8-KRegulation FD

FIRSTENERGY CORP 8-K Report, Regulation FD Disclosure (Jun 20, 2011)

Filed June 20, 2011For Securities:FE

Summary

This 8-K filing from FirstEnergy Corp. (FE) on June 20, 2011, primarily concerns a regulatory matter involving its subsidiaries, Metropolitan Edison Company (Met-Ed) and Pennsylvania Electric Company (Penelec). The Pennsylvania Public Utility Commission (PPUC) had previously denied these subsidiaries the ability to recover marginal transmission losses through their transmission service charge riders for a specific period. The Commonwealth Court of Pennsylvania affirmed this decision on June 14, 2011. Despite the unfavorable court ruling, Met-Ed and Penelec intend to appeal to the Pennsylvania Supreme Court and seek relief from the Federal District Court. They believe the decision contradicts federal law and prior rulings. Importantly, the company stated that this ongoing litigation has no impact on FirstEnergy's 2011 estimated earnings per share or cash from operating activities at this time. However, the company also included extensive forward-looking statements detailing numerous risks and uncertainties that could materially affect future results.

Key Highlights

  • 1Commonwealth Court affirmed PPUC's decision denying recovery of marginal transmission losses for Met-Ed and Penelec.
  • 2Met-Ed and Penelec plan to appeal the Commonwealth Court's decision to the Pennsylvania Supreme Court and seek Federal District Court relief.
  • 3FirstEnergy believes the court decision contradicts federal law and prior rulings.
  • 4The company expects to fully recover the related regulatory assets ($189 million for Met-Ed, $65 million for Penelec).
  • 5There is no current impact on FirstEnergy's 2011 estimated EPS or cash from operating activities due to this matter.
  • 6The filing includes a comprehensive list of forward-looking statements and associated risks and uncertainties.

Frequently Asked Questions

The main issue is the denial of FirstEnergy's subsidiaries, Met-Ed and Penelec, to recover marginal transmission losses through transmission service charge riders, a decision affirmed by the Commonwealth Court of Pennsylvania.

FirstEnergy believes the Commonwealth Court's decision is contrary to federal law and inconsistent with previous rulings. The company intends to appeal the decision.

As of the filing date, FirstEnergy stated that this matter has no impact on its 2011 estimated earnings per share or cash from operating activities. However, the company expects to recover the related regulatory assets.

FirstEnergy's subsidiaries, Met-Ed and Penelec, plan to file a Petition for Allowance of Appeal to the Pennsylvania Supreme Court and will also seek relief from the Federal District Court.