Allegheny Power 2010 Annual Report Download - page 23

8
Act 129 also requires utilities to reduce energy consumption and peak demand, with electricity consumption reduction targets
of 1% by May 31, 2011, and 3% by May 31, 2013, and a peak demand reduction target of 4.5% by May 31, 2013. The
Pennsylvania Companies responded by offering a wide variety of programs to residential, commercial, industrial,
governmental and non-profit customers through their PPUC-approved EE&C Plans.
JCP&L Rate Adjustment
JCP&L is permitted to defer for future collection from customers the amounts by which its costs of supplying BGS to non-
shopping customers, costs incurred under NUG agreements, and certain other stranded costs, exceed amounts collected
through BGS and NUGC rates and market sales of NUG energy and capacity. As of December 31, 2010, the accumulated
deferred cost balance was a credit of approximately $37 million. To better align the recovery of expected costs, on July 26,
2010, JCP&L filed a request to decrease the amount recovered for the costs incurred under the NUG agreements by $180
million annually. On February 10, 2011, the NJBPU approved a stipulation which allows the change in rates to become
effective March 1, 2011.
On January 18, 2011, JCP&L provided information to the NJBPU regarding the proposed merger between FirstEnergy and
Allegheny. A stipulation between JCP&L, Board Staff and Rate Counsel was also provided. The Board reviewed the
Stipulation at its January 25, 2011 meeting and issued an Order on February 10, 2011 indicating that it did not object to the
transaction proceeding.
FIRSTENERGY’S BUSINESS
We are a diversified energy company headquartered in Akron, Ohio, that operates primarily through two core business
segments (see Results of Operations).
• Energy Delivery Services transmits and distributes electricity through our seven utility distribution companies
and ATSI, serving 4.5 million customers within 36,100 square miles of Ohio, Pennsylvania and New Jersey.
This segment also purchases power for its POLR and default service requirements in all three states. Its
revenues are primarily derived from the delivery of electricity within our service areas 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 certain fuel costs.
The service areas of our utilities are summarized below:
Compan
y
Area Served Customers Served
OE Central and Northeastern Ohio 1,037,000
Penn Western Pennsylvania 160,000
CEI Northeastern Ohio 751,000
TE Northwestern Ohio 310,000
JCP&L Northern, Western and East
Central New Jersey
1,098,000
Met-Ed Eastern Pennsylvania 553,000
Penelec Western Pennsylvania 591,000
A
TSI Service areas of OE, Penn,
CEI and TE
• Competitive Energy Services segment supplies electric power to end-use customers through retail and
wholesale arrangements primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey. This
business segment controls 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.
STRATEGY AND OUTLOOK
FirstEnergy’s vision is to be a leading regional energy provider, recognized for operational excellence, outstanding
customer service and our commitment to safety; the choice for long-term growth, investment value and financial strength;
and a company driven by the leadership, skills, diversity and character of our employees.