Allegheny Power 2015 Annual Report Download - page 130

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114
12.SHORTTERMBORROWINGSANDBANKLINESOFCREDIT

FEandcertainofitssubsidiariesparticipateinthreefiveyearsyndicatedrevolvingcreditfacilitieswithaggregatecommitmentsof
$6.0billion(Facilities),whichareavailableuntilMarch31,2019.FirstEnergyhad$1,708millionand$1,799millionofshortterm
borrowingsasofDecember31,2015and2014,respectively.FirstEnergy’savailableliquidityundertheFacilitiesasofJanuary31,
2016wasasfollows:

Borrower(s)
Type
Maturity
Commitment
Available
Liquidity
(Inmillions)
FirstEnergy
(1)
 Revolving March2019
$
3,500
$
1,595
FES/AESupply Revolving March2019
1,500
1,442
FET
(2)
 Revolving March2019
1,000
1,000
Subtotal
$
6,000
$
4,037
Cash
—
63
Total
$
6,000
$
4,100

(1)FEandtheUtilities
(2)IncludesFET,ATSIandTrAILassubsidiaryborrowers

Generally,borrowingsundereachoftheFacilitiesareavailabletoeachborrowerseparatelyandmatureontheearlierof364days
fromthedateofborrowingorthecommitmentterminationdate,asthesamemaybeextended.EachoftheFacilitiescontains
financialcovenantsrequiringeachborrowertomaintainaconsolidateddebttototalcapitalizationratio(asdefinedundereachofthe
Facilities)ofnomorethan65%,and75%forFET,measuredattheendofeachfiscalquarter.

The following table summarizes the borrowing sublimits for each borrower under the Facilities, the limitations on shortterm
indebtednessapplicabletoeachborrowerundercurrentregulatoryapprovalsandapplicablestatutoryand/orcharterlimitations,asof
December31,2015:

Borrower
Revolving
CreditFacility
SubLimits
Regulatoryand
OtherShortTerm
DebtLimitations
(Inmillions)
FE
$
3,500
$
—

(1)
FES
1,500
—

(2)
AESupply
1,000
—

(2)
FET
1,000
—

(1)
OE
500
500

(3)
CEI
500
500

(3)
TE
500
500

(3)
JCP&L
600
500

(3)
ME
300
500

(3)
PN
300
300

(3)
WP
200
200

(3)
MP
500
500

(3)
PE
150
150

(3)
ATSI
500
500

(3)
Penn
50
100

(3)
TrAIL
400
400

(3)

(1)Nolimitations.
(2)NolimitationbaseduponblanketfinancingauthorizationfromtheFERCunderexistingmarketbasedratetariffs.
(3)Excludingamountswhichmaybeborrowedundertheregulatedcompanies'moneypool.

TheentireamountoftheFES/AESupplyFacility,$600millionoftheFEFacilityand$225millionoftheFETFacility,subjecttoeach
borrower’ssublimit,isavailablefortheissuanceofLOCs(subjecttoborrowingsdrawnundertheFacilities)expiringuptooneyear


115
fromthedateofissuance.ThestatedamountofoutstandingLOCswillcountagainsttotalcommitmentsavailableundereachofthe
Facilitiesandagainsttheapplicableborrower’sborrowingsublimit.

TheFacilitiesdonotcontainprovisionsthatrestricttheabilitytoborroworacceleratepaymentofoutstandingadvancesintheevent
ofanychangeincreditratingsoftheborrowers.Pricingisdefinedin“pricinggrids,”wherebythecostoffundsborrowedunderthe
Facilitiesisrelatedtothecreditratingsofthecompanyborrowingthefunds,otherthantheFETFacility,whichisbasedonits
subsidiaries'creditratings.Additionally,borrowingsundereachoftheFacilitiesaresubjecttotheusualandcustomaryprovisionsfor
accelerationupontheoccurrenceofeventsofdefault,includingacrossdefaultforotherindebtednessinexcessof$100million.

AsofDecember31,2015,theborrowerswereincompliancewiththeapplicabledebttototalcapitalizationratiocovenantsunderthe
respectiveFacilities.

TermLoans

FEhasa$1billionvariableratetermloancreditagreementwithamaturitydateofMarch31,2019.Theinitialborrowingunderthe
termloan,whichtooktheformofaEurodollarrateadvance,maybeconvertedfromtimetotime,inwholeorinpart,toalternatebase
rateadvancesorotherEurodollarrateadvances.TheproceedsfromthistermloanreducedborrowingsundertheFEFacility.
Additionally,FEhasa$200millionvariableratetermloanwithamaturitydateofMay29,2020.Eachofthetermloanscontains
covenantsandothertermsandconditionssubstantiallysimilartothoseoftheFEFacilitydescribedabove,includingthesame
consolidateddebttototalcapitalizationratiorequirement.

AsofDecember31,2015,FEwasincompliancewiththeapplicableconsolidateddebttototalcapitalizationratiocovenantsunder
eachofthesetermloans.

FirstEnergyMoneyPools

FirstEnergy’sutilityoperatingsubsidiarycompaniesalsohavetheabilitytoborrowfromeachotherandtheholdingcompanytomeet
theirshorttermworkingcapitalrequirements.AsimilarbutseparatearrangementexistsamongFirstEnergy’sunregulatedcompanies.
FESCadministersthesetwomoneypoolsandtrackssurplusfundsofFirstEnergyandtherespectiveregulatedandunregulated
subsidiaries,aswellasproceedsavailablefrombankborrowings.Companiesreceivingaloanunderthemoneypoolagreements
mustrepaytheprincipalamountoftheloan,togetherwithaccruedinterest,within364daysofborrowingthefunds.Therateof
interestisthesameforeachcompanyreceivingaloanfromtheirrespectivepoolandisbasedontheaveragecostoffundsavailable
throughthepool.Theaverageinterestrateforborrowingsin2015was0.84%perannumfortheregulatedcompanies’moneypool
and1.64%perannumfortheunregulatedcompanies’moneypool.

WeightedAverageInterestRates

Theweightedaverageinterestratesonshorttermborrowingsoutstanding,includingborrowingsundertheFirstEnergyMoneyPools,
asofDecember31,2015and2014,wereasfollows:
20152014
FirstEnergy2.16% 1.96%
FES —% 3.34%
13.ASSETRETIREMENTOBLIGATIONS

FirstEnergy has recognized applicable legal obligations forAROs and their associated cost primarily fornuclear power plant
decommissioning,reclamationofsludgedisposalponds,closureofcoalashdisposalsites,undergroundandabovegroundstorage
tanks, wastewater treatment lagoons and transformers containing PCBs. In addition, FirstEnergy has recognized conditional
retirementobligations,primarilyforasbestosremediation.

TheAROliabilitiesforFESprimarilyrelatetothedecommissioningoftheBeaverValley,DavisBesseandPerrynucleargenerating
facilities.FESusesanexpectedcashflowapproachtomeasurethefairvalueoftheirnucleardecommissioningAROs.
FirstEnergyandFESmaintainNDTsthatarelegallyrestrictedforpurposesofsettlingthenucleardecommissioningARO.Thefair
valuesofthedecommissioningtrustassetsasofDecember31,2015and2014wereasfollows:
20152014
(Inmillions)
FirstEnergy $ 2,282 $ 2,341
FES $ 1,327 $ 1,365
