Wall Street Access / Berenson & Company
                          West Coast Seminar
               Las Vegas • December 1...
Safer Harbor Statement under the Private Securities
Litigation Reform Act of 1995
These Presentations includes forward-loo...
2007 – Key Accomplishments

                                                          Regulatory
        Successfully tran...
2007 Key Accomplishments (continued)

                                 Operational
   Expecting generation output in exces...
2008 and Beyond – Key Objectives
Based on the Fundamentals


              Objectives
 Operations
   – Realize the full po...
Realizing Full Potential of Generating Fleet
Fleet Characteristics and Mission-Driven Strategy

      Significant scale: F...
Realizing Full Potential of Generating Fleet
Mining Our Assets – incremental, low-risk investment approach to fleet expans...
Realizing Full Potential of Generating Fleet
Leading the Way in Procuring Renewable Energy to Meet Growing Demand

       ...
Reinvesting in the Business
Capital Expenditure Forecast
                                                                 ...
Reinvesting in the Business
AQC Construction Overview

     Sammis Plant (2,233 MW) – $1.65B
      – SO2 control (scrubber...
Reinvesting in the Business
Our generation fleet is well-positioned for the future

                      Fleet Emission C...
Reinvesting in the Business
Energy Delivery – striving to achieve top quartile performance

                              ...
Managing Commodity Positions
Expected FES Supply & Sales*                                                       Expected F...
Managing Commodity Positions
Coal and Related Commodity Hedging

         % Hedged                      2008              ...
Seeking Full Recovery of Costs
Ohio Distribution Rate Cases
            Company Filing
            Proposed increase (Effe...
Transitioning to Competitive Generation Markets
Legislative Update: Ohio and Pennsylvania

      Penn Power successfully t...
Achieving Targeted Growth
2007 and 2008 Earnings Guidance


      2007 Non-GAAP Earnings Guidance*

              Original...
Achieving Targeted Growth
2008 Earnings Guidance

 $5.00


                                                               ...
Achieving Targeted Growth
Major Earnings Drivers 2009 - 2011

      Distribution rate case in OH effective 2009

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

      Declining margin from OH transition plans
...
Deploying Cash Effectively
Available Cash Forecast

                                                                    20...
Deploying Cash Effectively
Common Dividend

     Management will recommend that the Board of Directors
     declare a quar...
Bottom Line –
FirstEnergy is an attractive risk/reward opportunity

    Effectively managing transition
    to competitive...
Appendix
Corporate Profile
FirstEnergy Corporate Profile
   Diversified energy company headquartered in Akron, Ohio

   Involved in Generation, Trans...
Generation
FirstEnergy Generation – Diversity & Scale
    Michigan                                                        Ashtabula
 ...
Fossil Operating Performance
 2007 Highlights                                              2008 Look Ahead
  –            ...
Nuclear Operating Performance
 2007 Highlights                                               2008 Look Ahead
  –          ...
Top-Tier Operational Capability
Focus on Cost Control

              Mission-driven strategy in Fossil has resulted in sig...
Top-Tier Operational Capability
Continued Improvement of Asset Utilization

                  Garnered significant nuclear...
Operational Performance Targets
                                                                                          ...
Nuclear Generation
Future refueling outages focus on reliability
                              Expected          Expected
...
Generation – Implementing Plans for the Future
   Nuclear license renewal
                                           Curre...
Generation – Implementing Plans for the Future
   Nuclear spent fuel storage
    – Since 1983, FirstEnergy has collected $...
Environmental Strategy
AQC Upgrades – Sammis Plant
 Flue Duct Work – 9,000 tons (9,000 ft.)

 Electrical Cable – 9,120 circuits (530 miles)

 Fou...
Environmental Strategy
FirstEnergy’s climate activities




                                                              ...
FirstEnergy’s Position on Global Climate Change
    Climate change is a global issue ultimately requiring
    a global sol...
Additional Key Technologies FirstEnergy is
Actively Co-Funding
   Plug-in hybrid electric
   vehicles (PHEV)
    – Conside...
Commodity Operations
Coal Commodity Position
                                                                       Continue working to
       ...
Coal Transportation Position
                                                                       Actively pursuing clos...
Emission Allowance Position
                       SO2 Position
                       SO2 Position                       ...
Fuel Flexibility Creates Margin & Fuel Choices
   Enhanced systems, tools and processes providing the ability to react and...
PJM Capacity Position
          ME and PN have long-term capacity contracts
          Beaver Valley nuclear plant (1,779 M...
Energy Delivery
Regulated Rate Base and Sales Growth
Projected Annual Growth
     Projected Rate Base –
                                  ...
Energy Delivery Performance Targets
                                                                                      ...
Capital Planning Enhancements
Energy Delivery Capital Allocation Tool (E-CAT)

     Benchmarked leading performers in the
...
Workforce Management
      Power Systems Institute (PSI)
         – Started in 2000; partnered with two colleges in Ohio t...
Regulatory Matters
Ohio Regulatory Update
Distribution Rate Requests

            Ohio Edison, CEI and Toledo Edison
   OH
             Case ...
Ohio Regulatory Matters
Distribution Rate Requests (as filed)

            Proposed Changes in Revenues ($ millions)      ...
Ohio Regulatory Update
Competitive Generation Procurement Proposal

           Ohio Edison, CEI and Toledo Edison
   OH
  ...
Ohio Regulatory Update
Competitive Generation Procurement Proposal (continued)

              CBP process
               –...
Ohio Regulatory Update
Supreme Court of Ohio Remand on Rate Certainty Plan

           Ohio Edison, CEI and Toledo Edison
...
Pennsylvania Regulatory Update
Commonwealth Court Appeals & Generation Procurement Filing

           Met-Ed and Penelec
 ...
Pennsylvania Regulatory Update
Penn Power POLR II Case

             Penn Power successfully transitioned to
             ...
Regulatory Matters
Jersey Central Power & Light

              New Jersey Energy Master Plan
    NJ         – State goals
...
Retail Regulatory Structure
                          Generation              Transmission           Distribution         ...
Financial Matters
2007 – Key Financial Accomplishments
        Consistent financial results
          – Narrowed Non-GAAP 2007 earnings guid...
2007 – Key Financial Accomplishments (continued)
    Positioned FirstEnergy Solutions (FES) as an
    independent capital ...
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  1. 1. Wall Street Access / Berenson & Company West Coast Seminar Las Vegas • December 14, 2007 Ron Seeholzer Vice President, Investor Relations
  2. 2. Safer Harbor Statement under the Private Securities Litigation Reform Act of 1995 These 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. Wall Street Access / Berenson & Company 2 West Coast Seminar Las Vegas • December 14, 2007
  3. 3. 2007 – Key Accomplishments Regulatory Successfully transitioned Penn Power to competitive generation market prices Filed distribution rate case requests and competitive generation procurement proposal for Ohio utilities Financial Narrowed EPS guidance to top-half of the original range: $4.15–$4.25* Expecting to generate $1.7B of cash from operations Increased dividend 11.1% Completed accelerated repurchase of approx. 14.4 million shares Completed $1.3B sale and leaseback transaction on 779 MW of Mansfield Unit 1 * See GAAP to Non-GAAP reconciliations in the Appendix. Wall Street Access / Berenson & Company 3 West Coast Seminar Las Vegas • December 14, 2007
  4. 4. 2007 Key Accomplishments (continued) Operational Expecting 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 Wall Street Access / Berenson & Company 4 West Coast Seminar Las Vegas • December 14, 2007
  5. 5. 2008 and Beyond – Key Objectives Based on the Fundamentals Objectives Operations – Realize the full potential of our A strong and generation assets stable corporation – Reinvest in the business with a focus on – Minimize commodity risks the fundamentals Regulatory – Operational excellence – Recover cost of service – Financial discipline – Transition to competitive – Management credibility generation market prices – Continuous improvement Financial Strength & Flexibility – Achieve targeted growth – Deploy cash effectively Wall Street Access / Berenson & Company 5 West Coast Seminar Las Vegas • December 14, 2007
  6. 6. Realizing Full Potential of Generating Fleet Fleet Characteristics and Mission-Driven Strategy Significant scale: FES controls about 14,000 MW Balanced 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 Generation Output 100 80 (million MWh) 60 40 20 0 2004 2005 2006 2007F 2008F 2009F 2010F 2011F 29.9 28.7 29.0 30.7 32.0 31.0 32.2 32.0 Nuclear 46.5 51.5 53.0 51.5 52.7 52.4 53.7 54.6 Fossil Wall Street Access / Berenson & Company 6 West Coast Seminar Las Vegas • December 14, 2007
  7. 7. Realizing Full Potential of Generating Fleet Mining Our Assets – incremental, low-risk investment approach to fleet expansion Cumulative Type of MW Addition 2005–2007F 2008F–2011F MW Fossil baseload uprates 130 89 219 Fossil load following uprates 0 84 84 Nuclear baseload uprates 92 78 170 Peaking capacity enhancements* 149 0 149 Total MW additions 371 251 622 * Reflects 12 separate projects including returning 70 MW at Burger Unit 3 that has not been available since summer 2005. Mining Our Assets benefits: – ~$700/kW average capital cost is competitive vs. current market price of new capacity – Lower risk than large, long lead-time projects – Quicker to market – Low technology and construction risk Clarity on capacity and ancillary services market structure, technological advances, and environmental regulations will impact generation asset decisions in the future Wall Street Access / Berenson & Company 7 West Coast Seminar Las Vegas • December 14, 2007
  8. 8. Realizing Full Potential of Generating Fleet Leading the Way in Procuring Renewable Energy to Meet Growing Demand FES Wind Energy Portfolio Renewable State Overview Mandate Status Capacity RECs/Year In-service 145 MW 384 GWh 2007 Drives our PA 18% by 2020 renewable In-service 70 MW 180 GWh strategy today 2008 Total: 215 MW 564 GWh On the horizon and will impact Leading wind energy supplier in PA 25% by 2025 OH our renewable Evaluating expansion of current wind (Proposed) strategy in the portfolio future Considering other renewable technologies: Represents a – Solar minimal part of – Compressed air NJ 22.5% by 2020 our renewable – Biomass – Land fill gas requirements – Anaerobic digestion Wall Street Access / Berenson & Company 8 West Coast Seminar Las Vegas • December 14, 2007
  9. 9. Reinvesting in the Business Capital Expenditure Forecast Capital Expenditures ($ millions) Business Project Areas 2009F-2011F Unit 2004 2005 2006 2007F 2008F Average - Aged infrastructure rebuild Energy $455 $724 $650 $746 $730 $730 - Pockets of load growth Delivery - Reliability improvements - Improve managing operating risk $106 $148 $116 $104 $96 $155 Fossil - Upgrade aged equipment - Environmental / fuel enhancements - Availability improvements $141 $173 $229 $149 $131 $260 Nuclear - Dry fuel storage / license renewal - Materials issues $29 $45 $39 $88 $86 $75 Corporate - Information Technology, etc Sub-Total $731 $1,090 $1,034 $1,087 $1,043 $1,220 - Compliance strategy totals - Sammis, $0 $54 $136 $387 $650 $222 * AQC Burger Units, Mansfield and Eastlake Unit 5 Total $731 $1,144 $1,170 $1,474 $1,693 $1,442 * AQC annual expenditures include $500M (2009), $156M (2010), and $11M (2011) Wall Street Access / Berenson & Company 9 West Coast Seminar Las Vegas • December 14, 2007
  10. 10. Reinvesting in the Business 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) – $50M SO2 control (scrubber) upgrades completed Burger Plant – $180M – NOx control (SNCR) and SO2 control Electro-Catalytic Oxidation (ECO) Units 4 & 5 (312 MW) Eastlake Plant – $6M NOx control (SNCR) Unit 5 (597 MW) completed Wall Street Access / Berenson & Company 10 West Coast Seminar Las Vegas • December 14, 2007
  11. 11. Reinvesting in the Business Our generation fleet is well-positioned for the future Fleet Emission Control Status 2007 2010 Capacity Fleet Capacity Fleet (MW) % (MW) % Non-Emitting 4,581 34% 4,638 34% Coal Controlled 2,626 19% 5,237 38% (SO2/NOx – full control) Natural Gas Peaking 1,283 9% 1,283 9% 8,490 62% 11,158 81% Longer-term environmental considerations 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 Wall Street Access / Berenson & Company 11 West Coast Seminar Las Vegas • December 14, 2007
  12. 12. Reinvesting in the Business Energy Delivery – striving to achieve top quartile performance 2011 Focus Area Key Metrics 2007F 2008F Target Reliability Distribution SAIDI (minutes) 128 118 103 Top-quartile performance SAIDI and top-decile in TOF TOF (per circuit) 0.39* 0.31 0.31 Financial Performance Achieve top-quartile total spend per Total Cost Per Customer $270 $265 $263 customer * Top quartile SAIDI Performance Total Cost per Customer $300 220 Top Quartile 190 SAIDI (Minutes) $270 Total CPC 160 ED&CS $240 ED&CS 130 100 $210 Top Quartile 70 $180 40 $150 2005 2006 2007 2008 2009 2010 2011 2012 10 2005 2006 2007 2008 2009 2010 2011 2012 Wall Street Access / Berenson & Company 12 West Coast Seminar Las Vegas • December 14, 2007
  13. 13. Managing Commodity Positions Expected FES Supply & Sales* Expected FES Total Supply* 95 94 100 90 Significant reductions (million MWh) 80 60 in mostly on-peak 40 energy purchases 20 0 2008F 2009F 2010F 11 7 9 Forward / Spot Purchases 32 31 32 Nuclear 52 52 53 Fossil, Hydro, Wind Supply numbers exclude JCP&L and firm contract portion of ME/PN Expected FES Total Sales* 95 94 90 100 (million MWh) 80 Significant increases in 60 higher margin sales 40 20 0 2008F 2009F 2010F 1 31 29 Retail Auction 12 20 24 Competitive Retail 16 20 21 Forward / Spot Sales 14 19 20 ME/PN PRA Obligations 52 0 0 OH PSA Obligations Sales numbers exclude JCP&L and firm contract portion of ME/PN •*Assumes move to open market in Ohio in 2009 and beyond Wall Street Access / Berenson & Company 13 West Coast Seminar Las Vegas • December 14, 2007
  14. 14. Managing Commodity Positions Coal and Related Commodity Hedging % Hedged 2008 2009 2010 Coal only 99% 91% 100% Coal transportation 97% 91% 58% SO2 99% >100% >100% NOx >100% 78% 74% 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) Wall Street Access / Berenson & Company 14 West Coast Seminar Las Vegas • December 14, 2007
  15. 15. Seeking Full Recovery of Costs Ohio Distribution Rate Cases Company Filing Proposed increase (Effective 1/09 for OE & TE 1/09; 5/09 for CEI): $ millions Ohio Traditional distribution costs $212 Recovery of costs deferred under prior rate plans 120 Total proposed increase to quot;distributionquot; revenues $332 PUCO Staff Report (Dec. 4, 2007) – Based on initial review Proposed increase (Effective 1/09 for OE & TE 1/09; 5/09 for CEI): $ millions Traditional distribution costs $100 -$119 Recovery of costs deferred under prior rate plans 61 Total proposed increase to quot;distributionquot; revenues $161 - $180 Key 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) Wall Street Access / Berenson & Company 15 West Coast Seminar Las Vegas • December 14, 2007
  16. 16. Transitioning to Competitive Generation Markets Legislative Update: Ohio and Pennsylvania Penn Power successfully transitioned to competitive generation market prices on Jan. 2007 Ohio utilities transition scheduled for Jan. 2009; Met-Ed and Penelec transition scheduled for Jan. 2011 Efforts are underway in both OH and PA on potential new energy legislation FirstEnergy actively engaged in the legislative process Multiple issues being considered…key is to assure a smooth transition to market in both states FirstEnergy is positioned in each state to successfully transition to market Wall Street Access / Berenson & Company 16 West Coast Seminar Las Vegas • December 14, 2007
  17. 17. Achieving Targeted Growth 2007 and 2008 Earnings Guidance 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 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 * 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. Wall Street Access / Berenson & Company 17 West Coast Seminar Las Vegas • December 14, 2007
  18. 18. Achieving Targeted Growth 2008 Earnings Guidance $5.00 Ohio Transition Cost Amortization $0.14 $4.50 Depreciation & General Taxes $0.03 $0.06 $0.05 Other ($0.13) Generation $4.25* $0.04 2007 Output $4.20* ($0.10) Financing Share ($0.04) Costs Buyback Outage Wires O&M Sales Costs Growth $4.00 $3.50 Midpoint 2007 Midpoint 2008 Non-GAAP Non-GAAP EPS Guidance 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 $0.08 gain on the planned sale of non-core assets. Wall Street Access / Berenson & Company 18 West Coast Seminar Las Vegas • December 14, 2007
  19. 19. Achieving Targeted Growth Major Earnings Drivers 2009 - 2011 Distribution rate case in OH effective 2009 Market generation prices in OH in 2009 Market generation prices in PA in 2011 Asset mining / realizing full potential of generation assets Further operational enhancements Timely recovery of regulated costs and capital investments Wall Street Access / Berenson & Company 19 West Coast Seminar Las Vegas • December 14, 2007
  20. 20. Achieving Targeted Growth (continued) Major Earnings Drivers 2009 - 2011 Declining margin from OH transition plans Impact of expiring Met-Ed/Penelec third-party power contract in 2009 Increasing fuel and purchased power costs Increasing O&M costs Higher depreciation expenses (non-cash) Wall Street Access / Berenson & Company 20 West Coast Seminar Las Vegas • December 14, 2007
  21. 21. Deploying Cash Effectively Available Cash Forecast 2007F 2008F Change ($ millions) Net Cash from Operating Activities $1,698 $2,224 $526 Capital Expenditures (1,474) (1,693) (219) Nuclear Fuel Fabrication (94) (136) (42) Available Cash before Dividends $130 $395 $265 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 Wall Street Access / Berenson & Company 21 West Coast Seminar Las Vegas • December 14, 2007
  22. 22. Deploying Cash Effectively Common Dividend 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 Quarterly Change from Annualized Date Rate Prior Period Rate 1Q 2008 55.00¢ 10.00% $2.20 1Q 2007 50.00¢ 11.10% $2.00 1Q 2006 45.00¢ 4.65% $1.80 4Q 2005 43.00¢ 4.24% $1.72 1Q 2005 41.25¢ 10.00% $1.65 4Q 2004 37.50¢ – $1.50 Wall Street Access / Berenson & Company 22 West Coast Seminar Las Vegas • December 14, 2007
  23. 23. Bottom Line – FirstEnergy is an attractive risk/reward opportunity Effectively managing transition to competitive markets Realizing full potential of assets Significant Earnings Reinvesting for future growth Growth Effectively deploying strong cash flow Potential Striving for continuous improvement Maintaining strategic flexibility Well-positioned for climate legislation Wall Street Access / Berenson & Company 23 West Coast Seminar Las Vegas • December 14, 2007
  24. 24. Appendix
  25. 25. Corporate Profile
  26. 26. 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 Wall Street Access Corporate Profile Las Vegas, NV ▪ December 14, 2007 2
  27. 27. Generation
  28. 28. FirstEnergy Generation – Diversity & Scale Michigan Ashtabula Perry 244 MW Seneca 1,258 MW Eastlake Sumpter 451 MW 1,262 MW 340 MW Bay Shore Stryker Erie 648 MW Lake Shore 18 MW Yards Creek Towanda 249 MW Toledo 200 MW Cleveland New Castle Pennsylvania Akron Davis-Besse Edgewater Morristown Richland 893 MW Newark 48 MW 432 MW West Lorain Johnstown Reading Harrisburg 545 MW Allenhurst Trenton W. H. Sammis 2,233 MW New Columbus Beaver Valley Bruce Mansfield Jersey R. E. Burger 1,779 MW 2,490 MW 413 MW Mad River Forked River 60 MW 86 MW Ohio Unit Mission Strategy Baseload Peaking Units Other Load Following MW MW MW MW Mansfield 1-3 2,490 Sammis 1-5 1,020 West Lorain 545 OVEC 463 Wind 145 Beaver Valley 1,2 1,779 Eastlake 1-4 636 Seneca 451 Perry 1,258 Bay Shore 2-4 495 Richland 432 Total 608 FirstEnergy Power Sources Sammis 6,7 1,200 Burger 4 -5 312 Sumpter 340 Davis-Besse 893 Lake Shore 245 Yards Creek 200 C Coal 7,469 MW Eastlake 5 597 Ashtabula 244 Burger 3 & EMDs 101 N Nuclear 3,930 Bay Shore 1 136 Forked River* 86 H Hydro Total Load Following 2,952 651 Mad River 60 G Gas & O Oil 1,599 Total Baseload 8,353 Edgewater 48 Other 608 Stryker 18 Other 63 Total 14,257 MW Total Peaking Units 2,344 * Sale pending Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 2
  29. 29. Fossil Operating Performance 2007 Highlights 2008 Look Ahead – – Top-quartile safety performance Achieve top-decile safety performance – – New monthly all time generation Drive continuous improvement record set August 2007 through fleet standardization of best (4.6 million MWh) practices, benchmarking and Fossil Excellence annual diagnostics – Environmental projects (AQC) on track – Continue to focus on transitioning – Outage performance improving workforce knowledge and skills to a – Implemented Fossil Excellence at new generation of employees Bay Shore and Sammis (continuous – Execute Mining Our Assets strategies improvement) – Develop and implement a full start-up – On track for workforce replenishment testing, training and operation – Improved performance accountability strategy for AQC – Mansfield Unit 3 uprate (30 MW) 2011 Fossil 2007F 2008F 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 Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 3
  30. 30. Nuclear Operating Performance 2007 Highlights 2008 Look Ahead – – Top-quartile safety performance Maintain top-quartile safety performance – – DB worked > 7.5 million hours Targeting record generation without a Lost Time Accident (32.0 million MWh) – Record Fleet Generation projected – Two outages – DB and BV2 (30.7 million MWh) – Additional 12 MW from DB Caldon – BV1 uprate (43 MW); BV2 uprate (24 MW) modification – No forced losses at BV1; BV2 top – Additional 45 MW from BV power uprate quartile (0.24%) – NRC Emergency Preparedness Evaluated – PY returned to Standard Reactor Exercises at BV and PY Oversight Process – Dry Cask Fuel Storage underway at PY – NRC accepted BV license renewal application – Successful NRC Security drills at PY and BV – Lowest BV dose during fall outage 2011 Nuclear 2007F 2008F 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 Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 4
  31. 31. Top-Tier Operational Capability Focus on Cost Control Mission-driven strategy in Fossil has resulted in significant reductions in cost since 2004 as well as increased output In 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 Fossil Nuclear ($ / MWh) ($ / MWh) 2004 2005 2006 2007F 2008F 2004 2005 2006 2007F 2008F Non-Fuel Fuel Non-Fuel Fuel Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 5
  32. 32. Top-Tier Operational Capability Continued Improvement of Asset Utilization 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 100% 95% Factors (%) 90% 85% 80% 75% 2004 2005 2006 2007F 2008F 2011 Target 84.6% 86.9% 88.5% 81.0% 87.2% 90.7% Fossil baseload 89.5% 86.2% 86.8% 90.0% 92.9% 92.4% Nuclear Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 6
  33. 33. Operational Performance Targets 2011 Operational Performance 2004 2005 2006 2007F 2008F 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 Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 7
  34. 34. Nuclear Generation Future refueling outages focus on reliability Expected Expected Scope Driving Duration Year Plant Outage Costs Outage Duration (Items with asterisk* denote duration drivers) ($ millions) (days) Refueling * IVVI Perry 1R11 $30 30 Actual Outage Period (4/2/07 – 5/13/07) Split Pins * Containment Sump Modifications* Reactor Vessel ISI * 2007 100% Eddy Current Test Beaver Valley 1R18 $32 28 Reactor Vessel Head Inspection Pressurizer Overlay Actual Outage Period (9/24/07 – 10/24/07) Rewind Main Generator * Davis-Besse 1R15 $30 31 Split Pins * Low Pressre-2 Turbine Inspection * Reactor Vessel Head Inspection Beaver Valley 2R13 2008 $30 30 Main Cond Tube Replacement, Expansion Joints * Replace High Pressure Turbine * Type A Containment Pressurization Test Refueling * 10-year IVVI / Bioshield In-service Inspection Perry 1R12 $30 25 Recirc Pump Motor Replacement Replace Low Pressure Turbines (2) * 2009 Reactor Coolant System Loop Stop Valves (2) Beaver Valley 1R19 $30 30 Reactor Vessel Head Inspection Refueling * Beaver Valley 2R14 $30 25 Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 8
  35. 35. Generation – Implementing Plans for the Future Nuclear license renewal Current Submit Request Approval New Expiration (NRC Docket) Expected Expiration Beaver Valley Unit 1 2016 Submitted 2007* 2009 2036 Beaver Valley Unit 2 2027 Submitted 2007* 2009 2047 Davis-Besse 2017 2010 2012 2037 Perry 2026 2013 2015 2046 * The NRC accepted the application for review Nuclear steam generator replacements – Davis-Besse in 2014 – Beaver Valley Unit 2 in 2017 Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 9
  36. 36. Generation – Implementing Plans for the Future 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. Beaver Valley Implement dry storage by the end of 2014 Unit 1 Current ongoing criticality analysis will increase storage space Beaver Valley Re-rack before 2011 to provide capacity through 2025 Unit 2 Dry storage could then be implemented Continue with wet storage until 2021 Davis-Besse Switch back to dry storage in 2022 Perry Implement dry storage before 2011 Wall Street Access Generation Las Vegas, NV ▪ December 14, 2007 10
  37. 37. Environmental Strategy
  38. 38. AQC Upgrades – Sammis Plant Flue 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 Sammis Plant with computer overlay of Wet Flue Gas Desulphurization (WFGD) equipment Wall Street Access Environmental Strategy Las Vegas, NV ▪ December 14, 2007 2
  39. 39. Environmental Strategy FirstEnergy’s climate activities CO2 Capture and Storage Technologies Participating in Global Climate Change Policy • MRCSP – R.E. Burger Plant Sequestration test well • Global Roundtable on Climate Change • ECO2 Carbon Capture – Powerspan • EPRI Global Climate Policy Costs & Benefits Research • EPRI research • EEI Climate Change Policy Subcommittee • Power Partners • NEI Climate Change Policy Subcommittee • Oxy Fuel – B&W GHG Reduction Technologies & Voluntary Actions End-user Energy Management • Asia-Pacific Partnership • NJ Clean Energy Program • EPA SF6 Reduction Partnership • PA Sustainable Energy Fund • EPRI GHG Reduction and Electric Transportation Research • Ohio Energy-efficiency Programs • Climate Vision Renewables • DOE 1605(b) Voluntary Reporting of GHGs Program • 650 MWs Hydro • Powertree Carbon Company • >200 MWs Wind Purchase Agreements Generation Initiatives Renewal of Nuclear and Hydro Plant • Fossil plant efficiencies Operating Licenses • Nuclear plant uprates • Continued operation of non-emitting generation Wall Street Access Environmental Strategy Las Vegas, NV ▪ December 14, 2007 3
  40. 40. 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 Wall Street Access Environmental Strategy Las Vegas, NV ▪ December 14, 2007 4
  41. 41. 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 Wall Street Access Environmental Strategy Las Vegas, NV ▪ December 14, 2007 5
  42. 42. Commodity Operations
  43. 43. Coal Commodity Position Continue working to Securing Open Coal Commodity Positions secure long-term fuel supply contracts Actively testing alternate 2008 99% fuel blends at various plants to optimize plant 91% 2009 economics and flexibility Engaged in fuel flexibility 2010 100% initiative to expand margins and fuel choices 0 5,000 10,000 15,000 20,000 25,000 Total Needed Tons Total Covered Tons Wall Street Access Commodity Operations Las Vegas, NV ▪ December 14, 2007 2
  44. 44. Coal Transportation Position Actively pursuing closure to Securing Open Coal long-term transportation Transportation Positions positions – rail contract signed, 2010 barge contract agreement reached 97% 2008 Continuing to evaluate additional delivery options 2009 91% to increase both capabilities and flexibility Enhanced rail unloading 2010 58% capabilities in process at Ashtabula, Bay Shore and 0 5,000 10,000 15,000 20,000 25,000 Lake Shore In 2008, FES will manage PRB Total Needed Tons Total Covered Tons rail logistics previously outsourced Wall Street Access Commodity Operations Las Vegas, NV ▪ December 14, 2007 3
  45. 45. Emission Allowance Position SO2 Position SO2 Position Based on projected generation: 350,000 – SO2 emission allowance 260,000 positions are well covered for (tons) 170,000 2008 and 2009 – Closed 2010 SO2 positions early 80,000 to mitigate potential scrubber -10,000 projects completion risks 2008 2009 2010 Needed Covered Position – 2008 seasonal NOx is covered – 2009 – 2010 seasonal NOx Seasonal NOx Position requirements are expected to 30,000 be fully covered as allocations are made to states (OH due in 20,000 Jan. 2008) (tons) 10,000 – Annual NOx allocations are 0 beginning and markets are 2008 2009 2010 still thin -10,000 Needed Covered Position Wall Street Access Commodity Operations Las Vegas, NV ▪ December 14, 2007 4
  46. 46. Fuel Flexibility Creates Margin & Fuel Choices Enhanced 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 Wall Street Access Commodity Operations Las Vegas, NV ▪ December 14, 2007 5
  47. 47. PJM Capacity Position ME and PN have long-term capacity contracts Beaver Valley nuclear plant (1,779 MW) committed in PJM to cover capacity position Covered capacity prior to RPM auction for planning year 2008-2009 to replace long-term contracts Committed Seneca pumped storage (451 MW) to PJM as a capacity resource for planning year 2009 (commencing in June 2009) PJM Net Capacity FES View (continuing to serve the ME and PN PRA) 3500 2800 2100 1400 700 MW 0 (700) (1400) (2100) (2800) (3500) Jul Jul Jul Jan Feb Jun Jan Feb Jun Jan Feb Jun Oct Oct Oct Mar Mar Mar May Nov Dec May Nov Dec May Nov Dec Sep Sep Sep Aug Aug Aug Apr Apr Apr 2008 2009 2010 Includes Beaver Valley, Forked River and Seneca Wall Street Access Commodity Operations Las Vegas, NV ▪ December 14, 2007 6
  48. 48. Energy Delivery
  49. 49. Regulated Rate Base and Sales Growth Projected Annual Growth Projected Rate Base – 2011 Regulated Companies (T&D) 2007F 2008F Target ($ millions) Net Plant for Rate Base $9,800 $10,100 $11,000 Capital Expenditures, Net of $394 $365 $330 Depreciation Average Annual (2009F – 2011F) OH PA NJ Growth Rate (kWh) 0.9% 1.7% 2.2% Net Plant for Rate Base ($ millions) $4,420 $3,290 $3,000 # of Customers (millions) 2.1 1.3 1.1 Growing asset base and increased distribution throughput Wall Street Access Energy Delivery Las Vegas, NV ▪ December 14, 2007 2
  50. 50. Energy Delivery Performance Targets 2011 Focus Area Key Metrics 2007F 2008F Target Safety OSHA Incident Rate** 1.70* 1.62 1.00 Consistently achieve top-decile (1.24) Reliability Distribution SAIDI (minutes) 128 118 103 Top-quartile performance SAIDI and top-decile in TOF TOF (per circuit) 0.39* 0.31 0.31 Financial Performance Achieve top-quartile total spend per Total Cost Per Customer $270 $265 $263 customer Employees An environment where employees are Total Staffing 7,637 7,898 7,995 valued and accountable for the performance of the business * Top quartile ** Per 100 employees Wall Street Access Energy Delivery Las Vegas, NV ▪ December 14, 2007 3
  51. 51. Capital Planning Enhancements Energy Delivery Capital Allocation Tool (E-CAT) Benchmarked leading performers in the area of capital allocation Game Plan: Selected Navigant to help develop Target spend with capital allocation tool based on an emphasis on improving reliability fundamental engineering economics (quantified benefits) Continued focus on operational improvements E-CAT provides the granularity which drives our ability to prioritize thousands of projects based on predicted benefits Capital planning has undergone a fundamental change to enhance our financial discipline Wall Street Access Energy Delivery Las Vegas, NV ▪ December 14, 2007 4
  52. 52. 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 Started 2008F 2009F Graduated Hired 2000–2007 Program Line Workers 276 236 214 123 177 Substation 110 87 82 31 60 Electricians Total 386 323 296 154 237 Wall Street Access Energy Delivery Las Vegas, NV ▪ December 14, 2007 5
  53. 53. Regulatory Matters
  54. 54. Ohio Regulatory Update Distribution Rate Requests Ohio Edison, CEI and Toledo Edison OH Case detail – Request: $332M increase (7% on overall rates) – Distribution revenue requirements: $212M – Deferral recovery: $120M Case schedule – Filed June 2007, with 2008 test period and date certain of May 31, 2007 – PUCO Staff report issued December 4, 2007 – Hearings expected 1st quarter 2008 – 275-day timeline reached in March 2008 – Rates to be effective January 2009 (CEI in May 2009) Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 2
  55. 55. Ohio Regulatory Matters Distribution Rate Requests (as filed) Proposed Changes in Revenues ($ millions) Total Current quot;Distributionquot; Revenues $1,118 Proposed Increase: Associated with RCP Fuel Expense Deferrals 34 Associated with RCP Infrastructure Expense Deferrals 40 Associated with RCP DSM Deferrals (through a rider) 4 Associated with ETP & Ohio Line Extension Deferrals 42 quot;Basequot; Revenue Requirement Increases 212 Total Proposed Increase to quot;Distributionquot; Revenues $332 Proposed quot;Distributionquot; Revenues $1,450 Offsetting RTC Decrease ($594) Net Decrease, Including Offsets * ($262) % Decrease, Including Offsets to Total Current Revenues * -5.7% * Assumes current Generation & Transmission rates Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 3
  56. 56. Ohio Regulatory Update Competitive Generation Procurement Proposal Ohio Edison, CEI and Toledo Edison OH On 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 Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 4
  57. 57. Ohio Regulatory Update Competitive Generation Procurement Proposal (continued) CBP process – Descending clock bidding format OH – 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) Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 5
  58. 58. Ohio Regulatory Update Supreme Court of Ohio Remand on Rate Certainty Plan Ohio Edison, CEI and Toledo Edison OH August 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 Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 6
  59. 59. Pennsylvania Regulatory Update Commonwealth Court Appeals & Generation Procurement Filing Met-Ed and Penelec PA 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 Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 7
  60. 60. Pennsylvania Regulatory Update Penn Power POLR II Case Penn Power successfully transitioned to competitive generation market prices on PA 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 RFP Tranches (50 MW) Group Term Jan 08 Mar 08 Oct 08 Jan 09 Oct 09 Jan 10 Residential 1 year 2 2 0 0 2 2 Residential 2 year 2 2 2 2 0 0 Commercial 1 year 3 4 3 4 3 4 – Industrial customers on hourly priced default service Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 8
  61. 61. Regulatory Matters Jersey Central Power & Light New Jersey Energy Master Plan NJ – 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 Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 9
  62. 62. Retail Regulatory Structure Generation Transmission Distribution Transition Cost Ohio Edison RTC thru Stable rates Fixed rates Pass thru thru 2008 2008 – OE, TE CEI thru 20081 MISO costs “g + RSC” 2010 – CEI Toledo Edison Market in No CTC ended In Penn Power 2007 restriction Jan. 2006 Generation CTC thru 20102 Met-Ed POLR rates Pass thru No thru 2010 PJM costs restriction CTC thru 20092 Penelec No JCP&L BGS Supply MTC thru 2018 restriction CEI fixed through April 2009. 1 NUG recovery thru 2020. 2 Wall Street Access Regulatory Matters Las Vegas, NV ▪ December 14, 2007 10
  63. 63. Financial Matters
  64. 64. 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 * See GAAP to Non-GAAP reconciliations in the Appendix. Wall Street Access Financial Matters Las Vegas, NV ▪ December 14, 2007 2
  65. 65. 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) Wall Street Access Financial Matters Las Vegas, NV ▪ December 14, 2007 3

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