Allegheny Power 2010 Annual Report Download - page 136
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121
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. If it were ultimately determined that FirstEnergy or its subsidiaries
have legal liability or are otherwise made subject to liability based on the above matters, it could have a material adverse
effect on FirstEnergy's or its subsidiaries' financial condition, results of operations and cash flows.
15. SEGMENT INFORMATION
Financial information for each of FirstEnergy’s reportable segments is presented in the following table. FES and the
Utilities do not have separate reportable operating segments.
The Energy Delivery Services segment transmits and distributes electricity through FirstEnergy’s eight utility operating
companies, serving 4.5 million customers within 36,100 square miles of Ohio, Pennsylvania and New Jersey, and
purchases power for its POLR and default service requirements in Ohio, Pennsylvania and New Jersey. Its revenues are
primarily derived from the delivery of electricity within FirstEnergy’s service areas, cost recovery of regulatory assets and
the sale of electric generation service to retail customers who have not selected an alternative supplier (default service)
in its Ohio, Pennsylvania and New Jersey franchise areas. Its results reflect the commodity costs of securing electric
generation from FES and from non-affiliated power suppliers, the net PJM and MISO transmission expenses related to
the delivery of the respective generation loads and the deferral and amortization of purchased power costs.
The Competitive Energy Services segment supplies electric power to end-use customers through retail and wholesale
arrangements, including associated company power sales to meet all or a portion of the POLR and default service
requirements of FirstEnergy's Ohio and Pennsylvania utility subsidiaries and competitive retail sales to customers
primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey. This business segment controls
approximately 13,236 MWs of capacity and also purchases electricity to meet sales obligations. The segment's net
income is primarily derived from affiliated and non-affiliated electric generation sales revenues less the related costs of
electricity generation, including purchased power and net transmission (including congestion) and ancillary costs charged
by PJM and MISO to deliver energy to the segment’s customers.
The other segment contains corporate items and other businesses that are below the quantifiable threshold for separate
disclosure as a reportable segment.