 million, respectively. OE and Penn also recognized liabilities of $9.2 million and $0.8 million, respectively, for probable future cash contributions toward environmentally beneficial projects.

~~Climate Change~~

In December 1997, delegates to the United Nations’ climate summit in Japan adopted an agreement, the Kyoto Protocol (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 Protocol in 1998 but it failed to receive the two-thirds vote of the United States Senate required for ratification. 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 EPACT established a Committee on Climate Change Technology to coordinate federal climate change activities and promote the development and deployment of GHG reducing technologies.

~~The Companies cannot currently estimate the financial impact of climate change policies, although the potential restrictions on CO~~₂ ~~emissions could require significant capital and other expenditures. However, the CO~~₂ ~~emissions per kilowatt-hour of electricity generated by the Companies is lower than many regional competitors due to its diversified generation sources, which include low or non-CO~~₂ ~~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 the Companies' plants. In addition, Ohio, New Jersey and Pennsylvania have water quality standards applicable to the Companies' 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.

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 aquatic organisms are pinned against screens or other parts of a cooling water intake system and entrainment, which occurs when aquatic species are drawn into a facility’s cooling water system. The Companies are conducting comprehensive demonstration studies, due in 2008, to determine the operational measures, equipment or restoration activities, if any, necessary for compliance by its facilities with the performance standards. The Companies are unable to predict the outcome of such studies. Depending on the outcome of such studies, 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 waste.

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 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, 2005, based on estimates of the total costs of cleanup, the Companies’ proportionate responsibility for such costs and the financial ability of other nonaffiliated entities to pay. In addition, JCP&L has accrued liabilities 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 liabilities of approximately $64 million have been accrued through December 31, 2005.

~~Fuel Supply~~

FirstEnergy currently has long-term coal contracts to provide approximately 20.5 million tons for the year 2006. The contracts are shared among the Companies based on various economic considerations. This contract coal is produced primarily from mines located in Pennsylvania, Kentucky, Wyoming, West Virginia and Ohio. The contracts expire at various times through December 31, 2021.

FirstEnergy estimates its 2006 coal requirements to be approximately 23.1 million tons to be met 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 has contracts for uranium material and conversion services through 2008. The enrichment services are contracted for all of the enrichment requirements for nuclear fuel through 2006. A portion of enrichment requirements is also contracted through 2011. Fabrication services for fuel assemblies are contracted for the next two reloads for Beaver Valley Unit 1, the next two reloads for Beaver Valley Unit 2 (through approximately 2007 and 2006, respectively), the next reload for Davis-Besse (through approximately 2006) and through the operating license period for Perry (through approximately 2026). The Davis-Besse fabrication contract also has an extension provision for services 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.

On-site spent fuel storage facilities are expected to be adequate for Perry through 2011; facilities at Beaver Valley Units 1 and 2 are expected to be adequate through 2015 and 2008, respectively. With the plant modifications completed in 2002, Davis-Besse has adequate storage through the remainder 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. 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 proceed to the licensing phase. Based on the DOE schedule published in the July 1999 Draft Environmental Impact Statement, the Yucca Mountain Repository is currently projected to start receiving spent fuel in 2010. The Repository is expected to be delayed further as the result of an announced delay in submission of the license application. 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 2010.

~~System Capacity and Reserves~~

The 2005 net maximum hourly demand for each of the Companies was: OE-6,303 MW (including an additional 387 MW of firm power sales under a contract which ended December 31, 2005) on July 25, 2005; Penn-1,106 MW (including an additional 47 MW of firm power sales under a contract which ended December 31, 2005) on July 26, 2005; CEI-4,522 MW on July 25, 2005; TE-2,138 MW on July 25, 2005; JCP&L-6,279 MW on July 27, 2005; Met-Ed-2,850 MW on August 4, 2005; and Penelec-2,875 MW on August 4, 2005. JCP&L’s load is supplied through the New Jersey BGS Auction process, transferring the full 6,135 MW load obligation to other parties. FES participated in the auction and is currently responsible for a 300 MW segment of that load through May 2006.

Based on existing capacity plans, ongoing arrangements for firm purchase contracts, and anticipated term power sales and purchases, FirstEnergy has sufficient supply resources to meet load obligations. The current FirstEnergy capacity portfolio contains 13,427 MW of owned generation, 480 MW of generation from our 20.5% ownership of OVEC, and approximately 1,600 MW of long-term purchases from NUGs. FirstEnergy has also entered into approximately 275 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) and spot market purchases. FirstEnergy's sources of generation during 2005 were 64% and 36% from coal 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 the reliability of bulk power supply in the area through coordination of the planning and operation by the ECAR members of their bulk power supply facilities. The ECAR members have established principles and procedures regarding matters affecting 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 development of a program regarding emergency procedures during conditions of declining system frequency; and iv) the basis for uniform rating of generating equipment.

The transmission facilities of JCP&L, Met-Ed and Penelec are operated by PJM. PJM is the organization responsible for the operation and control of the bulk electric power system throughout major portions of five Mid-Atlantic states and the District of Columbia. PJM is dedicated to meeting the reliability criteria and standards of NERC and the Mid-Atlantic Area Council.

~~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 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.

As a result of actions taken by state legislative bodies over the last few years, major changes in the electric utility business are occurring 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, New Jersey and Michigan.

Competition in Ohio’s electric generation began on January 1, 2001. Pursuant to the generation asset transfers on October 24, 2005 and December 16, 2005, FGCO and NGC now own nearly all of the fossil and nuclear generation assets, respectively, previously owned by the Companies. The Companies continue to provide generation services to regulated franchise customers who have not chosen an alternative, competitive generation supplier, except in New Jersey where JCP&L’s obligation to provide BGS has been removed through a transitional mechanism of auctioning the obligation (see “NJBPU Rate Matters”). In September 2002, Met-Ed and Penelec assigned their PLR responsibility to FES through a wholesale power sale agreement. Under the terms of the wholesale agreement, FES assumed 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 (see “PPUC Rate Matters” for further discussion). The Ohio Companies and Penn obtain their generation through power supply agreements with FES.

~~Research and Development~~

The Companies participate in funding the Electric Power Research Institute (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.

~~Executive Officers~~

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

~~A. J. Alexander (A) (B)~~	54	~~President and Chief Executive Officer~~	~~2004-present~~
		~~President and Chief Operating Officer~~	~~2001-2004~~
		~~President~~	*-2001

~~L. M. Cavalier~~	54	~~Senior Vice President~~	~~2005-present~~
		~~Vice President - Human Resources~~	~~2001-2005~~
		~~President - Eastern Region~~	*-2001

~~M. T. Clark~~	55	~~Senior Vice President~~	~~2004-present~~
		~~Vice President - Business Development~~	* -2004

~~K. W. Dindo~~	56	~~Vice President and Chief Risk Officer~~	~~2001-present~~
		~~Vice President~~	*-2001

~~D. S. Elliott (B)~~	51	~~President - Pennsylvania Operations~~	~~2005-present~~
		~~Senior Vice President~~	~~2001-2005~~
		~~Vice President~~	*-2001

~~R. R. Grigg (A) (B)~~	57	~~Executive Vice President and Chief Operating Officer~~	~~2004-present~~
		~~President and Chief Executive Officer - WE Generation~~	*-2004


~~C. E. Jones (A) (B)~~	50	~~Senior Vice President~~	~~2003-present~~
		~~Vice President - Regional Operations~~	~~2001-2003~~
		~~President - Northern Region~~	*-2001

~~C. D. Lasky~~	43	~~Vice President - Fossil Operations~~	~~2004-present~~
		~~Plant Director~~	~~2003-2004~~
		~~Assistant Plant Director~~	*-2003

~~G. R. Leidich~~	55	~~President and Chief Nuclear Officer - FENOC~~	~~2003-present~~
		~~Executive Vice President - FENOC~~	~~2002-2003~~
		~~Executive Vice President - Institute of Nuclear Power Operations~~	*-2002

~~D. C. Luff~~	58	~~Senior Vice President~~	~~2005-present~~
		~~Vice President~~	~~2001-2005~~
		~~Manager of State Governmental Affairs~~	*-2001

~~R. H. Marsh (A) (B) (C)~~	55	~~Senior Vice President and Chief Financial Officer~~	~~2001-present~~
		~~Vice President and Chief Financial Officer~~	*-2001

~~S. E. Morgan (C)~~	55	~~President - JCP&L~~	~~2003-present~~
		~~Vice President - Energy Delivery~~	~~2002-2003~~
		~~President - Central Region~~	*-2002

~~J. M. Murray (A)~~	59	~~President - Ohio Operations~~	~~2005-present~~
		~~President - Western Region~~	*-2005

~~T. C. Navin~~	47	~~Vice President~~	~~2005-present~~
		~~Treasurer~~	*-2005

~~J. F. Pearson (A) (B) (C)~~	51	~~Treasurer~~	~~2005-present~~
		~~Group Controller - Strategic Planning and Operations~~	~~2004-2005~~
		~~Controller - FES~~	~~2003-2004~~
		~~Director - FES~~	~~2001-2003~~
		~~Manager - Budget and Business Planning~~	*-2001

~~G. L. Pipitone~~	55	~~President - FES~~	~~2004-present~~
		~~Senior Vice President~~	~~2001-2004~~
		~~Vice President~~	*-2001

~~D. R. Schneider~~	44	~~Vice President - Commodity Operations~~	~~2004-present~~
		~~Vice President - Fossil Operations~~	~~2001-2004~~
		~~Plant Manager~~	*-2001

~~C. B. Snyder~~	60	~~Senior Vice President~~	~~2001-present~~
		~~Executive Vice President - Corporate Affairs - GPU~~	*-2001

~~B. F. Tobin~~	45	~~Vice President and Chief Procurement Officer~~	~~2005-present~~
		~~Vice President~~	~~2005~~
		~~Vice President and Chief Information Officer~~	~~2004-2005~~
		~~Vice President and Chief Procurement Officer~~	~~2001-2004~~
		~~Senior Manager - Accenture~~	*-2001

~~L. L. Vespoli (A) (B) (C)~~	46	~~Senior Vice President and General Counsel~~	~~2001-present~~
		~~Vice President and General Counsel~~	*-2001

~~H. L. Wagner (A) (B) (C)~~	53	~~Vice President, Controller and Chief Accounting Officer~~	~~2001-present~~
		~~Controller and Chief Accounting Officer~~	*-2001

~~T. M. Welsh~~	56	~~Senior Vice President~~	~~2004-present~~
		~~Vice President - Communications~~	~~2001-2004~~
		~~Manager - Communications Services~~	*-2001

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

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

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

*~~Indicates position held at least since January 1, 2001.~~

~~Employees~~

~~As of January 1, 2006, FirstEnergy’s nonutility subsidiaries and the Companies had a total of 14,586 employees (excluding MYR) located in the United States as follows:~~

~~FESC~~	~~2,918~~
OE	~~1,221~~
~~CEI~~	~~949~~
TE	~~431~~
~~Penn~~	~~201~~
~~JCP&L~~	~~1,416~~
~~Met-Ed~~	~~678~~
~~Penelec~~	~~867~~
~~ATSI~~	36
~~FES~~	~~1,957~~
~~FENOC~~	~~2,735~~
~~FSG~~	~~1,177~~
~~Total~~	~~14,586~~

Of the above employees, 7,027 (including 229 for FESC, 740 for OE, 667 for CEI, 328 for TE, 148 for Penn, 1,120 for JCP&L, 508 for Met-Ed, 612 for Penelec, 1,161 for FES, 934 for FENOC and 580 for FSG) 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 ~~Arbitrator~~arbitration panel decided not to hear testimony on damages and closed the proceedings. On September 9, 2005, the ~~Arbitrator~~arbitration panel issued an opinion to award approximately $16 million to the bargaining unit employees. On February 6, 2006, ~~the~~a federal district court granted a union motion to dismiss, as premature, a JCP~~&L's~~&L appeal ~~as premature.~~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 ~~will file~~filed its ~~appeal again in federal district~~answer and counterclaim to 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 ~~Website~~or its subsidiaries have legal liability or are otherwise made subject to liability based on the above matters, it could have a material adverse effect on FES and the Companies financial condition, results of operations and cash flows.

~~Each~~14. FIRSTENERGY INTRA-SYSTEM GENERATION ASSET TRANSFERS

In 2005, the Ohio Companies and Penn transferred their respective undivided ownership interests in FirstEnergy's nuclear and non-nuclear generation assets to NGC and FGCO, respectively. All of the ~~registrant’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,~~non-nuclear assets were transferred to FGCO under the purchase option terms of a Master Facility Lease between FGCO and ~~amendments to those reports filed with or furnished to~~ the ~~SEC pursuant to Section 13(a) or 15(d) of~~Ohio Companies and Penn, under which FGCO leased, operated and maintained the Securities Exchange Act of 1934 are also made available free of charge on or through FirstEnergy’s internet website at www.firstenergycorp.com. These reports are posted on the website as soon as reasonably practicable after they are electronically filed with the SEC.

~~ITEM 1A. RISK FACTORS~~

~~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, stray voltage 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.

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,assets that it now owns. CEI and TE ~~are exposed~~sold their interests in nuclear generation assets at net book value to ~~losses under~~NGC, while OE and Penn transferred their ~~applicable sale-leaseback agreements for certain generating facilities upon~~interests to NGC through an asset spin-off in the ~~occurrence~~form of ~~certain contingent events that could render these facilities worthless. Although we believe these types~~a dividend. On December 28, 2006, the NRC approved the transfer of ~~events are unlikely~~ownership in NGC from FirstEnergy to ~~occur, OE, CEI~~FES. Effective December 31, 2006, NGC is a wholly owned subsidiary of FES and ~~TE each have a maximum exposure~~second tier subsidiary of FirstEnergy. FENOC continues to ~~loss under these provisions of approximately $1 billion.~~

~~We remain obligated to provide safe~~operate and ~~reliable service to customers within our franchised service territories. Meeting this commitment requires~~maintain the expenditure of significant capital and other 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.nuclear generation assets.

1973

~~Changes~~Although the generating plant interests transferred in ~~Commodity Prices Could Adversely Affect Our Profit Margins~~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

~~While much~~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 ~~our generation currently serves customers~~FGCO's obligations under ~~retail rates set~~each of the leases. The related lessor notes and pass through certificates are not guaranteed by ~~regulatory bodies, we also purchase~~FES or FGCO, but the notes are secured by, among other things, each lessor trusts undivided interest in Unit 1, rights and ~~sell electricity~~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 ~~competitive wholesale~~parent’s investment accounts and ~~retail markets. Increases~~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 ~~costs of fuel for our generation facilities (particularly coal~~entries required to reflect operating lease treatment associated with the 2007 Bruce Mansfield Unit 1 sale 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.leaseback transaction.

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

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

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

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

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

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

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

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

16. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

SFAS 157 - "Fair Value Measurements"

~~Electricity~~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 ~~fuel prices may fluctuate substantially over relatively short~~comparability in fair value measurements and for expanded disclosures about fair value measurements. The key changes to current practice are: (1) the definition of 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 credit standing; and (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 ~~time~~SFAS 157 for financial assets and financial liabilities measured at fair value on a ~~variety~~non-recurring basis for one year. FES and the Companies have evaluated the impact of ~~reasons, including:~~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.

·	~~changing weather conditions or seasonality;~~

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

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

·	~~illiquidity 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 sabotage, terrorist acts, embargoes and other catastrophic events.~~

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 company's choice to use fair value on its earnings. The Standard also requires companies to display the fair value of 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.

~~Nuclear Generation Involves Risks that Include Uncertainties Relating to Health and Safety, Additional Capital Costs, the Adequacy of Insurance Coverage and Nuclear Plant Decommissioning~~SFAS 141(R) - "Business Combinations"

~~FirstEnergy~~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 ~~subject~~not expected to have a material impact on FES and the ~~risks of nuclear generation, including but not limited to the following:~~Companies financial statements.

·	~~the potential harmful effects on the environment and human health resulting from the operation of nuclear facilities and the storage, handling and disposal of radioactive materials;~~

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

·	~~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~~In December 2007, the FASB issued SFAS 160 that establishes accounting and ~~safety-related requirements~~reporting standards for the ~~operation~~noncontrolling interest in a subsidiary and for the deconsolidation of ~~nuclear generation facilities. In~~a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the ~~event of non-compliance,~~consolidated entity that should be reported as equity in the ~~NRC has~~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 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.Companies financial statements.

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 $1.7 billion of insurance coverage for replacement power costs. Under these policies, we can be assessed a maximum of approximately $80 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.

2083

~~Regulatory Changes in the Electric Industry Could Affect Our Competitive Position and Result in Unrecoverable Costs Adversely Affecting Our Business and Results~~FSP FIN 39-1 - "Amendment of ~~Operations~~FASB Interpretation No. 39"

AsIn 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 ~~result of the actions taken by state legislative bodies over the last few years, changes~~retrospective change in ~~the electric utility business have occurred and are continuing to take place in states throughout the United States, including Ohio, Pennsylvania and New Jersey. These changes have resulted, and are~~accounting principle for all financial statements presented. FSP FIN 39-1 is not expected to ~~continue to result, in fundamental alterations in~~have a material effect on FES and the ~~way integrated utilities conduct their business.~~Companies financial statements.

EITF 06-11 - "Accounting for Income Tax Benefits of Dividends or Share-based Payment Awards"

~~Increased competition resulting from restructuring efforts, including but not limited~~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 ~~implementation by regulators~~income statement. The consensus is effective for income tax benefits of ~~periodic competitive bid processes for generation supply, could~~dividends declared during fiscal years beginning after December 15, 2007. EITF 06-11 is not expected to have ~~an adverse~~a material effect on FES and the Companies' financial impact on us and consequently on our results of operations. Increased competition could result in additional pressure to lower prices, including the price of electricity, potentially resulting in impairment of assets, loss of retail customers, lower profit margins and increased costs of capital. We cannot predict the extent or timing of entry by additional competitors into the electric markets.statements.

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.

~~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 would 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.

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.

~~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.

On August 8, 2005 President Bush signed into law the EPACT. This federal legislation will affect various aspects of electric generation, transmission and distribution. One of the provisions of the new legislation gives the FERC the authority to certify an ERO that will establish and enforce mandatory bulk power reliability standards, subject to FERC review and approval. The EPACT repealed PUHCA effective February 8, 2006. Some of PUHCA’s consumer protection authority have been transferred to the FERC and state utility commissions. The repeal of PUHCA and the impact of this legislation and its implementation on both a federal and state level could have a significant impact on our operations.

~~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.

2184

There have been recent changes in the EPA’s final CAIR, CAMR and CAVR. As a result of those changes 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 of these rules may not be known for several years and may depart significantly from the current rules. If the final rules are remanded by the Court, 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, our 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.

~~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, and whether state regulatory commissions will permit full and timely recovery of RTO or market-imposed costs, we cannot fully assess the impact that these power markets or other ongoing RTO developments may have on us.

~~Weather Conditions such as Tornadoes, Hurricanes, Ice Storms and Droughts, as Well as Seasonal Temperature Variations Could Have a Negative Impact on Our Results of Operations~~

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, storms, ice, 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.

~~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 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.

~~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 higher. 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.

~~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. We have implemented procedures 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, 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.

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.

~~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 as we plan 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 events 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.

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 and Fitch is positive.

~~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 needs are 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 May Ultimately Incur Liability in Connection with Federal Proceedings~~

On December 10, 2004, FirstEnergy received a letter from the United States Attorney’s Office stating that FENOC is a target of the federal grand jury investigation into alleged false statements made to the NRC in the Fall of 2001 in response to NRC Bulletin 2001-01. 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 Department of Justice (collectively, the “Department”) related to certain statements made by FENOC employees to the NRC during the period September 3, 2001 through November 28, 2001 with respect to the Davis-Besse Nuclear Power Station. Under the Agreement, FENOC paid a penalty of $28 million and agreed to cooperate with the United States and NRC during the term of the Agreement (which runs through December 31, 2006) in all criminal and administrative investigations and proceedings related to the conduct described in the Statement of Facts attached to the Agreement.

In consideration for FENOC’s (i) $28 million payment, (ii) cooperation as described above, (iii) acceptance and acknowledgement of responsibility for its conduct as described in the Statement of Facts attached to the Agreement, (iv) compliance with federal criminal laws, and (v) continued compliance with the terms of the Agreement, the Department has agreed to refrain from seeking an indictment or otherwise initiating criminal prosecution of FENOC for the conduct described in the Statement of Facts attached to the Agreement. If the Department determined that FENOC failed to comply with the terms of the Agreement, it could seek an indictment or begin criminal proceedings against FENOC, which could have an adverse impact on our results of operations and financial condition.

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 FirstEnergy and the Ohio Companies, and 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.

~~Acts of War or Terrorism Could Negatively Impact Our Business~~17. SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)

The ~~possibility that our infrastructure, or that of an interconnected company, such as electric generation, transmission~~following summarizes certain consolidated operating results by quarter for 2007 and distribution facilities could be direct targets of, or indirect casualties of, an act of war 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 our results of operations and financial condition.

~~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 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 owns, and/or leases, the following generating units in service as of March 1, 2006, 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.

Net

Demonstrated

Capacity

(MW)

Owned

Unit

Total

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
2 780 (b)
3 800 (c)

W. H. Sammis- 1-6 1,620
Stratton, OH
7 600
Total
7,389

Nuclear Units

Beaver Valley- 1 821
Shippingport, PA
2 821 (d)
Davis-Besse-
Oak Harbor, OH
1 883
Perry-
N. Perry Village, OH
1 1,260 (e)
Total
3,785

Oil/Gas-Fired/
Pumped Storage Units

Richland-Defiance, OH 1-3 42
4-6 390
Seneca-Warren, PA 1-3 435
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
Other 301
Total
2,253
Total
13,427
2006.

~~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% (223 MW) and~~ ~~17.30% (135 MW), respectively.~~
	~~(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)~~	~~Includes OE’s and TE’s leasehold interests in Beaver Valley Unit 2 of 21.66% (178 MW) and~~ ~~18.26% (150 MW), respectively.~~
	~~(e)~~	~~Includes OE’s leasehold interest in Perry of 12.58% (159 MW).~~

Prolonged outages of existing generating units might make it necessary for FirstEnergy, depending upon the demand for electric service upon their system, to use to a greater extent than otherwise, less efficient and less economic generating units, or purchased power, and in some cases may require the reduction of load during peak periods under FirstEnergy interruptible programs, all to an extent not presently determinable.

						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

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 14,980 pole miles.

2585

The Companies’ electric distribution systems include 115,641 miles of overhead pole line and underground conduit carrying primary, secondary and street lighting circuits. They own substations with a total installed transformer capacity of 91,323,000 kilovolt-amperes.

							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.

The transmission facilities that are owned and operated by ATSI also interconnect with those 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.

~~FirstEnergy’s distribution and transmission systems as of December 31, 2005, consist of the following:~~

Substation

Distribution

Transmission

Transformer

Lines

Lines

Capacity

(Miles)

(kV-amperes)

OE 29,839 550 8,298,000
Penn 5,717 44 1,739,000
CEI 24,973 2,144 9,301,000
TE 1,748 223 3,677,000
JCP&L 18,812 2,106 21,154,000
Met-Ed 14,666 1,407 9,985,000
Penelec 19,886 2,690 14,238,000
ATSI* - 5,816 22,931,000
Total 115,641 14,980 91,323,000

~~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,9A(T). CONTROLS AND PROCEDURES -- OE, CEI, TE ~~Penn, JCP&L, Met-Ed~~ and ~~Penelec.~~Penelec (Restated)

~~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 pages 3-5 of FirstEnergy’s 2005 Annual Report to Stockholders (Exhibit 13). Information for OE, CEI, TE, Penn, JCP&L, Met-Ed and Penelec is not required to be disclosed because they are wholly owned subsidiaries.

~~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 2005.~~

Period

October 1-31,
2005

November 1-30,
2005

December 1-31,
2005

Fourth
Quarter

Total Number Of Shares Purchased ^(a)
283,046 63,013 268,707 614,766
Average Price Paid per Share $ 52.14 $ 46.75 $ 47.27 $ 49.46
Total Number of Shares Purchased As Part of Publicly
Announced Plans Or Programs ^(b) - - - -
Maximum Number (or Approximate Dollar Value) of Shares that
May Yet Be Purchased Under the Plans Or Programs
- - - -

^(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.

~~(b)~~

~~FirstEnergy does not currently have any publicly announced plan or program for share purchases.~~

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

~~ITEM 7.~~~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND~~

~~RESULTS OF OPERATIONS~~

~~ITEM 7A.~~ ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

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

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 2005 Annual Report to Stockholders (Exhibit 13).

Item 6
Item 7
Item 7A
Item 8

FirstEnergy 3 4-45 28-31 46-95
OE 2 3-19 10 20-48
Penn 2 3-14 8-9 15-35
CEI 2 3-18 10 19-45
TE 2 3-18 9-10 19-46
JCP&L 2 3-14 7-9 15-40
Met-Ed 2 3-14 8-9 15-36
Penelec 2 3-14 7-9 15-36

~~ITEM 9.~~~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING~~

~~AND FINANCIAL DISCLOSURE~~

~~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, ~~2005.~~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 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, ~~2005. 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, ~~2005,~~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 2005 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 2005 that have materially affected, or are reasonably likely to materially affect, FirstEnergy's internal control over financial reporting.~~

~~- CEI, OE, PENN AND TE~~

~~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, ~~2005.~~

~~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 2005~~ that have materially affected, or are reasonably likely to materially affect, the registrants' internal control over financial reporting.

~~- JCP&L~~

~~Evaluation of Disclosure Controls and Procedures~~

The 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 Chief Executive Officer and Chief Financial Officer concluded that such registrant's disclosure controls and procedures were effective as of December 31, 2005.

~~Management’s Consideration of the Restatement~~

In coming to the conclusion that the registrant’s disclosure controls and procedures were effective as of December 31, 2005, management considered, among other things, the restatement related to the tax matter as disclosed in Note 2 to the accompanying consolidated financial statements included in this Form 10-K. Management reviewed and analyzed the Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) No. 99, “Materiality,” paragraph 29 of Accounting Principles Board Opinion No. 28, “Interim Financial Reporting,” and SAB Topic 5F, “Accounting Changes Not Retroactively Applied Due to Immateriality.” Taking into consideration (i) that the restatement adjustments did not have a material impact on the financial statements of prior interim or annual periods taken as a whole; (ii) that the cumulative impact of the restatement adjustments on common stockholder’s equity was not material to the financial statements of prior interim or annual periods; and (iii) that JCP&L decided to restate its previously issued financial statements solely because the cumulative impact of the adjustments, if recorded in the current period, would have been material to the current year’s reported net income, management concluded that these matters individually did not constitute a material weakness.

~~Changes in Internal Control over Financial Reporting~~

There were no changes in the registrant’s internal control over financial reporting during the fourth quarter of 2005 that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

~~- MET-ED AND PENELEC~~

~~Evaluation of Disclosure Controls and Procedures~~

A material weakness is a control deficiency or combination of control deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected. Management identified a material weakness due to deficiencies in the operating effectiveness of internal controls associated with the accuracy of the regulatory accounting for the registrants' NUG contracts. Established accounting procedures were misapplied with respect to Penelec's NUG contract asset, resulting in an inappropriate reduction to deferred NUG costs recoverable through Penelec's CTC and a corresponding understatement of net income. The affected Penelec accounts were properly adjusted as of December 31, 2005. While Met-Ed’s NUG contract position is currently a liability, the material weakness also extends to Met-Ed because the same controls related to the accuracy of the regulatory accounting for NUG contracts also existed for Met-Ed. As a material weakness as described above, this control deficiency could result in a misstatement of the aforementioned accounts that could result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Management is strengthening the effectiveness of internal controls related to regulatory accounting, related to the registrants' NUG contract accounting. Coordination of activities regarding NUG contracts between regulatory affairs and accounting personnel are being enhanced and a more robust review and approval process involving higher-level management is being established. The registrants plan to fully implement the enhancements in the first quarter of 2006.

2887

~~This material weakness was discussed with the Audit Committee of the Board of Directors and PricewaterhouseCoopers LLP, the registrants' independent registered public accountants.~~PART IV

~~Changes in Internal Control over Financial Reporting~~

There were no changes in the registrants' internal control over financial reporting during the fourth quarter of 2005 that have materially affected, or are reasonably likely to materially affect, the registrants' internal control over financial reporting.

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

On February 21, 2006, the Board of Directors approved the recommendation of the Compensation Committee establishing FirstEnergy’s confidential performance and business criteria or Key Performance Indicators (KPIs) for the 2006 performance period. These KPIs are related to various operational and corporate objectives.

Mr. Alexander’s KPIs are based on the achievement of certain levels of earnings per share, free cash flow from operations, customer service excellence, and employee, nuclear and other operational safety measures.

The KPIs established for Messrs. Clark and Marsh and Ms. Vespoli are based on the achievement of certain levels of earnings per share, free cash flow from operations, employee safety, corporate operating measures and contributions to earnings from various strategic initiatives.

The KPIs established for Mr. Grigg are based on the achievement of certain levels of earnings per share, free cash flow from operations, employee safety, corporate operating measures, reliability and generation fleet performance and margin.

On February 21, 2006, FirstEnergy’s Board of Directors approved the award of performance-adjusted restricted stock units (“RSUs’) to the named executive officers (the “Grantees”) under the FirstEnergy Executive and Director Incentive Compensation Plan (the “Plan”). The Plan is applicable to, among others, the company’s senior executive officers including the Grantees. The performance-adjusted restricted stock units are subject to a Restricted Stock Unit Agreement (the “Agreement”) dated March 1, 2006. Under the terms and conditions of the Agreement, the company granted a pre-determined number of RSUs that are subject to adjustment based on the company’s performance as described below.

The RSUs vest at the end of three years. Dividends accrue on the RSUs during the vesting period and are converted into additional units. The Grantee is credited on the books and records of the company with an amount per unit equal to the amount per share of any cash dividends declared by the Board of Directors on the outstanding common stock of the company. The RSUs will be settled in actual company shares of common stock upon vesting. Additionally, the number of shares awarded at the end of the vesting period may be increased or decreased by 25% based on company performance.

The company will measure its performance against three key metrics (i.e., earnings per share, safety, and the operational performance index) during the three-year vesting period to determine if the target number of shares that actually vest will be increased or decreased by the 25% increment, or remain at the target level. The annual target performance level relating to each metric for each year will be established by the Compensation Committee in February of that year. The actual performance result for each of the three years will be averaged and compared to the average target level set for each performance metric. Depending upon the results of the comparison for each of the three metrics, the final award may increase, decrease, or remain at the target level.

~~For example:~~

·	~~If the company’s average annual performance exceeds target on all three measures, 25% additional shares will be awarded at the end of the three-year vesting period;~~

·	~~If the company’s average annual performance is below target on all three measures, 25% fewer shares will be awarded at the end of the vesting period; and~~

·	If the company’s average annual performance exceeds target on some of the measures but is below the target on others, the base number of shares issuable under the RSUs as originally granted will not be increased or decreased.

The Agreement of each Grantee contains share value protection rights that are triggered in the event of a change in control. Under the share value protection provisions, the Grantee is entitled, at vesting, to the highest of three values: the value of the units as of the day of the grant, the value as of the date of the change in control, or the value as of the date the restricted units are paid out by operation of the Plan. If necessary, the share value protection provisions trigger a lump sum cash payment to ensure compliance. The share value protection provisions are not triggered if the Grantee voluntarily terminates employment.

On February 21, 2006 the Board of Directors approved the award of Performance Shares to the Grantees in accordance with the Plan. The awards are effective January 1, 2006, vest at the end of a three-year cycle and are subject to the terms of the Plan and a performance share agreement, substantially similar to the Agreement described above, including the presence of share value protection provisions. The performance shares are equivalent units of FirstEnergy common stock. Dividends accrue on the performance shares during the vesting period and are converted into additional units. Each Grantee is credited on the books and records of the company with an amount per unit equal to the amount per share of any cash dividends declared by the Board of Directors on the outstanding common stock of the company.

The performance share units are subject to an adjustment based on FirstEnergy’s total shareholder return relative to peer companies in the EEI Index. Awards can be increased by as much as an additional fifty (50) percent or reduced to zero based on this adjustment. Any awards are paid out in cash at the end of the three-year cycle.

On February 21, 2006, the Board of Directors approved a discretionary RSU award to Mr. Marsh. Awards of discretionary RSUs vest after five years. Dividends accrue on the RSUs during the vesting period and are converted into additional units. Mr. Marsh is credited on the books and records of the company with an amount per unit equal to the amount per share of any cash dividends declared by the Board of Directors on the outstanding common stock of the company. This RSU award is subject to an underlying restricted stock agreement; substantially similar to the Agreement described above, including the presence of share value protection provisions, except that there is no performance adjustment made to the RSUs.

Finally, effective February 27, 2006, the Board of Directors approved a Restricted Stock award to Mr. Alexander. This award can vest as early as April 30, 2011, at the discretion of the Board of Directors, but no later than April 30, 2013 and will be paid out in shares of FirstEnergy common stock. Dividends accrue on the underlying shares during the vesting period and are converted into additional shares. Mr. Alexander is credited on the books and records of the company with an amount per share equal to the amount per share of any cash dividends declared by the Board of Directors on the outstanding common stock of the company. The award, like the others, is subject to an agreement, substantially similar to the Agreement described above, including the presence of share value protection provisions.

~~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 2006 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, 2005.~~

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

A. J. Alexander, R. H. Marsh and R. R. Grigg are the Directors of OE, Penn, 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 45) has served as FirstEnergy Service Company’s Vice President - Energy Delivery since 2003. From 1999 to 2003, Mr. Ewing served as Director of Operations Services - Northern Region.~~

Mr. Julian (Age 49) 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. He was Director of Operations Services - Northern Region from 2000 to 2001.

Mrs. Persson (Age 75) 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 72) 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.~~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, Penn, JCP&L, Met-Ed and Penelec~~ -

The information required by Items 11, 12 and 13 is incorporated herein by reference to FirstEnergy’s 2006 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, 2005 and 2004 are as follows:~~

Audit Fees⁽¹⁾

Audit-Related Fees⁽²⁾

Company

2005

2004

2005

2004

(In thousands)

OE $ 879 $ 1,036 $ - $ -
CEI 755 797 - -
TE 610 650 - -
Penn 613 624 - -
JCP&L 728 810 - -
Met-Ed 597 609 - -
Penelec 605 595 - -
Other subsidiaries 1,786 1,542 - 18

Total FirstEnergy $ 6,573 $ 6,663 $ - $ 18

~~(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.

~~(2)~~

~~Assurance and related services related to audits of employee benefit plans.~~

~~Tax and Other Fees~~

~~There were no other fees billed to FirstEnergy for tax or other services for the years ended December 31, 2005 and December 31, 2004.~~

~~Additional information required by this item is incorporated herein by reference to FirstEnergy's 2006 Proxy Statement filed with the SEC pursuant to Regulation 14A.~~

~~PART IV~~

~~ITEM 15.~~~~EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K~~

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

~~Included in Part II of this report and incorporated herein by reference to the respective company’s 2005 Annual Report to Stockholders (Exhibit 13 below) at the pages indicated.~~

First-
Energy

OE

Penn

CEI

TE

JCP&L*

Met-Ed

Penelec

Management Reports 1 - - - - - - -
Report of Independent Registered Public Accounting Firm 2 1 1 1 1 1 1 1
Statements of Income-Three Years Ended December 31, 2005 46 20 15 19 19 15 15 15
Balance Sheets-December 31, 2005 and 2004 47 21 16 20 20 16 16 16
Statements of Capitalization-December 31, 2005 and 2004 48-50 22-23 17 21 21 17 17 17
Statements of Common Stockholders’ Equity-Three Years
Ended December 31, 2005
51 24 18 22 22 18 18 18
Statements of Preferred Stock-Three Years Ended
December 31, 2005
52 24 18 22 22 18 18 18
Statements of Cash Flows-Three Years Ended December 31, 2005 53 25 19 23 23 19 19 19
Statements of Taxes-Three Years Ended December 31, 2005 54 26 20 24 24 20 20 20
Notes to Financial Statements 55-95 27-48 21-35 25-45 25-46 21-40 21-36 21-36

* JCP&L is restating its consolidated financial statements for the two years ended December 31, 2004. The revisions are a result of a current tax audit from the State of New Jersey, in which JCP&L became aware that the New Jersey Transitional Energy Facilities Assessment tax is not an allowable deduction for state income tax purposes. See Note 2(I) to JCP&L’s consolidated financial statements for further discussion.

2.	*~~Financial Statement Schedules~~*

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

First-
Energy

OE

Penn

CEI

TE

JCP&L

Met-Ed

Penelec

Report of Independent Registered Public Accounting
Firm
68 69 72 70 71 73 74 75

Schedule - Three Years Ended December 31, 2005:
II - Consolidated Valuation and Qualifying Accounts
76 77 80 78 79 81 82 83

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 Corp.~~*

~~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)~~

~~(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)

~~(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)~~

~~EXHIBIT~~

~~NUMBER~~


~~(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 10-9)~~

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

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

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

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

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

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

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

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

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

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

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

~~(C)10-21~~	~~Executive Incentive Compensation Plan-Tier 2. (2001 Form 10-K, Exhibit 20-21)~~

~~(C)10-22~~	~~Executive Incentive Compensation Plan-Tier 3. (2001 Form 10-K, Exhibit 20-22)~~

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

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

~~(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 10-25)~~

~~(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 10-26)

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

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

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

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

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

~~EXHIBIT~~

~~NUMBER~~


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

~~(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 10-47)~~

~~(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 10-48)

~~(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 10-49)

~~(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 10-50)

~~(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 10-51)~~

~~EXHIBIT~~

~~NUMBER~~


~~(C)10-50~~	~~Executive and Director Incentive Compensation Plan, Amendment dated January 18, 2005. (2004 Form 10-K, Exhibit 10-52)~~

~~(C)10-51~~	~~Form of Restricted Stock Agreements, between FirstEnergy and Officers. (2004 Form 10-K, Exhibit 10-53)~~

~~(C)10-52~~	~~Form of Restricted Stock Unit Agreements (Performance Adjusted), between FirstEnergy and Officers. (2004 Form 10-K, Exhibit 10-54)~~

~~(C)10-53~~	~~Form of Restricted Stock Agreement, between FirstEnergy and an officer. (2004 Form 10-K, Exhibit 10-55)~~

~~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)

~~(A)(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.~~

~~(A)(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.

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

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

~~(A)(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.~~

~~(A)(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.~~

~~(A)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)~~

~~(A)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)~~

~~(A)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)~~

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

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

~~EXHIBIT~~

~~NUMBER~~


~~(A)13~~	~~FirstEnergy 2005 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, 2005.~~

~~(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) (FirstEnergy, OE, CEI, TE, Penn, Met-Ed and Penelec).~~

~~(A)31.2~~	~~Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e) (FirstEnergy, OE, CEI, TE, Penn, JCP&L, Met-Ed and Penelec).~~

~~(A)32.1~~	~~Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. §1350 (FirstEnergy, OE, CEI, TE, Penn, Met-Ed and Penelec).~~

~~(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.~~

~~(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.

~~(B)~~3.~~Exhibits - Ohio Edison Company (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:~~

		~~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)~~

~~EXHIBIT~~

~~NUMBER~~

		~~Incorporated by~~
		~~Reference to~~
~~Dated as of~~	~~File Reference~~	~~Exhibit No.~~
~~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)~~
~~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)~~
~~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)~~

~~EXHIBIT~~

~~NUMBER~~

~~(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.~~

~~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)~~

~~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))~~

~~EXHIBIT~~

~~NUMBER~~

~~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.)~~

~~(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.)

~~EXHIBIT~~

~~NUMBER~~


~~(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.)

~~(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.)

~~EXHIBIT~~

~~NUMBER~~


~~(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.)

~~(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.)

~~EXHIBIT~~

~~NUMBER~~


~~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.)

~~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.)

~~EXHIBIT~~

~~NUMBER~~


~~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.)

~~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.)

~~EXHIBIT~~

~~NUMBER~~


~~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.)~~

~~10-90~~	~~Transfer and Assignment Agreement among Ohio Edison Company and Chemical Bank, as trustee under the OE Power Contract Trust. (1990 Form 10-K, Exhibit 10-65.)~~

~~10-91~~	Renunciation of Payments and Assignment among Ohio Edison Company, Monongahela Power Company, West Penn Power Company, and the Potomac Edison Company dated as of January 4, 1991. (1990 Form 10-K, Exhibit 10-66.)

~~10-92~~	~~Transfer and Assignment Agreement dated May 20, 1994 among Ohio Edison Company and Chemical Bank, as trustee under the OE Power Contract Trust. (1994 Form 10-K, Exhibit 10-110.)~~

~~10-93~~	Renunciation of Payments and Assignment among Ohio Edison Company, Monongahela Power Company, West Penn Power Company, and the Potomac Edison Company dated as of May 20, 1994. (1994 Form 10-K, Exhibit 10-111.)

~~10-94~~	~~Transfer and Assignment Agreement dated October 12, 1994 among Ohio Edison Company and Chemical Bank, as trustee under the OE Power Contract Trust. (1994 Form 10-K, Exhibit 10-112.)~~

~~10-95~~	Renunciation of Payments and Assignment among Ohio Edison Company, Monongahela Power Company, West Penn Power Company, and the Potomac Edison Company dated as of October 12, 1994. (1994 Form 10-K, Exhibit 10-113.)

~~(E)10-96~~	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.)

~~EXHIBIT~~

~~NUMBER~~

~~(E)10-97~~	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)10-98~~	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.)

~~(E)10-99~~	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)10-100~~	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)10-101~~	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)10-102~~	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)10-103~~	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)10-104~~	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)10-105~~	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)10-106~~	~~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)10-107~~	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)10-108~~	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.)

~~EXHIBIT~~

~~NUMBER~~


~~(E)10-109~~	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)10-110~~	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)10-111~~	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.)

~~(E)10-112~~	~~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)10-113~~	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)10-114~~	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)10-115~~	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)10-116~~	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)10-117~~	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)10-118~~	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)10-119~~	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)10-120~~	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.)

~~EXHIBIT~~

~~NUMBER~~

~~(F)10-121~~	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)10-122~~	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)10-123~~	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.)

~~(F)10-124~~	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)10-125~~	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)10-126~~	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)10-127~~	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)10-128~~	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)10-129~~	~~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)10-130~~	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)10-131~~	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)10-132~~	~~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)10-133~~	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)10-134~~	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.)

~~EXHIBIT~~

~~NUMBER~~


~~(F)10-135~~	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)10-136~~	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)10-137~~	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.)

~~10-138~~	~~Operating Agreement dated March 10, 1987 with respect to Perry Unit No. 1 between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-24.)~~

~~10-139~~	~~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.)~~

~~10-140~~	~~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.)~~

~~10-141~~	OE-APS Power Interchange Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company, and Monongahela Power Company and West Penn Power Company and The Potomac Edison Company. (1987 Form 10-K, Exhibit 28-27.)

~~10-142~~	~~OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-28.)~~

~~10-143~~	Supplement No. 1 dated as of April 28, 1987, to the OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company, Pennsylvania Power Company, and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-29.)

~~10-144~~	APS-PEPCO Power Resale Agreement dated March 18, 1987, by and among Monongahela Power Company, West Penn Power Company, and The Potomac Edison Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-30.)

~~10-145~~	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)

~~10-146~~	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)

~~EXHIBIT~~

~~NUMBER~~


~~10-147~~	~~OE Nuclear Capital Contribution Agreement by and between Ohio Edison Company and FirstEnergy Nuclear Generation Corp. (June 2005 10-Q, Exhibit 10.1)~~

~~10-148~~	~~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)~~

~~10-149~~	~~Consent Decree dated as of March 18, 2005. (Form 8-K dated March 18, 2005, Exhibit 10.1)~~

~~(A)10-150~~	~~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).~~

~~(A)10-151~~	~~Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and the FirstEnergy Operating Companies - OE, CEI and TE (Buyers).~~

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

~~(A)13.1~~	~~OE 2005 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, 2005.~~

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

~~(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.~~

~~(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.~~

	~~Note: Reports of OE on Forms 10-Q and 10-K are on file with the SEC under number 1-2578.~~

	~~Pursuant to Rule 14a - 3 (10) of the Securities Exchange Act of 1934, the Company will furnish any exhibit in this Report upon the payment of the Company’s expenses in furnishing such exhibit.~~

3.~~Exhibits~~ - ~~Pennsylvania Power Company (Penn)~~

~~3-1~~	~~Amended and Restated Articles of Incorporation, as amended March 15, 2002. (2001 Form 10-K, Exhibit 3-1)~~

~~3-2~~	~~Amended and Restated By-Laws of Penn, as amended March 15, 2002. (2001 Form 10-K, Exhibit 3-2)~~

~~EXHIBIT~~

~~NUMBER~~


~~4-1~~	Indenture dated as of November 1, 1945, between Penn and The First National Bank of the City of New York (now Citibank, N.A.), as Trustee, as supplemented and amended by Supplemental Indentures dated as of May 1, 1948, March 1, 1950, February 1, 1952, October 1, 1957, September 1, 1962, June 1, 1963, June 1, 1969, May 1, 1970, April 1, 1971, October 1, 1971, May 1, 1972, December 1, 1974, October 1, 1975, September 1, 1976, April 15, 1978, June 28, 1979, January 1, 1980, June 1, 1981, January 14, 1982, August 1, 1982, December 15, 1982, December 1, 1983, September 6, 1984, December 1, 1984, May 30, 1985, October 29, 1985, August 1, 1987, May 1, 1988, November 1, 1989, December 1, 1990, September 1, 1991, May 1, 1992, July 15, 1992, August 1, 1992, and May 1, 1993, July 1, 1993, August 31, 1993, September 1, 1993, September 15, 1993, October 1, 1993, November 1, 1993, and August 1, 1994. (Physically filed and designated as Exhibits 2(b)(1)-1 through 2(b)(1)-15 in Registration Statement File No. 2-60837; as Exhibits 2(b)(2), 2(b)(3), and 2(b)(4) in Registration Statement File No. 2-68906; as Exhibit 4-2 in Form 10-K for 1981 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1982 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1983 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1984 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1985 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1987 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1988 File No. 1-3491; as Exhibit 19 in Form 10-K for 1989 File No. 1-3491; as Exhibit 19 in Form 10-K for 1990 File No. 1-3491; as Exhibit 19 in Form 10-K for 1991 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1992 File No. 1-3491; as Exhibit 4-2 in Form 10-K for 1993 File No. 1-3491; and as Exhibit 4-2 in Form 10-K for 1994 File No. 1-3491.)

~~4-2~~	~~Supplemental Indenture dated as of September 1, 1995, between Penn and Citibank, N.A., as Trustee. (1995 Form 10-K, Exhibit 4-2.)~~

~~4-3~~	~~Supplemental Indenture dated as of June 1, 1997, between Penn and Citibank, N.A., as Trustee. (1997 Form 10-K, Exhibit 4-3.)~~

~~4-4~~	~~Supplemental Indenture dated as of June 1, 1998, between Penn and Citibank, N. A., as Trustee. (1998 Form 10-K, Exhibit 4-4.)~~

~~4-5~~	~~Supplemental Indenture dated as of September 29, 1999, between Penn and Citibank, N.A., as Trustee. (1999 Form 10-K, Exhibit 4-5.)~~

~~4-6~~	~~Supplemental Indenture dated as of November 15, 1999, between Penn and Citibank, N.A., as Trustee. (1999 Form 10-K, Exhibit 4-6.)~~

~~4-7~~	~~Supplemental Indenture dated as of June 1, 2001. (2001 Form 10-K, Exhibit 4-7)~~

~~4-8~~	~~Supplemental Indenture dated as of December 1, 2004. (2004 Form 10-K, Exhibit 4-8)~~

~~10-1~~	~~Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration Statement of Ohio Edison Company, File 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 Statement No. 2-68906, Exhibit 5 (c)(3).)~~

~~10-3~~	~~Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (Registration Statement of Ohio Edison Company, File 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, Ohio Edison Company.)~~

~~10-5~~	~~Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group. (Registration Statement 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, Ohio Edison Company.)

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

~~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, File No. 1-2578, of Ohio Edison Company.)

~~10-9~~	~~Amendment No. 3 dated as of July 1, 1984, to CAPCO Basic Operating Agreement as amended September 1, 1980. (1985 Form 10-K, Exhibit 10-7, File No. 1-2578, of Ohio Edison Company.)~~

~~10-10~~	~~Basic Operating Agreement between the CAPCO Companies as amended October 1, 1991. (1991 Form 10-K, Exhibit 10-8, File No. 1-2578, of Ohio Edison Company.)~~

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

~~10-12~~	~~Memorandum of Agreement effective as of September 1, 1980, among the CAPCO Group. (1991 Form 10-K, Exhibit 19-2, Ohio Edison Company.)~~

~~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, File No. 1-2578, of Ohio Edison Company.)

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

~~10-15~~	~~Memorandum of Understanding dated as of March 31, 1985, among the CAPCO Companies. (1985 Form 10-K, Exhibit 10-35, File No. 1-2578, Ohio Edison Company.)~~

~~(B)10-16~~	~~Ohio Edison System Executive Supplemental Life Insurance Plan. (1995 Form 10-K, Exhibit 10-44, File No. 1-2578, Ohio Edison Company.)~~

~~(B)10-17~~	~~Ohio Edison System Executive Incentive Compensation Plan. (1995 Form 10-K, Exhibit 10-45, File No. 1-2578, Ohio Edison Company.)~~

~~(B)10-18~~	~~Ohio Edison System Restated and Amended Executive Deferred Compensation Plan. (1995 Form 10-K, Exhibit 10-46, File No. 1-2578, Ohio Edison Company.)~~

~~(B)10-19~~	~~Ohio Edison System Restated and Amended Supplemental Executive Retirement Plan. (1995 Form 10-K, Exhibit 10-47, File No. 1-2578, Ohio Edison Company.)~~

~~10-20~~	~~Operating Agreement for Perry Unit No. 1 dated March 10, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-24, File No. 1-2578, Ohio Edison Company.)~~

~~10-21~~	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, File No. 1-2578, Ohio Edison Company.)

~~10-22~~	~~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, File No. 1-2578, Ohio Edison Company.)~~

~~10-23~~	OE-APS Power Interchange Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company, and Monongahela Power Company and West Penn Power Company and The Potomac Edison Company. (1987 Form 10-K, Exhibit 28-27, File No. 1-2578, of Ohio Edison Company.)

~~10-24~~	OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-28, File No. 1-2578, of Ohio Edison Company.)

~~EXHIBIT~~

~~NUMBER~~

~~10-25~~	Supplement No. 1 dated as of April 28, 1987, to the OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company, Pennsylvania Power Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-29, File No. 1-2578, of Ohio Edison Company.)

~~10-26~~	APS-PEPCO Power Resale Agreement dated March 18, 1987, by and among Monongahela Power Company, West Penn Power Company, and The Potomac Edison Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-30, File No. 1-2578, of Ohio Edison Company.)

~~10-27~~	Pennsylvania Power Company Master Decommissioning Trust Agreement for Beaver Valley Power Station and Perry Nuclear Power Plant dated as of April 21, 1995. (Quarter ended June 30, 1995 Form 10-Q, Exhibit 10, File No. 1-3491.)

~~10-28~~	~~Nuclear Fuel Lease dated as of March 31, 1989, between OES Fuel, Incorporated, as Lessor, and Pennsylvania Power Company, as Lessee. (1989 Form 10-K, Exhibit 10-39, File No. 1-3491.)~~

~~10-29~~	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)

~~10-30~~	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)

~~10-31~~	~~PP Nuclear Subscription and Capital Contribution Agreement by and between Pennsylvania Power Company and FirstEnergy Nuclear Generation Corp. (June 2005 10-Q, Exhibit 10.1)~~

~~10-32~~	~~PP Fossil Purchase and Sale Agreement by and between Pennsylvania Power Company (Seller) and FirstEnergy Generation Corp. (Purchaser). (June 2005 10-Q, Exhibit 10.2)~~

~~10-33~~	~~Consent Decree dated as of March 18, 2005. (Form 8-K dated March 18, 2005, Exhibit 10.1)~~

~~(A)10-34~~	~~Electric Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and Pennsylvania Power Company (Buyer).~~

~~(A)12.5~~	~~Fixed Charge Ratios~~

~~(A)13.4~~	~~Penn 2005 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed “filed” with the Securities and Exchange Commission.)~~

~~(A)21.4~~	~~List of Subsidiaries of the Registrant at December 31, 2005.~~

~~(A)23.2~~	~~Consent of Independent Registered Public Accounting Firm.~~

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

~~(B)~~	Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K, Penn 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 Penn, but hereby agrees to furnish to the Commission on request any such instruments.
~~(C)~~	~~Management contract or compensatory plan contract or arrangement filed pursuant to Item 601 of Regulation S-K.~~

~~EXHIBIT~~

~~NUMBER~~


	~~Pursuant to Rule 14a-3(10) of the Securities Exchange Act of 1934, the Company will furnish any exhibit in this Report upon the payment of the Company’s expenses in furnishing such exhibit.~~

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).~~

~~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).

~~EXHIBIT~~

~~NUMBER~~


~~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).~~

~~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).

~~EXHIBIT~~

~~NUMBER~~


~~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).

~~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).

~~EXHIBIT~~

~~NUMBER~~


~~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 - The Cleveland Electric Illuminating Company (CEI)~~*

3a	~~Amended Articles of Incorporation of CEI, as amended, effective May 28, 1993 (Exhibit 3a, 1993 Form 10-K, File No. 1-2323).~~

3b	~~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).~~
~~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).~~

~~EXHIBIT~~

~~NUMBER~~

~~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).~~
~~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).~~

~~EXHIBIT~~

~~NUMBER~~

~~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.~~

~~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)

~~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)~~

~~(A)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)~~

~~EXHIBIT~~

~~NUMBER~~


~~(A)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)~~

~~(A)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)~~

~~(A)12.3~~	~~Consolidated fixed charge ratios.~~

~~(A)13.2~~	~~CEI 2005 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, 2005.~~

~~(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.	*~~Exhibits - The Toledo Edison Company (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).~~
~~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).~~

~~EXHIBIT~~

~~NUMBER~~

~~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).~~
~~10-1~~	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)

~~10-2~~	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)

~~10-3~~	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)

~~10-4~~	~~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)~~

~~10-5~~	~~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)~~

~~(A)10-6~~	~~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)~~

~~(A)10-7~~	~~Power Supply Agreement dated as of October 31, 2005 between FirstEnergy Solutions Corp. (Seller) and the FirstEnergy Operating Companies - OE, CEI and TE (Buyers)~~

~~(A)10-8~~	~~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)~~

~~(A)12.4~~	~~Consolidated fixed charge ratios.~~

~~(A)13.3~~	~~TE 2005 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, 2005.~~

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

~~EXHIBIT~~

~~NUMBER~~


~~(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 - Jersey Central Power & Light Company (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.~~

~~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.~~

~~EXHIBIT~~

~~NUMBER~~


~~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.~~

~~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.~~

~~EXHIBIT~~

~~NUMBER~~


~~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.~~

~~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.~~

~~(A)12.6~~	~~Consolidated fixed charge ratios.~~

~~(A)13.5~~	~~JCP&L 2005 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 JCP&L at December 31, 2005.~~

~~EXHIBIT~~

~~NUMBER~~

~~(A)31.3~~	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
~~(A)32.2~~		32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. ~~Section 1350.~~§1350.
CEI

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

~~3. Exhibits - Metropolitan Edison Company (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.~~

~~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.~~

~~EXHIBIT~~

~~NUMBER~~

~~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.~~

~~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.~~

~~EXHIBIT~~

~~NUMBER~~

~~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.

~~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) 12.7~~	~~Consolidated fixed charge ratios.~~

~~(A) 13.6~~	~~Met-Ed 2005 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 Met-Ed at December 31, 2005.~~

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

~~3. Exhibits - Pennsylvania Electric Company (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.~~

~~EXHIBIT~~

~~NUMBER~~


~~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.~~

~~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)12.8~~	~~Consolidated fixed charge ratios.~~

~~(A)13.7~~	~~Penelec 2005 Annual Report to Stockholders (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed “filed” with SEC.)~~

~~(A) 21.7~~	~~List of Subsidiaries of Penelec at December 31, 2005.~~

~~(A) 23.3~~	Consent of Independent Registered Public Accounting ~~Firm- Penelec.~~Firm.
		31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. §1350.
TE
		23	Consent of Independent Registered Public Accounting Firm.
		31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. §1350.
Penelec
		23	Consent of Independent Registered Public Accounting Firm.
		31.1	Certification of chief executive officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		31.2	Certification of chief financial officer, as adopted pursuant to Rule 13a-15(e)/15d-15(e).
		32	Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. §1350.

6788

~~EXHIBIT~~

~~NUMBER~~


~~(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).~~

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

~~3. Exhibits - Common Exhibits for FirstEnergy, OE, Penn, CEI, TE, JCP&L, Met-Ed and Penelec~~

~~10-1~~

$2,000,000,000 Credit Agreement dated as of June 14, 2005 among FirstEnergy Corp., FirstEnergy Solutions Corp., American Transmission Systems, Incorporated, 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, Citigroup Global Markets Inc., and Barclays Capital as Joint Lead Arrangers, Barclays Bank plc, as Syndication Agent, JPMorgan Chase Bank, N.A., Key Bank, National Association, and Wachovia Bank, N.A., as Co-Documentation Agents, and Citicorp USA, Inc. as Administrative Agent, and the banks named therein. (Form 8-K dated June 16, 2005, Exhibit 10.1)

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~Financial Statement Schedules~~SIGNATURES

~~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, 2006 appearing in the 2005 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~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, 2006 appearing in the 2005 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~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, 2006~~appearing in the 2005 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~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, 2006~~appearing in the 2005 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~Financial Statement Schedules~~

~~To the Board of Directors of~~

~~Pennsylvania Power Company:~~

~~Our audit of the consolidated financial statements, referred to in our report dated February 27, 2006~~appearing in the 2005 Annual Report to Stockholders of Pennsylvania Power 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~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, 2006~~appearing in the 2005 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~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, 2006~~appearing in the 2005 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, 2006~~

~~Report of Independent~~ ~~Registered Public Accounting Firm~~

~~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, 2006~~appearing in the 2005 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, 2006~~

~~SCHEDULE II~~

~~FIRSTENERGY CORP.~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

Additions

Charged

Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In Thousands)

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

Year Ended December 31, 2003:

Accumulated provision for
uncollectible accounts - customers $ 52,514 $ 63,535 $ 15,966 (a) $ 81,768 (b) $ 50,247
- other $ 12,851 $ 6,516 $ 10,002 (a) $ 11,086 (b) $ 18,283

Loss carryforward
tax valuation reserve $ 482,061 $ 29,575 $ 50,503 $ 91,326 (c) $ 470,813

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~(c)Includes a reclassification of a valuation allowance to a contingent liability.~~

~~SCHEDULE II~~

~~OHIO EDISON COMPANY~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

Additions

Charged

Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

                    (In thousands)

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

Year Ended December 31, 2003:

Accumulated provision for
uncollectible accounts - customers $ 5,240 $ 18,157 $ 4,384 (a) $ 19,034 (b) $ 8,747
     - other $ 1,000 $ 1,282 $ -- $ -- $ 2,282

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~SCHEDULE II~~

~~THE CLEVELAND ELECTRIC ILLUMINATING COMPANY~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

Additions

Charged

Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

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 $ 1,765 $ (1,181 ) $ 12 (a) $ 303 (b) $ 293

Year Ended December 31, 2003:

Accumulated provision for
uncollectible accounts $ 1,015 $ 765 $ -- $ 15 (b) $ 1,765

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~SCHEDULE II~~

~~THE TOLEDO EDISON COMPANY~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~SCHEDULE II~~

~~PENNSYLVANIA POWER COMPANY~~

~~VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~SCHEDULE II~~

~~JERSEY CENTRAL POWER & LIGHT COMPANY~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

Additions

Charged

Beginning

Charged

to Other

Ending

Description

Balance

to Income

Accounts

Deductions

Balance

(In thousands)

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

Year Ended December 31, 2003:

Accumulated provision for
uncollectible accounts - customers $ 4,509 $ 7,867 $ 2,991 (a) $ 11,071 (b) $ 4,296
     - other $ -- $ 1,183 $ -- $ -- $ 1,183

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~SCHEDULE II~~

~~METROPOLITAN EDISON COMPANY~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~SCHEDULE II~~

~~PENNSYLVANIA ELECTRIC COMPANY~~

~~CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003~~

~~_______________~~

~~(a)Represents recoveries and reinstatements of accounts previously written off.~~

~~(b)Represents the write-off of accounts considered to be uncollectible.~~

~~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: March 1, 2006~~

~~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/Paul J. Powers~~
~~Paul T. Addison~~		~~Paul J. Powers~~
~~Director~~		~~Director~~


~~/s/Carol A. Cartwright~~		~~/s/Catherine A. Rein~~
~~Carol A. Cartwright~~		~~Catherine A. Rein~~
~~Director~~		~~Director~~


~~/s/William T. Cottle~~		~~/s/Robert C. Savage~~
~~William T. Cottle~~		~~Robert C. Savage~~
~~Director~~		~~Director~~


~~/s/Robert B. Heisler, Jr.~~		~~/s/Wes M. Taylor~~
~~Robert B. Heisler, Jr.~~		~~Wes M. Taylor~~
~~Director~~		~~Director~~


~~/s/Russell W. Maier~~		~~/s/Jesse T. Williams, Sr.~~
~~Russell W. Maier~~		~~Jesse T. Williams, Sr.~~
~~Director~~		~~Director~~


~~/s/Ernest J. Novak, Jr.~~		~~/s/Patricia K. Woolf~~
~~Ernest J. Novak, Jr.~~		~~Patricia K. Woolf~~
~~Director~~		~~Director~~


~~/s/Robert N. Pokelwaldt~~
~~Robert N. Pokelwaldt~~
~~Director~~

~~Date: March 1, 2006~~

~~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: March 1, 2006~~

~~/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: March 1, 2006~~

~~SIGNATURES~~

	~~THE CLEVELAND ELECTRIC ILLUMINATING COMPANY~~ Registrant

	PENNSYLVANIA ELECTRIC COMPANY
	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~ Registrant

~~Date: March 1, 2006~~

~~/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: March 1, 2006~~

~~SIGNATURES~~

	~~THE TOLEDO EDISON COMPANY~~


	~~BY:~~/s/~~Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: March 1, 2006~~

~~/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: March 1, 2006~~

~~SIGNATURES~~

	~~JERSEY CENTRAL POWER & LIGHT COMPANY~~


	~~BY:/s/Stephen E. Morgan~~
	~~Stephen E. Morgan~~
	~~President~~

~~Date: March 1, 2006~~

~~/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: March 1, 2006~~

~~SIGNATURES~~

	~~METROPOLITAN EDISON COMPANY~~


	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: March 1, 2006~~

~~/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: March 1, 2006~~

~~SIGNATURES~~

	~~PENNSYLVANIA ELECTRIC COMPANY~~


	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: March 1, 2006~~

~~/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: March 1, 2006~~

~~SIGNATURES~~

	~~PENNSYLVANIA POWER COMPANY~~


	~~BY:/s/Anthony J. Alexander~~
	~~Anthony J. Alexander~~
	~~President~~

~~Date: March 1, 2006~~

~~/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: March 1, 2006~~

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

~~1-3491~~	~~PENNSYLVANIA POWER COMPANY~~	~~25-0718810~~
	~~(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~~

~~Ohio Edison Company~~	~~Cumulative Preferred Stock, $100 par value:~~
	~~3.90% Series~~	~~All series registered on New~~
	~~4.40% Series~~	~~York Stock Exchange and~~
	~~4.44% Series~~	~~Chicago Stock Exchange~~
	~~4.56% Series~~


~~The Toledo Edison~~	~~Cumulative Preferred Stock, par value~~
~~Company~~	~~$100 per share:~~
	~~4-1/4% Series~~	~~American Stock Exchange~~

	~~Cumulative Preferred Stock, par value~~
	~~$25 per share:~~
	~~$2.365 Series~~	~~All series registered on~~
		~~New York Stock Exchange~~
	~~Adjustable Rate, Series B~~


~~Jersey Central Power &~~	~~Cumulative Preferred Stock, without~~
~~Light Company~~	~~par value:~~
	~~4% Series~~	~~New York Stock Exchange~~


~~Registrant~~		~~Title of Each Class~~

~~Pennsylvania Power Company~~		~~Cumulative Preferred Stock, $100 par value;~~
		~~4.24% Series~~
		~~4.25% Series~~
		~~4.64% Series~~

Yes ~~(X) No~~ ( )	~~FirstEnergy Corp.~~
~~Yes ( )~~ No (X)	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

Yes (X) No ( )	~~Metropolitan~~The Cleveland Electric Illuminating Company and The Toledo Edison Company
Yes ( ) No (X)	Ohio Edison Company and Pennsylvania Electric Company
~~Yes ( ) No (X)~~	~~FirstEnergy Corp., Ohio Edison Company, Pennsylvania Power Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Jersey Central Power & Light Company~~

(X)	~~FirstEnergy Corp.~~
~~( )~~	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.~~Company

Large Accelerated Filer ~~(X)~~( )	~~FirstEnergy Corp.~~N/A
Accelerated Filer ( )	N/A
Non-accelerated Filer (do not check if a Smaller Reporting Company) ~~Filer~~ (X)	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

		OUTSTANDING
CLASS		~~As of March 1, 2006~~ AS OF FEBRUARY 28, 2008

~~FirstEnergy Corp., $0.10 par value~~		~~329,836,276~~
Ohio Edison Company, no par value		~~100~~60
The Cleveland Electric Illuminating Company, no par value		~~79,590,689~~67,930,743
The Toledo Edison Company, $5 par value		~~39,133,887~~
~~Pennsylvania Power Company, $30 par value~~		~~6,290,000~~
~~Jersey Central Power & Light Company, $10 par value~~		~~15,371,270~~
~~Metropolitan Edison Company, no par value~~		~~859,500~~29,402,054
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, ~~2005 (Pages 3-94)~~2007		Part II

Proxy Statement for ~~2006~~2008 Annual Meeting of Stockholders
to be held May ~~16, 2006~~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 ~~registered~~ 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
AOCI	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
BPJ	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
CO₂	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
~~ERO~~	~~Electric Reliability Organization~~
FASB	Financial Accounting Standards Board
~~FEPA~~	~~Federal Environmental Protection Agency~~
FERC	Federal Energy Regulatory Commission
FIN	FASB Interpretation
FIN 4639-1	FIN 39-1, “Amendment of FASB Interpretation No. 39”
FIN 46R	FIN 46 ~~“Consolidation~~(revised December 2003), "Consolidation of Variable Interest ~~Entities”~~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
~~GCAF~~FSP	~~Generation Charge Adjustment Factor~~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
~~MEC~~IRS	~~Michigan Electric Coordination Systems~~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.
~~Moody's~~	~~Moody's Investors Service~~
~~MOU~~	~~Memorandum of Understanding~~
MTC	Market Transition Charge
MW	Megawatts

NAAQS	National Ambient Air Quality Standards
NERC	North American Electric Reliability ~~Council~~
~~NEIL~~	~~Nuclear Electric Insurance Limited~~Corporation
NJBPU	New Jersey Board of Public Utilities
~~NOAC~~NOPR	~~Northwest Ohio Aggregation Coalition~~Notice of Proposed Rulemaking
NOV	~~Notices~~Notice of Violation
NO_xX	Nitrogen Oxide
NRC	Nuclear Regulatory Commission
NSR	New Source Review
NUG	Non-Utility ~~Generator~~Generation
~~NYSE~~NUGC	~~New York Stock Exchange~~
~~OAL~~	~~Office of Administrative Law~~Non-Utility Generation Charge
OCA	Office of Consumer Advocate
~~OCC~~OCI	~~Ohio Consumers’ Counsel~~Other Comprehensive Income
~~OPAE~~OPEB	~~Ohio Partners of Affordable Energy~~
~~OSBA~~	~~Office of Small Business Advocate~~
~~OTS~~	~~Office of Trial Staff~~Other Post-Employment Benefits
PICA	Penelec Industrial Customer ~~Association~~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~~"Accounting for the Effects of Certain Types of ~~Regulation”~~Regulation"
SFAS 101	SFAS No. 101, ~~“Accounting~~"Accounting for Discontinuation of Application of SFAS ~~71”~~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 or 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
SO₂	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~~	3
~~Regulatory Accounting~~	3
~~Reliability Initiatives~~	4
~~PUCO Rate Matters~~	5
~~PPUC Rate Matters~~	6
~~NJBPU Rate Matters~~	7
~~FERC Rate Matters~~	9
~~Capital Requirements~~	9
~~Nuclear Regulation~~	11
~~Nuclear Insurance~~	12
~~Environmental Matters~~	13
~~Clean Air Act Compliance~~	13
~~National Ambient Air Quality Standards~~	14
~~Mercury Emissions~~	14
~~W. H. Sammis Plant~~	15
~~Climate Change~~	15
~~Clean Water Act~~	15
~~Regulation of Hazardous Waste~~	15
~~Fuel Supply~~	15
~~System Capacity and Reserves~~	16
~~Regional Reliability~~	16
~~Competition~~	17
~~Research and Development~~	17
~~Executive Officers~~	17
~~Employees~~	19
~~FirstEnergy Website~~	19

~~Item 1A.Risk Factors~~	19

~~Item 1B.Unresolved Staff Comments~~	24

~~Item 2.Properties~~	24

~~Item 3.Legal Proceedings~~	26

~~Item 4.Submission of Matters to a Vote of Security Holders~~	26

~~Part II~~
~~Item 5.Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities~~	26

~~Item 6.Selected Financial Data~~	27

~~Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	27

~~Item 7A.Quantitative and Qualitative Disclosures About Market Risk~~	27

~~Item 8.Financial Statements and Supplementary Data~~	27

~~Item 9.Changes In and Disagreements with Accountants on Accounting and Financial Disclosure~~	27

~~Item 9A.Controls and Procedures~~	27

~~Item 9B.Other Information~~	29

~~Part III~~
~~Item 10.Directors and Executive Officers of the Registrant~~	29

~~Item 11.Executive Compensation~~	30

~~Item 12.Security Ownership of Certain Beneficial Owners and Management and Related~~ ~~Shareholder Matters~~	30

~~Item 13.Certain Relationships and Related Transactions~~	30

~~Item 14.Principal Accounting Fees and Services~~	30

~~Part IV~~
~~Item 15.Exhibits, Financial Statement Schedules~~	30

	2005		Capital Expenditures Forecast
	Actual		2006		2007-2010		Total
	*(In millions)*
OE	$	147	$	100	$	444	$	544
Penn		78		19		72		91
CEI		142		107		493		600
TE		62		54		174		228
JCP&L		205		174		750		924
Met-Ed		83		81		284		365
Penelec		111		83		386		469
ATSI		66		45		237		282
FES		182		215		2,042		2,257
NGC		20		208		591		799
Other subsidiaries		48		45		136		181
Total	$	1,144	$	1,131	$	5,609	$	6,740

	Long-Term Debt Redemption Schedule
	2006		2007-2010		Total
	*(In millions)*

OE	$	3	$	185	$	188
Penn*		1		4		5
CEI**		-		395		395
TE		-		30		30
JCP&L		207		78		285
Met-Ed		100		150		250
Penelec		-		159		159
FirstEnergy		1,000		-		1,000
Other subsidiaries		13		26		39
Total	$	1,324	$	1,027	$	2,351

* Penn has an additional $54 million of pollution control notes to be redeemed in January and February 2006 through the use of restricted cash and an additional $63 million due to associated companies in 2007-2010.
** CEI has an additional $54 million due to associated companies in 2007-2010.

	Net
	Operating Lease Commitments
	2006		2007-2010		Total
	*(In millions)*
OE	$	80	$	378	$	458
CEI		15		38		53
TE		82		291		373
JCP&L		2		7		9
Met-Ed		1		7		8
Total	$	180	$	721	$	901

			Net
			Demonstrated
			Capacity
			(MW)
			Owned
	Unit		Total
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		780	(b)
		3		800	(c)

W. H. Sammis-		1-6		1,620
Stratton, OH		7		600
Total				7,389

Nuclear Units
Beaver Valley-		1		821
Shippingport, PA		2		821	(d)
Davis-Besse-
Oak Harbor, OH		1		883
Perry-
N. Perry Village, OH		1		1,260	(e)
Total				3,785

Oil/Gas-Fired/
Pumped Storage Units
Richland-Defiance, OH		1-3		42
		4-6		390
Seneca-Warren, PA		1-3		435
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
Other				301
Total				2,253
Total				13,427

					Substation
	Distribution		Transmission		Transformer
	Lines		Lines		Capacity
	*(Miles)*				*(kV-amperes)*

OE		29,839		550		8,298,000
Penn		5,717		44		1,739,000
CEI		24,973		2,144		9,301,000
TE		1,748		223		3,677,000
JCP&L		18,812		2,106		21,154,000
Met-Ed		14,666		1,407		9,985,000
Penelec		19,886		2,690		14,238,000
ATSI*		-		5,816		22,931,000
Total		115,641		14,980		91,323,000

	Period
	October 1-31, 2005		November 1-30, 2005		December 1-31, 2005		Fourth Quarter
Total Number Of Shares Purchased ^(a)		283,046		63,013		268,707		614,766
Average Price Paid per Share	$	52.14	$	46.75	$	47.27	$	49.46
Total Number of Shares Purchased As Part of Publicly
Announced Plans Or Programs ^(b)		-		-		-		-
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans Or Programs		-		-		-		-

	Item 6	Item 7	Item 7A	Item 8

FirstEnergy	3	4-45	28-31	46-95
OE	2	3-19	10	20-48
Penn	2	3-14	8-9	15-35
CEI	2	3-18	10	19-45
TE	2	3-18	9-10	19-46
JCP&L	2	3-14	7-9	15-40
Met-Ed	2	3-14	8-9	15-36
Penelec	2	3-14	7-9	15-36

	Audit Fees⁽¹⁾				Audit-Related Fees⁽²⁾
Company	2005		2004		2005		2004
	*(In thousands)*
OE	$	879	$	1,036	$	-	$	-
CEI		755		797		-		-
TE		610		650		-		-
Penn		613		624		-		-
JCP&L		728		810		-		-
Met-Ed		597		609		-		-
Penelec		605		595		-		-
Other subsidiaries		1,786		1,542		-		18

Total FirstEnergy	$	6,573	$	6,663	$	-	$	18

	First- Energy		OE		Penn		CEI		TE		JCP&L*		Met-Ed		Penelec
	First- Energy		OE		Penn		CEI		TE		JCP&L*		Met-Ed		Penelec

Management Reports		1		-		-		-		-		-		-		-
Report of Independent Registered Public Accounting Firm		2		1		1		1		1		1		1		1
Statements of Income-Three Years Ended December 31, 2005		46		20		15		19		19		15		15		15
Balance Sheets-December 31, 2005 and 2004		47		21		16		20		20		16		16		16
Statements of Capitalization-December 31, 2005 and 2004		48-50		22-23		17		21		21		17		17		17
Statements of Common Stockholders’ Equity-Three Years Ended December 31, 2005		51		24		18		22		22		18		18		18
Statements of Preferred Stock-Three Years Ended December 31, 2005		52		24		18		22		22		18		18		18
Statements of Cash Flows-Three Years Ended December 31, 2005		53		25		19		23		23		19		19		19
Statements of Taxes-Three Years Ended December 31, 2005		54		26		20		24		24		20		20		20
Notes to Financial Statements		55-95		27-48		21-35		25-45		25-46		21-40		21-36		21-36

	First- Energy	OE	Penn	CEI	TE	JCP&L	Met-Ed	Penelec
	First- Energy	OE	Penn	CEI	TE	JCP&L	Met-Ed	Penelec

Report of Independent Registered Public Accounting Firm	68	69	72	70	71	73	74	75

Schedule - Three Years Ended December 31, 2005: II - Consolidated Valuation and Qualifying Accounts	76	77	80	78	79	81	82	83

			Additions
						Charged
	Beginning		Charged			to Other						Ending
Description	Balance		to Income			Accounts			Deductions			Balance
	*(In Thousands)*
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


Year Ended December 31, 2003:

Accumulated provision for
uncollectible accounts - customers	$	52,514	$	63,535		$	15,966	(a)	$	81,768	(b)	$	50,247
- other	$	12,851	$	6,516		$	10,002	(a)	$	11,086	(b)	$	18,283

Loss carryforward
tax valuation reserve	$	482,061	$	29,575		$	50,503		$	91,326	(c)	$	470,813