8-KRegulation FD

FIRSTENERGY CORP 8-K Report, Regulation FD Disclosure (Jan 8, 2009)

Filed January 8, 2009For Securities:FE

Summary

FirstEnergy Corp. (FE) subsidiary Ohio Edison Company (OE), The Cleveland Electric Illuminating Company (CEI), and The Toledo Edison Company (TE) (collectively, the Ohio Companies) successfully completed a competitive bidding process on December 31, 2008, to secure wholesale electricity supply for their retail customers from January 5, 2009, to March 31, 2009. Managed by CRA International, the solicitation resulted in an average winning bid price equivalent to 6.98 cents per kilowatt-hour, ensuring a reliable power source for customers who do not choose alternative suppliers. FirstEnergy Solutions Corp. (FES), an affiliate of the Ohio Companies, was a significant successful bidder, securing approximately 75% of the available tranches, which is expected to account for about 50% of FES's estimated electric sales for the first quarter of 2009. This competitive procurement was undertaken following regulatory decisions by the Public Utilities Commission of Ohio (PUCO) that denied the Ohio Companies' Market Rate Offer (MRO) filing and significantly altered their Electric Security Plan (ESP). The Ohio Companies withdrew their ESP application and sought a rehearing on the MRO. Management is planning a similar bidding process for power supply beyond March 31, 2009, indicating an ongoing effort to manage power procurement under the evolving regulatory landscape.

Key Highlights

  • 1Ohio subsidiaries (OE, CEI, TE) completed a successful competitive bidding process for electricity supply covering January 5, 2009, to March 31, 2009.
  • 2The average winning bid price was 6.98 cents per kilowatt-hour, securing wholesale capacity and energy for retail customers.
  • 3FirstEnergy Solutions Corp. (FES), a FirstEnergy subsidiary, won approximately 75% of the bid tranches.
  • 4The procurement is expected to cover about 50% of FES's estimated electric sales for Q1 2009.
  • 5The bidding process was necessitated by the PUCO's denial of the Market Rate Offer (MRO) and alterations to the Electric Security Plan (ESP).
  • 6The Ohio Companies withdrew their ESP application and sought a rehearing on the MRO.
  • 7A similar bidding process is planned for power supply beyond March 31, 2009.

Frequently Asked Questions

The competitive bidding process was initiated because the Public Utilities Commission of Ohio (PUCO) denied the Ohio Companies' Market Rate Offer (MRO) filing and significantly altered their Electric Security Plan (ESP). This situation required the Ohio Companies to find an alternative way to secure power for their retail customers.

The process was successful, securing wholesale capacity and energy for the period January 5, 2009, through March 31, 2009, at an average winning bid price equivalent to 6.98 cents per kilowatt-hour. FirstEnergy Solutions Corp. (FES), a FirstEnergy affiliate, was a major winner, securing a significant portion of the supply.

This ensures a reliable supply of electricity for retail customers who do not opt for alternative suppliers during the specified period. The competitive process aimed to secure this supply at a determined price.

Yes, FirstEnergy is planning a similar competitive bid process to secure power supply for the Ohio Companies beyond March 31, 2009, indicating an ongoing strategy to manage energy procurement through competitive mechanisms under the current regulatory environment.