first energywallstreetaccess_121407_new

Ron SeeholzerVice President, Investor Relations

Wall Street Access / Berenson & Company West Coast Seminar

Las Vegas • December 14, 2007

Wall Street Access / Berenson & CompanyWest Coast SeminarLas Vegas • December 14, 2007

2

Safer Harbor Statement under the Private SecuritiesLitigation Reform Act of 1995These Presentations includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding our, or our management’s, intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry and legislative and regulatory changes affecting how generation rates will be determined following the expiration of existing rate plans in Ohio and Pennsylvania, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of FirstEnergy’s regulated utilities to collect transition and other charges or to recover increased transmission costs, maintenance costs being higher than anticipated, other legislative and regulatory changes including revised environmental requirements, the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the Air Quality Compliance Plan (including that such amounts could be higher than anticipated) or levels of emission reductions related to the Consent Decree resolving the New Source Review litigation or other potential regulatory initiatives, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight by the Nuclear Regulatory Commission including, but not limited to, the Demand for Information issued to FENOC on May 14, 2007) as disclosed in our SEC filings, the timing and outcome of various proceedings before the PUCO (including, but not limited to, the Distribution Rate Cases and the generation supply plan filing for the Ohio Companies and the successful resolution of the issues remanded to the PUCO by the Supreme Court of Ohio regarding the Rate Stabilization Plan and the Rate Certainty Plan, including the deferral of fuel costs) and the PPUC (including the resolution of the Petitions for Review filed with the Commonwealth Court of Pennsylvania with respect to the transition rate plan for Met-Ed and Penelec), the continuing availability of generating units and their ability to continue to operate at or near full capacity, the ability to comply with applicable state and federal reliability standards, the inability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the ability to improve electric commodity margins and to experience growth in the distribution business, the ability to access the public securities and other capital markets and the cost of such capital, the outcome, cost and other effects of present and potential legal and administrative proceedings and claims related to the August 14, 2003 regional power outage, the risks and other factors discussed from time to time in our SEC filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for us to predict all such factors, nor can we assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. Dividends declared from time to time on FirstEnergy's common stock during any annual period may in aggregate vary from the indicated amounts due to circumstances considered by FirstEnergy's Board of Directors at the time of the actual declarations. Also, a security rating is not a recommendation to buy, sell or hold securities, and it may be subject to revision or withdrawal at any time and each such rating should be evaluated independently of any other rating. We expressly disclaim any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.


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RegulatorySuccessfully transitioned Penn Power to competitive generation market prices Filed distribution rate case requests and competitive generationprocurement proposal for Ohio utilities

2007 – Key Accomplishments

FinancialNarrowed EPS guidance to top-half of the original range: $4.15–$4.25* Expecting to generate $1.7B of cash from operationsIncreased dividend 11.1% Completed accelerated repurchase of approx. 14.4 million sharesCompleted $1.3B sale and leaseback transaction on 779 MW of Mansfield Unit 1

* See GAAP to Non-GAAP reconciliations in the Appendix.


4

OperationalExpecting generation output in excess of 81 million MWh –20% increase from 2003

Added over 300 MW of additional generating capacity through uprates, wind contracts and peaking enhancements – with significantly less risk than new plant construction

Continued improvement in T&D reliability metrics – SAIDI down 15%

Achieving top-decile safety performance – 0.89 YTD OSHA rate

On schedule and budget for Air Quality Control (AQC) projects at the Sammis Plant

NRC accepted Beaver Valley Units 1 & 2 license renewal applications for review

2007 Key Accomplishments (continued)


5

ObjectivesOperations

– Realize the full potential of our generation assets

– Reinvest in the business– Minimize commodity risks

Regulatory– Recover cost of service– Transition to competitive

generation market prices

Financial Strength & Flexibility– Achieve targeted growth– Deploy cash effectively

2008 and Beyond – Key Objectives

A strong and stable corporation with a focus on the fundamentals

– Operational excellence– Financial discipline– Management credibility– Continuous improvement

Based on the Fundamentals


6

Generation Output

0

20

40

60

80

100

(mill

ion

MW

h)

Nuclear 29.9 28.7 29.0 30.7 32.0 31.0 32.2 32.0Fossil 46.5 51.5 53.0 51.5 52.7 52.4 53.7 54.6

2004 2005 2006 2007F 2008F 2009F 2010F 2011F

Realizing Full Potential of Generating Fleet

Significant scale: FES controls about 14,000 MWBalanced fuel mix: 38% nuclear; 62% fossil & other (2007F output)

Geographic diversity: Participate in two RTOs (MISO and PJM)Fleet strategy optimizes performance and reliability

– Each unit has a specific mission (baseload, load-following or peaking) – Increases efficiency and reduces wear and tear on baseload units

Fleet Characteristics and Mission-Driven Strategy


7


Mining Our Assets benefits:– ~$700/kW average capital cost is competitive vs. current market price of new capacity– Lower risk than large, long lead-time projects– Quicker to market– Low technology and construction risk

Clarity on capacity and ancillary services market structure, technological advances, and environmental regulations will impact generation asset decisions in the future

* Reflects 12 separate projects including returning 70 MW at Burger Unit 3 that has not been available since summer 2005.

Type of MW Addition 2005–2007F 2008F–2011F Cumulative MW

Fossil baseload uprates 130 89 219Fossil load following uprates 0 84 84Nuclear baseload uprates 92 78 170Peaking capacity enhancements* 149 0 149Total MW additions 371 251 622

Mining Our Assets – incremental, low-risk investment approach to fleet expansion


8

Status Capacity RECs/Year

In-service 2007 145 MW 384 GWh

In-service 2008 70 MW 180 GWh

Total: 215 MW 564 GWh

FES Wind Energy PortfolioState Renewable

Mandate Overview

PA 18% by 2020Drives our renewable strategy today

On the horizon and will impact our renewable strategy in the future

Represents a minimal part of our renewable requirements

OH 25% by 2025(Proposed)

NJ 22.5% by 2020

Leading the Way in Procuring Renewable Energy to Meet Growing Demand

Leading wind energy supplier in PAEvaluating expansion of current wind portfolio Considering other renewable technologies:

– Solar– Compressed air– Biomass– Land fill gas– Anaerobic digestion



9

Reinvesting in the Business

* AQC annual expenditures include $500M (2009), $156M (2010), and $11M (2011)

2004 2005 2006 2007F 2008F2009F-2011F

Average

Energy Delivery

- Aged infrastructure rebuild- Pockets of load growth- Reliability improvements

$455 $724 $650 $746 $730 $730

Fossil- Improve managing operating risk- Upgrade aged equipment- Environmental / fuel enhancements

$106 $148 $116 $104 $96 $155

Nuclear- Availability improvements- Dry fuel storage / license renewal- Materials issues

$141 $173 $229 $149 $131 $260

Corporate - Information Technology, etc $29 $45 $39 $88 $86 $75

Sub-Total $731 $1,090 $1,034 $1,087 $1,043 $1,220

AQC- Compliance strategy totals - Sammis, Burger Units, Mansfield and Eastlake Unit 5

$0 $54 $136 $387 $650 $222 *

Total $731 $1,144 $1,170 $1,474 $1,693 $1,442

Capital Expenditures ($ millions)Project AreasBusiness

Unit

Capital Expenditure Forecast


10

AQC Construction Overview

Sammis Plant (2,233 MW) – $1.65B– SO2 control (scrubbers) all units– NOx control (SCRs) Units 6 & 7 (1,200 MW)

NOx control (SNCR) Units 1–5 (1,033 MW) completed

Mansfield Plant (2,490 MW) – $50MSO2 control (scrubber) upgrades completed

Burger Plant – $180M– NOx control (SNCR) and SO2 control

Electro-Catalytic Oxidation (ECO) Units 4 & 5 (312 MW)

Eastlake Plant – $6MNOx control (SNCR) Unit 5 (597 MW) completed



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CO2 control – Over 35% of annual fleet output is non-emitting– Involved in CO2 capture and sequestration R&D

Mercury control – Excellent reduction through “co-benefits”– Based on current rules and plans, additional equipment not required before 2018

Longer-term environmental considerations


Fleet Emission Control Status2007 2010

Fleet%

Fleet%

34% 34%

19% 38%

9% 9%

62% 81%

Capacity (MW)

Capacity (MW)

Non-Emitting 4,581 4,638Coal Controlled(SO2/NOx – full control) 2,626 5,237

Natural Gas Peaking 1,283 1,283

8,490 11,158

Our generation fleet is well-positioned for the future


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* Top quartile

Reliability

Distribution SAIDI (minutes) 128 118 103

TOF (per circuit) 0.39* 0.31 0.31

Financial Performance

Total Cost Per Customer $270 $265 $263

Focus Area Key Metrics

Top-quartile performance SAIDI and top-decile in TOF

Achieve top-quartile total spend per customer

2007F 2008F 2011 Target

Top Quartile

ED&CS

$150

$180

$210

$240

$270

$300

Tota

l CPC

2005 2006 2007 2008 2009 2010 2011 2012

Total Cost per CustomerSAIDI Performance

Top Quartile

ED&CS

10

40

70

100

130

160

190

220

SAID

I (M

inut

es)

2005 2006 2007 2008 2009 2010 2011 2012

Reinvesting in the BusinessEnergy Delivery – striving to achieve top quartile performance


13

Expected FES Total Supply*

0

20

40

60

80

100

(mill

ion

MW

h)

Forward / Spot Purchases 11 7 9Nuclear 32 31 32Fossil, Hydro, Wind 52 52 53

2008F 2009F 2010F

Supply numbers exclude JCP&L and firm contract portion of ME/PN

Managing Commodity Positions

Significant reductions in mostly on-peak energy purchases

Significant increases in higher margin sales

9590 94

Expected FES Total Sales*

020406080

100

(mill

ion

MW

h)

Retail Auction 1 31 29Competitive Retail 12 20 24Forward / Spot Sales 16 20 21ME/PN PRA Obligations 14 19 20OH PSA Obligations 52 0 0

2008F 2009F 2010F

Sales numbers exclude JCP&L and firm contract portion of ME/PN

95 90 94

•*Assumes move to open market in Ohio in 2009 and beyond

Expected FES Supply & Sales*


14

Engaged in fuel flexibility initiative to expand margins and fuel choices

Actively pursuing closure to long-term transportation positions – rail contract signed, 2010 barge contract agreement reached

2009–2010 seasonal NOx requirements are expected to be fully covered as State allocations are made (OH due Jan. 2008)

Managing Commodity Positions

% Hedged 2008 2009 2010

Coal only 99% 91%

91%

>100%

78%

100%

Coal transportation 97% 58%

SO2 99% >100%

NOx >100% 74%

Coal and Related Commodity Hedging


15

Proposed increase (Effective 1/09 for OE & TE 1/09; 5/09 for CEI): $ millionsTraditional distribution costs $212Recovery of costs deferred under prior rate plans 120

Total proposed increase to "distribution" revenues $332

Ohio

Seeking Full Recovery of CostsOhio Distribution Rate Cases

Company Filing

Proposed increase (Effective 1/09 for OE & TE 1/09; 5/09 for CEI): $ millionsTraditional distribution costs $100 -$119Recovery of costs deferred under prior rate plans 61

Total proposed increase to "distribution" revenues $161 - $180Key Staff Report differences:Matters to be considered in other cases ($106)ROE @ 10.06% to 11.09% (vs. Co. @ 11.75%) ($33) - ($14)Capital structure (equity ratio @ 43.75% vs. Co. @ 49%) ($18)Other issues (net) ($14)

PUCO Staff Report (Dec. 4, 2007) – Based on initial review


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Transitioning to Competitive Generation Markets

Penn Power successfully transitioned to competitive generation market prices on Jan. 2007Ohio utilities transition scheduled for Jan. 2009; Met-Ed and Penelec transition scheduled for Jan. 2011Efforts are underway in both OH and PA on potential new energy legislationFirstEnergy actively engaged in the legislative processMultiple issues being considered…key is to assure a smooth transition to market in both states

FirstEnergy is positioned in each state FirstEnergy is positioned in each state to successfully transition to marketto successfully transition to market

Legislative Update: Ohio and Pennsylvania


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Achieving Targeted Growth

Established 2008 Non-GAAP earnings guidance of $4.15 to $4.35 per share*– Normalized to exclude anticipated gain on the planned sale of

non-core assets, currently estimated at $0.08 per share in 2008

2007 Non-GAAP Earnings Guidance*

Original (Feb. 2007) $4.05 – $4.25

Revised (Oct. 2007) $4.15 – $4.25

Affirmed (Dec. 2007) $4.15 – $4.25

* Financial Guidance is current as of December 5, 2007. See GAAP to Non-GAAP reconciliations in the Appendix. On a GAAP basis, 2008 EPS is expected to be $4.23 to $4.43 reflecting an $0.08 gain on the planned sale of non-core assets.

2007 and 2008 Earnings Guidance


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$3.50

$4.00

$4.50

$5.00

Midpoint 2007 Non-GAAP

EPS Guidance

Midpoint 2008Non-GAAP

EPS Guidance

* Financial Guidance is current as of December 5, 2007. See GAAP to Non-GAAP reconciliations in the Appendix. 2008 EPS guidance, excluding special items, is $4.15 to $4.35. On a GAAP basis, 2008 EPS is expected to be $4.23 to $4.43 reflecting an $0.08 gain on the planned sale of non-core assets.

$4.20*$0.04

$0.06 $0.03

$0.14

($0.13)

($0.10)$4.25*

FinancingCosts

GenerationOutput

WiresSales

Growth

2007Share

Buyback

OhioTransition

CostAmortization

Depreciation &General Taxes

OutageO&MCosts

$0.05 Other

($0.04)

Achieving Targeted Growth2008 Earnings Guidance


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Distribution rate case in OH effective 2009

Market generation prices in OH in 2009

Market generation prices in PA in 2011

Asset mining / realizing full potential of generation assets

Further operational enhancements

Timely recovery of regulated costs and capital investments

Achieving Targeted GrowthMajor Earnings Drivers 2009 - 2011


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Declining margin from OH transition plans

Impact of expiring Met-Ed/Penelec third-party power contract in 2009

Increasing fuel and purchased power costs

Increasing O&M costs

Higher depreciation expenses (non-cash)

Achieving Targeted Growth (continued)Major Earnings Drivers 2009 - 2011


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Deploying Cash EffectivelyAvailable Cash Forecast

($ millions) 2007F 2008F Change$1,698 $2,224

(1,693)

(136)

$395

(1,474)

$526

(219)

(42)(94)

$130 $265

Net Cash from Operating Activities

Capital Expenditures

Nuclear Fuel Fabrication

Available Cash before Dividends

Potential uses of substantial growth in free cash following completion of AQC projects– Dividend growth– Potential for share repurchases– Invest for future growth– Ability to take advantage of strategic opportunities


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Management will recommend that the Board of Directors declare a quarterly dividend of $0.55 per share payable March 2008 at their December 18 meeting

Dividend Increases:Payment

DateQuarterly

RateChange fromPrior Period

AnnualizedRate

1Q 2008 55.00¢ 10.00% $2.20

$2.00

$1.80

$1.72

$1.65

$1.50

1Q 2007 50.00¢ 11.10%

1Q 2006 45.00¢ 4.65%

4Q 2005 43.00¢ 4.24%

1Q 2005 41.25¢ 10.00%

4Q 2004 37.50¢ –

Deploying Cash Effectively Common Dividend


23

SignificantEarningsGrowth

Potential

Bottom Line –FirstEnergy is an attractive risk/reward opportunity

Effectively managing transitionto competitive markets

Realizing full potential of assets

Reinvesting for future growth

Effectively deploying strong cash flow

Striving for continuous improvement

Maintaining strategic flexibility

Well-positioned for climate legislation

Appendix

Corporate Profile

Wall Street AccessLas Vegas, NV ▪ December 14, 2007

FirstEnergy Corporate Profile

Diversified energy company headquartered in Akron, Ohio

Involved in Generation, Transmission and Distribution of electricity, as well as other energy-related services

Fifth largest investor owned electric utility in U.S based on customers served

4.5 million customers within 36,100 square miles of Ohio, Pennsylvania and New Jersey

Control more than 14,000 megawatts of generating capacity

$11.5B in annual revenues and more than $31B in assets

Approx. $22B market capitalization

2Corporate Profile

Generation


Akron

Toledo

Reading

Beaver Valley1,779 MW

Davis-Besse893 MW

Perry1,258 MW

R. E. Burger413 MW

W. H. Sammis2,233 MW

Bruce Mansfield2,490 MW

Eastlake1,262 MW

Ashtabula244 MW

Seneca451 MW

Edgewater48 MW

Richland432 MW

Stryker18 MW Yards Creek

200 MW

Mad River60 MW

West Lorain545 MW

Lake Shore249 MW

Sumpter340 MW

Erie

Ohio

Pennsylvania

NewJersey

Harrisburg

MorristownNewark

Allenhurst

Trenton

Bay Shore648 MW

Columbus

New Castle

Cleveland

Johnstown

Forked River86 MW

Michigan

Baseload Load Following Peaking Units

Unit Mission Strategy

Towanda

MW MWMW

FirstEnergy Generation – Diversity & Scale

West Lorain 545Seneca 451Richland 432Sumpter 340Yards Creek 200Burger 3 & EMDs 101Forked River* 86Mad River 60Edgewater 48Stryker 18Other 63

Total Peaking Units 2,344

Mansfield 1-3 2,490Beaver Valley 1,2 1,779Perry 1,258Sammis 6,7 1,200Davis-Besse 893Eastlake 5 597Bay Shore 1 136

Total Baseload 8,353

Sammis 1-5 1,020Eastlake 1-4 636Bay Shore 2-4 495Burger 4 -5 312Lake Shore 245Ashtabula 244

Total Load Following 2,952

OVEC 463Wind 145

Total 608

Other MW

FirstEnergy Power Sources

C Coal 7,469 MWN Nuclear 3,930 H Hydro 651 G Gas & O Oil 1,599

Other 608Total 14,257 MW

* Sale pending

2Generation


Fossil 2007F 2008F 2011 Target

OSHA Incident Rate (per 100 employees) 1.12 1.12 0.80

Total Generation (million MWh) 51.5 52.7 54.6

Capacity Factor (Baseload %) 81.0 87.2 90.7

Fossil Operating Performance

2007 Highlights– Top-quartile safety performance – New monthly all time generation

record set August 2007 (4.6 million MWh)

– Environmental projects (AQC) on track– Outage performance improving– Implemented Fossil Excellence at

Bay Shore and Sammis (continuous improvement)

– On track for workforce replenishment– Improved performance accountability– Mansfield Unit 3 uprate (30 MW)

2008 Look Ahead– Achieve top-decile safety performance – Drive continuous improvement

through fleet standardization of best practices, benchmarking and Fossil Excellence annual diagnostics

– Continue to focus on transitioning workforce knowledge and skills to a new generation of employees

– Execute Mining Our Assets strategies– Develop and implement a full start-up

testing, training and operation strategy for AQC

3Generation


2007 Highlights – Top-quartile safety performance– DB worked > 7.5 million hours

without a Lost Time Accident – Record Fleet Generation projected

(30.7 million MWh) – BV1 uprate (43 MW); BV2 uprate (24 MW)– No forced losses at BV1; BV2 top

quartile (0.24%)– PY returned to Standard Reactor

Oversight Process– NRC accepted BV license renewal application– Successful NRC Security drills at PY and BV– Lowest BV dose during fall outage

2008 Look Ahead– Maintain top-quartile safety performance– Targeting record generation

(32.0 million MWh) – Two outages – DB and BV2– Additional 12 MW from DB Caldon

modification– Additional 45 MW from BV power uprate– NRC Emergency Preparedness Evaluated

Exercises at BV and PY – Dry Cask Fuel Storage underway at PY

Nuclear 2007F 2008F 2011 Target

OSHA Incident Rate (per 100 employees) 0.25 0.25 0.25

Total Generation (million MWh) 30.7 32.0 32.0

Capability Factor (%) 90.0 92.9 92.4

Nuclear Operating Performance

4Generation


Mission-driven strategy in Fossil has resulted in significant reductions in cost since 2004 as well as increased outputIn spite of increased AQC-related O&M in 2008–2010, non-fuel production costs are expected to remain stable Cost-effective execution of outages is expected to drive improvement and stability of nuclear non-fuel expenses

Focus on Cost Control Top-Tier Operational Capability

Fossil

2004 2005 2006 2007F 2008F

($ /

MW

h)

Non-Fuel Fuel

Nuclear

2004 2005 2006 2007F 2008F

($ /

MW

h)

Non-Fuel Fuel

5Generation


Top-Tier Operational Capability

Garnered significant nuclear reliability improvements during 2006–2007 outages

Fossil fleet expected to return to top-quartile performance in 2008 – AQC-related outages will lower capacity factors in 2009 and 2010– Expect to reach top-decile performance levels by 2011

Baseload Capability/Capacity Factors

75%

80%

85%

90%

95%

100%

Fact

ors

(%)

Fossil baseload 84.6% 86.9% 88.5% 81.0% 87.2% 90.7%

Nuclear 89.5% 86.2% 86.8% 90.0% 92.9% 92.4%

2004 2005 2006 2007F 2008F 2011 Target

Continued Improvement of Asset Utilization

6Generation


Operational Performance TargetsOperational Performance 2004 2005 2006 2007F 2008F 2011

Targets

Total Generation (million MWh) 76.4 80.2 82.0 82.2 84.7 86.6

Fossil Reliability

Capacity Factor (Baseload %) 84.6 86.9 88.5 81.0 87.2 90.7

Nuclear Reliability

Capability Factor % 89.5 86.2 86.8 90.0 92.9 92.4

Energy Delivery Reliability

Distribution SAIDI (minutes) 159 191 152 128 118 103

7Generation

Wall Street AccessLas Vegas, NV ▪ December 14, 2007 8

Nuclear Generation

Year PlantExpected

Outage Costs($ millions)

Expected Outage Duration

(days)Scope Driving Duration

(Items with asterisk* denote duration drivers)

Perry 1R11 $30 30Refueling *IVVIActual Outage Period (4/2/07 – 5/13/07)

Beaver Valley 1R18 $32 28

Split Pins *Containment Sump Modifications*Reactor Vessel ISI *100% Eddy Current TestReactor Vessel Head InspectionPressurizer OverlayActual Outage Period (9/24/07 – 10/24/07)

Davis-Besse 1R15 $30 31 Rewind Main Generator *

2008 Beaver Valley 2R13 $30 30

Split Pins *Low Pressre-2 Turbine Inspection *Reactor Vessel Head InspectionMain Cond Tube Replacement, Expansion Joints *Replace High Pressure Turbine *Type A Containment Pressurization Test

Perry 1R12 $30 25Refueling *10-year IVVI / Bioshield In-service InspectionRecirc Pump Motor Replacement

Beaver Valley 1R19 $30 30Replace Low Pressure Turbines (2) *Reactor Coolant System Loop Stop Valves (2)Reactor Vessel Head Inspection

Beaver Valley 2R14 $30 25 Refueling *

2009

2007

Generation

Future refueling outages focus on reliability


Generation – Implementing Plans for the Future

Nuclear license renewal

Nuclear steam generator replacements– Davis-Besse in 2014– Beaver Valley Unit 2 in 2017

Current Expiration

Submit Request (NRC Docket)

Approval Expected

New Expiration

Submitted 2007* 2036

Beaver Valley Unit 2 2027 Submitted 2007* 2009 2047

Davis-Besse 2017 2010 2012 2037

2046Perry 2026 2013 2015

Beaver Valley Unit 1 2016 2009

* The NRC accepted the application for review

9Generation


Nuclear spent fuel storage– Since 1983, FirstEnergy has collected $494M from the rate-payers

for the long-term storage of used nuclear fuel. At the federal level, Yucca Mountain has been proposed as a site for long-term storage and may be available as early as 2017 to receive used fuel, but this is not likely. If Yucca Mountain is available in 2017, FirstEnergy will be eligible to ship fuel starting in 2021.

Generation – Implementing Plans for the Future

Beaver ValleyBeaver ValleyUnit 1Unit 1 Implement dry storage by the end of 2014

Beaver ValleyBeaver ValleyUnit 2Unit 2

Current ongoing criticality analysis will increase storage spaceRe-rack before 2011 to provide capacity through 2025 Dry storage could then be implemented

DavisDavis--BesseBesseContinue with wet storage until 2021Switch back to dry storage in 2022

PerryPerry Implement dry storage before 2011

10Generation

Environmental Strategy


Sammis Plant with computer overlay of Wet Flue Gas Desulphurization (WFGD) equipment

AQC Upgrades – Sammis PlantFlue Duct Work – 9,000 tons (9,000 ft.)

Electrical Cable – 9,120 circuits (530 miles)

Foundation Piles – 5,600 piles (445,000 LF)

Concrete – 51,000 cubic yards

Tons of Steel – 17,200 tons

DCS I/O Points – 8,200

Large Bore Pipe – 88,300 ft. (17 miles)

Small Bore Pipe – 13,000 ft. (2.5 miles)

Overland “Pipe” Conveyor – 3.0 miles long

2Environmental Strategy


Participating in Global Climate Change Policy• Global Roundtable on Climate Change• EPRI Global Climate Policy Costs & Benefits Research• EEI Climate Change Policy Subcommittee• NEI Climate Change Policy Subcommittee

GHG Reduction Technologies & Voluntary Actions• Asia-Pacific Partnership• EPA SF6 Reduction Partnership• EPRI GHG Reduction and Electric Transportation Research• Climate Vision• DOE 1605(b) Voluntary Reporting of GHGs Program• Powertree Carbon Company

Generation Initiatives• Fossil plant efficiencies • Nuclear plant uprates

CO2 Capture and Storage Technologies• MRCSP – R.E. Burger Plant Sequestration test well• ECO2 Carbon Capture – Powerspan• EPRI research• Power Partners• Oxy Fuel – B&W

End-user Energy Management• NJ Clean Energy Program• PA Sustainable Energy Fund• Ohio Energy-efficiency Programs

Renewables• 650 MWs Hydro• >200 MWs Wind Purchase Agreements

Renewal of Nuclear and Hydro Plant Operating Licenses

• Continued operation of non-emitting generation

Environmental StrategyFirstEnergy’s climate activities



FirstEnergy’s Position on Global Climate Change

Climate change is a global issue ultimately requiring a global solution

Technology development is key – Energy efficiency and demand-side management– Clean coal technologies– Carbon capture and sequestration

Significant future impact on price of electricity whether states are regulated or deregulated– Be consistent over broad geographic region– Include reasonable compliance timeframes – Encourage new cost-effective technologies



Additional Key Technologies FirstEnergy is Actively Co-Funding

Plug-in hybrid electric vehicles (PHEV)– Considerably cleaner than

internal combustion engine vehicle, including battery charging– 30% less GHG– 15% less SO2 and NOx

– Provides largely off-peak demand, an opportunity for growth

– Advanced meters are an enabling technology


Commodity Operations


Coal Commodity Position

Continue working to secure long-term fuel supply contracts

Actively testing alternate fuel blends at various plants to optimize plant economics and flexibility

Engaged in fuel flexibility initiative to expand margins and fuel choices

Securing Open Coal Commodity Positions

0 5,000 10,000 15,000 20,000 25,000

2010

2009

2008

Total Needed Tons Total Covered Tons

91%

99%

100%


2


Coal Transportation PositionActively pursuing closure to long-term transportation positions – rail contract signed, 2010 barge contract agreement reachedContinuing to evaluate additional delivery options to increase both capabilities and flexibilityEnhanced rail unloading capabilities in process at Ashtabula, Bay Shore and Lake ShoreIn 2008, FES will manage PRB rail logistics previously outsourced

Securing Open Coal Transportation Positions

0 5,000 10,000 15,000 20,000 25,000

2010

2009

2008

Total Needed Tons Total Covered Tons

91%

97%

58%


3


Emission Allowance PositionBased on projected generation:

– SO2 emission allowance positions are well covered for 2008 and 2009

– Closed 2010 SO2 positions early to mitigate potential scrubber projects completion risks

– 2008 seasonal NOx is covered– 2009 – 2010 seasonal NOx

requirements are expected to be fully covered as allocations are made to states (OH due in Jan. 2008)

– Annual NOx allocations are beginning and markets are still thin

SO2 Position

-10,000

80,000

170,000

260,000

350,000

2008 2009 2010

(ton

s)

Needed Covered Position

Seasonal NOx Position

-10,000

0

10,000

20,000

30,000

2008 2009 2010

(ton

s)

Needed Covered Position


SO2 Position

4


Fuel Flexibility Creates Margin & Fuel ChoicesEnhanced systems, tools and processes providing the ability to react and adjust blends quickly to match market prices

“Fuel Flex” creates value by continuously increasing fuel blend choices– Maximize revenues when real-time market prices are favorable– Minimize costs when market prices are low

The Right Fuel at the

Right Time


5


ME and PN have long-term capacity contractsBeaver Valley nuclear plant (1,779 MW) committed in PJM to covercapacity positionCovered capacity prior to RPM auction for planning year 2008-2009 to replace long-term contractsCommitted Seneca pumped storage (451 MW) to PJM as a capacity resource for planning year 2009 (commencing in June 2009)

PJM Net Capacity

(3500)(2800)(2100)(1400)(700)

0700

1400210028003500

Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

MW

FES View (continuing to serve the ME and PN PRA)

2008 2009

Includes Beaver Valley, Forked River and Seneca

2010

PJM Capacity Position


6

Energy Delivery


Regulated Rate Base and Sales Growth

Projected Rate Base –Regulated Companies (T&D)($ millions)

2007F 2008F 2011 Target

Net Plant for Rate Base $9,800 $10,100

$394

$11,000

Capital Expenditures, Net of Depreciation $365 $330

Growing asset base and increased distribution throughput Growing asset base and increased distribution throughput

Average Annual (2009F – 2011F) OH PA NJ

0.9% 2.2%

Net Plant for Rate Base ($ millions) $4,420 $3,290 $3,000

1.12.1

Growth Rate (kWh) 1.7%

# of Customers (millions) 1.3

Projected Annual Growth

Energy Delivery

2


Energy Delivery Performance Targets

* Top quartile** Per 100 employees

Safety

Consistently achieve top-decile (1.24) OSHA Incident Rate** 1.70* 1.62 1.00

Reliability

Distribution SAIDI (minutes) 128 118 103

TOF (per circuit) 0.39* 0.31 0.31

Financial Performance

Total Cost Per Customer $270 $265 $263

EmployeesAn environment where employees are valued and accountable for the performance of the business

Total Staffing 7,637 7,898 7,995

Focus Area Key Metrics

Top-quartile performance SAIDI and top-decile in TOF

Achieve top-quartile total spend per customer

2007F 2008F 2011 Target

3Energy Delivery


Capital Planning Enhancements

Benchmarked leading performers in the area of capital allocation

Selected Navigant to help develop capital allocation tool based on fundamental engineering economics (quantified benefits)

E-CAT provides the granularity which drives our ability to prioritize thousands of projects based on predicted benefits

Energy Delivery Capital Allocation Tool (E-CAT)

Capital planning has undergone a fundamental change to Capital planning has undergone a fundamental change to enhance our financial discipline enhance our financial discipline

Game Plan:

Target spend with an emphasis on improving reliability

Continued focus on operational improvements

4Energy Delivery


Workforce Management

Power Systems Institute (PSI)– Started in 2000; partnered with two colleges in Ohio to offer

lineworker training– Currently, partnerships with 11 local community colleges

and universities across OH, PA and NJ

Enrollment/Hires 2000–2007

Started Program Graduated Hired

Line Workers 276 236 214Substation Electricians 110 87 82

Total 386 323 296

2008F 2009F

123 177

31 60

154 237

5Energy Delivery

Regulatory Matters


Ohio Edison, CEI and Toledo EdisonCase detail– Request: $332M increase (7% on overall rates)

– Distribution revenue requirements: $212M– Deferral recovery: $120M

Case schedule– Filed June 2007, with 2008 test period and

date certain of May 31, 2007– PUCO Staff report issued December 4, 2007– Hearings expected 1st quarter 2008– 275-day timeline reached in March 2008– Rates to be effective January 2009 (CEI in May 2009)

Ohio Regulatory UpdateDistribution Rate Requests

Regulatory Matters

2

OH


* Assumes current Generation & Transmission rates

Proposed Changes in Revenues ($ millions) TotalCurrent "Distribution" Revenues $1,118Proposed Increase:

Associated with RCP Fuel Expense Deferrals 34Associated with RCP Infrastructure Expense Deferrals 40Associated with RCP DSM Deferrals (through a rider) 4Associated with ETP & Ohio Line Extension Deferrals 42"Base" Revenue Requirement Increases 212

Total Proposed Increase to "Distribution" Revenues $332Proposed "Distribution" Revenues $1,450Offsetting RTC Decrease ($594)Net Decrease, Including Offsets * ($262)% Decrease, Including Offsets to Total Current Revenues * -5.7%

Ohio Regulatory MattersDistribution Rate Requests (as filed)

Regulatory Matters

3


Ohio Edison, CEI and Toledo EdisonOn July 10, 2007, filed a comprehensive supply plan for competitively priced generation service to implement market provisions of S.B. 3 effective January 1, 2009

Proposal includes:– Option to phase in generation price increases for residential

tariff groups that experience > 15% increase in avg. total price– Time-of-day and hourly pricing options– Renewable energy component

Competitive bid process (CBP) alternatives– By Customer Class, or– Slice of System

Ohio Regulatory UpdateCompetitive Generation Procurement Proposal

4Regulatory Matters

OH


CBP process– Descending clock bidding format– Full requirements product (energy, capacity, transmission)– Individual bidders limited to 75% of total customer load– Multiple solicitations; three-year ladder

Bids secured in 2008 would be for service beginning January 1, 2009, and ending:– May 31, 2010 (17-month)– May 31, 2011 (29-month)– May 31, 2012 (41-month)

Subsequent annual bids for 1/3 of load (3-year supply)

Ohio Regulatory UpdateCompetitive Generation Procurement Proposal (continued)

5Regulatory Matters

OH


Ohio Edison, CEI and Toledo EdisonAugust 29: Supreme Court of Ohio remanded recovery of deferred fuel costs in distribution rates to PUCO for further consideration

The Court reaffirmed all other aspects of the Rate Certainty Plan

September 10: Companies filed a Remand Application with the PUCO seeking generation-related fuel cost recovery rider

– Remand remains at PUCO

OH

Ohio Regulatory UpdateSupreme Court of Ohio Remand on Rate Certainty Plan

6Regulatory Matters


PAMet-Ed and Penelec

Commonwealth Court appeals of rate cases– $109M net increase effective January 2007– Pending appeals to Commonwealth Court

– ME & PN - denial of generation relief and tax expense adjustment– Industrials & OCA - transmission recovery– Oral arguments expected late 4Q or early 2008– Decision expected in 2008

Generation procurement filing plan– ME & PN transition to competitive generation market prices

on January 1, 2011– Plan to submit generation procurement proposal in 2008

Pennsylvania Regulatory UpdateCommonwealth Court Appeals & Generation Procurement Filing

7Regulatory Matters


Penn Power successfully transitioned to competitive generation market prices on January 1, 2007– POLR I RFPs implemented for January 2007–May 2008– POLR II multiple RFP’s with staggered delivery

June 2008 through May 2011– Proposed full requirements product by class– Settlement Agreement filed in September 2007– Favorable ALJ Recommended Decision received in October 2007– Anticipate Commission Order in December 2007

– Industrial customers on hourly priced default service

RFP Tranches (50 MW)Group Term Jan 08 Mar 08 Oct 08 Jan 09 Oct 09 Jan 10Residential 1 year 2 2 0 0 2 2Residential 2 year 2 2 2 2 0 0Commercial 1 year 3 4 3 4 3 4

Pennsylvania Regulatory UpdatePenn Power POLR II Case

8Regulatory Matters

PA


NJNew Jersey Energy Master Plan – State goals

– Reduce total projected electricity demand by 20% by 2020– Meet 22.5% of electricity needs with renewable energy– Reduce air pollution and energy use– Encourage and maintain economic development– Achieve a 20% reduction in CAIDI and SAIFI by 2020– Unit prices at no more than +5% of the regional price level– Eliminate transmission congestion by 2020

– Detailed draft plan expected by year end 2007– JCP&L focus: Peak demand management and cost recovery

Regulatory MattersJersey Central Power & Light

9Regulatory Matters


Retail Regulatory Structure

1 CEI fixed through April 2009.2 NUG recovery thru 2020.

Ohio Edison Stable ratesthru 2008“g + RSC”

RTC thru2008 – OE, TE2010 – CEI

Fixed ratesthru 20081

Pass thruMISO costs

Penn Power Market in2007

POLR ratesthru 2010

GenerationGeneration TransmissionTransmission DistributionDistribution Transition CostTransition Cost

Norestriction

JCP&L BGS Supply MTC thru 2018Norestriction

Met-Ed

Penelec

Toledo Edison

CEI

CTC endedJan. 2006

CTC thru 20102

CTC thru 20092

Pass thruPJM costs

Norestriction

InGeneration

10Regulatory Matters

Financial Matters


2007 – Key Financial Accomplishments

Consistent financial results– Narrowed Non-GAAP 2007 earnings guidance to $4.15 to $4.25*,

the top half of original guidance range

Continued strong cash flow– Expect net cash from operating activities of $1.7B

– Includes pension contribution of $300M

Enhanced capital structure– Transferred $427M of tax-exempt pollution control debt from utilities to

unregulated Gencos– Issued approximately $1.1B of operating company debt

Strengthened pension fund– Voluntary $300M contribution– Plan well funded

Financial Matters

* See GAAP to Non-GAAP reconciliations in the Appendix.

2


2007 – Key Financial Accomplishments (continued)

Positioned FirstEnergy Solutions (FES) as an independent capital raising entity– Investment grade credit ratings (BBB/Baa2) received in March 2007– Completed $1.3B sale and leaseback transaction on 779 MW portion

of Unit 1 of the Bruce Mansfield Plant– Captured benefit of $752M of expiring tax capital loss carryforwards– Equivalent to borrowing at 3.6% for a term of 33 years

– Upsized FES’ borrowing capacity under FirstEnergy’s revolver to $1.0B

Increased shareholder value– Year-to-date stock price appreciation of 13.7% (through Nov. 2007)– Three year annualized TSR of 21.5% (through Nov. 2007)– Dividend increase of 11.1% (March 2007)– Accelerated repurchase of approx. 14.4 million shares (March 2007)

3Financial Matters


Projected 2008 – 2011 Capital Expenditures

($ millions) 2008F 2009F – 2011F Average

$730 $730

260

155

75

$1,220

131

96

Corporate 86

$1,043

Energy Delivery

FENOC

Fossil

Subtotal without AQC

($ millions) 2008F 2009F 2010F 2011F

$650$261

$11$500($150) ($145)

$156($344)

AQCChange from Prior Year

4Financial Matters


Finance Plans: 2008 and Beyond

Maintain financial flexibility– Investment grade credit metrics at all entities

– Metrics maintained over near-term – Metrics improved as AQC capital spend winds down post-2009

– Maintain substantial liquidity– $3.4B total capacity

Reduce holding company debt while appropriately capitalizing operating companies and FirstEnergy Solutions– Utility debt maturities of only $685M over 2008 – 2011 period– Opportunistically transfer remaining $263M of utility tax-

exempt debt to Generating Companies– $1.9B already transferred

– $1.5B, 6.45% Series B FE Notes due November 2011

5Financial Matters


Finance Plans: 2008 and Beyond (continued)

Efficient funding of capital program – Capital expenditures financed largely through internal cash

flow, even during peak AQC spend– New tax-exempt financings of approximately $200M planned to

support Sammis AQC project

Potential uses of substantial growth in free cash following completion of AQC projects– Dividend growth– Potential for share repurchases– Invest for future growth– Ability to take advantage of strategic opportunities

6Financial Matters


Share Repurchase Summary

2006 2007F Cumulative

Beginning Shares 329.8 319.2 329.8

Shares Repurchased 10.6 14.4 25.0

Ending Shares 319.2 304.8 304.8

% Reduction 3.2% 4.5% 7.7%

Cost ($ millions) $627 $940* $1,567*

Avg. Price per Share $58.99 $65.39* $62.68*

Annual EPS Benefit $0.13 $0.19* $0.32*

(Shares in millions)

* Estimate subject to settlement

7Financial Matters


FirstEnergy Credit Ratings

On October 18, S&P revised the outlook of FE and its subsidiaries to negative from stable

On November 2, Moody’s revised the outlook of FE and its subsidiaries to stable from positive

Corporate Credit Rating (S&P) / Issuer Rating

(Moody's)

Senior Secured Senior Unsecured

S&P Moodys S&P Moodys S&P MoodysFirstEnergy Corp. BBB Baa3 - - BBB- Baa3

FirstEnergy Solutions BBB Baa2 - - BBB Baa2

Ohio Edison BBB Baa2 BBB+ Baa1 BBB- Baa2

Cleveland Electric Illuminating BBB Baa3 BBB+ Baa2 BBB- Baa3

Toledo Edison BBB Baa3 BBB Baa2 BBB- Baa3

Pennsylvania Power BBB Baa2 A- Baa1 BBB- Baa2

Jersey Central Power & Light BBB Baa2 BBB+ Baa1 BBB Baa2

Metropolitan Edison BBB Baa2 BBB+ Baa1 BBB Baa2

Pennsylvania Electric BBB Baa2 BBB+ Baa1 BBB Baa2

As of December 6, 2007As of November 30, 2007

8Financial Matters


Strong Liquidity Position

Substantial liquidity available– $3.1B available borrowing capacity at November 30, 2007

Company Type Term Maturity Amount ($M)

Aug. 2011 $ 2,750

120

550

$ 3,420

Various

Various

Total

FirstEnergy Corp. RCA* 5-year

FirstEnergy Corp. Bank Lines Various

OH & PA Utilities A/R Fin. 1-year

* Revolving Credit Agreement

9Financial Matters


2007 Non-GAAP Earnings Per Share GuidanceReconciliation GAAP to Non-GAAP

10

Affirmed on December 5, 2007

2007 EPS

Basic EPS (GAAP basis) $4.21 – $4.31Excluding Special Items:

New Regulatory AssetAuthorized by PPUC (0.05)Gain on sale of non-core assets (0.04)Trust Securities Impairment 0.03

Basic EPS (Non-GAAP basis) $4.15 – $4.25

Financial Matters


2008 Non-GAAP Earnings Per Share GuidanceReconciliation GAAP to Non-GAAP

11

Issued on December 5, 2007

2008 EPSBasic EPS (GAAP basis) $4.23 – $4.43Excluding Special Items:

Gain on sale of non-core assets (0.08)Basic EPS (Non-GAAP basis) $4.15 – $4.35

Financial Matters

first energywallstreetaccess_121407_new

Economy & Finance

forwardlooking statements

new factors

similar factors

transition rate plan

rate stabilization plan

rate certainty plan

regulatory changes

combination of factors