Allegheny Power 2010 Annual Report Download - page 123

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108
capacity, energy, ancillary services, and congestion costs with Met-Ed and Penelec for each product won. Under the
terms and conditions of the SMA, Met-Ed and Penelec are responsible for payment of noncontrollable transmission costs
billed by PJM.
On January 18 to 20, 2011 FES participated in a descending clock auction for POLR service administered by Met-Ed,
Penelec, and Penn Power and their consultant, NERA for the following tranche products and delivery periods:
Residential 12-month, Residential 24-month, Commercial 12-month and Industrial 12-month. All 12-month delivery
periods are from June 1, 2011 through May 31, 2012 while all 24-month delivery periods are from June 1, 2011 through
May 31, 2013. Met-Ed offered 3 Residential 12-month tranches, 4 Residential 24-month tranches, 6 Commercial 12-
month tranches and 11 Industrial tranches. Penelec offered 3 Residential 12-month tranches, 2 Residential 24-month
tranches, 5 Commercial 12-month tranches and 11 Industrial tranches. Penn Power offered 2 Residential 12-month
tranches, 1 Residential 24-month tranche, 3 Commercial 12-month tranches and 3 Industrial tranches.
For Met-Ed offerings, FES won 1 Commercial 12-month tranche and zero for the remaining products. For Penelec and
Penn Power offerings, FES won no tranches. FES entered into a SMA to provide capacity, energy, ancillary services,
and congestion costs with Met-Ed for the product won. Under the terms and conditions of the SMA, Met-Ed is
responsible for payment of noncontrollable transmission costs billed by PJM.
11. CAPITALIZATION
(A) COMMON STOCK
Retained Earnings and Dividends
As of December 31, 2010, FirstEnergy's unrestricted retained earnings were $4.6 billion. Dividends declared in 2010 and
2009 were $2.20 per share in each year, which included quarterly dividends of $0.55 per share paid in the second, third
and fourth quarters of 2010 and 2009, respectively, and payable in the first quarter of 2011 and 2010, respectively. The
amount and timing of all dividend declarations are subject to the discretion of the Board of Directors and its consideration
of business conditions, results of operations, financial condition and other factors.
In addition to paying dividends from retained earnings, each of FirstEnergy’s electric utility subsidiaries has authorization
from the FERC to pay cash dividends to FirstEnergy from paid-in capital accounts, as long as its equity to total
capitalization ratio (without consideration of retained earnings) remains above 35%. The articles of incorporation,
indentures and various other agreements relating to the long-term debt of certain FirstEnergy subsidiaries contain
provisions that could further restrict the payment of dividends on their common stock. None of these provisions materially
restricted FirstEnergy’s subsidiaries’ ability to pay cash dividends to FirstEnergy as of December 31, 2010.
(B) PREFERRED AND PREFERENCE STOCK
FirstEnergy’s and the Utilities’ preferred stock and preference stock authorizations are as follows:
Preferred Stock Preference Stock
Shares Par Shares Par
Authorized Value Authorized Value
FirstEnergy 5,000,000 $100
OE 6,000,000 $100 8,000,000 no par
OE 8,000,000 $25
Penn 1,200,000 $100
CEI 4,000,000 no par 3,000,000 no par
TE 3,000,000 $100 5,000,000 $25
TE 12,000,000 $25
JCP&L 15,600,000 no par
Met-Ed 10,000,000 no par
Penelec 11,435,000 no par
No preferred shares or preference shares are currently outstanding.