Allegheny Power 2013 Annual Report Download - page 49

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For the Years Ended
December 31, Increase
Operating Expenses - Allegheny(1) 2012 2011 (Decrease)
(In millions)
Fuel $ 861 $ 794 $ 67
Purchased power 103 149 (46)
Fossil generation 149 148 1
Transmission 123 198 (75)
Other operating expenses 38 100 (62)
Pensions and OPEB mark-to-market adjustment 49 44 5
General taxes 41 39 2
Depreciation 122 110 12
Total Operating Expense $ 1,486 $ 1,582 $ (96)
(1) Allegheny results include 12 months in 2012 and 10 months in 2011, and excludes items classified in
Discontinued Operations.
Fuel expenses increased due to higher generation levels and fuel prices. The purchased power expense decreased due to lower
volumes purchased and lower capacity expenses. Transmission expense declined as a result of lower congestion.
Other Expense —
Total other expense in 2012 increased $541 million compared to 2011 due to the absence of the gain on the partial sale of FEV's
interest in Signal Peak in 2011 ($569 million), partially offset by reduced net interest expense ($18 million) from debt reductions in
2011 and higher investment income ($10 million) from the NDTs.
Other — 2012 Compared with 2011
Financial results from other operating segments and reconciling items, including interest expense on holding company debt and
corporate support services revenues and expenses, resulted in a $37 million decrease in earnings available to FirstEnergy Corp.
in 2012 compared to 2011. The decrease resulted primarily from lower other operating expenses ($95 million) due to lower merger-
related costs. These benefits were offset by decreased investment income ($33 million), decreased income attributable to
noncontrolling interest ($17 million) relating to Signal Peak, which was deconsolidated in the fourth quarter of 2011, and increased
income tax expense ($83 million).
Regulatory Assets
Regulatory assets represent incurred costs that have been deferred because of their probable future recovery from customers
through regulated rates. Regulatory liabilities represent amounts that are expected to be credited to customers through future
regulated rates or amounts collected from customers for costs not yet incurred. FirstEnergy and the Utilities net their regulatory
assets and liabilities based on federal and state jurisdictions. The following table provides information about the composition of net
regulatory assets as of December 31, 2013 and December 31, 2012, and the changes during the year ended December 31, 2013:
Regulatory Assets by Source
December 31,
2013
December 31,
2012
Increase
(Decrease)
(In millions)
Regulatory transition costs $ 266 $ 293 $ (27)
Customer receivables for future income taxes 518 505 13
Nuclear decommissioning and spent fuel disposal costs (198) (219) 21
Asset removal costs (362) (372) 10
Deferred transmission costs 112 352 (240)
Deferred generation costs 346 379 (33)
Deferred distribution costs 194 231 (37)
Contract valuations 260 463 (203)
Storm-related costs 455 469 (14)
Other 263 229 34
Total $ 1,854 $ 2,330 $ (476)