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12
University of Akron.
We remain actively engaged in the federal and state debate over future environmental requirements and legislation. We actively
work with policy makers and regulators to develop fair and reasonable requirements, with the goal of reducing emissions while
minimizing the economic impact on our customers. Due to the significant uncertainty as to the final form or timing of a significant
number of regulations and legislation at both the federal and state levels, we are unable to determine the potential impact and risks
associated with all future environmental requirements. The CSAPR was stayed at the end of 2011 and the federal appeals court
reviewing CSAPR has scheduled an April 13, 2012 hearing. The new MATS were finalized at the end of 2011, which resulted in
our decision to retire nine older coal-fired generation plants by September 1, 2012. Our current estimate is that it may cost
approximately $1.3 - $1.7 billion to bring our remaining units into compliance.
We also have a long history of supporting research in distributed energy resources. Distributed energy resources include fuel cells,
solar and wind systems or energy storage technologies located close to the customer or direct control of customer loads to provide
alternatives or enhancements to the traditional electric power system. We are testing the world's largest utility-scale fuel cell system
to determine its feasibility for augmenting generating capacity during summer peak-use periods. Through a partnership with EPRI,
the Cuyahoga Valley National Park, the Department of Defense and Case Western Reserve University, two solid-oxide fuel cells
were installed as part of a test program to explore the technology and the environmental benefits of distributed generation.
We are also evaluating the impact of distributed energy storage on the distribution system through analysis and field demonstrations
of advanced battery technologies. FirstEnergy's EasyGreen® load-management program utilizes two-way communication capability
with customers' non-critical equipment, such as air conditioners in New Jersey and Pennsylvania, to help manage peak loading on
the electric distribution system. We have also made an online interactive energy efficiency tool, Home Energy Analyzer, available
to our customers to help achieve electricity use reduction goals.
RISKS AND CHALLENGES
In executing our strategy, we face a number of industry and enterprise risks and challenges. See Item 1A. Risk Factors of our filed
Form 10-K for the year end December 31, 2011 for a discussion of the risks and challenges faced by FirstEnergy.
RESULTS OF OPERATIONS
The financial results discussed below include revenues and expenses from transactions among FirstEnergy’s business segments.
A reconciliation of segment financial results is provided in Note 19, Segment Information of the Combined Notes to the Consolidated
Financial Statements. As described in Note 1, Organization, Basis of Presentation and Significant Accounting Policies, FirstEnergy
elected to change its method of recognizing actuarial gains and losses for its defined benefit pension and OPEB plans and applied
this change retrospectively to all periods presented. Earnings available to FirstEnergy by major business segment were as follows:
Earnings By Business Segment:
Regulated Distribution
Competitive Energy Services
Regulated Independent Transmission
Other and reconciling adjustments(1)
Earnings available to FirstEnergy Corp.
Earnings Per Basic Share
Earnings Per Diluted Share
2011
(In millions, except per share data)
$ 570
377
112
(174)
$ 885
$ 2.22
$ 2.21
2010
$ 553
210
54
(75)
$ 742
$ 2.44
$ 2.42
2009
$ 335
446
39
52
$ 872
$ 2.87
$ 2.85
Increase (Decrease)
2011 vs 2010
$ 17
167
58
(99)
$ 143
$ (0.22)
$ (0.21)
2010 vs 2009
$ 218
(236)
15
(127)
$ (130)
$ (0.43)
$ (0.43)
(1) Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses, noncontrolling
interests and the elimination of intersegment transactions.