10-KPeriod: FY2002

FIRSTENERGY CORP Annual Report, Year Ended Dec 31, 2002

Filed March 26, 2003For Securities:FE

Summary

FIRSTENERGY CORP. (FE) filed its 2002 annual report on Form 10-K on March 26, 2003. This filing provides a comprehensive overview of the company's operations, financial condition, and regulatory landscape as of December 31, 2002. The report details FirstEnergy's extensive utility operations across Ohio, New Jersey, and Pennsylvania, highlighting its transmission, generation, and distribution activities. Significant discussions include the impact of utility deregulation in these states, capital expenditure plans for 2003-2007, and various regulatory matters before state and federal commissions. A key focus of the report is the company's strategic response to industry changes, including divestitures and compliance with environmental regulations. Investors will find detailed information on the company's nuclear operations, including the challenges and costs associated with the Davis-Besse plant outage. The report also covers legal proceedings, executive compensation, and market-related information for the registrant's common stock.

Key Highlights

  • 1FirstEnergy Corp. operates extensive electric utility services across Ohio, New Jersey, and Pennsylvania, serving approximately 11.1 million people.
  • 2The company is actively navigating the evolving landscape of utility deregulation, with specific details on rate matters in Ohio, New Jersey, and Pennsylvania.
  • 3Capital expenditure forecasts for 2003-2007 are provided, totaling over $3 billion for property, plant, and equipment, in addition to nuclear fuel and operating lease commitments.
  • 4Significant discussions surround the Davis-Besse nuclear power plant, including an extended outage, repair costs, and an estimated April 2003 return to service.
  • 5The report details divestiture activities, including international operations and generating assets, and outlines strategies for environmental compliance with air and water regulations.
  • 6FirstEnergy's financial statements are incorporated by reference from its 2002 Annual Report to Stockholders, with specific pages identified for various financial disclosures.
  • 7The company switched its independent accountants from Arthur Andersen LLP to PricewaterhouseCoopers LLP in April 2002.

Frequently Asked Questions

FirstEnergy Corp.'s primary business is holding the common stock of its electric utility operating subsidiaries. These subsidiaries are involved in the generation, distribution, and sale of electric energy. The company also operates other subsidiaries involved in energy-related products and services, utility infrastructure construction, natural gas pipelines, and international utility operations.

FirstEnergy and its subsidiaries have projected capital expenditures of approximately $3.05 billion for the period 2003-2007. The company plans to fund its cash requirements through operations, existing cash reserves, potential long-term debt issuances, and revolving credit arrangements. Future financings will depend on market conditions and the company's ability to comply with coverage requirements for issuing debt and preferred stock.

The report highlights the ongoing impact of electric industry deregulation in Ohio, New Jersey, and Pennsylvania, which includes allowing customers to choose generation suppliers, establishing 'provider of last resort' obligations, and enabling the recovery of transition costs. The company also faces regulation from the SEC under the Public Utility Holding Company Act of 1935, and from the FERC for wholesale and interstate operations.

The Davis-Besse plant experienced an extended outage due to issues identified during a refueling outage, specifically corrosion in the reactor vessel head near penetration holes caused by boric acid leaks. The company incurred significant costs for repairs, replacement power, and operational adjustments. Restart is projected for April 2003, pending NRC approval, and ongoing costs for operation and maintenance are expected.