& #160; 
RECENT DEVELOPMENTS
Met-Ed and Penelec Transition Rate Plan Filing
On April 10, Metropolitan Edison Company (Met-Ed) and Pennsylvania Electric Company (Penelec) filed a comprehensive transition rate plan, including requests for general rate increases, with the Pennsylvania Public Utility Commission. The plan is the first request to increase base rates since 1986 for Penelec and 1992 for Met-Ed. The filing addresses transmission, distribution and power supply issues while ensuring that customers continue to pay below-market prices for generation through 2010. Under the preferred approach, Met-Ed requested an overall increase of $216 million or 19%, while Penelec requested an increase of $157 million, or 15%. If approved, Met-Ed and Penelec customer rates for electricity in 2007 would remain comparable to the average rates currently charged by electric utilities across Pennsylvania.
Record Generation Output
FirstEnergy set a new first quarter generation output record of 20 million megawatt-hours, a 7.0% increase over the prior record established in the first quarter of 2005. The generation record was attributable to an increase in fossil generation, which established its best quarterly output ever.
Nuclear Plant Updates
On April 19, Beaver Valley Unit 1 returned to service 11 days ahead of schedule from a refueling and construction outage. The Unit became the first plant in the world to cut a temporary opening in its containment building and replace its steam generators and reactor head all within a 65-day timeframe. Other major work activities included replacing the turbine rotor, rewinding the main generator, and replacing about 40 percent of the fuel assemblies. Beaver Valley Unit 1 had operated safely and reliably for a unit-record of 456 consecutive days when it was taken off line for the outage and had posted an availability factor of 100 percent since its last refueling in the fall of 2004.
The Davis-Besse Nuclear Power Station is currently in the process of restarting, following the completion of its scheduled refueling outage. Major work activities during the outage included replacing several components in the plant’s turbine which is expected to increase power output by 11 megawatts, rebuilding two of the four reactor coolant pumps, and replacing approximately 40 percent of the fuel assemblies.
Renewable Wind Power Portfolio
During the quarter, FirstEnergy entered into several long-term agreements to expand its renewable wind power portfolio. On March 15, FirstEnergy entered into 20-year agreements to purchase the combined 250-megawatt output of two new wind power generation projects being developed in West Virginia, targeted to be operational by December 2007. On March 27, FirstEnergy entered into a 23-year agreement to purchase 80-megawatts of wind power from a project being developed in Pennsylvania, targeted to be operational by early 2007. When combined with existing contracts, FirstEnergy anticipates offering more than 360-megawatts of renewable wind power, more than any other company in the Mid-Atlantic region.
Ohio Competitive Bid Process
On February 23, the Competitive Bid Process (CBP) auction manager, National Economic Research Associates, notified the Public Utilities Commission of Ohio (PUCO) that the CBP designed to potentially provide firm generation service for our Ohio utilities’ 2007 and 2008 actual load requirements could not proceed due to lack of interest, as there were no bidder applications submitted. Additionally, on March 16, the PUCO denied applications for rehearing filed by various third parties regarding the Commission’s rules for the CBP.
Penn Power RFP Proposal
On April 20, the Pennsylvania Public Utility Commission (PPUC) approved Pennsylvania Power Company's POLR supply plan with modifications. The approved plan encourages wholesale electric suppliers to participate in a bidding process to provide customers with generation service from Jan. 1, 2007, through May 31, 2008. Penn Power’s POLR rates are currently capped at prices determined through restructuring agreements which are set to expire year-end 2006. As noted in the PPUC’s press release, the Commission is obligated to approve a POLR plan with rates that reflect prevailing market prices and that allow Penn Power to recover all reasonable costs for service.
Consolidated Report to the Financial Community - 1st Quarter 2006 12
Forward-looking Statements. This Consolidated Report to the Financial Community includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Actual results may differ materially due to the speed and nature of increased competition and deregulation in the electric utility industry, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of our regulated utilities to collect transition and other charges or to recover increased transmission costs, maintenance costs being higher than anticipated, legislative and regulatory changes (including revised environmental requirements), and the legal and regulatory changes resulting from the implementation of the Energy Policy Act of 2005(including, but not limited to, the repeal of the Public Utility Holding Company Act of 1935), the uncertainty of the timing and amounts of the capital expenditures (including that such amounts could be higher than anticipated) or levels of emission reductions related to the Consent Decree resolving the New Source Review litigation, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits, fines or other enforcement actions and remedies) of governmental investigations and oversight, including by the Securities and Exchange Commission, the United States Attorney's Office, the Nuclear Regulatory Commission and the various state public utility commissions as disclosed in our Securities and Exchange Commission filings, generally, and with respect to the Davis-Besse Nuclear Power Station outage and heightened scrutiny at the Perry Nuclear Power Plant in particular, the timing and outcome of various proceedings before the Pennsylvania Public Utility Commission, including the transition rate filings for MetEd and Penelec, the continuing availability and operation of generating units, the ability of our generating units to continue to operate at, or near full capacity, our inability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the anticipated benefits from our voluntary pension plan contributions, our ability to improve electric commodity margins and to experience growth in the distribution business, our ability to access the public securities and other capital markets and the cost of such capital, the outcome, cost and other effects of present and potential legal and administrative proceedings and claims related to the August 14, 2003 regional power outage, circumstances which may lead management to seek, or the Board of Directors to grant, in each case in its sole discretion, authority for the implementation of a share repurchase program in the future, the risks and other factors discussed from time to time in our Securities and Exchange Commission filings, and other similar factors. Dividends declared from time to time during any annual period may in aggregate vary from the indicated amounts due to circumstances considered by the Board at the time of the actual declarations. Also, a security rating should not be viewed as a recommendation to buy, sell or hold securities and it may be subject to revision or withdrawal at any time. We expressly disclaim any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.
Consolidated Report to the Financial Community - 1st Quarter 2006 13
