Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2022shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2022 |
Document Transition Report | false |
Entity File Number | 333-21011 |
Entity Registrant Name | FIRSTENERGY CORP. |
Entity Incorporation, State or Country Code | OH |
Entity Address, Address Line One | 76 South Main Street |
Entity Address, City or Town | Akron |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44308 |
City Area Code | (800) |
Local Phone Number | 736-3402 |
Entity Tax Identification Number | 34-1843785 |
Title of 12(b) Security | Common Stock, $0.10 par value |
Trading Symbol | FE |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock Shares Outstanding | 570,932,260 |
Amendment Flag | false |
Entity Central Index Key | 0001031296 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
REVENUES: | |||
Revenues | [1] | $ 2,989 | $ 2,726 |
OPERATING EXPENSES: | |||
Fuel | 140 | 118 | |
Purchased power | 875 | 718 | |
Other operating expenses | 820 | 752 | |
Provision for depreciation | 340 | 323 | |
Amortization (deferral) of regulatory assets, net | (37) | 92 | |
General taxes | 292 | 273 | |
Gain on sale of Yards Creek (Note 9) | 0 | (109) | |
Total operating expenses | 2,430 | 2,167 | |
OPERATING INCOME | 559 | 559 | |
OTHER INCOME (EXPENSE): | |||
Miscellaneous income, net | 106 | 135 | |
Interest expense | (313) | (285) | |
Capitalized financing costs | 19 | 13 | |
Total other expense | (188) | (137) | |
INCOME BEFORE INCOME TAXES | 371 | 422 | |
INCOME TAXES | 83 | 87 | |
NET INCOME | $ 288 | $ 335 | |
EARNINGS PER SHARE OF COMMON STOCK (Note 3): | |||
Basic - Earnings Per Share of Common Stock (in dollars per share) | $ 0.51 | $ 0.62 | |
Diluted - Earnings Per Share to Common Stock (in dollars per share) | $ 0.50 | $ 0.62 | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | |||
Basic, in shares | 570 | 543 | |
Diluted, in shares | 571 | 544 | |
Distribution Services and Retail Generation | |||
REVENUES: | |||
Revenues | $ 2,397 | $ 2,236 | |
Transmission | |||
REVENUES: | |||
Revenues | 451 | 401 | |
Other | |||
REVENUES: | |||
Revenues | $ 141 | $ 89 | |
[1] | Includes excise and gross receipts tax collections of $103 million and $95 million during the three months ended March 31, 2022 and 2021, respectively. |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Excise taxes collected | $ 103 | $ 95 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 288 | $ 335 |
OTHER COMPREHENSIVE LOSS: | ||
Pension and OPEB prior service costs | (2) | (3) |
Other comprehensive loss | (2) | (3) |
Income tax benefits on other comprehensive loss | (1) | (1) |
Other comprehensive loss, net of tax | (1) | (2) |
COMPREHENSIVE INCOME | $ 287 | $ 333 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 283 | $ 1,462 |
Restricted cash | 27 | 49 |
Receivables- | ||
Other, net of allowance for uncollectible accounts of $10 in 2022 and 2021 | 246 | 246 |
Materials and supplies, at average cost | 273 | 260 |
Prepaid taxes and other | 295 | 187 |
Total current assets | 2,250 | 3,237 |
PROPERTY, PLANT AND EQUIPMENT: | ||
In service | 46,349 | 46,002 |
Less — Accumulated provision for depreciation | 12,834 | 12,672 |
Property, plant and equipment in service net of accumulated provision for depreciation | 33,515 | 33,330 |
Construction work in progress | 1,481 | 1,414 |
Total net property, plant and equipment | 34,996 | 34,744 |
INVESTMENTS AND OTHER NONCURRENT ASSETS: | ||
Goodwill | 5,618 | 5,618 |
Investments (Note 6) | 646 | 655 |
Regulatory assets | 70 | 71 |
Other | 1,037 | 1,107 |
Total deferred charges and other assets | 7,371 | 7,451 |
Total assets | 44,617 | 45,432 |
CURRENT LIABILITIES: | ||
Currently payable long-term debt | 1,055 | 1,606 |
Short-term borrowings | 350 | 0 |
Accounts payable | 1,090 | 943 |
Accrued interest | 289 | 283 |
Accrued taxes | 650 | 647 |
Accrued compensation and benefits | 276 | 313 |
Dividends Payable | 223 | 222 |
Other | 427 | 402 |
Total current liabilities | 4,360 | 4,416 |
Stockholders’ equity- | ||
Common stock | 57 | 57 |
Other paid-in capital | 10,031 | 10,238 |
Accumulated other comprehensive loss | (16) | (15) |
Accumulated deficit | (1,317) | (1,605) |
Total stockholders’ equity | 8,755 | 8,675 |
Long-term debt and other long-term obligations | 21,754 | 22,248 |
Total capitalization | 30,509 | 30,923 |
NONCURRENT LIABILITIES: | ||
Accumulated deferred income taxes | 3,544 | 3,437 |
Retirement benefits | 2,620 | 2,669 |
Regulatory liabilities | 2,025 | 2,124 |
Other | 1,559 | 1,863 |
Total noncurrent liabilities | 9,748 | 10,093 |
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 8) | ||
Total liabilities and capitalization | 44,617 | 45,432 |
Customer | ||
Receivables- | ||
Customers | 1,258 | 1,192 |
Less — Allowance for uncollectible customer receivables | 132 | 159 |
Customers | $ 1,126 | $ 1,033 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Stockholders’ equity- | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares outstanding (in shares) | 570,932,260 | 570,261,104 |
Other | ||
Receivables- | ||
Allowance for uncollectible accounts | $ 10 | $ 10 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | OPIC | AOCI | Accumulated Deficit |
Beginning balance, (in shares) at Dec. 31, 2020 | 543,000,000 | ||||
Beginning balance at Dec. 31, 2020 | $ 7,237 | $ 54 | $ 10,076 | $ (5) | $ (2,888) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 335 | 335 | |||
Other comprehensive loss, net of tax | (2) | (2) | |||
Stock Investment Plan and share-based benefit plans (in shares) | 1,000,000 | ||||
Share-based benefit plans | 2 | 2 | |||
Cash dividends declared on common stock | (212) | (212) | |||
Ending balance (in shares) at Mar. 31, 2021 | 544,000,000 | ||||
Ending balance at Mar. 31, 2021 | $ 7,360 | $ 54 | 9,866 | (7) | (2,553) |
Beginning balance, (in shares) at Dec. 31, 2021 | 570,261,104 | 570,000,000 | |||
Beginning balance at Dec. 31, 2021 | $ 8,675 | $ 57 | 10,238 | (15) | (1,605) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 288 | 288 | |||
Other comprehensive loss, net of tax | (1) | (1) | |||
Stock Investment Plan and share-based benefit plans (in shares) | 1,000,000 | ||||
Share-based benefit plans | 20 | 20 | |||
Cash dividends declared on common stock | (223) | (223) | |||
Other | $ (4) | (4) | |||
Ending balance (in shares) at Mar. 31, 2022 | 570,932,260 | 571,000,000 | |||
Ending balance at Mar. 31, 2022 | $ 8,755 | $ 57 | $ 10,031 | $ (16) | $ (1,317) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.39 | $ 0.39 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 288 | $ 335 |
Adjustments to reconcile net income to net cash from operating activities- | ||
Depreciation and amortization | 359 | 454 |
Deferred income taxes and investment tax credits, net | 77 | 82 |
Retirement benefits, net of payments | (96) | (105) |
Gain on sale of Yards Creek (Note 9) | 0 | (109) |
Changes in current assets and liabilities- | ||
Receivables | (93) | 161 |
Materials and supplies | (13) | 14 |
Prepaid taxes and other current assets | (105) | (121) |
Accounts payable | 147 | 43 |
Accrued taxes | (133) | (127) |
Accrued interest | 6 | 7 |
Accrued compensation and benefits | (106) | (129) |
Other current liabilities | 10 | (7) |
Other | 14 | 35 |
Net cash provided from operating activities | 355 | 533 |
New financing- | ||
Long-term debt | 0 | 500 |
Short-term borrowings, net | 350 | 0 |
Redemptions and repayments- | ||
Long-term debt | (1,046) | (29) |
Short-term borrowings, net | 0 | (750) |
Make-whole premiums paid on debt redemptions | (38) | 0 |
Common stock dividend payments | (222) | (212) |
Other | (8) | (18) |
Net cash used for financing activities | (964) | (509) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Property additions | (520) | (604) |
Proceeds from sale of Yards Creek | 0 | 155 |
Sales of investment securities held in trusts | 6 | 5 |
Purchases of investment securities held in trusts | (9) | (7) |
Asset removal costs | (49) | (47) |
Other | (20) | (1) |
Net cash used for investing activities | (592) | (499) |
Net change in cash, cash equivalents, and restricted cash | (1,201) | (475) |
Cash, cash equivalents, and restricted cash at beginning of period | 1,511 | 1,801 |
Cash, cash equivalents, and restricted cash at end of period | $ 310 | $ 1,326 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Unless otherwise indicated, defined terms and abbreviations used herein have the meanings set forth in the accompanying Glossary of Terms. FE was incorporated under Ohio law in 1996. FE’s principal business is the holding, directly or indirectly, of all of the outstanding equity of its principal subsidiaries: OE, CEI, TE, Penn (a wholly owned subsidiary of OE), JCP&L, ME, PN, FESC, MP, AGC (a wholly owned subsidiary of MP), PE, WP, and FET and its principal subsidiaries (ATSI, MAIT and TrAIL). In addition, FE holds all of the outstanding equity of other direct subsidiaries including: AE Supply, FirstEnergy Properties, Inc., FEV, FirstEnergy License Holding Company, GPUN, Allegheny Ventures, Inc., and Suvon, LLC, doing business as both FirstEnergy Home and FirstEnergy Advisors. FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity. FirstEnergy’s ten utility operating companies comprise one of the nation’s largest investor-owned electric systems, based on serving over six million customers in the Midwest and Mid-Atlantic regions. FirstEnergy’s transmission operations include approximately 24,000 miles of lines and two regional transmission operation centers. AGC and MP control 3,580 MWs of total capacity. PN, as lessee of the property of its subsidiary, the Waverly Electric Light & Power Company, serves approximately 4,000 customers in the Waverly, New York vicinity. On February 10, 2021, PN entered into an agreement to transfer its customers and the related assets in Waverly, New York to Tri-County Rural Electric Cooperative; the completion of such transfer is subject to several closing conditions including regulatory approval, which are ongoing. These interim financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2021. FE and its subsidiaries follow GAAP and comply with the related regulations, orders, policies and practices prescribed by the SEC, FERC, and, as applicable, the PUCO, the PPUC, the MDPSC, the NYPSC, the WVPSC, the VSCC and the NJBPU. The accompanying interim financial statements are unaudited, but reflect all adjustments, consisting of normal recurring adjustments, that, in the opinion of management, are necessary for a fair statement of the financial statements. 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 necessarily indicative of results of operations for any future period. FE and its subsidiaries have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. FE and its subsidiaries consolidate all majority-owned subsidiaries over which they exercise control and, when applicable, entities for which they have a controlling financial interest. Intercompany transactions and balances are eliminated in consolidation as appropriate and permitted pursuant to GAAP. FE and its subsidiaries consolidate a VIE when it is determined that it is the primary beneficiary. Investments in affiliates over which FE and its subsidiaries have the ability to exercise significant influence, but do not have a controlling financial interest, follow the equity method of accounting. Under the equity method, the interest in the entity is reported as an investment in the Consolidated Balance Sheets and the percentage of FE’s ownership share of the entity’s earnings is reported in the Consolidated Statements of Income and Comprehensive Income. Certain prior year amounts have been reclassified to conform to the current year presentation. Capitalized Financing Costs For the three months ended March 31, 2022 and 2021, capitalized financing costs on FirstEnergy’s Consolidated Statements of Income include $13 million and $7 million, respectively, of allowance for equity funds used during construction and $6 million of capitalized interest in both periods. COVID-19 FirstEnergy is continuously evaluating the COVID-19 global pandemic and taking steps to mitigate known risks. FirstEnergy provides a critical and essential service to its customers and the health and safety of its employees and customers is its first priority. FirstEnergy continues to provide flexibility for approximately 7,000 of its 12,400 employees to work from home. Pandemic safety and cleaning protocols were implemented for those workers who have continued to report to a FirstEnergy work location during the pandemic, ensuring FirstEnergy employees can report directly to job sites and work with the same small group of employees every day. FirstEnergy continues to assess its work from home policies to allow for a flexible workplace to continue for its employees after the pandemic. FirstEnergy continues to effectively manage operations during the pandemic in order to provide critical service to customers. FirstEnergy has experienced supply chain challenges during the COVID-19 pandemic. Lead times have increased across numerous material categories, with some as much as doubling from previous times. Some key suppliers have struggled with labor shortages and raw material availability, which along with increasing inflationary pressure, have increased the costs of certain materials, equipment and contractors. FirstEnergy has taken steps to mitigate these risks and does not currently expect service disruptions or any material impact on its capital spending plan. However, the situation remains fluid and future impacts to FirstEnergy that are presently unknown or unanticipated may occur. Customer Receivables Receivables from customers include distribution services and retail generation sales to residential, commercial and industrial customers of the Utilities. The allowance for uncollectible customer receivables is based on historical loss information comprised of a rolling 36-month average net write-off percentage of revenues, in conjunction with a qualitative assessment of elements that impact the collectability of receivables to determine if allowances for uncollectible accounts should be further adjusted in accordance with the accounting guidance for credit losses. FirstEnergy reviews its allowance for uncollectible customer receivables utilizing a quantitative and qualitative assessment. Management contemplates available current information such as changes in economic factors, regulatory matters, industry trends, customer credit factors, amount of receivable balances that are past-due, payment options and programs available to customers, and the methods that the Utilities are able to utilize to ensure payment. This analysis includes consideration of the outbreak of COVID-19 and the impact on customer receivable balances outstanding and write-offs since the pandemic began. During the first quarter of 2022, various regulatory actions including extensions on moratoriums, certain restrictions on disconnections, and extended installment plan offerings continue to impact the level of past due balances in certain states. However, certain states have resumed normal collections activity and arrears levels have declined towards pre-pandemic levels. As a result of this analysis, FirstEnergy recognized a $25 million decrease to its allowance for uncollectible customer receivables during the first quarter of 2022, of which $15 million was applied to existing deferred regulatory assets. Additionally, as a result of these pandemic-related moratoriums and certain customer installment or extended payment plans offered, the allowance for uncollectible accounts on receivables in 2022 continue to be elevated due to the extension of when certain write-offs would have otherwise occurred. Receivables from customers also include PJM receivables resulting from transmission and wholesale sales. FirstEnergy’s uncollectible risk on PJM receivables is minimal due to the nature of PJM’s settlement process whereby members of PJM legally agree to share the cost of defaults and as a result there is no allowance for doubtful accounts. Activity in the allowance for uncollectible accounts on customer receivables for the three months ended March 31, 2022 and for the year ended December 31, 2021 are as follows: (In millions) Balance, January 1, 2021 $ 164 Charged to income (1) 54 Charged to other accounts (2) 42 Write-offs (101) Balance, December 31, 2021 $ 159 Charged to income (3) (5) Charged to other accounts (2) 39 Write-offs (61) Balance, March 31, 2022 $ 132 (1) $12 million of which was deferred for future recovery in the twelve months ended December 31, 2021. (2) Represents recoveries and reinstatements of accounts written off for uncollectible accounts. (3) $(11) million of which was deferred for future refund to customers in the three months ended March 31, 2022. Sale of Minority Interest in FirstEnergy Transmission, LLC On November 6, 2021, FirstEnergy, along with FET, entered into the FET P&SA, with Brookfield and Brookfield Guarantors, pursuant to which FET agreed to issue and sell to Brookfield at the closing, and Brookfield agreed to purchase from FET, certain newly issued membership interests of FET, such that Brookfield will own 19.9% of the issued and outstanding membership interests of FET, for a purchase price of $2.375 billion. KATCo, which is currently a subsidiary of FET, will become a wholly owned subsidiary of FE prior to the closing of the transaction and will remain in the Regulated Transmission segment. The transaction is subject to customary closing conditions, including approval from the FERC and review by the CFIUS. On January 5, 2022, the parties to this transaction submitted an application to FERC requesting approval of the transaction no later than April 30, 2022. On April 14, 2022, CFIUS notified FET and Brookfield that it has determined that there were no unresolved national security issues and its review of the transaction was concluded. On April 21, 2022, FERC approved the matter. The transaction is now expected to close at the end of May 2022. Pursuant to the terms of the FET P&SA, in connection with the closing, Brookfield, FET and FirstEnergy Corp will enter into the FET LLC Agreement. The FET LLC Agreement, among other things, provides for the governance, exit, capital and distribution, and other arrangements for FET from and following the closing. Under the FET LLC Agreement, Brookfield will be entitled to appoint a number of directors to the FET Board, in approximate proportion to Brookfield’s ownership percentage in FET (rounded to the next whole number). Upon the closing, the FET Board will consist of five directors, one appointed by Brookfield and four appointed by FE. The FET LLC Agreement contains certain investor protections, including, among other things, requiring Brookfield's approval for FET and its subsidiaries to take certain major actions. Under the terms of the FET LLC Agreement, for so long as Brookfield holds a 9.9% interest in FET, Brookfield’s consent is required for FET or any of its subsidiaries to incur indebtedness (other than the refinancing of existing indebtedness on commercially reasonable terms reflecting then-current credit market conditions) that would reasonably be expected to result in FET’s consolidated Debt-to-Capital Ratio (as defined in the FET LLC Agreement) equaling or exceeding (i) prior to the fifth anniversary of the effective date, 65%, and (ii) thereafter, 70%. New Accounting Pronouncements Recently Issued Pronouncements - FirstEnergy has assessed new authoritative accounting guidance issued by the FASB that has not yet been adopted and none are currently expected to have a material impact to the financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE FirstEnergy accounts for revenues from contracts with customers under ASC 606, “ Revenue from Contracts with Customers. ” Revenue from leases, financial instruments, other contractual rights or obligations and other revenues that are not from contracts with customers are outside the scope of the standard and accounted for under other existing GAAP. FirstEnergy has elected to exclude sales taxes and other similar taxes collected on behalf of third parties from revenue as prescribed in the standard. As a result, tax collections and remittances are excluded from recognition in the income statement and instead recorded through the balance sheet. Excise and gross receipts taxes that are assessed on FirstEnergy are not subject to the election and are included in revenue. FirstEnergy has elected the optional invoice practical expedient for most of its revenues and utilizes the optional short-term contract exemption for transmission revenues due to the annual establishment of revenue requirements, which eliminates the need to provide certain revenue disclosures regarding unsatisfied performance obligations. FirstEnergy’s revenues are primarily derived from electric service provided by the Utilities and Transmission Companies. The following represents a disaggregation of revenue from contracts with customers for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, 2022 Revenues by Type of Service Regulated Distribution Regulated Transmission Corporate/Other and Reconciling Adjustments (1) Total (In millions) Distribution services $ 1,348 $ — $ (28) $ 1,320 Retail generation 1,094 — (17) 1,077 Wholesale sales 90 — 6 96 Transmission — 451 — 451 Other 26 — — 26 Total revenues from contracts with customers $ 2,558 $ 451 $ (39) $ 2,970 Other revenue unrelated to contracts with customers 31 2 (14) 19 Total revenues $ 2,589 $ 453 $ (53) $ 2,989 (1) Includes eliminations and reconciling adjustments of inter-segment revenues. For the Three Months Ended March 31, 2021 Revenues by Type of Service Regulated Distribution Regulated Transmission Corporate/Other and Reconciling Adjustments (1) Total (In millions) Distribution services $ 1,339 $ — $ (26) $ 1,313 Retail generation 935 — (12) 923 Wholesale sales 69 — 4 73 Transmission — 401 — 401 Other 33 — — 33 Total revenues from contracts with customers $ 2,376 $ 401 $ (34) $ 2,743 ARP (2) (27) — — (27) Other revenue unrelated to contracts with customers 21 4 (15) 10 Total revenues $ 2,370 $ 405 $ (49) $ 2,726 (1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Reflects amount the Ohio Companies refunded to customers that was previously collected under decoupling mechanisms, with interest. See Note 7, “Regulatory Matters,” for further discussion on Ohio decoupling rates. Other revenue unrelated to contracts with customers includes revenue from late payment charges of $10 million and $9 million for the three months ended March 31, 2022 and 2021, respectively. Other revenue unrelated to contracts with customers also includes revenue from derivatives of $9 million for the three months ended March 31, 2022. Regulated Distribution The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies and also controls 3,580 MWs of regulated electric generation capacity located primarily in West Virginia and Virginia. Each of the Utilities earns revenue from state-regulated rate tariffs under which it provides distribution services to residential, commercial and industrial customers in its service territory. The Utilities are obligated under the regulated construct to deliver power to customers reliably, as it is needed, which creates an implied monthly contract with the end-use customer. See Note 7, “Regulatory Matters,” for additional information on rate recovery mechanisms. Distribution and electric revenues are recognized over time as electricity is distributed and delivered to the customer and the customers consume the electricity immediately as delivery occurs. Retail generation sales relate to POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland, as well as generation sales in West Virginia that are regulated by the WVPSC. Certain of the Utilities have default service obligations to provide power to non-shopping customers who have elected to continue to receive service under regulated retail tariffs. The volume of these sales varies depending on the level of shopping that occurs. Supply plans vary by state and by service territory. Default service for the Ohio Companies, Pennsylvania Companies, JCP&L and PE’s Maryland jurisdiction are provided through a competitive procurement process approved by each state’s respective commission. Retail generation revenues are recognized over time as electricity is delivered and consumed immediately by the customer. The following table represents a disaggregation of the Regulated Distribution segment revenue from contracts with distribution service and retail generation customers for the three months ended March 31, 2022 and 2021, by class: For the Three Months Ended March 31, Revenues by Customer Class 2022 2021 (In millions) Residential $ 1,542 $ 1,457 Commercial 597 541 Industrial 283 258 Other 20 18 Total Revenues $ 2,442 $ 2,274 Wholesale sales primarily consist of generation and capacity sales into the PJM market from FirstEnergy’s regulated electric generation capacity and NUGs. Certain of the Utilities may also purchase power in the PJM markets to supply power to their customers. Generally, these power sales from generation and purchases to serve load are netted hourly and reported as either revenues or purchased power on the Consolidated Statements of Income based on whether the entity was a net seller or buyer each hour. Capacity revenues are recognized ratably over the PJM planning year at prices cleared in the annual PJM Reliability Pricing Model Base Residual Auction and Incremental Auctions. Capacity purchases and sales through PJM capacity auctions are reported within revenues on the Consolidated Statements of Income. Certain capacity income (bonuses) and charges (penalties) related to the availability of units that have cleared in the auctions are unknown and not recorded in revenue until, and unless, they occur. The Utilities’ distribution customers are metered on a cycle basis. An estimate of unbilled revenues is calculated to recognize electric service provided from the last meter reading through the end of the month. This estimate includes many factors, among which are historical customer usage, load profiles, estimated weather impacts, customer shopping activity and prices in effect for each class of customer. In each accounting period, the Utilities accrue the estimated unbilled amount as revenue and reverse the related prior period estimate. Customer payments vary by state but are generally due within 30 days. ASC 606 excludes industry-specific accounting guidance for recognizing revenue from ARPs as these programs represent contracts between the utility and its regulators, as opposed to customers. Therefore, revenues from these programs are not within the scope of ASC 606 and regulated utilities are permitted to continue to recognize such revenues in accordance with existing practice but are presented separately from revenue arising from contracts with customers. FirstEnergy had ARPs in Ohio and has reflected refunds of decoupling revenue owed to customers as reductions to ARPs in 2021. Please see Note 7, “Regulatory Matters,” for further discussion on decoupling revenues in Ohio. Regulated Transmission The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy's utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment's revenues are derived from forward-looking formula rates. See Note 7, “Regulatory Matters,” for additional information. Forward-looking formula rates recover costs that the regulatory agencies determine are permitted to be recovered and provide a return on transmission capital investment. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual costs. Revenues and cash receipts for the stand-ready obligation of providing transmission service are recognized ratably over time. The following table represents a disaggregation of revenue from contracts with regulated transmission customers for the three months ended March 31, 2022 and 2021, by transmission owner: For the Three Months Ended March 31, Transmission Owner 2022 2021 (In millions) ATSI 217 $ 206 TrAIL 63 59 MAIT 79 67 JCP&L 60 36 MP, PE and WP 32 33 Total Revenues $ 451 $ 401 |
Earnings Per Share Of Common St
Earnings Per Share Of Common Stock | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE OF COMMON STOCK | EARNINGS PER SHARE OF COMMON STOCK Basic EPS is computed using the weighted average number of common shares outstanding during the relevant period as the denominator. The denominator for diluted EPS of common stock reflects the weighted average of common shares outstanding plus the potential additional common shares that could result if dilutive securities and other agreements to issue common stock were exercised. Diluted EPS reflects the dilutive effect of potential common shares from share-based awards. The dilutive effect of outstanding share-based awards was computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of the award would be used to purchase common stock at the average market price for the period. The following table reconciles basic and diluted EPS of common stock: For the Three Months Ended March 31, Reconciliation of Basic and Diluted EPS 2022 2021 (In millions, except per share amounts) Net Income $ 288 $ 335 Share count information: Weighted average number of basic shares outstanding 570 543 Assumed exercise of dilutive stock options and awards 1 1 Weighted average number of diluted shares outstanding 571 544 EPS of Common Stock: Basic EPS of common stock $ 0.51 $ 0.62 Diluted EPS of common stock $ 0.50 $ 0.62 |
Pension and Other Post-Employme
Pension and Other Post-Employment Benefits | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS | PENSION AND OTHER POST-EMPLOYMENT BENEFITS The components of the consolidated net periodic costs (credits) for pension and OPEB were as follows: Components of Net Periodic Benefit Costs (Credits) Pension OPEB For the Three Months Ended March 31, 2022 2021 2022 2021 (In millions) Service costs $ 46 $ 49 $ 1 $ 1 Interest costs 68 56 3 3 Expected return on plan assets (164) (163) (10) (10) Amortization of prior service costs (credits) (1) 1 1 (3) (4) Net periodic credits, including amounts capitalized $ (49) $ (57) $ (9) $ (10) Net periodic credits, recognized in earnings $ (69) $ (78) $ (9) $ (10) (1) The income tax benefits associated with pension and OPEB prior service costs amortized out of AOCI were $1 million as of March 31, 2022 and 2021. On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021, which among other things, extended shortfall amortization periods and modification of the interest rate stabilization rules for single-employer plans thereby impacting funding requirements. As a result, FirstEnergy does not currently expect to have a required contribution to the pension plan based on various assumptions, including annual expected rate of returns for assets of 7.5%. However, FirstEnergy may elect to contribute to the pension plan voluntarily. Service costs, net of capitalization, are reported within Other operating expenses on FirstEnergy’s Consolidated Statements of Income. Non-service costs, other than the pension and OPEB mark-to-market adjustment, which is separately shown, are reported within Miscellaneous income, net, within Other Income (Expense) on FirstEnergy’s Consolidated Statements of Income. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES FirstEnergy’s interim effective tax rates reflect the estimated annual effective tax rates for 2022 and 2021. These tax rates are affected by estimated annual permanent items, such as AFUDC equity and other flow-through items, as well as discrete items that may occur in any given period but are not consistent from period to period. FirstEnergy’s effective tax rate on continuing operations for the three months ended March 31, 2022 and 2021, was 22.4% and 20.6%, respectively. The change in effective tax rate was primarily due to a valuation allowance against certain municipal deferred tax assets. In February 2022, the IRS completed its examination of FirstEnergy’s 2020 federal income tax return and issued a Full Acceptance Letter with no adjustment to FirstEnergy’s taxable income. There was no material change to FirstEnergy’s reserve for uncertain tax positions for the first three months ended March 31, 2022, and it remains reasonably possible that |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS RECURRING FAIR VALUE MEASUREMENTS Authoritative accounting guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy gives the highest priority to Level 1 measurements and the lowest priority to Level 3 measurements. The three levels of the fair value hierarchy and a description of the valuation techniques are as follows: Level 1 - Quoted prices for identical instruments in active market. Level 2 - Quoted prices for similar instruments in active market. - Quoted prices for identical or similar instruments in markets that are not active. - Model-derived valuations for which all significant inputs are observable market data. Models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Level 3 - Valuation inputs are unobservable and significant to the fair value measurement. FirstEnergy produces a long-term power and capacity price forecast annually with periodic updates as market conditions change. When underlying prices are not observable, prices from the long-term price forecast are used to measure fair value. FTRs are financial instruments that entitle the holder to a stream of revenues (or charges) based on the hourly day-ahead congestion price differences across transmission paths. FTRs are acquired by FirstEnergy in the annual, monthly and long-term PJM auctions and are initially recorded using the auction clearing price less cost. After initial recognition, FTRs’ carrying values are periodically adjusted to fair value using a mark-to-model methodology, which approximates market. The primary inputs into the model, which are generally less observable than objective sources, are the most recent PJM auction clearing prices and the FTRs’ remaining hours. The model calculates the fair value by multiplying the most recent auction clearing price by the remaining FTR hours less the prorated FTR cost. Significant increases or decreases in inputs in isolation may have resulted in a higher or lower fair value measurement. FirstEnergy primarily applies the market approach for recurring fair value measurements using the best information available. Accordingly, FirstEnergy maximizes the use of observable inputs and minimizes the use of unobservable inputs. There were no changes in valuation methodologies used as of March 31, 2022, from those used as of December 31, 2021. The determination of the fair value measures takes into consideration various factors, including but not limited to, nonperformance risk, counterparty credit risk and the impact of credit enhancements (such as cash deposits, LOCs and priority interests). The impact of these forms of risk was not significant to the fair value measurements. The following tables set forth the recurring assets and liabilities that are accounted for at fair value by level within the fair value hierarchy: March 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets (In millions) Derivative assets FTRs (1) $ — $ — $ 1 $ 1 $ — $ — $ 9 $ 9 Equity securities 2 — — 2 2 — — 2 U.S. state debt securities — 258 — 258 — 273 — 273 Cash, cash equivalents and restricted cash (2) 310 — — 310 1,511 — — 1,511 Other (3) — 45 — 45 — 42 — 42 Total assets $ 312 $ 303 $ 1 $ 616 $ 1,513 $ 315 $ 9 $ 1,837 Liabilities Derivative liabilities FTRs (1) $ — $ — $ — $ — $ — $ — $ (1) $ (1) Total liabilities $ — $ — $ — $ — $ — $ — $ (1) $ (1) Net assets (liabilities) $ 312 $ 303 $ 1 $ 616 $ 1,513 $ 315 $ 8 $ 1,836 (1) Contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings. (2) Restricted cash of $27 million and $49 million as of March 31, 2022 and December 31, 2021 respectively, primarily relates to cash collected from MP, PE and the Ohio Companies’ customers that is specifically used to service debt of their respective securitization or funding companies. (3) Primarily consists of short-term investments. Level 3 Quantitative Information The following table provides quantitative information for FTRs contracts that are classified as Level 3 in the fair value hierarchy for the period ended March 31, 2022: Fair Value, Net (In millions) Valuation Significant Input Range Weighted Average Units FTRs $ 1 Model RTO auction clearing prices $ 0.20 to $ 4.00 $0.90 Dollars/MWH 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 equity securities, AFS debt securities and other investments. FirstEnergy has no debt securities held for trading purposes. Generally, unrealized gains and losses on equity securities are recognized in income whereas unrealized gains and losses on AFS debt securities are recognized in AOCI. However, the spent nuclear fuel disposal trusts of JCP&L, ME and PN are subject to regulatory accounting with all gains and losses on equity and AFS debt securities offset against regulatory assets. Spent Nuclear Fuel Disposal Trusts JCP&L holds debt securities within the spent nuclear fuel disposal trust, which are classified as AFS securities, recognized at fair market value. The trust is intended for funding spent nuclear fuel disposal fees to the DOE associated with the previously owned Oyster Creek and TMI-1 nuclear power plants. The following table summarizes the amortized cost basis, unrealized gains, unrealized losses and fair values of investments held in spent nuclear fuel disposal trusts as of March 31, 2022, and December 31, 2021: March 31, 2022 (1) December 31, 2021 (2) Cost Basis Unrealized Gains Unrealized Losses Fair Value Cost Basis Unrealized Gains Unrealized Losses Fair Value (In millions) Debt securities $ 279 $ — $ (21) $ 258 $ 280 $ 2 $ (9) $ 273 (1) Excludes short-term cash investments of $13 million. (2) Excludes short-term cash investments of $11 million. Proceeds from the sale of investments in AFS debt securities, realized gains and losses on those sales and interest and dividend income for the three months ended March 31, 2022 and 2021, were as follows: For the Three Months Ended March 31, 2022 2021 (In millions) Sale proceeds $ 6 $ 5 Realized gains — — Realized losses (1) — Interest and dividend income 3 3 Other Investments Other investments include employee benefit trusts, which are primarily invested in corporate-owned life insurance policies and equity method investments. Other investments were $375 million and $371 million as of March 31, 2022, and December 31, 2021, respectively, and are excluded from the amounts reported above. 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 as Short-term borrowings on the Consolidated Balance Sheets at cost. Since these borrowings are short-term in nature, FirstEnergy believes that their costs approximate their fair market value. The following table provides the approximate fair value and related carrying amounts of long-term debt, which excludes finance lease obligations and net unamortized debt issuance costs, unamortized fair value adjustments, premiums and discounts as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 (In millions) Carrying value $ 22,900 $ 23,946 Fair value $ 23,754 $ 27,043 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 period. The yields assumed were based on securities with similar characteristics offered by corporations with credit ratings similar to those of FirstEnergy. FirstEnergy classified short-term borrowings, long-term debt and other long-term obligations as Level 2 in the fair value hierarchy as of March 31, 2022, and December 31, 2021. In December 2021, notice of redemption was provided for all remaining $850 million of FE’s 4.25% Notes, Series B, due 2023, which was completed on January 20, 2022, with a make-whole premium of approximately $38 million. On January 27, 2022, CEI instructed its indenture trustee to provide notice of redemption for all remaining $150 million of CEI’s 2.77% Senior Notes, Series A, due 2034, for redemption which occurred on March 14, 2022. Also on January 27, 2022, TE instructed its indenture trustee to provide notice of partial redemption for $25 million of TE’s 2.65% Senior Secured Notes, due 2028, for partial redemption which occurred on February 11, 2022. |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2022 | |
Regulated Operations [Abstract] | |
REGULATORY MATTERS | REGULATORY MATTERS STATE REGULATION Each of the Utilities' retail rates, conditions of service, issuance of securities and other matters are subject to regulation in the states in which it operates - in Maryland by the MDPSC, in New Jersey by the NJBPU, in Ohio by the PUCO, in Pennsylvania by the PPUC, in West Virginia by the WVPSC and in New York by the NYPSC. The transmission operations of PE in Virginia, ATSI in Ohio, and the Transmission Companies in Pennsylvania are subject to certain regulations of the VSCC, PUCO and PPUC, respectively. In addition, under Ohio law, municipalities may regulate rates of a public utility, subject to appeal to the PUCO if not acceptable to the utility. Further, if any of the FirstEnergy affiliates were to engage in the construction of significant new transmission facilities, depending on the state, they may be required to obtain state regulatory authorization to site, construct and operate the new transmission facility. MARYLAND PE operates under MDPSC approved base rates that were effective as of March 23, 2019. PE also provides SOS pursuant to a combination of settlement agreements, MDPSC orders and regulations, and statutory provisions. SOS supply is competitively procured in the form of rolling contracts of varying lengths through periodic auctions that are overseen by the MDPSC and a third-party monitor. Although settlements with respect to SOS supply for PE customers have expired, service continues in the same manner until changed by order of the MDPSC. PE recovers its costs plus a return for providing SOS. PE expects to file a new base rate case in early 2023, consistent with the MDPSC’s order issued on March 22, 2019. The EmPOWER Maryland program requires each electric utility to file a plan to reduce electric consumption and demand 0.2% per year, up to the ultimate goal of 2% annual savings, for the duration of the 2021-2023 EmPOWER Maryland program cycles to the extent the MDPSC determines that cost-effective programs and services are available. PE's approved 2021-2023 EmPOWER Maryland plan continues and expands upon prior years' programs for a projected total investment of approximately $148 million over the three-year period. PE recovers program investments with a return through an annually reconciled surcharge, with most costs subject to recovery over a five-year period with a return on the unamortized balance. Maryland law only allows for the utility to recover lost distribution revenue attributable to energy efficiency or demand reduction programs through a base rate case proceeding, and to date, such recovery has not been sought or obtained by PE. NEW JERSEY JCP&L operates under NJBPU approved rates that were effective for customers as of November 1, 2021. JCP&L provides BGS for retail customers who do not choose a third-party EGS and for customers of third-party EGSs that fail to provide the contracted service. All New Jersey EDCs participate in this competitive BGS procurement process and recover BGS costs directly from customers as a charge separate from base rates. JCP&L has instituted energy efficiency and peak demand reduction programs in accordance with the New Jersey Clean Energy Act as approved by the NJBPU in April 2021. The NJBPU approved plans include recovery of lost revenues resulting from the programs and a three-year plan including total program costs of $203 million, of which $158 million of investment is recovered over a ten-year amortization period with a return as well as operations and maintenance expenses and financing costs of $45 million recovered on an annual basis. In December 2017, the NJBPU issued proposed rules to modify its current CTA policy in base rate cases to: (i) calculate savings using a five-year look back from the beginning of the test year; (ii) allocate savings with 75% retained by the company and 25% allocated to customers; and (iii) exclude transmission assets of electric distribution companies in the savings calculation. On January 17, 2019, the NJBPU approved the proposed CTA rules with no changes. On May 17, 2019, the NJ Rate Counsel filed an appeal with the Appellate Division of the Superior Court of New Jersey and on June 7, 2021, the Superior Court issued an order reversing the NJBPU’s CTA rules and remanded the case back to the NJBPU. Specifically, the Court’s ruling requires 100% of the CTA savings to be credited to customers in lieu of the NJBPU’s current policy requiring 25%. On December 6, 2021, the NJBPU issued proposed amended rules modifying its current CTA policy in base rate cases consistent with the Superior Court’s June 7, 2021 order. Comments were filed on March 3, 2022. Once the proposed rules are final, they will be applied on a prospective basis in a future base rate case, however, it is not expected to have a material adverse effect on FirstEnergy’s results or financial condition. On October 28, 2020, the NJBPU approved a stipulated settlement between JCP&L and various parties, resolving JCP&L’s request for distribution base rate increase. The settlement provided for a $94 million annual base distribution revenues increase for JCP&L based on an ROE of 9.6%, which became effective for customers on November 1, 2021. The settlement additionally provided that JCP&L would be subject to a management audit. The management audit began in May 2021 and is currently ongoing. On August 27, 2020, JCP&L filed an AMI Program with the NJBPU, which proposed the deployment of approximately 1.2 million advanced meters over a three-year period beginning on January 1, 2023, at a total cost of approximately $418 million, including the pre-deployment phase. The then proposed 3-year deployment was part of the 20-year AMI Program that was projected to cost approximately $732 million and proposed a cost recovery mechanism through a separate AMI tariff rider. On September 14, 2021, JCP&L submitted a supplemental filing, which reflected increases in the AMI Program’s costs. Under the revised AMI Program, during the first six years of the AMI Program from 2022 through 2027, JCP&L estimates costs of $494 million, consisting of capital expenditures of approximately $390 million, incremental operations and maintenance expenses of approximately $73 million and cost of removal of $31 million. On February 8, 2022, JCP&L filed with the NJBPU a stipulation entered into with the NJBPU staff, NJ Rate Counsel and others, that, pending NJBPU approval, would affirm the terms of the revised AMI Program. The Stipulation, which was approved by NJBPU order on February 23, 2022, also provides that the revised AMI Program-related capital costs, the legacy meter stranded costs, and the operations and maintenance expense will be deferred and placed in regulatory assets, with such amounts sought to be recovered in the JCP&L’s subsequent base rate cases. On July 2, 2020, the NJBPU issued an order allowing New Jersey utilities to track and create a regulatory asset for future recovery of all prudently incurred incremental costs arising from the COVID-19 pandemic beginning March 9, 2020 and continuing until the New Jersey Governor issues an order stating that the COVID-19 pandemic is no longer in effect. New Jersey utilities can request recovery of such regulatory asset in a stand-alone COVID-19 regulatory asset filing or future base rate case. On October 28, 2020, the NJBPU issued an order expanding the scope of the proceeding to examine all pandemic issues, including recovery of the COVID-19 regulatory assets, by way of a generic proceeding. Through various executive orders issued by the New Jersey Governor, the moratorium period was extended to December 31, 2021. On December 21, 2021, the moratorium on residential disconnections for certain entities providing utility service was extended until March 15, 2022. The moratorium on residential disconnections was not extended for investor-owned electric utilities such as JCP&L, but does require that investor-owned electric public utilities offer qualifying residential customers deferred payment arrangements meeting certain minimum criteria prior to disconnecting service. Additionally, while the moratorium on residential disconnections for certain entities providing electric service was not extended after March 15, 2022, new legislation was enacted on March 25, 2022, prohibiting utilities from disconnecting electric service to customers that have applied for utility bill assistance before June 15, 2022 until such time as the state agency administering the assistance program makes a decision on the application and further requiring that all utilities offer a deferred payment arrangement meeting certain minimum criteria after the state agency’s decision on the application has been made. Pursuant to an NJBPU order requiring all New Jersey electric distribution companies to file electric vehicle programs, JCP&L filed its program on March 1, 2021. JCP&L’s proposed electric vehicle program consisted of six sub-programs, including a consumer education and outreach initiative that would begin on January 1, 2022, and continue over a four-year period. The total proposed budget for the electric vehicle program is approximately $50 million, including investments of $16 million and operations and maintenance expenses of $34 million. JCP&L is proposing to recover the electric vehicle program costs via a non-bypassable rate clause applicable to all distribution customer rate classes, which became effective on January 1, 2022. On May 26, 2021, a procedural schedule was set to include evidentiary hearings the week of October 18, 2021. On July 16, 2021, the procedural schedule was extended by thirty days as requested by JCP&L to continue settlement discussions. On August 19, 2021, the presiding commissioner issued an order modifying the procedural schedule by extending the procedural schedule by ninety days as requested by JCP&L to continue settlement discussions. On November 12, 2021, JCP&L filed a letter with the presiding commissioner requesting a suspension of the procedural schedule in order to allow the parties to continue settlement discussion. On November 23, 2021, the presiding commissioner entered an order suspending the procedural schedule. JCP&L expects an order from the NJBPU by the end of the second quarter of 2022. OHIO The Ohio Companies operate under PUCO approved base distribution rates that became effective in 2009. The Ohio Companies currently operate under ESP IV, effective June 1, 2016 and continuing through May 31, 2024, that continues the supply of power to non-shopping customers at a market-based price set through an auction process. ESP IV also continues the Rider DCR, which supports continued investment related to the distribution system for the benefit of customers, with increased revenue caps of $20 million per year from June 1, 2019 through May 31, 2022; and $15 million per year from June 1, 2022 through May 31, 2024. In addition, ESP IV includes: (1) continuation of a base distribution rate freeze through May 31, 2024; (2) a goal across FirstEnergy to reduce CO 2 emissions by 90% below 2005 levels by 2045; and (3) contributions, totaling $51 million to: (a) fund energy conservation programs, economic development and job retention in the Ohio Companies’ service territories; (b) establish a fuel-fund in each of the Ohio Companies’ service territories to assist low-income customers; and (c) establish a Customer Advisory Council to ensure preservation and growth of the competitive market in Ohio. On September 8, 2020, the OCC filed motions in the Ohio Companies’ corporate separation audit and DMR audit dockets, requesting the PUCO to open an investigation and management audit, hire an independent auditor, and require FirstEnergy to show it did not improperly use money collected from consumers or violate any utility regulatory laws, rules or orders in its activities regarding HB 6. On December 30, 2020, in response to the OCC's motion, the PUCO reopened the DMR audit docket, and directed PUCO staff to solicit a third-party auditor and conduct a full review of the DMR to ensure funds collected from customers through the DMR were only used for the purposes established in ESP IV. On June 2, 2021, the PUCO selected an auditor and the auditor filed the final audit report on January 14, 2022, which made certain findings and recommendations. The report found that spending of DMR revenues was not required to be tracked, and that DMR revenues, like all rider revenues, are placed into the regulated money pool as a matter of routine, where the funds lose their identity. Therefore, the report could not suggest that DMR funds were used definitively for direct or indirect support for grid modernization. The report also concluded that there was no documented evidence that ties revenues from the DMR to lobbying for the passage of HB 6, but also could not rule out with certainty uses of DMR funds to support the passage of HB 6. The report further recommended that the regulated companies' money pool be audited more frequently and the Ohio Companies adopt formal dividend policies. On September 15, 2020, the PUCO opened a new proceeding to review the political and charitable spending by the Ohio Companies in support of HB 6 and the subsequent referendum effort, and directing the Ohio Companies to show cause, demonstrating that the costs of any political or charitable spending in support of HB 6, or the subsequent referendum effort, were not included, directly or indirectly, in any rates or charges paid by customers. The Ohio Companies initially filed a response stating that the costs of any political or charitable spending in support of HB 6, or the subsequent referendum effort, were not included, directly or indirectly, in any rates or charges paid by customers, but on August 6, 2021, filed a supplemental response explaining that, in light of the facts set forth in the DPA and the findings of the Rider DCR audit report further discussed below, political or charitable spending in support of HB 6, or the subsequent referendum effort, affected pole attachment rates paid by approximately $15 thousand. On October 26, 2021, the OCC filed a motion requesting the PUCO to order an independent external audit to investigate FE’s political and charitable spending related to HB 6, and to appoint an independent review panel to retain and oversee the auditor. In November and December 2021, parties filed comments and reply comments regarding the Ohio Companies’ original and supplemental responses to the PUCO’s September 15, 2020, show cause directive. On March 9, 2022, the PUCO directed its staff to seek the services of a third-party auditor to determine whether the show cause demonstration submitted by the Ohio Companies is sufficient to ensure that the cost of any political or charitable spending in support of HB 6 or the subsequent referendum effort was not included, directly or indirectly, in any rates or charges paid by ratepayers. In connection with an ongoing audit of the Ohio Companies’ policies and procedures relating to the code of conduct rules between affiliates, on November 4, 2020, the PUCO initiated an additional corporate separation audit as a result of the FirstEnergy leadership transition announcement made on October 29, 2020, as further discussed below. The additional audit is to ensure compliance by the Ohio Companies and their affiliates with corporate separation laws and the Ohio Companies’ corporate separation plan. The additional audit is for the period from November 2016 through October 2020. The final audit report was filed on September 13, 2021. The audit report makes no findings of major non-compliance with Ohio corporate separation requirements, minor non-compliance with eight requirements, and findings of compliance with 23 requirements. Parties filed comments and reply comments on the audit report, and a PUCO attorney examiner has issued a procedural schedule setting an evidentiary hearing on August 22, 2022. In the fourth quarter of 2020, motions were filed with the PUCO requesting that the PUCO amend the Ohio Companies’ riders for collecting the OVEC related charges required by HB 6, which the Ohio Companies are further required to remit to other Ohio electric distribution utilities or to the State Treasurer, to provide for refunds in the event such provisions of HB 6 are repealed. The Ohio Companies contested the motions, which are pending before the PUCO. On November 1, 2021, the Ohio Companies, together with the OCC, PUCO Staff, and several other signatories, entered into an Ohio Stipulation with the intent of resolving the ongoing energy efficiency rider audits, various SEET proceedings, including the Ohio Companies’ 2017 SEET proceeding, and the Ohio Companies’ quadrennial ESP review, each of which was pending before the PUCO. Specifically, the Ohio Stipulation provides that the Ohio Companies’ current ESP IV passes the required statutory test for their prospective SEET review as part of the Quadrennial Review of ESP IV, and except for limited circumstances, the signatory parties have agreed not to challenge the Ohio Companies’ SEET return on equity calculation methodology for their 2021-2024 SEET proceedings. The Ohio Stipulation additionally affirms that: (i) the Ohio Companies’ ESP IV shall continue through its previously authorized term of May 31, 2024; and (ii) the Ohio Companies will file their next base rate case in May 2024, and further, no signatory party will seek to adjust the Ohio Companies’ base distribution rates before that time, except in limited circumstances. The Ohio Companies further agreed to refund $96 million to customers in connection with the 2017-2019 SEET cases, and to provide $210 million in future rate reductions for all customers, including $80 million in 2022, $60 million in 2023, $45 million in 2024, and $25 million in 2025. The PUCO approved the 2017-2019 SEET refunds and 2022 rate reductions December 1, 2021, and refunds began in January 2022. Future rate reductions are recognized as a reduction to regulated distribution segment’s revenue in the Consolidated Statements of Income as they are provided to the Ohio Companies’ customers. In connection with an ongoing annual audit of the Ohio Companies’ Rider DCR for 2020, and as a result of disclosures in FirstEnergy’s Form 10-K for the year ended December 31, 2020 (filed on February 18, 2021), the PUCO expanded the scope of the audit on March 10, 2021, to include a review of certain transactions that were either improperly classified, misallocated, or lacked supporting documentation, and to determine whether funds collected from customers were used to pay the vendors, and if so, whether or not the funds associated with those payments should be returned to customers through Rider DCR or through an alternative proceeding. On August 3, 2021, the auditor filed its final report on this phase of the audit, and the parties submitted comments and reply comments on this audit report in October 2021. Additionally, on September 29, 2021, the PUCO expanded the scope of the audit in this proceeding to determine if the costs of the naming rights for FirstEnergy Stadium have been recovered from the Ohio Companies’ customers. On November 19, 2021, the auditor filed its final report, in which the auditor concluded that the FirstEnergy Stadium naming rights expenses were not recovered from Ohio customers. On December 15, 2021, the PUCO further expanded the scope of the audit to include an investigation into an apparent nondisclosure of a side agreement in the Ohio Companies’ ESP IV settlement proceedings, but stayed its expansion of the audit until otherwise ordered by the PUCO. See Note 8, "Commitments, Guarantees and Contingencies" below for additional details on the government investigations and subsequent litigation surrounding the investigation of HB 6. PENNSYLVANIA The Pennsylvania Companies operate under rates approved by the PPUC, effective as of January 27, 2017. On November 18, 2021, the PPUC issued orders to each of the Pennsylvania Companies directing they operate under DSPs for the June 1, 2019 through May 31, 2023 delivery period, which DSPs provide for the competitive procurement of generation supply for customers who do not receive service from an alternative EGS. Under the 2019-2023 DSPs, supply will be provided by wholesale suppliers through a mix of 3, 12 and 24-month energy contracts, as well as two RFPs for 2-year SREC contracts for ME, PN and Penn. On December 14, 2021, the Pennsylvania Companies filed proposed DSPs for provision of generation for the June 1, 2023 through May 31, 2027 delivery period, to be sourced through competitive procurements for customers who do not receive service from an alternative EGS. An evidentiary hearing was held on April 13, 2022, and the parties filed a partial settlement with the PPUC resolving most of the issues in the proceeding on April 20, 2022. The remaining issues in the proceeding, which are limited to the treatment of customer-generated energy and renewable energy credit production will be resolved through briefing. Under the 2023-2027 DSPs, supply is proposed to be provided through a mix of 12 and 24-month energy contracts, as well as long-term solar PPAs. In March 2018, the PPUC approved adjusted customer rates of the Pennsylvania Companies to reflect the net impact of the Tax Act. As a result, the Pennsylvania Companies established riders that, beginning July 1, 2018, refunded to customers tax savings attributable to the Tax Act as compared to the amounts established in their most recent base rate proceedings on a current and going forward basis. The amounts recorded as savings for the total period of January 1 through June 30, 2018, were tracked and were to be addressed for treatment in a future proceeding. On May 17, 2021, the Pennsylvania Companies filed petitions with the PPUC proposing to refund the net savings for the January through June 2018 period to customers beginning January 1, 2022. On November 18, 2021, the PPUC approved the Pennsylvania Companies' proposed refunds, but also revised a previous methodology for calculating the net tax savings, which resulted in additional tax savings attributable to the Tax Act to be refunded to customers and directed the Pennsylvania Companies to file new petitions to propose the timing and methodology to provide these additional refunds to customers. The Pennsylvania Companies recalculated the net impact for 2018 through 2021 under the revised PPUC methodology in comparison to amounts already refunded to customers under the existing riders, which resulted in an additional $61 million in savings, with interest, to be provided to customers. As a result, FirstEnergy recognized a pre-tax charge of $61 million in the fourth quarter of 2021 associated with the additional refund and based on the November 2021 PPUC order and methodology. The Pennsylvania Companies filed petitions to propose the timing and methodology of the refund of these amounts on February 17, 2022. If approved, the Pennsylvania Companies would refund these amounts beginning July 1, 2022, and continuing through the end of the year. Pursuant to Pennsylvania Act 129 of 2008 and PPUC orders, Pennsylvania EDCs implement energy efficiency and peak demand reduction programs. On June 18, 2020, the PPUC entered a Final Implementation Order for a Phase IV EE&C Plan, operating from June 2021 through May 2026. The Final Implementation Order set demand reduction targets, relative to 2007 to 2008 peak demands, at 2.9% MW for ME, 3.3% MW for PN, 2.0% MW for Penn, and 2.5% MW for WP; and energy consumption reduction targets, as a percentage of the Pennsylvania Companies’ historic 2009 to 2010 reference load at 3.1% MWH for ME, 3.0% MWH for PN, 2.7% MWH for Penn, and 2.4% MWH for WP. The Pennsylvania Companies’ Phase IV plans were approved by PPUC without modification on March 25, 2021. Pennsylvania EDCs are permitted to seek PPUC approval of an LTIIP for infrastructure improvements and costs related to highway relocation projects, after which a DSIC may be approved to recover LTIIP costs. On January 16, 2020, the PPUC approved the Pennsylvania Companies’ LTIIPs for the five-year period beginning January 1, 2020 and ending December 31, 2024 for a total capital investment of approximately $572 million for certain infrastructure improvement initiatives. On June 25, 2021, the Pennsylvania OCA filed a complaint against Penn’s quarterly DSIC rate, disputing the recoverability of the Companies’ automated distribution management system investment under the DSIC mechanism. On January 26, 2022, the parties filed a joint petition for settlement that resolves all issues in this matter pending PPUC approval. Following the Pennsylvania Companies’ 2016 base rate proceedings, the PPUC ruled in a separate proceeding related to the DSIC mechanisms that the Pennsylvania Companies were not required to reflect federal and state income tax deductions related to DSIC-eligible property in DSIC rates. The decision was appealed to the Pennsylvania Supreme Court and in July 2021 the court upheld the Pennsylvania Commonwealth Court’s reversal of the PPUC’s decision and remanded the matter back to the PPUC for determination as to how DSIC calculations shall account for ADIT and state taxes. The matter awaits further action by the PPUC. The adverse ruling by the Pennsylvania Supreme Court is not expected to result in a material impact to FirstEnergy. WEST VIRGINIA MP and PE provide electric service to all customers through traditional cost-based, regulated utility ratemaking and operate under WVPSC approved rates that became effective in February 2015. MP and PE recover net power supply costs, including fuel costs, purchased power costs and related expenses, net of related market sales revenue through the ENEC. MP’s and PE’s ENEC rate is updated annually. On December 30, 2020, MP and PE filed with the WVPSC a determination of the rate impact of the Tax Act with respect to ADIT. The filing proposed an annual revenue reduction of $2.6 million, effective January 1, 2022, with reconciliation and any resulting adjustments incorporated into annual ENEC proceedings. On August 12, 2021, a unanimous settlement was reached with all the parties agreeing to a $7.7 million rate reduction beginning January 1, 2022, with a true-up in the ENEC proceeding each year. On November 30, 2021, the WVPSC approved the settlement on all terms, except for the proposed effective date of the rate reduction, which was held in abeyance until further notice. On August 27, 2021, MP and PE filed with the WVPSC their annual ENEC case requesting an increase in ENEC rates of $19.6 million beginning January 1, 2022, which represented a 1.5% increase to the rates currently in effect. WVPSC issued an order on December 29, 2021, granting the requested $19.6 million increase in ENEC rates. Among other things, the order requires MP and PE to refund to its large industrial customers their respective portion of the $7.7 million rate reduction discussed above and also requires MP and PE to negotiate a PPA for its capacity shortfall and a reasonable reserve margin if certain conditions are met. By order dated March 2, 2022, the WVPSC reopened the case to determine whether rates should be increased to recover growing ENEC under-recoveries. MP and PE proposed a $94 million rate increase to address the growing under-recoveries and a hearing was held on March 24, 2022. Any interim rate increase approved by WVPSC would be expected to begin May 1, 2022. On December 3, 2021 and on December 27, 2021, the WVPSC approved settlements granting MP and PE a $16 million increase in rates effective January 1, 2022, and permitting the continuation of the vegetation management program and surcharge for another two years. WVPSC additionally ordered MP and PE to perform equipment inspections within a reasonable time after vegetation management occurs on a circuit. On November 22, 2021, MP and PE filed with the WVPSC their plan to construct 50 MWs of solar generation at five sites in West Virginia. The plan includes a tariff to offer solar power to West Virginia customers and cost recovery for MP and PE from other customers through a surcharge for any solar investment not fully subscribed by their customers. A hearing was held on March 16 and 17, 2022, and an order is expected in the second quarter of 2022. The solar generation project, if approved, is expected to cost approximately $110 million and begin being in-serviced by the end of 2023 with all construction completed at the other sites no later than the end of 2025. On December 17, 2021, MP and PE filed with the WVPSC for approval of environmental compliance projects at the Ft. Martin and Harrison Power Stations to comply with the EPA’s ELG and operate these plants beyond 2028. The request includes a surcharge to recover the expected $142 million capital investment and $3 million in annual operation and maintenance expense. A hearing has been set for in August 2022, with a ruling from the WVPSC expected in the fall of 2022. If approved, construction would be expected to be completed by the end of 2025. See Note 8, “Commitments, Guarantees and Contingencies - Environmental Matters - Clean Water Act" below, for additional details on the EPA's ELG. FERC REGULATORY MATTERS Under the FPA, FERC regulates rates for interstate wholesale sales, transmission of electric power, accounting and other matters, including construction and operation of hydroelectric projects. With respect to their wholesale services and rates, the Utilities, AE Supply and the Transmission Companies are subject to regulation by FERC. FERC regulations require JCP&L, MP, PE, WP and the Transmission Companies to provide open access transmission service at FERC-approved rates, terms and conditions. Transmission facilities of JCP&L, MP, PE, WP and the Transmission Companies are subject to functional control by PJM and transmission service using their transmission facilities is provided by PJM under the PJM Tariff. FERC regulates the sale of power for resale in interstate commerce in part by granting authority to public utilities to sell wholesale power at market-based rates upon showing that the seller cannot exert market power in generation or transmission or erect barriers to entry into markets. The Utilities and AE Supply each have been authorized by FERC to sell wholesale power in interstate commerce at market-based rates and have a market-based rate tariff on file with FERC, although in the case of the Utilities major wholesale purchases remain subject to review and regulation by the relevant state commissions. Federally enforceable mandatory reliability standards apply to the bulk electric system and impose certain operating, record-keeping and reporting requirements on the Utilities, AE Supply, and the Transmission Companies. NERC is the ERO designated by FERC to establish and enforce these reliability standards, although NERC has delegated day-to-day implementation and enforcement of these reliability standards to six regional entities, including RFC. All of the facilities that FirstEnergy operates are located within the RFC region. FirstEnergy actively participates in the NERC and RFC stakeholder processes, and otherwise monitors and manages its companies in response to the ongoing development, implementation and enforcement of the reliability standards implemented and enforced by RFC. FirstEnergy believes that it is in material compliance with all currently effective and enforceable reliability standards. Nevertheless, in the course of operating its extensive electric utility systems and facilities, FirstEnergy occasionally learns of isolated facts or circumstances that could be interpreted as excursions from the reliability standards. If and when such occurrences are found, FirstEnergy develops information about the occurrence and develops a remedial response to the specific circumstances, including in appropriate cases “self-reporting” an occurrence to RFC. Moreover, it is clear that NERC, RFC and FERC will continue to refine existing reliability standards as well as to develop and adopt new reliability standards. Any inability on FirstEnergy’s part to comply with the reliability standards for its bulk electric system could result in the imposition of financial penalties, or obligations to upgrade or build transmission facilities, that could have a material adverse effect on its financial condition, results of operations, and cash flows. FERC Audit FERC’s Division of Audits and Accounting initiated a nonpublic audit of FESC in February 2019. Among other ma |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, GUARANTEES AND CONTINGENCIES | COMMITMENTS, GUARANTEES AND CONTINGENCIES GUARANTEES AND OTHER ASSURANCES FirstEnergy has various financial and performance guarantees and indemnifications, which are issued in the normal course of business. These contracts include performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. FirstEnergy enters into these arrangements to facilitate commercial transactions with third parties by enhancing the value of the transaction to the third party. As of March 31, 2022, outstanding guarantees and other assurances aggregated approximately $1.1 billion, consisting of parental guarantees on behalf of its consolidated subsidiaries ($602 million) and other assurances ($468 million). COLLATERAL AND CONTINGENT-RELATED FEATURES In the normal course of business, FE and its subsidiaries may enter into physical or financially settled contracts for the sale and purchase of electric capacity, energy, fuel and emission allowances. Certain agreements contain provisions that require FE or its subsidiaries to post collateral. This collateral may be posted in the form of cash or credit support with thresholds contingent upon FE’s or its subsidiaries’ credit rating from each of the major credit rating agencies. The collateral and credit support requirements vary by contract and by counterparty. As of March 31, 2022, $52 million of collateral has been posted by FE or its subsidiaries and is included in Prepaid taxes and other current assets on FirstEnergy’s Consolidated Balance Sheets. These credit-risk-related contingent features stipulate that if the subsidiary were to be downgraded or lose its investment grade credit rating (based on its senior unsecured debt rating), it would be required to provide additional collateral. The following table discloses the potential additional credit rating contingent contractual collateral obligations as of March 31, 2022: Potential Collateral Obligations Utilities and Transmission Companies FE Total (In millions) Contractual Obligations for Additional Collateral Upon Further Downgrade $ 43 $ — $ 43 Surety Bonds (Collateralized Amount) (1) 57 258 315 Total Exposure from Contractual Obligations $ 100 $ 258 $ 358 (1) Surety Bonds are not tied to a credit rating. Surety Bonds’ impact assumes maximum contractual obligations, which is ordinarily 100% of the face amount of the surety bond except with the respect to $39 million of surety bond obligations for which the collateral obligation is capped at 60% of the face amount, and typical obligations require 30 days to cure. ENVIRONMENTAL MATTERS Various federal, state and local authorities regulate FirstEnergy with regard to air and water quality, hazardous and solid waste disposal, and other environmental matters. While FirstEnergy’s environmental policies and procedures are designed to achieve compliance with applicable environmental laws and regulations, such laws and regulations are subject to periodic review and potential revision by the implementing agencies. FirstEnergy cannot predict the timing or ultimate outcome of any of these reviews or how any future actions taken as a result thereof may materially impact its business, results of operations, cash flows and financial condition. Clean Air Act FirstEnergy complies with SO 2 and NOx emission reduction requirements under the CAA and SIP(s) by burning lower-sulfur fuel, utilizing combustion controls and post-combustion controls and/or using emission allowances. CSAPR requires reductions of NOx and SO 2 emissions in two phases (2015 and 2017), ultimately capping SO 2 emissions in affected states to 2.4 million tons annually and NOx emissions to 1.2 million tons annually. CSAPR allows trading of NOx and SO 2 emission allowances between power plants located in the same state and interstate trading of NOx and SO 2 emission allowances with some restrictions. On July 28, 2015, the D.C. Circuit ordered the EPA to reconsider the CSAPR caps on NOx and SO 2 emissions from power plants in 13 states, including West Virginia. This followed the 2014 U.S. Supreme Court ruling generally upholding the EPA’s regulatory approach under CSAPR but questioning whether the EPA required upwind states to reduce emissions by more than their contribution to air pollution in downwind states. The EPA issued a CSAPR Update on September 7, 2016, reducing summertime NOx emissions from power plants in 22 states in the eastern U.S., including West Virginia, beginning in 2017. Various states and other stakeholders appealed the CSAPR Update to the D.C. Circuit in November and December 2016. On September 13, 2019, the D.C. Circuit remanded the CSAPR Update to the EPA citing that the rule did not eliminate upwind states’ significant contributions to downwind states’ air quality attainment requirements within applicable attainment deadlines. Also in March 2018, the State of New York filed a CAA Section 126 petition with the EPA alleging that NOx emissions from nine states (including West Virginia) significantly contribute to New York’s inability to attain the ozone NAAQS. The petition sought suitable emission rate limits for large stationary sources that are allegedly affecting New York’s air quality within the three years allowed by CAA Section 126. On September 20, 2019, the EPA denied New York’s CAA Section 126 petition. On October 29, 2019, the State of New York appealed the denial of its petition to the D.C. Circuit. On July 14, 2020, the D.C. Circuit reversed and remanded the New York petition to the EPA for further consideration. On March 15, 2021, the EPA issued a revised CSAPR Update that addresses, among other things, the remands of the prior CSAPR Update and the New York Section 126 petition. In December 2021, MP purchased NOx emissions allowances to comply with 2021 ozone season requirements. On April 6, 2022, the EPA published proposed rules seeking to impose further significant reductions in EGU NO x emissions in 25 states, including West Virginia. The EPA held a virtual public hearing regarding the proposed rules on April 21, 2022, with comments due June 6, 2022. Depending on the outcome of any appeals and how the EPA and the states ultimately implement the revised CSAPR Update, the future cost of compliance may materially impact FirstEnergy's operations, cash flows and financial condition. Climate Change There are several initiatives to reduce GHG emissions at the state, federal and international level. Certain northeastern states are participating in the RGGI and western states led by California, have implemented programs, primarily cap and trade mechanisms, to control emissions of certain GHGs. Additional policies reducing GHG emissions, such as demand reduction programs, renewable portfolio standards and renewable subsidies have been implemented across the nation. In September 2016, the U.S. joined in adopting the agreement reached on December 12, 2015, at the United Nations Framework Convention on Climate Change meetings in Paris to reduce GHGs. The Paris Agreement’s non-binding obligations to limit global warming to below two degrees Celsius became effective on November 4, 2016. On June 1, 2017, the Trump Administration announced that the U.S. would cease all participation in the Paris Agreement. On January 20, 2021, President Biden signed an executive order re-adopting the agreement on behalf of the U.S. In November 2020, FirstEnergy published its Climate Story which includes its climate position and strategy, as well as a new comprehensive and ambitious GHG emission goal. FirstEnergy pledged to achieve carbon neutrality by 2050 and set an interim goal for a 30% reduction in GHGs within FirstEnergy’s direct operational control by 2030, based on 2019 levels. Future resource plans to achieve carbon reductions, including any determination of retirement dates of the regulated coal-fired generation, will be developed by working collaboratively with regulators in West Virginia. Determination of the useful life of the regulated coal-fired generation could result in changes in depreciation, and/or continued collection of net plant in rates after retirement, securitization, sale, impairment, or regulatory disallowances. If MP is unable to recover these costs, it could have a material adverse effect on FirstEnergy’s and/or MP’s financial condition, results of operations, and cash flow. Furthermore, FirstEnergy cannot currently estimate the financial impact of climate change policies, although potential legislative or regulatory programs restricting CO 2 emissions, or litigation alleging damages from GHG emissions, could require material capital and other expenditures or result in changes to its operations. In December 2009, the EPA released its final “Endangerment and Cause or Contribute Findings for GHGs under the Clean Air Act,” concluding that concentrations of several key GHGs constitute an "endangerment" and may be regulated as "air pollutants" under the CAA and mandated measurement and reporting of GHG emissions from certain sources, including electric generating plants. Subsequently, the EPA released its final CPP regulations in August 2015 to reduce CO 2 emissions from existing fossil fuel-fired EGUs and finalized separate regulations imposing CO 2 emission limits for new, modified, and reconstructed fossil fuel-fired EGUs. Numerous states and private parties filed appeals and motions to stay the CPP with the D.C. Circuit in October 2015. On February 9, 2016, the U.S. Supreme Court stayed the rule during the pendency of the challenges to the D.C. Circuit and U.S. Supreme Court. On March 28, 2017, an executive order, entitled “Promoting Energy Independence and Economic Growth,” instructed the EPA to review the CPP and related rules addressing GHG emissions and suspend, revise or rescind the rules if appropriate. On June 19, 2019, the EPA repealed the CPP and replaced it with the ACE rule that established guidelines for states to develop standards of performance to address GHG emissions from existing coal-fired generation. On January 19, 2021, the D.C. Circuit vacated and remanded the ACE rule declaring that the EPA was “arbitrary and capricious” in its rule making and, as such, the ACE rule is no longer in effect and all actions thus far taken by states to implement the federally mandated rule are now null and void. The D.C. Circuit decision was appealed by several states, including West Virginia, as well as other interested parties. On February 28, 2022, the U.S. Supreme Court heard oral arguments on the matter is subject to legal challenge. Depending on the outcomes of the appeal and how any final rules are ultimately implemented, the future cost of compliance may be material. Clean Water Act Various water quality regulations, the majority of which are the result of the federal CWA and its amendments, apply to FirstEnergy’s facilities. In addition, the states in which FirstEnergy operates have water quality standards applicable to FirstEnergy’s operations. On September 30, 2015, the EPA finalized new, more stringent effluent limits for the Steam Electric Power Generating category (40 CFR Part 423) for arsenic, mercury, selenium and nitrogen for wastewater from wet scrubber systems and zero discharge of pollutants in ash transport water. The treatment obligations were to phase-in as permits are renewed on a five-year cycle from 2018 to 2023. However, on April 13, 2017, the EPA granted a Petition for Reconsideration and on September 18, 2017, the EPA postponed certain compliance deadlines for two years. On August 31, 2020, the EPA issued a final rule revising the effluent limits for discharges from wet scrubber systems, retaining the zero-discharge standard for ash transport water, (with some limited discharge allowances), and extending the deadline for compliance to December 31, 2025 for both. In addition, the EPA allows for less stringent limits for sub-categories of generating units based on capacity utilization, flow volume from the scrubber system, and unit retirement date. The EPA is reconsidering the ELG rule with a publicly announced target of issuing a proposed revised rule in the Fall of 2022 and a final rule by the Spring of 2023. In the interim, the rule issued on August 31, 2020, remains in effect. Depending on the outcome of appeals and how final rules are ultimately implemented, the compliance with these standards, could require additional capital expenditures or changes in operations at Ft. Martin and Harrison power stations from what was filed with the WVPSC in December 2021 that seeks approval of environmental compliance projects to comply with the EPA’s ELG. After the completion of a negotiated settlement, a complaint was filed by the EPA and PA DEP on January 10, 2022 in Federal District Court for the Western District of Pennsylvania, alleging, among other things, that WP violated the CWA in connection with past boron exceedances at WP’s Springdale and Mingo landfills. On January 11, 2022, WP entered into a consent decree with the EPA and PA DEP resolving the matters addressed in the complaint, which, among other things, required a civil penalty of $610 thousand. The District Court entered the Consent Decree as final on March 17, 2022 and WP subsequently paid the penalty amount as required therein. Regulation of Waste Disposal Federal and state hazardous waste regulations have been promulgated as a result of the RCRA, as amended, and the Toxic Substances Control Act. Certain CCRs, such as coal ash, were exempted from hazardous waste disposal requirements pending the EPA’s evaluation of the need for future regulation. In April 2015, the EPA finalized regulations for the disposal of CCRs (non-hazardous), establishing national standards for landfill design, structural integrity design and assessment criteria for surface impoundments, groundwater monitoring and protection procedures and other operational and reporting procedures to assure the safe disposal of CCRs from electric generating plants. On September 13, 2017, the EPA announced that it would reconsider certain provisions of the final regulations. On July 29, 2020, the EPA published a final rule again revising the date that certain CCR impoundments must cease accepting waste and initiate closure to April 11, 2021. The final rule also allows for an extension of the closure deadline based on meeting proscribed site-specific criteria. On November 30, 2020, AE Supply submitted a closure deadline extension request to the EPA seeking to extend the closure date of McElroy's Run CCR impoundment facility until 2024, which request is pending technical review by the EPA. AE Supply continues to operate McElroy’s Run as a disposal facility for FG’s Pleasants Power Station. FE or its subsidiaries have been named as potentially responsible parties at waste disposal sites, which may require cleanup under the CERCLA. 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 potentially responsible parties for a particular site may be liable on a joint and several basis. Environmental liabilities that are considered probable have been recognized on the Consolidated Balance Sheets as of March 31, 2021, based on estimates of the total costs of cleanup, FirstEnergy’s proportionate responsibility for such costs and the financial ability of other unaffiliated entities to pay. Total liabilities of approximately $110 million have been accrued through March 31, 2022, of which, approximately $70 million are for environmental remediation of former MGP and gas holder facilities in New Jersey, which are being recovered by JCP&L through a non-bypassable SBC. FE or its subsidiaries could be found potentially responsible for additional amounts or additional sites, but the loss or range of losses cannot be determined or reasonably estimated at this time. OTHER LEGAL PROCEEDINGS United States v. Larry Householder, et al. On July 21, 2020, a complaint and supporting affidavit containing federal criminal allegations were unsealed against the now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Mr. Householder. Also, on July 21, 2020, and in connection with the investigation, FirstEnergy received subpoenas for records from the U.S. Attorney’s Office for the S.D. Ohio. FirstEnergy was not aware of the criminal allegations, affidavit or subpoenas before July 21, 2020. On July 21, 2021, FE entered into a three-year DPA with the U.S. Attorney’s Office that, subject to court proceedings, resolves this matter. Under the DPA, FE has agreed to the filing of a criminal information charging FE with one count of conspiracy to commit honest services wire fraud. The DPA requires that FirstEnergy, among other obligations: (i) continue to cooperate with the U.S. Attorney’s Office in all matters relating to the conduct described in the DPA and other conduct under investigation by the U.S. government; (ii) pay a criminal monetary penalty totaling $230 million within sixty days, which shall consist of (x) $115 million paid by FE to the United States Treasury and (y) $115 million paid by FE to the ODSA to fund certain assistance programs, as determined by the ODSA, for the benefit of low-income Ohio electric utility customers; (iii) publish a list of all payments made in 2021 to either 501(c)(4) entities or to entities known by FirstEnergy to be operating for the benefit of a public official, either directly or indirectly, and update the same on a quarterly basis during the term of the DPA; (iv) issue a public statement, as dictated in the DPA, regarding FE’s use of 501(c)(4) entities; and (v) continue to implement and review its compliance and ethics program, internal controls, policies and procedures designed, implemented and enforced to prevent and detect violations of the U.S. laws throughout its operations, and to take certain related remedial measures. The $230 million payment will neither be recovered in rates or charged to FirstEnergy customers nor will FirstEnergy seek any tax deduction related to such payment. The entire amount of the monetary penalty was recognized as expense in the second quarter of 2021, and paid in the third quarter of 2021. Under the terms of the DPA, the criminal information will be dismissed after FirstEnergy fully complies with its obligations under the DPA. Legal Proceedings Relating to United States v. Larry Householder, et al. On August 10, 2020, the SEC, through its Division of Enforcement, issued an order directing an investigation of possible securities laws violations by FE, and on September 1, 2020, issued subpoenas to FE and certain FE officers. On April 28, 2021, the SEC issued an additional subpoena to FE. While no contingency has been reflected in its consolidated financial statements, FE believes that it is probable that it will incur a loss in connection with the resolution of the SEC investigation. Given the ongoing nature and complexity of the review, inquiries and investigations, FE cannot yet reasonably estimate a loss or range of loss that may arise from the resolution of the SEC investigation. In addition to the subpoenas referenced above under “—United States v. Larry Householder, et. al.” and the SEC investigation, certain FE stockholders and FirstEnergy customers filed several lawsuits against FirstEnergy and certain current and former directors, officers and other employees, and the complaints in each of these suits is related to allegations in the complaint and supporting affidavit relating to HB 6 and the now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Mr. Householder. The plaintiffs in each of the below cases seek, among other things, to recover an unspecified amount of damages (unless otherwise noted). Unless otherwise indicated, no contingency has been reflected in FirstEnergy’s consolidated financial statements with respect to these lawsuits as a loss is neither probable, nor is a loss or range of a loss reasonably estimable. • In re FirstEnergy Corp. Securities Litigation (Federal District Court, S.D. Ohio); on July 28, 2020 and August 21, 2020, purported stockholders of FE filed putative class action lawsuits alleging violations of the federal securities laws. Those actions have been consolidated and a lead plaintiff, the Los Angeles County Employees Retirement Association, has been appointed by the court. A consolidated complaint was filed on February 26, 2021. The consolidated complaint alleges, on behalf of a proposed class of persons who purchased FE securities between February 21, 2017 and July 21, 2020, that FE and certain current or former FE officers violated Sections 10(b) and 20(a) of the Exchange Act by issuing misrepresentations or omissions concerning FE’s business and results of operations. The consolidated complaint also alleges that FE, certain current or former FE officers and directors, and a group of underwriters violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 as a result of alleged misrepresentations or omissions in connection with offerings of senior notes by FE in February and June 2020. FE believes that it is probable that it will incur a loss in connection with the resolution of this lawsuit. Given the ongoing nature and complexity of such litigation, FE cannot yet reasonably estimate a loss or range of loss. • MFS Series Trust I, et al. v. FirstEnergy Corp., et al. and Brighthouse Funds II – MFS Value Portfolio, et al. v. FirstEnergy Corp., et al. (Federal District Court, S.D. Ohio) on December 17, 2021 and February 21, 2022, purported stockholders of FE filed complaints against FE, certain current and former officers, and certain current and former officers of EH. The complaints allege that the defendants violated Sections 10(b) and 20(a) of the Exchange Act by issuing alleged misrepresentations or omissions regarding FE’s business and its results of operations, and seek the same relief as the In re FirstEnergy Corp. Securities Litigation described above. FE believes that it is probable that it will incur losses in connection with the resolution of these lawsuits. Given the ongoing nature and complexity of such litigation, FE cannot yet reasonably estimate a loss or range of loss. • State of Ohio ex rel. Dave Yost, Ohio Attorney General v. FirstEnergy Corp., et al. and City of Cincinnati and City of Columbus v. FirstEnergy Corp. (Common Pleas Court, Franklin County, OH, all actions have been consolidated); on September 23, 2020 and October 27, 2020, the OAG and the cities of Cincinnati and Columbus, respectively, filed complaints against several parties including FE (the OAG also named FES as a defendant), each alleging civil violations of the Ohio Corrupt Activity Act in connection with the passage of HB 6. On January 13, 2021, the OAG filed a motion for a temporary restraining order and preliminary injunction against FirstEnergy seeking to enjoin FirstEnergy from collecting the Ohio Companies' decoupling rider. On January 31, 2021, FE reached a partial settlement with the OAG and the cities of Cincinnati and Columbus with respect to the temporary restraining order and preliminary injunction request and related issues. In connection with the partial settlement, the Ohio Companies filed an application on February 1, 2021, with the PUCO to set their respective decoupling riders (CSR) to zero. On February 2, 2021, the PUCO approved the application of the Ohio Companies setting the rider to zero and no additional customer bills will include new decoupling rider charges after February 8, 2021. The cases are stayed pending final resolution of the United States v. Larry Householder, et al. criminal proceeding described above, although on August 13, 2021, new defendants were added to the complaint, including two former officers of FirstEnergy. On November 9, 2021, the OAG filed a motion to lift the agreed-upon stay, which FE opposed on November 19, 2021; the motion remains pending. On December 2, 2021, the cities and FE entered a stipulated dismissal with prejudice of the cities’ suit. • Smith v. FirstEnergy Corp. et al., Buldas v. FirstEnergy Corp. et al., and Hudock and Cameo Countertops, Inc. v. FirstEnergy Corp. et al. (Federal District Court, S.D. Ohio, all actions have been consolidated); on July 27, 2020, July 31, 2020, and August 5, 2020, respectively, purported customers of FE filed putative class action lawsuits against FE and FESC, as well as certain current and former FE officers, alleging civil Racketeer Influenced and Corrupt Organizations Act violations and related state law claims. FE agreed to a settlement to resolve these claims on April 11, 2022. In the fourth quarter of 2021, FirstEnergy recognized a pre-tax reserve of $37.5 million in the aggregate with respect to these lawsuits and the Emmons lawsuit below. • Emmons v. FirstEnergy Corp. et al. (Common Pleas Court, Cuyahoga County, OH); on August 4, 2020, a purported customer of FirstEnergy filed a putative class action lawsuit against FE, FESC, the Ohio Companies, along with FES, alleging several causes of action, including negligence and/or gross negligence, breach of contract, unjust enrichment, and unfair or deceptive consumer acts or practices. FE agreed to a settlement to resolve these claims on April 11, 2022. In the fourth quarter of 2021, FirstEnergy recognized a pre-tax reserve of $37.5 million in the aggregate with respect to this lawsuit and the lawsuits above consolidated with Smith in the S.D. Ohio alleging, among other things, civil violations of the Racketeer Influenced and Corrupt Organizations Act. On February 9, 2022, FE, acting through the SLC, agreed to a settlement term sheet to resolve the following shareholder derivative lawsuits relating to HB 6 and the now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Mr. Householder that were filed in the S.D. Ohio, the N.D. Ohio, and the Ohio Court of Common Pleas, Summit County: • Gendrich v. Anderson, et al. and Sloan v. Anderson, et al. (Common Pleas Court, Summit County, OH, all actions have been consolidated); on July 26, 2020 and July 31, 2020, respectively, purported stockholders of FE filed shareholder derivative action lawsuits against certain FE directors and officers, alleging, among other things, breaches of fiduciary duty. • Miller v. Anderson, et al. (Federal District Court, N.D. Ohio); Bloom, et al. v. Anderson, et al.; Employees Retirement System of the City of St. Louis v. Jones, et al.; Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Anderson et al.; Massachusetts Laborers Pension Fund v. Anderson et al.; The City of Philadelphia Board of Pensions and Retirement v. Anderson et al.; Atherton v. Dowling et al.; Behar v. Anderson, et al. (Federal District Court, S.D. Ohio, all actions have been consolidated); beginning on August 7, 2020, purported stockholders of FE filed shareholder derivative actions alleging the FE Board and officers breached their fiduciary duties and committed violations of Section 14(a) of the Exchange Act. On March 11, 2022, the parties executed a stipulation and agreement of settlement, and filed a motion the same day requesting preliminary settlement approval in the S.D. Ohio. The settlement agreement, if approved, will fully resolve the shareholder derivative lawsuits above and stipulates a series of corporate governance enhancements, that has resulted or is expected to result in the following: • Six members of the FE Board, Messrs. Michael J. Anderson, Donald T. Misheff, Thomas N. Mitchell, Christopher D. Pappas and Luis A. Reyes, and Ms. Julia L. Johnson are not standing for re-election at FE’s 2022 annual shareholder meeting; • A special FE Board committee of at least three recently appointed independent directors will be formed to initiate a review process of the current senior executive team, to begin within 30 days of the 2022 annual shareholder meeting; • The FE Board will oversee FE’s lobbying and political activities, including periodically reviewing and approving political and lobbying action plans prepared by management; • An FE Board committee of recently appointed independent directors will oversee the implementation and third-party audits of the FE Board-approved action plans with respect to political and lobbying activities; • FE will implement enhanced disclosure to shareholders of political and lobbying activities, including enhanced disclosure in its annual proxy statement; and • FE will further align financial incentives of senior executives to proactive compliance with legal and ethical obligations. The settlement also includes a payment to FirstEnergy of $180 million, to be paid by insurance after court approval, less any court-ordered attorney’s fees awarded to plaintiffs. In letters dated January 26, and February 22, 2021, staff of FERC's Division of Investigations notified FirstEnergy that the Division is conducting an investigation of FirstEnergy’s lobbying and governmental affairs activities concerning HB 6, and staff directed FirstEnergy to preserve and maintain all documents and information related to the same as such have been developed as part of an ongoing non-public audit being conducted by FERC's Division of Audits and Accounting. While no contingency has been reflected in the consolidated financial statements, FirstEnergy believes that it is probable that it will incur a loss in connection with the resolution of the FERC investigation. Given the ongoing nature and complexity of the review, inquiries and investigations, FirstEnergy cannot yet reasonably estimate a loss or range of loss that may arise from the resolution of the FERC investigation. The outcome of any of these lawsuits, governmental investigations and audit is uncertain and could have a material adverse effect on FE’s or its subsidiaries’ reputation, business, financial condition, results of operations, liquidity, and cash flows. Other Legal Matters There are various lawsuits, claims (including claims for asbestos exposure) and proceedings related to FirstEnergy’s normal business operations pending against FE or its subsidiaries. The loss or range of loss in these matters is not expected to be material to FE or its subsidiaries. The other potentially material items not otherwise discussed above are described under Note 7, “Regulatory Matters.” FirstEnergy accrues legal 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. In cases where FirstEnergy determines that it is not probable, but reasonably possible that it has a material obligation, it discloses such obligations and the possible loss or range of loss if such estimate can be made. If it were ultimately determined that FE or its subsidiaries have legal liability or are otherwise made subject to liability based on any of the matters referenced above, it could have a material adverse effect on FE’s or its subsidiaries’ financial condition, results of operations, and cash flows. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity through its reportable segments, Regulated Distribution and Regulated Transmission. The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies, serving approximately six million customers within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This segment also controls 3,580 MWs of regulated electric generation capacity located primarily in West Virginia and Virginia. The segment’s results reflect the costs of securing and delivering electric generation from transmission facilities to customers, including the deferral and amortization of certain related costs. On April 6, 2020, JCP&L signed an asset purchase agreement with Yards Creek Energy, LLC, a subsidiary of LS Power to sell its 50% interest in the Yards Creek pumped-storage hydro generation facility. With the receipt of all required regulatory approvals, the transaction was consummated on March 5, 2021 and resulted in a $109 million gain within the regulated distribution segment in the first quarter of 2021. The gain from the transaction was applied against and reduced JCP&L’s existing regulatory asset for previously deferred storm costs and, as a result, was offset by expense in the “Amortization (deferral) of regulatory assets, net”, line on the Consolidated Statements of Income, resulting in no earnings impact to FirstEnergy or JCP&L. The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy’s utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment’s revenues are primarily derived from forward-looking formula rates. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual rate base and costs. The segment’s results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy’s transmission facilities. On November 6, 2021, FirstEnergy, along with FET, entered into the FET P&SA, with Brookfield and Brookfield Guarantors pursuant to which FET agreed to issue and sell to Brookfield at the closing, and Brookfield agreed to purchase from FET, certain newly issued membership interests of FET, such that Brookfield will own 19.9% of the issued and outstanding membership interests of FET, for a purchase price of $2.375 billion. The transaction is subject to customary closing conditions, including approval from the FERC and review by the CFIUS. CFIUS completed its review on April 14, 2022 and FERC approved the transaction on April 21, 2022. The transaction is expected to close at the end of May 2022. KATCo, which is currently a subsidiary of FET, will become a wholly owned subsidiary of FE prior to the closing of the transaction and will remain in the Regulated Transmission segment. Corporate/Other reflects corporate support and other costs not charged or attributable to the Utilities or Transmission Companies, including FE’s retained Pension and OPEB assets and liabilities of the FES Debtors, interest expense on FE’s holding company debt and other investments or businesses that do not constitute an operating segment. Reconciling adjustments for the elimination of inter-segment transactions are shown separately in the following table of Segment Financial Information. As of March 31, 2022, 67 MWs of electric generating capacity, representing AE Supply’s OVEC capacity entitlement, is included in Corporate/Other. As of March 31, 2022, Corporate/Other had approximately $7.4 billion of FE holding company debt. Financial information for each of FirstEnergy’s business segments and reconciliations to consolidated amounts is presented in the tables below. FirstEnergy evaluates segment performance based on Net income (loss). Segment Financial Information For the Three Months Ended Regulated Distribution Regulated Transmission Corporate/ Other Reconciling Adjustments FirstEnergy Consolidated (In millions) March 31, 2022 External revenues $ 2,532 $ 451 $ 6 $ — $ 2,989 Internal revenues 57 2 — (59) — Total revenues $ 2,589 $ 453 $ 6 $ (59) $ 2,989 Depreciation 235 86 2 17 340 Amortization (deferral) of regulatory assets, net (38) 1 — — (37) Miscellaneous income (expense), net 85 6 17 (2) 106 Interest expense 129 59 127 (2) 313 Income taxes (benefits) 69 41 (27) — 83 Net income (loss) 265 125 (102) — 288 Property additions $ 317 $ 197 $ 6 $ — $ 520 March 31, 2021 External revenues $ 2,321 $ 401 $ 4 $ — $ 2,726 Internal revenues 49 4 — (53) — Total revenues $ 2,370 $ 405 $ 4 $ (53) $ 2,726 Depreciation 226 81 1 15 323 Amortization of regulatory assets, net 87 5 — — 92 Miscellaneous income (expense), net 107 11 22 (5) 135 Interest expense 128 61 101 (5) 285 Income taxes (benefits) 82 33 (28) — 87 Net income (loss) 313 109 (87) — 335 Property additions $ 321 $ 273 $ 10 $ — $ 604 As of March 31, 2022 Total assets $ 30,883 $ 13,070 $ 664 $ — $ 44,617 Total goodwill $ 5,004 $ 614 $ — $ — $ 5,618 As of December 31, 2021 Total assets $ 30,812 $ 13,237 $ 1,383 $ — $ 45,432 Total goodwill $ 5,004 $ 614 $ — $ — $ 5,618 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | These interim financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2021. FE and its subsidiaries follow GAAP and comply with the related regulations, orders, policies and practices prescribed by the SEC, FERC, and, as applicable, the PUCO, the PPUC, the MDPSC, the NYPSC, the WVPSC, the VSCC and the NJBPU. The accompanying interim financial statements are unaudited, but reflect all adjustments, consisting of normal recurring adjustments, that, in the opinion of management, are necessary for a fair statement of the financial statements. 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 necessarily indicative of results of operations for any future period. FE and its subsidiaries have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. |
Consolidation | FE and its subsidiaries consolidate all majority-owned subsidiaries over which they exercise control and, when applicable, entities for which they have a controlling financial interest. Intercompany transactions and balances are eliminated in consolidation as appropriate and permitted pursuant to GAAP. FE and its subsidiaries consolidate a VIE when it is determined that it is the primary beneficiary. Investments in affiliates over which FE and its subsidiaries have the ability to exercise significant influence, but do not have a controlling financial interest, follow the equity method of accounting. Under the equity method, the interest in the entity is reported as an investment in the Consolidated Balance Sheets and the percentage of FE’s ownership share of the entity’s earnings is reported in the Consolidated Statements of Income and Comprehensive Income. |
Customer Receivables | Customer Receivables Receivables from customers include distribution services and retail generation sales to residential, commercial and industrial customers of the Utilities. The allowance for uncollectible customer receivables is based on historical loss information comprised of a rolling 36-month average net write-off percentage of revenues, in conjunction with a qualitative assessment of elements that impact the collectability of receivables to determine if allowances for uncollectible accounts should be further adjusted in accordance with the accounting guidance for credit losses. FirstEnergy reviews its allowance for uncollectible customer receivables utilizing a quantitative and qualitative assessment. Management contemplates available current information such as changes in economic factors, regulatory matters, industry trends, customer credit factors, amount of receivable balances that are past-due, payment options and programs available to customers, and the methods that the Utilities are able to utilize to ensure payment. This analysis includes consideration of the outbreak of COVID-19 and the impact on customer receivable balances outstanding and write-offs since the pandemic began. During the first quarter of 2022, various regulatory actions including extensions on moratoriums, certain restrictions on disconnections, and extended installment plan offerings continue to impact the level of past due balances in certain states. However, certain states have resumed normal collections activity and arrears levels have declined towards pre-pandemic levels. As a result of this analysis, FirstEnergy recognized a $25 million decrease to its allowance for uncollectible customer receivables during the first quarter of 2022, of which $15 million was applied to existing deferred regulatory assets. Additionally, as a result of these pandemic-related moratoriums and certain customer installment or extended payment plans offered, the allowance for uncollectible accounts on receivables in 2022 continue to be elevated due to the extension of when certain write-offs would have otherwise occurred. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Issued Pronouncements - FirstEnergy has assessed new authoritative accounting guidance issued by the FASB that has not yet been adopted and none are currently expected to have a material impact to the financial statements. |
Revenue | FirstEnergy accounts for revenues from contracts with customers under ASC 606, “ Revenue from Contracts with Customers. ” Revenue from leases, financial instruments, other contractual rights or obligations and other revenues that are not from contracts with customers are outside the scope of the standard and accounted for under other existing GAAP. FirstEnergy has elected to exclude sales taxes and other similar taxes collected on behalf of third parties from revenue as prescribed in the standard. As a result, tax collections and remittances are excluded from recognition in the income statement and instead recorded through the balance sheet. Excise and gross receipts taxes that are assessed on FirstEnergy are not subject to the election and are included in revenue. FirstEnergy has elected the optional invoice practical expedient for most of its revenues and utilizes the optional short-term contract exemption for transmission revenues due to the annual establishment of revenue requirements, which eliminates the need to provide certain revenue disclosures regarding unsatisfied performance obligations. |
Earnings Per Share | Basic EPS is computed using the weighted average number of common shares outstanding during the relevant period as the denominator. The denominator for diluted EPS of common stock reflects the weighted average of common shares outstanding plus the potential additional common shares that could result if dilutive securities and other agreements to issue common stock were exercised. Diluted EPS reflects the dilutive effect of potential common shares from share-based awards. The dilutive effect of outstanding share-based awards was computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of the award would be used to purchase common stock at the average market price for the period. |
Investments | 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 equity securities, AFS debt securities and other investments. FirstEnergy has no debt securities held for trading purposes. |
Long-Term Debt and Other Long-Term Obligations | LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONSAll borrowings with initial maturities of less than one year are defined as short-term financial instruments under GAAP and are reported as Short-term borrowings on the Consolidated Balance Sheets at cost. Since these borrowings are short-term in nature, FirstEnergy believes that their costs approximate their fair market value. |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Activity in the allowance for uncollectible accounts on customer receivables | Activity in the allowance for uncollectible accounts on customer receivables for the three months ended March 31, 2022 and for the year ended December 31, 2021 are as follows: (In millions) Balance, January 1, 2021 $ 164 Charged to income (1) 54 Charged to other accounts (2) 42 Write-offs (101) Balance, December 31, 2021 $ 159 Charged to income (3) (5) Charged to other accounts (2) 39 Write-offs (61) Balance, March 31, 2022 $ 132 (1) $12 million of which was deferred for future recovery in the twelve months ended December 31, 2021. (2) Represents recoveries and reinstatements of accounts written off for uncollectible accounts. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following represents a disaggregation of revenue from contracts with customers for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, 2022 Revenues by Type of Service Regulated Distribution Regulated Transmission Corporate/Other and Reconciling Adjustments (1) Total (In millions) Distribution services $ 1,348 $ — $ (28) $ 1,320 Retail generation 1,094 — (17) 1,077 Wholesale sales 90 — 6 96 Transmission — 451 — 451 Other 26 — — 26 Total revenues from contracts with customers $ 2,558 $ 451 $ (39) $ 2,970 Other revenue unrelated to contracts with customers 31 2 (14) 19 Total revenues $ 2,589 $ 453 $ (53) $ 2,989 (1) Includes eliminations and reconciling adjustments of inter-segment revenues. For the Three Months Ended March 31, 2021 Revenues by Type of Service Regulated Distribution Regulated Transmission Corporate/Other and Reconciling Adjustments (1) Total (In millions) Distribution services $ 1,339 $ — $ (26) $ 1,313 Retail generation 935 — (12) 923 Wholesale sales 69 — 4 73 Transmission — 401 — 401 Other 33 — — 33 Total revenues from contracts with customers $ 2,376 $ 401 $ (34) $ 2,743 ARP (2) (27) — — (27) Other revenue unrelated to contracts with customers 21 4 (15) 10 Total revenues $ 2,370 $ 405 $ (49) $ 2,726 (1) Includes eliminations and reconciling adjustments of inter-segment revenues. (2) Reflects amount the Ohio Companies refunded to customers that was previously collected under decoupling mechanisms, with interest. See Note 7, “Regulatory Matters,” for further discussion on Ohio decoupling rates. The following table represents a disaggregation of the Regulated Distribution segment revenue from contracts with distribution service and retail generation customers for the three months ended March 31, 2022 and 2021, by class: For the Three Months Ended March 31, Revenues by Customer Class 2022 2021 (In millions) Residential $ 1,542 $ 1,457 Commercial 597 541 Industrial 283 258 Other 20 18 Total Revenues $ 2,442 $ 2,274 The following table represents a disaggregation of revenue from contracts with regulated transmission customers for the three months ended March 31, 2022 and 2021, by transmission owner: For the Three Months Ended March 31, Transmission Owner 2022 2021 (In millions) ATSI 217 $ 206 TrAIL 63 59 MAIT 79 67 JCP&L 60 36 MP, PE and WP 32 33 Total Revenues $ 451 $ 401 |
Earnings Per Share Of Common _2
Earnings Per Share Of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings Per Share | The following table reconciles basic and diluted EPS of common stock: For the Three Months Ended March 31, Reconciliation of Basic and Diluted EPS 2022 2021 (In millions, except per share amounts) Net Income $ 288 $ 335 Share count information: Weighted average number of basic shares outstanding 570 543 Assumed exercise of dilutive stock options and awards 1 1 Weighted average number of diluted shares outstanding 571 544 EPS of Common Stock: Basic EPS of common stock $ 0.51 $ 0.62 Diluted EPS of common stock $ 0.50 $ 0.62 |
Pension and Other Post-Employ_2
Pension and Other Post-Employment Benefits (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Costs | The components of the consolidated net periodic costs (credits) for pension and OPEB were as follows: Components of Net Periodic Benefit Costs (Credits) Pension OPEB For the Three Months Ended March 31, 2022 2021 2022 2021 (In millions) Service costs $ 46 $ 49 $ 1 $ 1 Interest costs 68 56 3 3 Expected return on plan assets (164) (163) (10) (10) Amortization of prior service costs (credits) (1) 1 1 (3) (4) Net periodic credits, including amounts capitalized $ (49) $ (57) $ (9) $ (10) Net periodic credits, recognized in earnings $ (69) $ (78) $ (9) $ (10) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured on Recurring Basis | The following tables set forth the recurring assets and liabilities that are accounted for at fair value by level within the fair value hierarchy: March 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets (In millions) Derivative assets FTRs (1) $ — $ — $ 1 $ 1 $ — $ — $ 9 $ 9 Equity securities 2 — — 2 2 — — 2 U.S. state debt securities — 258 — 258 — 273 — 273 Cash, cash equivalents and restricted cash (2) 310 — — 310 1,511 — — 1,511 Other (3) — 45 — 45 — 42 — 42 Total assets $ 312 $ 303 $ 1 $ 616 $ 1,513 $ 315 $ 9 $ 1,837 Liabilities Derivative liabilities FTRs (1) $ — $ — $ — $ — $ — $ — $ (1) $ (1) Total liabilities $ — $ — $ — $ — $ — $ — $ (1) $ (1) Net assets (liabilities) $ 312 $ 303 $ 1 $ 616 $ 1,513 $ 315 $ 8 $ 1,836 (1) Contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings. (2) Restricted cash of $27 million and $49 million as of March 31, 2022 and December 31, 2021 respectively, primarily relates to cash collected from MP, PE and the Ohio Companies’ customers that is specifically used to service debt of their respective securitization or funding companies. (3) Primarily consists of short-term investments. |
Quantitative Information for Level 3 Valuation | The following table provides quantitative information for FTRs contracts that are classified as Level 3 in the fair value hierarchy for the period ended March 31, 2022: Fair Value, Net (In millions) Valuation Significant Input Range Weighted Average Units FTRs $ 1 Model RTO auction clearing prices $ 0.20 to $ 4.00 $0.90 Dollars/MWH |
Amortized Cost Basis, Unrealized Gains and Losses and Fair Values of Investments in Available-for-sale Securities | The following table summarizes the amortized cost basis, unrealized gains, unrealized losses and fair values of investments held in spent nuclear fuel disposal trusts as of March 31, 2022, and December 31, 2021: March 31, 2022 (1) December 31, 2021 (2) Cost Basis Unrealized Gains Unrealized Losses Fair Value Cost Basis Unrealized Gains Unrealized Losses Fair Value (In millions) Debt securities $ 279 $ — $ (21) $ 258 $ 280 $ 2 $ (9) $ 273 (1) Excludes short-term cash investments of $13 million. (2) Excludes short-term cash investments of $11 million. |
Proceeds from the Sale of Investments in Available-for-sale Securities, Realized Gains and Losses on Those Sales, and Interest and Dividend Income | Proceeds from the sale of investments in AFS debt securities, realized gains and losses on those sales and interest and dividend income for the three months ended March 31, 2022 and 2021, were as follows: For the Three Months Ended March 31, 2022 2021 (In millions) Sale proceeds $ 6 $ 5 Realized gains — — Realized losses (1) — Interest and dividend income 3 3 |
Fair Value and Related Carrying Amounts of Long-term Debt and Other Long-term Obligations | The following table provides the approximate fair value and related carrying amounts of long-term debt, which excludes finance lease obligations and net unamortized debt issuance costs, unamortized fair value adjustments, premiums and discounts as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 (In millions) Carrying value $ 22,900 $ 23,946 Fair value $ 23,754 $ 27,043 |
Commitments, Guarantees and C_2
Commitments, Guarantees and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Guarantor Obligations | These credit-risk-related contingent features stipulate that if the subsidiary were to be downgraded or lose its investment grade credit rating (based on its senior unsecured debt rating), it would be required to provide additional collateral. The following table discloses the potential additional credit rating contingent contractual collateral obligations as of March 31, 2022: Potential Collateral Obligations Utilities and Transmission Companies FE Total (In millions) Contractual Obligations for Additional Collateral Upon Further Downgrade $ 43 $ — $ 43 Surety Bonds (Collateralized Amount) (1) 57 258 315 Total Exposure from Contractual Obligations $ 100 $ 258 $ 358 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Financial Information | Financial information for each of FirstEnergy’s business segments and reconciliations to consolidated amounts is presented in the tables below. FirstEnergy evaluates segment performance based on Net income (loss). Segment Financial Information For the Three Months Ended Regulated Distribution Regulated Transmission Corporate/ Other Reconciling Adjustments FirstEnergy Consolidated (In millions) March 31, 2022 External revenues $ 2,532 $ 451 $ 6 $ — $ 2,989 Internal revenues 57 2 — (59) — Total revenues $ 2,589 $ 453 $ 6 $ (59) $ 2,989 Depreciation 235 86 2 17 340 Amortization (deferral) of regulatory assets, net (38) 1 — — (37) Miscellaneous income (expense), net 85 6 17 (2) 106 Interest expense 129 59 127 (2) 313 Income taxes (benefits) 69 41 (27) — 83 Net income (loss) 265 125 (102) — 288 Property additions $ 317 $ 197 $ 6 $ — $ 520 March 31, 2021 External revenues $ 2,321 $ 401 $ 4 $ — $ 2,726 Internal revenues 49 4 — (53) — Total revenues $ 2,370 $ 405 $ 4 $ (53) $ 2,726 Depreciation 226 81 1 15 323 Amortization of regulatory assets, net 87 5 — — 92 Miscellaneous income (expense), net 107 11 22 (5) 135 Interest expense 128 61 101 (5) 285 Income taxes (benefits) 82 33 (28) — 87 Net income (loss) 313 109 (87) — 335 Property additions $ 321 $ 273 $ 10 $ — $ 604 As of March 31, 2022 Total assets $ 30,883 $ 13,070 $ 664 $ — $ 44,617 Total goodwill $ 5,004 $ 614 $ — $ — $ 5,618 As of December 31, 2021 Total assets $ 30,812 $ 13,237 $ 1,383 $ — $ 45,432 Total goodwill $ 5,004 $ 614 $ — $ — $ 5,618 |
Organization and Basis of Pre_4
Organization and Basis of Presentation - Narrative (Details) mi in Thousands, customer in Thousands, $ in Millions | Apr. 14, 2022USD ($) | Mar. 31, 2022USD ($)customercompanytransmissionCentermiMW | Mar. 31, 2021USD ($) | Apr. 30, 2022director |
Property, Plant and Equipment [Line Items] | ||||
Length of transmission lines | mi | 24 | |||
Number of regional transmission centers | transmissionCenter | 2 | |||
Capitalized cost of equity | $ 13 | $ 7 | ||
Capitalized interest | 6 | $ 6 | ||
Incremental decrease to uncollectible expense due to Covid-19 | 25 | |||
Deferred Regulatory Assets | ||||
Property, Plant and Equipment [Line Items] | ||||
Incremental decrease to uncollectible expense due to Covid-19 | $ 15 | |||
PN | Waverly, New York | ||||
Property, Plant and Equipment [Line Items] | ||||
Number of customers served by utility operating companies | customer | 4 | |||
FET | Forecast | ||||
Property, Plant and Equipment [Line Items] | ||||
Number of directors | director | 5 | |||
Minimum ownership interest | 9.90% | |||
Year one through five required debt to equity percentage | 65.00% | |||
Required debt to equity ratio thereafter | 70.00% | |||
FET | North American Transmission Company II LLC | Forecast | ||||
Property, Plant and Equipment [Line Items] | ||||
Sale of ownership interest by parent | 19.90% | |||
Sale price of ownership interest by parent | $ 2,375 | |||
Number of directors | director | 1 | |||
FET | FirstEnergy | Forecast | ||||
Property, Plant and Equipment [Line Items] | ||||
Number of directors | director | 4 | |||
Regulated Distribution | ||||
Property, Plant and Equipment [Line Items] | ||||
Number of existing utility operating companies | company | 10 | |||
Number of customers served by utility operating companies | customer | 6,000 | |||
Plant capacity (in MW's) | MW | 3,580 |
Organization and Basis of Pre_5
Organization and Basis of Presentation - Activity in Uncollectable Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 159 | $ 164 |
Charged to income | (5) | 54 |
Charged to other accounts | 39 | 42 |
Write-offs | (61) | (101) |
Ending balance | 132 | 159 |
Deferred for recovery | $ (11) | $ (12) |
Revenue (Details)
Revenue (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)companyMW | Mar. 31, 2021USD ($) | ||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | $ 2,970 | $ 2,743 | |
Total revenues | [1] | 2,989 | 2,726 |
Other Non-Customer Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Late payment charges | 10 | 9 | |
Distribution services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 1,320 | 1,313 | |
Retail generation | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 1,077 | 923 | |
Wholesale sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 96 | 73 | |
Transmission | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 451 | 401 | |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 26 | 33 | |
ARP | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | (27) | ||
Other non-customer revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 19 | 10 | |
Derivative revenue | Other Non-Customer Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 9 | ||
Regulated Distribution | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | $ 2,442 | 2,274 | |
Number of existing utility operating companies | company | 10 | ||
Megawatts of net demonstrated capacity of competitive segment | MW | 3,580 | ||
Utility customer payment period | 30 days | ||
Regulated Distribution | Residential | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | $ 1,542 | 1,457 | |
Regulated Distribution | Commercial | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 597 | 541 | |
Regulated Distribution | Industrial | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 283 | 258 | |
Regulated Distribution | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 20 | 18 | |
Regulated Transmission | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 451 | 401 | |
Regulated Transmission | ATSI | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 217 | 206 | |
Regulated Transmission | TrAIL | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 63 | 59 | |
Regulated Transmission | MAIT | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 79 | 67 | |
Regulated Transmission | JCP&L | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 60 | 36 | |
Regulated Transmission | MP, PE and WP | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 32 | 33 | |
Operating Segments | Regulated Distribution | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 2,558 | 2,376 | |
Total revenues | 2,589 | 2,370 | |
Operating Segments | Regulated Distribution | Distribution services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 1,348 | 1,339 | |
Operating Segments | Regulated Distribution | Retail generation | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 1,094 | 935 | |
Operating Segments | Regulated Distribution | Wholesale sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 90 | 69 | |
Operating Segments | Regulated Distribution | Transmission | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Operating Segments | Regulated Distribution | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 26 | 33 | |
Operating Segments | Regulated Distribution | ARP | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | (27) | ||
Operating Segments | Regulated Distribution | Other non-customer revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 31 | 21 | |
Operating Segments | Regulated Transmission | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 451 | 401 | |
Total revenues | 453 | 405 | |
Operating Segments | Regulated Transmission | Distribution services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Operating Segments | Regulated Transmission | Retail generation | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Operating Segments | Regulated Transmission | Wholesale sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Operating Segments | Regulated Transmission | Transmission | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 451 | 401 | |
Operating Segments | Regulated Transmission | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Operating Segments | Regulated Transmission | ARP | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 0 | ||
Operating Segments | Regulated Transmission | Other non-customer revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 2 | 4 | |
Corporate/Other and Reconciling Adjustments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | (39) | (34) | |
Total revenues | (53) | (49) | |
Corporate/Other and Reconciling Adjustments | Distribution services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | (28) | (26) | |
Corporate/Other and Reconciling Adjustments | Retail generation | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | (17) | (12) | |
Corporate/Other and Reconciling Adjustments | Wholesale sales | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 6 | 4 | |
Corporate/Other and Reconciling Adjustments | Transmission | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Corporate/Other and Reconciling Adjustments | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues from contracts with customers | 0 | 0 | |
Corporate/Other and Reconciling Adjustments | ARP | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 0 | ||
Corporate/Other and Reconciling Adjustments | Other non-customer revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ (14) | $ (15) | |
[1] | Includes excise and gross receipts tax collections of $103 million and $95 million during the three months ended March 31, 2022 and 2021, respectively. |
Earnings Per Share Of Common _3
Earnings Per Share Of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
EPS of Common Stock | ||
Net Income | $ 288 | $ 335 |
Share count information: | ||
Weighted average number of basic shares outstanding (in shares) | 570,000 | 543,000 |
Assumed exercise of dilutive stock options and awards (in shares) | 1,000 | 1,000 |
Weighted average number of diluted shares outstanding | 571,000 | 544,000 |
EPS of Common Stock: | ||
Basic - EPS of Common Stock (in dollars per share) | $ 0.51 | $ 0.62 |
Diluted - EPS to Common Stock (in dollars per share) | $ 0.50 | $ 0.62 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from the calculation of diluted shares outstanding, in shares | 0 | 0 |
Pension and Other Post-Employ_3
Pension and Other Post-Employment Benefits (Details) - USD ($) $ in Millions | Mar. 11, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Pension and OPEB prior service costs amortized out of AOCI | $ 1 | $ 1 | |
Pension | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service costs | 46 | 49 | |
Interest costs | 68 | 56 | |
Expected return on plan assets | (164) | (163) | |
Amortization of prior service costs (credits) | 1 | 1 | |
Net periodic credits, including amounts capitalized | (49) | (57) | |
Net periodic credits, recognized in earnings | (69) | (78) | |
Estimated return | 7.50% | ||
OPEB | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service costs | 1 | 1 | |
Interest costs | 3 | 3 | |
Expected return on plan assets | (10) | (10) | |
Amortization of prior service costs (credits) | (3) | (4) | |
Net periodic credits, including amounts capitalized | (9) | (10) | |
Net periodic credits, recognized in earnings | $ (9) | $ (10) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (percent) | 22.40% | 20.60% |
Unrecognized tax benefits period decrease | $ 31 | |
Unrecognized tax benefits that would impact effective tax rate | $ 24 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Liabilities | ||
Restricted cash | $ 27 | $ 49 |
Recurring | ||
Assets | ||
Fair value, assets | 616 | 1,837 |
Liabilities | ||
Fair value, liabilities | 0 | (1) |
Net assets (liabilities) | 616 | 1,836 |
Recurring | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | (1) |
Recurring | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 1 | 9 |
Recurring | Equity securities | ||
Assets | ||
Fair value, assets | 2 | 2 |
Recurring | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 258 | 273 |
Recurring | Cash, cash equivalents and restricted cash | ||
Assets | ||
Fair value, assets | 310 | 1,511 |
Recurring | Other | ||
Assets | ||
Fair value, assets | 45 | 42 |
Recurring | Level 1 | ||
Assets | ||
Fair value, assets | 312 | 1,513 |
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Net assets (liabilities) | 312 | 1,513 |
Recurring | Level 1 | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Recurring | Level 1 | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 1 | Equity securities | ||
Assets | ||
Fair value, assets | 2 | 2 |
Recurring | Level 1 | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 1 | Cash, cash equivalents and restricted cash | ||
Assets | ||
Fair value, assets | 310 | 1,511 |
Recurring | Level 1 | Other | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 2 | ||
Assets | ||
Fair value, assets | 303 | 315 |
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Net assets (liabilities) | 303 | 315 |
Recurring | Level 2 | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | 0 |
Recurring | Level 2 | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 2 | Equity securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 2 | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 258 | 273 |
Recurring | Level 2 | Cash, cash equivalents and restricted cash | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 2 | Other | ||
Assets | ||
Fair value, assets | 45 | 42 |
Recurring | Level 3 | ||
Assets | ||
Fair value, assets | 1 | 9 |
Liabilities | ||
Fair value, liabilities | 0 | (1) |
Net assets (liabilities) | 1 | 8 |
Recurring | Level 3 | FTRs | Derivative Liabilities | ||
Liabilities | ||
Fair value, liabilities | 0 | (1) |
Recurring | Level 3 | FTRs | Derivative Assets | ||
Assets | ||
Fair value, assets | 1 | 9 |
Recurring | Level 3 | Equity securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 3 | U.S. state debt securities | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 3 | Cash, cash equivalents and restricted cash | ||
Assets | ||
Fair value, assets | 0 | 0 |
Recurring | Level 3 | Other | ||
Assets | ||
Fair value, assets | $ 0 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Quantitative Information (Details) - Model - Level 3 - FTRs $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($)$ / MWh | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |
Fair Value | $ | $ 1 |
Minimum | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |
Fair Value Inputs, RTO Auction Clearing Prices (in $/MWH) | 0.20 |
Maximum | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |
Fair Value Inputs, RTO Auction Clearing Prices (in $/MWH) | 4 |
Weighted Average | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |
Fair Value Inputs, RTO Auction Clearing Prices (in $/MWH) | 0.90 |
Fair Value Measurements - Inves
Fair Value Measurements - Investments Held in Trusts (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Short-term cash investments | $ 13 | $ 11 |
Debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost Basis | 279 | 280 |
Unrealized Gains | 0 | 2 |
Unrealized Losses | (21) | (9) |
Fair Value | $ 258 | $ 273 |
Fair Value Measurements - Proce
Fair Value Measurements - Proceeds from the Sale of Investments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Proceeds from the sale of investments in available-for-sale securities, realized gains and losses on those sales, and interest and dividend income | ||
Sale proceeds | $ 6 | $ 5 |
Realized gains | 0 | 0 |
Realized losses | (1) | 0 |
Interest and dividend income | $ 3 | $ 3 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts of Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair value and related carrying amounts of long-term debt and other long-term obligations | ||
Long-term debt and other long-term obligations | $ 22,900 | $ 23,946 |
Fair Value | ||
Fair value and related carrying amounts of long-term debt and other long-term obligations | ||
Long-term debt and other long-term obligations | $ 23,754 | $ 27,043 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Jan. 27, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value of Financial Instruments [Line Items] | |||
Investments not required to be disclosed | $ 375 | $ 371 | |
4.25% Series B Senior Notes Due 2023 | Senior Notes | |||
Fair Value of Financial Instruments [Line Items] | |||
Face amount of debt | $ 850 | ||
Stated interest rate | 4.25% | ||
Debt Instrument, Unamortized Premium | $ 38 | ||
2.77% Series A Senior Notes Due 2034 | Senior Notes | The Cleveland Electric Illuminating Company | |||
Fair Value of Financial Instruments [Line Items] | |||
Face amount of debt | $ 150 | ||
Stated interest rate | 2.77% | ||
2.65%, 150 Million Notes Maturing 2028 | Senior Notes | TE | |||
Fair Value of Financial Instruments [Line Items] | |||
Stated interest rate | 2.65% | ||
Early repayment of debt | $ 25 |
Regulatory Matters - Maryland a
Regulatory Matters - Maryland and New Jersey (Details) meter in Millions, $ in Millions | Nov. 01, 2021 | Sep. 14, 2021USD ($) | Apr. 23, 2021USD ($) | Mar. 01, 2021USD ($)program | Oct. 28, 2020USD ($) | Aug. 27, 2020USD ($)meter | Mar. 31, 2022USD ($) |
PE | Maryland | |||||||
Regulatory Matters [Line Items] | |||||||
Incremental energy savings goal per year (percent) | 0.20% | ||||||
Incremental energy savings goal thereafter (percent) | 2.00% | ||||||
Amortization period | 5 years | ||||||
Amount of requested rate increase (decrease) | $ 148 | ||||||
Recovery period for expenditures for cost recovery program | 3 years | ||||||
JCP&L | Advanced Metering Infrastructure | New Jersey | Regulated Distribution | |||||||
Regulatory Matters [Line Items] | |||||||
Amount of requested rate increase (decrease) | $ 732 | ||||||
JCP&L | Advanced Metering Infrastructure Supplemental Filing | New Jersey | Regulated Distribution | |||||||
Regulatory Matters [Line Items] | |||||||
First period of the program | 6 years | ||||||
Costs associated with program | $ 494 | ||||||
Amount of capital expenditures | 390 | ||||||
Amount of maintenance expense | 73 | ||||||
Cost of removal | $ 31 | ||||||
JCP&L | NJBPU | New Jersey | |||||||
Regulatory Matters [Line Items] | |||||||
Requested increase to ROE | 9.60% | ||||||
Amount of revenue increase | $ 94 | ||||||
JCP&L | NJBPU | Advanced Metering Infrastructure | New Jersey | Regulated Distribution | |||||||
Regulatory Matters [Line Items] | |||||||
Meter deployment period | 3 years | ||||||
Number of meters to be deployed | meter | 1.2 | ||||||
Expected cost of the program | $ 418 | ||||||
Time period of the program | 20 years | ||||||
JCP&L | NJBPU | Energy Efficiency and Peak Demand Reduction | New Jersey | Regulated Distribution | |||||||
Regulatory Matters [Line Items] | |||||||
Amortization period | 10 years | ||||||
JCP&L | NJBPU | Electrical Vehicle Program | New Jersey | Regulated Distribution | |||||||
Regulatory Matters [Line Items] | |||||||
Amount of requested rate increase (decrease) | $ 50 | ||||||
Number of programs | program | 6 | ||||||
Electric vehicle program period | 4 years | ||||||
Amount of requested return on capital | $ 16 | ||||||
Requested amount for operations and maintenance expense | $ 34 | ||||||
JCP&L | NJBPU | Energy Efficiency and Peak Demand Reduction Stipulation Settlement | New Jersey | Regulated Distribution | |||||||
Regulatory Matters [Line Items] | |||||||
Amount of requested rate increase (decrease) | $ 203 | ||||||
Approved period of rate plan | 3 years | ||||||
Approved investment recovery | $ 158 | ||||||
Approved amount of operation and maintenance recovery | $ 45 |
Regulatory Matters - Ohio (Deta
Regulatory Matters - Ohio (Details) - OHIO - PUCO $ in Thousands | Nov. 01, 2021USD ($) | Jun. 01, 2016USD ($) | Mar. 31, 2022USD ($) | Sep. 13, 2021requirement | Aug. 06, 2021USD ($) |
Regulatory Matters [Line Items] | |||||
Proposed goal to reduce CO2 pollution (percent) | 90.00% | ||||
Energy Conservation, Economic Development and Job Retention | |||||
Regulatory Matters [Line Items] | |||||
Contribution amount | $ 51,000 | ||||
Delivery Capital Recovery Rider | |||||
Regulatory Matters [Line Items] | |||||
Annual revenue cap for rider for years three through six | 20,000 | ||||
Annual revenue cap for rider for years six through eight | $ 15,000 | ||||
Rider DCR Audit Report | The Ohio Companies | |||||
Regulatory Matters [Line Items] | |||||
Refund to customer of pole attachment sates | $ 15 | ||||
Number of requirements with minor non-compliance | requirement | 8 | ||||
Number of requirements | requirement | 23 | ||||
SEET 2017-2019 Cases | The Ohio Companies | |||||
Regulatory Matters [Line Items] | |||||
Rate refunds | $ 96,000 | ||||
Ohio Stipulation | |||||
Regulatory Matters [Line Items] | |||||
Rate refunds | 210,000 | ||||
Rate refunds in 2022 | 80,000 | ||||
Rate refunds in 2023 | 60,000 | ||||
Rate refunds in 2024 | 45,000 | ||||
Rate refunds in 2025 | $ 25,000 | ||||
Ohio Stipulation | Regulated Distribution | |||||
Regulatory Matters [Line Items] | |||||
Pre-tax charges | $ 96,000 |
Regulatory Matters - Pennsylvan
Regulatory Matters - Pennsylvania and West Virginia (Details) $ in Millions | Mar. 17, 2022USD ($) | Mar. 02, 2022USD ($) | Dec. 29, 2021USD ($) | Dec. 27, 2021USD ($) | Dec. 17, 2021USD ($) | Nov. 22, 2021MW | Nov. 18, 2021USD ($) | Aug. 27, 2021USD ($) | Dec. 30, 2020USD ($) | Jan. 16, 2020USD ($) | Mar. 31, 2022USD ($)proposal | Sep. 30, 2021USD ($) | Jun. 18, 2020 |
FERC | Transmission Related Vegetation Management Programs | Other Nonoperating Income (Expense) | FirstEnergy | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Pre-tax impairment of regulatory asset | $ 21 | ||||||||||||
ATSI | FERC | Transmission Related Vegetation Management Programs | Regulated Transmission | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Pre-tax impairment of regulatory asset | 48 | ||||||||||||
ATSI | FERC | Transmission Related Vegetation Management Programs | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Pre-tax impairment of regulatory asset | $ 27 | ||||||||||||
Pennsylvania | DSP June 2019- May 2023 | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Number of RFP's | proposal | 2 | ||||||||||||
RFP term | 2 years | ||||||||||||
Pennsylvania | Three month period | DSP June 2019- May 2023 | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Term of energy contract | 3 months | ||||||||||||
Pennsylvania | Twelve month period | DSP June 2019- May 2023 | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Term of energy contract | 12 months | ||||||||||||
Pennsylvania | Twenty-four month period | DSP June 2019- May 2023 | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Term of energy contract | 24 months | ||||||||||||
Pennsylvania | PPUC | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amended amount of rate increase | $ 61 | ||||||||||||
Pennsylvania | PPUC | Regulated Distribution | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Pre-tax charges | $ 61 | ||||||||||||
Pennsylvania | Pennsylvania Companies | PPUC | New LTIIPs | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Recovery period | 5 years | ||||||||||||
Amount of requested rate increase (decrease) | $ 572 | ||||||||||||
Pennsylvania | ME | PPUC | EE&C Phase IV | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Demand reduction targets | 2.90% | ||||||||||||
Energy consumption reduction targets | 3.10% | ||||||||||||
Pennsylvania | PN | PPUC | EE&C Phase IV | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Demand reduction targets | 3.30% | ||||||||||||
Energy consumption reduction targets | 3.00% | ||||||||||||
Pennsylvania | Penn | PPUC | EE&C Phase IV | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Demand reduction targets | 2.00% | ||||||||||||
Energy consumption reduction targets | 2.70% | ||||||||||||
Pennsylvania | WP | PPUC | EE&C Phase IV | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Demand reduction targets | 2.50% | ||||||||||||
Energy consumption reduction targets | 2.40% | ||||||||||||
West Virginia | MP and PE | WVPSC | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 94 | ||||||||||||
West Virginia | MP and PE | WVPSC | Ft. Martin and Harrison Power Stations | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 142 | ||||||||||||
Requested annual rate increase | $ 3 | ||||||||||||
West Virginia | MP and PE | WVPSC | Solar Generation Project | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Plant capacity (in MW's) | MW | 50 | ||||||||||||
Expected cost of the program | $ 110 | ||||||||||||
West Virginia | MP and PE | WVPSC | ENEC | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Amount of requested rate increase (decrease) | $ 19.6 | $ (2.6) | |||||||||||
Approved amount of annual increase | $ (7.7) | ||||||||||||
Amount of requested rate increase (decrease) (percent) | 1.50% | ||||||||||||
Supplemental requested decrease | $ (7.7) | ||||||||||||
Expected cost of the program | $ 2.9 | ||||||||||||
West Virginia | MP and PE | WVPSC | Integrated Resource Plan | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Approved amount of annual increase | $ 19.6 | ||||||||||||
West Virginia | MP and PE | WVPSC | VMS | |||||||||||||
Regulatory Matters [Line Items] | |||||||||||||
Approved amount of annual increase | $ 16 | ||||||||||||
Surcharge period | 2 years |
Commitments, Guarantees and C_3
Commitments, Guarantees and Contingencies - Potential Collateral Obligations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | $ 358 |
Percent of face amount of debt | 100.00% |
Curing period | 30 days |
Upon Further Downgrade | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | $ 43 |
Surety Bond (Collateralized Amount) | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | $ 315 |
Percent of face amount of debt | 60.00% |
Capped portion of surety bond obligations | $ 39 |
Utilities and Transmission Companies | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 100 |
Utilities and Transmission Companies | Upon Further Downgrade | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 43 |
Utilities and Transmission Companies | Surety Bond (Collateralized Amount) | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 57 |
FirstEnergy | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 258 |
FirstEnergy | Upon Further Downgrade | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | 0 |
FirstEnergy | Surety Bond (Collateralized Amount) | |
Guarantor Obligations [Line Items] | |
Guarantor obligations | $ 258 |
Commitments, Guarantees and C_4
Commitments, Guarantees and Contingencies - Narrative (Details) $ in Thousands | Feb. 09, 2022USD ($) | Jul. 21, 2021USD ($) | Feb. 20, 2018USD ($) | Mar. 31, 2022USD ($) | Mar. 11, 2022director | Dec. 31, 2021USD ($) |
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | $ 1,100,000 | |||||
Company posted collateral related to net liability positions | $ 52,000 | |||||
Goal to reduce in GHG emissions | 30.00% | |||||
United States v. Householder, et al. | ||||||
Guarantor Obligations [Line Items] | ||||||
Number of board members not seeking re-election | director | 6 | |||||
Number of board members on special committee | director | 3 | |||||
Smith v FirstEnergy Corp et al., Buldas v FirstEnergy Corp. et al., and Hudock and Cameo Countertops, Inc. v. FirstEnergy Corp. et al. | ||||||
Guarantor Obligations [Line Items] | ||||||
Loss contingency accrual | $ 37,500 | |||||
Emmons v. FirstEnergy Corp. et al. | ||||||
Guarantor Obligations [Line Items] | ||||||
Loss contingency accrual | $ 37,500 | |||||
Shareholder Derivative Lawsuit | ||||||
Guarantor Obligations [Line Items] | ||||||
Amount awarded from other party | $ 180,000 | |||||
Regulation of Waste Disposal | ||||||
Guarantor Obligations [Line Items] | ||||||
Accrual for environmental loss contingencies | $ 110,000 | |||||
Environmental liabilities former gas facilities | 70,000 | |||||
FE | ||||||
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | 602,000 | |||||
Other Assurances | ||||||
Guarantor Obligations [Line Items] | ||||||
Outstanding guarantees and other assurances aggregated | $ 468,000 | |||||
EPA | Clean Water Act | ||||||
Guarantor Obligations [Line Items] | ||||||
Amount awarded to other party | $ 610 | |||||
U.S. Attorney's Office | United States v. Householder, et al. | ||||||
Guarantor Obligations [Line Items] | ||||||
Term of payments | 60 days | |||||
Term of DPA | 3 years | |||||
Loss in period | $ 230,000 | |||||
United States Treasury | United States v. Householder, et al. | ||||||
Guarantor Obligations [Line Items] | ||||||
Amount awarded to other party | 115,000 | |||||
Ohio Development Service | United States v. Householder, et al. | ||||||
Guarantor Obligations [Line Items] | ||||||
Amount awarded to other party | $ 115,000 |
Segment Information - Narrative
Segment Information - Narrative (Details) mi² in Thousands, customer in Millions, $ in Millions | Apr. 14, 2022USD ($) | Mar. 05, 2021USD ($) | Apr. 06, 2020 | Mar. 31, 2022USD ($)mi²customercompanyMW | Mar. 31, 2021USD ($) |
Segment Reporting Information [Line Items] | |||||
Gain on sale of Yards Creek (Note 9) | $ 0 | $ 109 | |||
FET | North American Transmission Company II LLC | Forecast | |||||
Segment Reporting Information [Line Items] | |||||
Sale of ownership interest by parent | 19.90% | ||||
Sale price of ownership interest by parent | $ 2,375 | ||||
JCP&L | Yard's Creek Energy | NEW JERSEY | NJBPU | |||||
Segment Reporting Information [Line Items] | |||||
Ownership interest sold | 50.00% | ||||
Regulated Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Number of existing utility operating companies | company | 10 | ||||
Number of customers served by utility operating companies | customer | 6 | ||||
Number of square miles in service area | mi² | 65 | ||||
Megawatts of net demonstrated capacity of competitive segment | MW | 3,580 | ||||
Regulated Distribution | JCP&L | Yard's Creek Energy | NEW JERSEY | |||||
Segment Reporting Information [Line Items] | |||||
Gain on sale of Yards Creek (Note 9) | $ 109 | ||||
Other/Corporate | OVEC | |||||
Segment Reporting Information [Line Items] | |||||
Megawatts of net demonstrated capacity of competitive segment | MW | 67 | ||||
FirstEnergy | Other/Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Long-term debt and other long-term obligations | $ 7,400 |
Segment Information - Financial
Segment Information - Financial Data (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Segment Financial Information | ||||
Revenues | [1] | $ 2,989 | $ 2,726 | |
Depreciation | 340 | 323 | ||
Amortization (deferral) of regulatory assets, net | (37) | 92 | ||
Miscellaneous income (expense), net | 106 | 135 | ||
Interest expense | 313 | 285 | ||
Income taxes (benefits) | 83 | 87 | ||
Income (loss) from continuing operations | 288 | 335 | ||
Property additions | 520 | 604 | ||
Total assets | 44,617 | $ 45,432 | ||
Goodwill | 5,618 | 5,618 | ||
External Customers | ||||
Segment Financial Information | ||||
Revenues | 2,989 | 2,726 | ||
Internal Customers | ||||
Segment Financial Information | ||||
Revenues | 0 | 0 | ||
Operating Segments | Regulated Distribution | ||||
Segment Financial Information | ||||
Revenues | 2,589 | 2,370 | ||
Depreciation | 235 | 226 | ||
Amortization (deferral) of regulatory assets, net | (38) | 87 | ||
Miscellaneous income (expense), net | 85 | 107 | ||
Interest expense | 129 | 128 | ||
Income taxes (benefits) | 69 | 82 | ||
Income (loss) from continuing operations | 265 | 313 | ||
Property additions | 317 | 321 | ||
Total assets | 30,883 | 30,812 | ||
Goodwill | 5,004 | 5,004 | ||
Operating Segments | Regulated Distribution | External Customers | ||||
Segment Financial Information | ||||
Revenues | 2,532 | 2,321 | ||
Operating Segments | Regulated Distribution | Internal Customers | ||||
Segment Financial Information | ||||
Revenues | 57 | 49 | ||
Operating Segments | Regulated Transmission | ||||
Segment Financial Information | ||||
Revenues | 453 | 405 | ||
Depreciation | 86 | 81 | ||
Amortization (deferral) of regulatory assets, net | 1 | 5 | ||
Miscellaneous income (expense), net | 6 | 11 | ||
Interest expense | 59 | 61 | ||
Income taxes (benefits) | 41 | 33 | ||
Income (loss) from continuing operations | 125 | 109 | ||
Property additions | 197 | 273 | ||
Total assets | 13,070 | 13,237 | ||
Goodwill | 614 | 614 | ||
Operating Segments | Regulated Transmission | External Customers | ||||
Segment Financial Information | ||||
Revenues | 451 | 401 | ||
Operating Segments | Regulated Transmission | Internal Customers | ||||
Segment Financial Information | ||||
Revenues | 2 | 4 | ||
Corporate/Other | ||||
Segment Financial Information | ||||
Revenues | 6 | 4 | ||
Depreciation | 2 | 1 | ||
Amortization (deferral) of regulatory assets, net | 0 | 0 | ||
Miscellaneous income (expense), net | 17 | 22 | ||
Interest expense | 127 | 101 | ||
Income taxes (benefits) | (27) | (28) | ||
Income (loss) from continuing operations | (102) | (87) | ||
Property additions | 6 | 10 | ||
Total assets | 664 | 1,383 | ||
Goodwill | 0 | 0 | ||
Corporate/Other | External Customers | ||||
Segment Financial Information | ||||
Revenues | 6 | 4 | ||
Corporate/Other | Internal Customers | ||||
Segment Financial Information | ||||
Revenues | 0 | 0 | ||
Reconciling Adjustments | ||||
Segment Financial Information | ||||
Revenues | (59) | (53) | ||
Depreciation | 17 | 15 | ||
Amortization (deferral) of regulatory assets, net | 0 | 0 | ||
Miscellaneous income (expense), net | (2) | (5) | ||
Interest expense | (2) | (5) | ||
Income taxes (benefits) | 0 | 0 | ||
Income (loss) from continuing operations | 0 | 0 | ||
Property additions | 0 | 0 | ||
Total assets | 0 | 0 | ||
Goodwill | 0 | $ 0 | ||
Reconciling Adjustments | External Customers | ||||
Segment Financial Information | ||||
Revenues | 0 | 0 | ||
Reconciling Adjustments | Internal Customers | ||||
Segment Financial Information | ||||
Revenues | $ (59) | $ (53) | ||
[1] | Includes excise and gross receipts tax collections of $103 million and $95 million during the three months ended March 31, 2022 and 2021, respectively. |