Allegheny Power 2011 Annual Report Download - page 159
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144
Affiliated Company Transactions —
2010
Revenues:
Electric sales to affiliates
Ground lease with ATSI
Other
Expenses:
Purchased power from affiliates
Fuel
Support services
Investment Income:
Interest income from affiliates
Interest income from FE
Interest Expense:
Interest expense to affiliates
Interest expense to FE
FES
(In millions)
$2,227
—
88
371
46
620
—
3
9
—
OE
$ 190
12
1
522
—
128
—
—
3
—
CEI
$ 2
7
7
361
—
64
—
—
14
1
TE
$ 46
2
1
181
—
52
12
—
1
—
JCP&L
$ —
—
—
—
—
94
—
—
4
—
Met-Ed
$ 73
—
10
612
—
59
—
—
2
—
Penelec
$ 65
—
—
643
—
58
—
—
2
—
Affiliated Company Transactions —
2009
Revenues:
Electric sales to affiliates
Ground lease with ATSI
Other
Expenses:
Purchased power from affiliates
Fuel
Support services
Investment Income:
Interest income from affiliates
Interest income from FE
Interest Expense:
Interest expense to affiliates
Interest expense to FE
FES
(In millions)
$2,826
—
30
222
15
584
—
4
6
4
OE
$ 189
12
1
993
—
141
15
1
5
1
CEI
$ 2
7
6
735
—
62
—
—
17
1
TE
$ 38
2
1
393
—
59
17
—
2
1
JCP&L
$ —
—
—
—
—
91
—
—
4
—
Met-Ed
$ —
—
10
365
—
54
—
1
3
—
Penelec
$ —
—
—
342
—
57
—
—
2
1
FirstEnergy does not bill directly or allocate any of its costs to any subsidiary company. Costs are allocated to FES and the Registrant
Utilities from FESC, AESC and FENOC. The majority of costs are directly billed or assigned at no more than cost. The remaining
costs are for services that are provided on behalf of more than one company, or costs that cannot be precisely identified and are
allocated using formulas developed by FESC, AESC and FENOC. The current allocation or assignment formulas used and their
bases include multiple factor formulas: each company’s proportionate amount of FirstEnergy’s aggregate direct payroll, number of
employees, asset balances, revenues, number of customers, other factors and specific departmental charge ratios. Management
believes that these allocation methods are reasonable. Intercompany transactions are generally settled under commercial terms
within thirty days.
FES and the Utilities are parties to an intercompany income tax allocation agreement with FirstEnergy and its other subsidiaries
that provides for the allocation of consolidated tax liabilities. Net tax benefits attributable to FirstEnergy are generally reallocated
to the subsidiaries of FirstEnergy that have taxable income. That allocation is accounted for as a capital contribution to the company
receiving the tax benefit (see Note 5, Taxes).
18. SUPPLEMENTAL GUARANTOR INFORMATION
As discussed in Note 6, Leases FES has fully and unconditionally guaranteed all of FGCO’s obligations under each of the leases
associated with Bruce Mansfield Unit 1. The Consolidating Statements of Income for the three years ended December 31, 2011,
Consolidating Balance Sheets as of December 31, 2011, and December 31, 2010, and Condensed Consolidating Statements of
Cash Flows for the three years ended December 31, 2011, for FES (parent and guarantor), FGCO and NGC (non-guarantor) are
presented below and have been revised, as applicable, for the change in accounting for pensions and OPEB (see Note 1,
Organization, Basis of Presentation and Significant Accounting Policies). Investments in wholly owned subsidiaries are accounted
for by FES using the equity method. Results of operations for FGCO and NGC are, therefore, reflected in FES’ investment accounts
and earnings as if operating lease treatment was achieved (see Note 6, Leases). The principal elimination entries eliminate
investments in subsidiaries and intercompany balances and transactions and the entries required to reflect operating lease treatment