ML003708964

Annual Financial Reports and Certified Financial Statements for the Perry Nuclear Power Plant (Docket Number 50-440) and the Davis-Besse Nuclear Power Station (Docket Number 50-346)

ML003708964
Person / Time
Site:	Davis Besse, Perry
Issue date:	04/20/1998
From:	Saunders R FirstEnergy Nuclear Operating Co
To:	NRC/OCIO/IMD/RMB
References
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Download: ML003708964 (137)

Text

FENOC 76 South Main Street Akron, OH 44308 FirstEnergyNuclearOperating Company Robert F Saunders 330 384-2415 President Fax: 330 384-5669 April 20, 2000 PY-CEI/NRR-2485L (Perry)

Serial Number-2656 (Davis-Besse)

United States Nuclear Regulatory Commission Document Control Desk Washington, D.C. 20555 Annual Financial Reports and Certified Financial Statements for the Perry Nuclear Power Plant (Docket Number 50-440) and the Davis-Besse Nuclear Power Station (Docket Number 50-346)

Ladies and Jentlemen:

FirstEnergy Corp. is the parent company for the FirstEnergy Nuclear Operating Company, which operates the Perry Nuclear Power Plant and the Davis-Besse Nuclear Power Station. In accordance with 10CFR50.71 (b), FirstEnergy Corp. hereby submits the annual financial reports, including the certified financial statements for the two licensees. Also, enclosed is Form 10-K, the Annual Report to the United States Securities and Exchange Commission, for the fiscal year ending December 31, 1999.

If you have any questions, please contact Mr. Gregory Dunn, Manager - Regulatory Affairs, Perry, at (440) 280-5305.

Very truly yours, pmj Enclosures cc: Regional Administrator, NRC Region III NRC Project Manager (Perry)

NRC Project Manager (Davis-Besse)

NRC Senior Resident Inspector (Perry)

NRC Senior Resident Inspector (Davis-Besse)

Utility Radiological Safety Board p/4 I'

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Financial HIGHLIGHT S STRATEGIC VISION FirstEnergy will be the leading 1999 1998 regional retail energy and (Dollarsin thousands, except per share amounts) related services supplier; Total revenues $6,319,647 $5,874,906 the preferred choice for total Income before extraordinary charge $568,299 $441,396 customer solutions; the Earnings per common share:

shareholder's choice for long Before extraordinary charge $2.50 $1.95 term growth and investment After extraordinary charge $2.50 $1.82 value; and a Company that is Return on average common equity* 12.7% 10.3%

driven by the skills, diversity, Dividends per common share $1.50 $1.50 flexibility and character of Book value per common share $20.22 $19.37 its employees. Common equity to total capitalization 39.8% 37.9%

Cash provided by operating activities $1,488,306 $1,155,325 MISSION STATEMENT *Before extraordinarycharge in 1998 FirstEnergy will provide competitively priced, high quality products and value-added services in:

"*Energy sales and services

"*Energy delivery

"*Power supply

"*Regulated and unregulated supplemental services related to our core business Book Value Per Share Earnings Per Share STRATEGY

$20.22 To achieve our vision we will: s19.37 s18.71

"*Maximize the value of core sl7.35' operations

"*Position the Company for profitable growth in related areas

"*Maximize value retention during the transition to competition

"*Increase financial flexibility '96 '97 '98* '99

• Before extraordinary charge and investor confidence CONTENTS Message to Shareholders 2 Year in Review 4 Directors and Management 14 Management's Discussion and Analysis 18 ShareholderInformation 49 I

A Mes sage to S HARE H O L D E RS We're taking on the competition. With the nation's power costs by nearly $126 million, mainly due to the tenth largest investor-owned electric system, expanding increased availability of our generating units. We also natural gas resources and the Midwest's largest provider redeemed or refinanced $888 million in securities, of facilities services, FirstEnergy is achieving its which will produce about $50 million in annual savings.

vision of becoming the region's premier retail energy In addition, we repurchased approximately six million and related services supplier. shares of our outstanding common stock. We intend In 1999, we entered deregulated electricity markets in to purchase up to 15 million shares by the end of 2001 Pennsylvania, New Jersey and Delaware, where we're to improve our long-term financial performance.

adding thousands of new customers, including more We're also strengthening our performance by setting than 800 federal facilities, such as the goals and planning our operations in terms of their Statue of Liberty. We're expanding our potential for creating value. To assess the true value natural gas operations, with 44,000 new of investments and changes in operating activities, we customers added last year, and are con use Shareholder Value Added (SVA) - a measurement tinuing to grow our Facilities Services of net profit after taxes and the cost of capital. Last Group, which provides mechanical year, SVA improved by $166 million compared with contracting, facilities management, 1998 results.

and energy management services to customers nationwide. Despite these achievements, higher interest rates and uncertainty about the impact that competition will have By the end of 2000, we expect to on our industry have depressed the value of our common produce approximately $1.5 billion in stock, and the stock of electric utilities nationwide.

annual revenues from these unregulated We can't predict future market performance. However, activities. At the same time, we're we believe a favorable resolution of competitive issues sharpening our skills to retain and in Ohio will have a positive effect on our common stock.

expand our customer base in Ohio, where all consumers can select P1RIEIPARING FOR their electricity supplier beginning COMPETITION IN 01110 January 1, 2001, and in other states as While Ohio's new electric utility restructuring law gives opportunities arise.

consumers the opportunity to choose their electricity supplier, it also gives us the opportunity to continue

1) 1DEL I V E*R I N G S T RON GE1Rý R recovering costs we had expected to recover in future ICA RN ING S PE RF0 RMAN CI years under the current regulatory structure.

Growth in retail sales, lower purchased power costs and continued savings from our debt-reduction and We've filed for recovery of $6.97 billion, which refinancing activities contributed to stronger earnings includes credits to customers for such items as performance in 1999. deferred income taxes, in our proposed transition plan submitted to the Public Utilities Commission of Ohio We earned $568.3 million, or $2.50 per share of (PUCO). The 11,000-page filing is the first step in a common stock for the year, a 38-percent increase complex process that will determine unbundled prices from 1998 net income of $410.9 million, or $1.82 per for the services we provide; how we will separate share. Earnings in 1998 included a one-time charge of our regulated and unregulated businesses; and rules 13 cents per share that resulted from the deregulation for how we and other suppliers will operate in a of Pennsylvania's electric generation business. competitive environment.

The increase in earnings reflects our seventh consecutive We believe our rationale for recovery of transition year of growth in regulated retail kilowatt-hour sales. costs is solid. The PUCO is expected to reach a Residential sales increased 6.7 percent, commercial decision on our plan this summer.

sales rose 3.9 percent, and sales to industrial customers were up 3.4 percent. Total regulated and unregulated ACHIEVING OUR VISION electric sales increased 8.9 percent, reflecting a For nearly a decade, we've been taking the necessary 28.4 percent rise in power sales to other utilities steps to prepare for competition, most notably the and new sales in deregulated energy markets.

1997 merger of Ohio Edison and Centerior Energy Improved operations and cost-control efforts also that formed FirstEnergy.

contributed to higher earnings. We reduced purchased

Since then, we've transformed FirstEnergy from an AI)1IRE SSING A electric utility holding company into a diversified U.S. EPA ACTION energy services enterprise equipped to meet all of Despite spending more than $4 billion to ensure our customers' energy needs. that our power plants comply with environmental Key operational milestones in our core electric business regulations, the U.S. Environmental Protection are contributing to our progress. For instance, last Agency (U.S. EPA) has taken legal action against year we gained exclusive ownership and operational our W. H. Sammis Plant - along with 43 plants in the control of the 1,630-megawatt Beaver Valley Power Midwest and South owned by other electric utilities Station and nine generating units that we had jointly alleging that it has violated the Clean Air Act. New owned with other electric utility companies. York and Connecticut have taken steps to join the U.S. EPA action, blaming the plants for pollution We're aggressively working to bring Beaver Valley's in the Northeast.

performance in line with that of our other nuclear plants - Perry and Davis-Besse - which are among The U.S. EPA claims that maintenance, repairs and the world's top performers. replacements conducted since 1984 - some under the agency's own oversight - now trigger provisions of Our employees' ongoing commitment to operational the Act that require additional environmental controls, excellence resulted in another year of impressive even though generating capacity and emissions have performance in productivity, safety and customer not increased.

service. The reliable operation of our generating units significantly reduced our need to purchase costly We believe that this is a misinterpretation of the Clean power during periods of peak customer demand and Air Act, and we remain confident that the Sammis enabled us to make highly profitable electricity sales Plant is in full compliance with the law.

on the wholesale market.

TAKING O\N TI lE C(OMPETITION We did so while keeping employee safety a top priority. Operations employees at Davis-Besse Sales of electricity in deregulated markets, natural gas marked their twentieth year without a lost-time and facilities services are diversifying our revenue accident. In addition, our ongoing emphasis on sources and helping us better meet all our customers' safety helped us achieve a 34-percent improvement in energy needs. This strategy has positioned us to take a key Occupational Safety and Health Administration on the competition in the northeast quadrant of the measurement. That puts our safety record on track to United States - the region we've targeted for growth.

rank among the top utility companies in the Edison A good deal of the credit for the progress we've Electric Institute's annual safety survey that will be made goes to Willard R. Holland, who retired on released later this year. December 31 as Chairman of your Board. I'm Significant accomplishments weren't limited to our sure you'll join me in wishing Will the best in core electric business. his retirement.

We now serve approximately 50,000 natural gas With your ongoing support, and the hard work customers in the Midwest following our acquisitions of our employees, we'll continue capitalizing on of Atlas Gas Marketing, Inc., located near Pittsburgh, opportunities and taking on challenges in the Pennsylvania; Volunteer Energy, L.L.C., of Columbus, increasingly competitive energy marketplace.

Ohio; and Belden Energy Services Company of North Sincerely, Canton, Ohio.

We greatly expanded our natural gas resources by combining our properties and pipelines in the Appalachian Basin with Range Resources Corporation's H. Peter Burg Appalachian properties through a new joint venture Chairman and Chief Executive Officer called Great Lakes Energy Partners, L.L.C. March 8, 2000 And, the continued growth of our Facilities Services Group's customer base is enhancing our opportunities to sell electricity and natural gas outside our traditional service area.

3

Pre p aring for COMPETITION in Ohio After years of debate, Ohio enacted a new law last year that will enable consumers to change their electricity supplier beginning January 1, 2001, the start of a five year market development period, and the beginning of a transition period that could last through 2010.

The law opens the power generation portion of the electric utility industry to competition. While cus tomers can choose a dif ferent electricity supplier, our electric utility operating companies will continue to deliver electricity, and will provide other regu lated services within our traditional service area.

Under the law, we filed a transition plan with the Public Utilities Commission of Ohio (PUCO) that details how we plan to move from regulation to competition. The plan includes proposals for:

Unbundling the price of electricity into its component elements

- primarily genera tion, transmission, distribution and tran sition charges

The plan also seeks ferred to A. SI. They recovery of $6.97 billion include approximately in tUausition costs, including 7,100 miles of transmission credits to customers for lines with voltages of such items as deferred 69,000 and higher; income taxes. In general, 130 transmission a eAnl transition costs were substations; and

- Corporate separation incurred to meet govern 37 interconnections of our regulated ment policies, practices or with 6 other electric and unregulated mandates under the exist companies.

businesses ing regulatory structure.

The transfer would be the

"*Operational and tech Recovery of these costs first step toward our nical support including will not increase the price participation in a changes to customer customers currently pay regional transmis hilling, metering and for electricity. Under our sion organization accounting to plan, most transition costs (RTO), an entity that accommodate new would be recovered by would operate and electricity suppliers the end of 2005, with ultimately could own

"*Taiiff tenms and condi recovery of remaining the transmission sys dons for customers costs continuing up tem. We're working who choose a new through 2010. The PUCO to create such an supplier is expected to rule on our organization

"*Assistance for utility plan this sum mer. called the Alliance employees whose jobs RTO with Wetre also repositioning are affected by the American Electric Power, our transmission business new law Consumers Energy, in preparation for Detroit Edison and Total Re'enues

"*Consumer education competition. We received (; NMllions)

Virginia Power.

to help customers approval cori the Federal 6,32(0 Energy Regulatory FERC has conditionally 5,875 better understand their options Commission (FERC) to approved our proposed 5,089 transfer our transmission formation of this RTO.

"*Independent operation assets with an original through which member of our transmi ssion cost of S1.2 billion to a companies will consolidate system to ensure fair subsidiary. American control and operation of and equal access for Transmission Systems, their transmission systems, all electricity suppliers Inc. (ATSI). while ensuring that users ")6 97 98 '99 have non discriminatory I iRegu..ted ..

I*]ard Upon receipt of other access to the transmission regulatory approvals, our gi id.

high-voltage transmission "fcilitieas would he trans C/.

(Far left to r0411t, clockwise) Our Str) o(i, ties to Clevezlnd oud Ihludreds The plan also seeks ferred to ATSI. They of' other recovery of $6.97 billion include approximately co llol1l u ?nities,'

cuil be (t kcY in transition costs, including 7,100 miles of transmission credits to customers for lines with voltages of Oh io's ilectricit3t such items as deferred 69,000 and higher; morkrt opens income taxes. In general, 130 transmission to Competition; substations; and clcctricul transition costs were equipolncut at ut Corporate separation incurred to meet govern 37 interconnections tta*1(smi~ssioul of our regulated ment policies, practices or with 6 other electric substattionz: ct and unregulated mandates under the exist companies. .145, O00-v'olt businesses ing regulatory structure. ti-mismnissi~on The transfer would be the to.&C'1r; the Ohio

"*Operational and tech Recovery of these costs first step toward our I Cs hils.

nical support, including will not increase the price participation in a changes to customer customers currently pay regional transmis billing, metering and for electricity. Under our sion organization accounting to plan, most transition costs (RTO), an entity that accommodate new would be recovered by would operate and electricity suppliers the end of 2005, with ultimately could own

"*Tariff terms and condi recovery of remaining the transmission sys tions for customers costs continuing up tem. We're working who choose a new through 2010. The PUCO to create such an supplier is expected to rule on our organization plan this summer. called the Alliance

"*Assistance for utility RTO - with employees whose jobs We're also repositioning American Electric Power, are affected by the our transmission business Consumers Energy, new law in preparation for Detroit Edison and Total Revenues

($ Millions)

" Consumer education competition. We received Virginia Power.

to help customers approval from the Federal 6,320 5,875 better understand Energy Regulatory FERC has conditionally 5,206 approved our proposed 5,089 their options Commission (FERC) to transfer our transmission formation of this RTO,

" Independent operation assets - with an original through which member of our transmission cost of $1.2 billion - to a companies will consolidate system to ensure fair subsidiary, American control and operation of and equal access for Transmission Systems, their transmission systems, all electricity suppliers Inc. (ATSI). while ensuring that users '96 '97 '98 '99 have non-discriminatory ]I Regulated IUnregulated Upon receipt of other access to the transmission regulatory approvals, our grid.

high-voltage transmission facilities would be trans-

A c hievin g Operational EXCELLENCE (/tZ"hC chc(si Ue, oýL:ncrshitp q~t"th BeaCuCVrUdllv performance in line with availability of 87.6 percent, (old IBruac our other nuclear plants which significantly lowered Mansfield Davis-Besse and Perry our purchased power costs. p/ailts; (t'*ar Ic~ti, which are among the clock.:*oi~sc Our Occupational Safety industry's top performers. itmoni(orilcr and Health Administration The plants are operated incident rate of 1.66 per Control (Center, by FirstEnergy Nuclear 100 utility employees Ongoing improvements tuilrbinle Operating Company represents a 34-percent ill s p'ctionl; in our core electric busi (FENOC) under which improvement over 1998. coul bOa-c, oil ness are preparing us for thc, Ohlio R~iver.*

we've consolidated As a result, we expect our competition in Ohio and management of our safety record to are helping us succeed nuclear operations to rank near the top in new markets.

improve reliability, of the Edison Among our most significant safety and efficiencies. Electric Institute's accomplishments in 1999 annual safety We're already seeing was the completion of our survey of electric positive results. In 1999, asset transfer with utility companies the Perry Plant completed Duquesne Light Company nationwide that the shortest refueling of Pittsburgh. This trans will be released later this outage in its history, and action gave us exclusive year.

in January of 2000 ownership and operating surpassed its longest We're also increasing our control of the power plants on-line run of 266 days. peaking capacity to better we had jointly owned, and In addition, through year serve new and existing better positions us to end, Perry and Davis-Besse customers and to further maximize their value.

employees worked 1.7 reduce purchased power We exchanged our Avon and 2.5 million hours, costs.

Lake, Niles and New respectively, without a We added 87 MW of Castle plants for lost-time accident.

peaking capacity by Duquesne's share in the Our coal-fired plants acquiring GPU, Inc.'s Beaver Valley, Sammis, made impressive minority share of our Eastlake, Mansfield and improvements as well, 435-MW Seneca Pumped Perry plants, increasing including an operating Storage Hydroelectric our system capacity by a net 108 megawatts(MW).

Gaining operational control of Beaver Valley enables us to bring its 6

Generating Station located time, making it easier to and services on the Internet in western Pennsylvania. respond to electrical load are examples of how new swings. We expect to add technologies are helping us And, we're installing three, another 765 MW of peak improve our operations and 130-MW, natural-gas-fired ing capacity over the next service to customers.

turbines at our Richland three years.

Substation, located in Defiance, Ohio. These In addition to these OSHA Safety Rating (Incidents Per 100 Utility Employees) units, which will be opera improvements, we're using 1.66 tional later this year, are the Internet to further 2.52 3.91 economical to install. And, enhance the efficiency of 3 71

. f_,

unlike large, base-load our operations. Participation units, they require shorter in auctions of coal and construction and start-up purchases of other goods

'96 '97 '98 '99

Succeeding in NEW MARKET S Pennsylvania, New Jersey revenues from unregulated nation's largest producer Our entrance into and Delaware, where we are sales outside our traditional of high-quality bar steel.

deregulated electricity licensed to sell electricity. electric utility service area, markets and continued We're managing the and expect those sales growth in facilities services Our efforts are paying off. electricity and natural gas to exceed $300 million and natural gas are just a We're already serving needs of the company's in 2000.

few ways that we're more than 20,000 new 16 facilities in the eastern redefining our Company electricity accounts, We're also expanding our half of the United States.

as the region's premier including 800 federal services to customers They are expected to use retail energy and related government facilities in New through innovative $1 billion in energy and services supplier. Jersey, such as the Statue partnerships. For instance, related services over the of Liberty and Ellis Island; we're the exclusive energy next five years.

We are aggressively 131 Wal-Mart stores; and services manager for pursuing new customers Continued growth of our 125 Kmart locations. Akron, Ohio-based in states that have deregu natural gas business is Republic Technologies lated their electric utility In 1999, we generated expanding our share of International, Inc., the industries, including $60 million in new the energy market.

I - ... h0 Ohio, Pennsylvania. West management, and energy d  ! 11(,(

Virginia. Kentucky and management services. In Tennessee. 1999, the Group generated more than $500 million Together. our resources in revenues, maintaining op -Ifo*, "I now include:

a pattern of double digit

• Interests in more than growth that is expected In 1999. we acquired 7,700 oil and natural gas to continue this year Atlas Gas Marketing, wells Inc., near Pittsburgh. Facilities Services is

• Drilling rights to nearly Pennsylvania; Volunteer playing a key role one million acres Energy. .L.C., of in expanding our Columbus. Ohio: and

• Proved reserves of customer base. Its Belden Energy Services 450 billion cubic feet II companies Company of North equivalent of natural located in Indiana.

Canton. Ohio. These three gas and oil Maryland. New York. Ohio.

enterprises are now part

• 5,000 miles of pipelines Pennsylvania and of our FirstEnergy Our natural gas business Trading Services, Inc., Virginia serve a produced approximately subsidiary, which acquires diverse group

$158 million in revenues and arranges for the of national and in 1999, and sales are delivery of natural gas regional customers, such expected to more and electricity to retail as Fabri Centers of than triple to nearly customers of our unrcgn America's more than

$500 million in 2000.

lated affiliates. With the 1,000 Jo Ann stores and Our Facilities Services OfficeMax's more than addition of these companies, Group has emerged as 900 stores throughout the we serve approximately one of the nation's largest United States.

50.000 natural gas cus providers of mechanical Such relationships tomers in the Midwest.

Retail Kilowatt Hour Sales contracting, facilities greatly enhance our (Milions)

We also formed a joint opportunities for venturc Great Ilakes natural gas and 55,864 Energy Partners, L.LC, 55,276 -* 1 electricity sales.

with Range Resources Corporation, of Fort Worth, Texas. The venture combined our natural gas properties and pipelines in the Appalachian Basin, '96 97 98 99 Re LI Reuatedi Unrepoulated located in portions of

(FaIr Iet, clock'c'kisc) (1ro (Ie C lice-i e1t dwcriscdlllel 'S i~clucds Jaccobs Field. hoIce ot Ohio, Pennsylvania, West management, and energy the (ACvcelard Virginia, Kentucky and management services. In hldi(*s; lrid the Tennessee. 1999, the Group generated all-electric more than $500 million Prime Outlets Together, our resources a(t Grove Cite.

in revenues, maintaining now include: n~orth* o!f a pattern of double-digit 1ittsbu rreh;

• Interests in more than growth that is expected In 1999, we acquired 7,700 oil and natural gas to continue this year. lratural(40s Atlas Gas Marketing, wells trun~smissimz*

Inc., near Pittsburgh, Facilities Services is ftcili:,; metal

• Drilling rights to nearly tib ricatiomfr.tr Pennsylvania; Volunteer playing a key role one million acres a reechulaical Energy, L.L.C., of in expanding our coll'trrictir el

• Proved reserves of customer base. Its Columbus, Ohio; and eCIt (tl MC V Belden Energy Services 450 billion cubic feet 11 companies equivalent of natural located in Indiana, Company of North gas and oil Maryland, New Canton, Ohio. These three enterprises are now part

• 5,000 miles of pipelines York, Ohio, of our FirstEnergy Pennsylvania and Our natural gas business Virginia - serve a Trading Services, Inc., produced approximately subsidiary, which acquires diverse group

$158 million in revenues II and arranges for the of national and in 1999, and sales are delivery of natural gas regional customers, such expected to more and electricity to retail as Fabri-Centers of than triple to nearly customers of our unregu America's more than

$500 million in 2000.

lated affiliates. With the 1,000 Jo-Ann stores and Our Facilities Services OfficeMax's more than addition of these companies, Group has emerged as 900 stores throughout the we serve approximately one of the nation's largest United States.

50,000 natural gas cus providers of mechanical Such relationships tomers in the Midwest. Retail Kilowatt-Hour Sales contracting, facilities (Millions) greatly enhance our We also formed a joint opportunities for 60,483 56,545 venture - Great Lakes natural gas and 55,864 Energy Partners, L.L.C. 5;r 124_-,ý electricity sales.

with Range Resources Corporation, of Fort Worth, Texas. The venture combined our natural gas properties and pipelines in the Appalachian Basin, '96 '97 '98 '99 located in portions of 3 3Regulated Unregulated c)

Protecting the ENVIRONMENT The boiler - part of a replacements - common

$184-million project industry practices that will improve the plant's have been followed for performance and reduce decades under the agency's fuel costs and emissions own oversight - have by using a by-product triggered provisions of from the neighboring the Act that require Since passage of the British Petroleum's installation of costly Clean Air Act in 1970, Toledo Refinery as fuel. environmental controls, we've spent more than even though capacity The fluidized-bed boiler,

$4 billion on environmental and emissions the world's largest to be protection efforts. As a have not fired by petroleum coke, result, we have significantly increased.

will generate low-cost reduced emissions from steam to make electricity In fact, low-NOx our plants. Since 1990 at our plant and petroleum burners, scheduled alone, we've cut sulfur products at the refinery. for installation in dioxide (S02) by more 2000, will cut than a third and nitrous Despite the success of NOx emissions at oxide (NOx) by more our recycling and other the plant to less than a half. environmental protection than half of 1990 efforts, the U.S.

We're also developing levels.

Environmental Protection new markets for recycled Agency (U.S. EPA) has New York and materials from our plants.

taken legal action Connecticut have taken For instance, by-products against our 2,233-MW steps to join the U.S.

from the air-quality Sammis Plant, along EPA's action, alleging control system at our with 43 coal-fired plants that emissions from Bruce Mansfield Plant owned by other utilities coal-fired plants in the are being used to produce in the Midwest and South, Midwest and South are wallboard at a new state alleging violation of the to blame for pollution of-the-art facility that Clean Air Act. in those states. Scientific Interest Expense began operating in 1999 ($ Millions) evidence does not adjacent to the plant. The U.S. EPA claims that 509 maintenance, repairs and support their claims. 543 556 And, we're scheduled to 557' begin operation later this year of a new petroleum coke-fired boiler at our Bay Shore Power Plant.

'96 '97 '98 '99 10

According to the Ozone Transport Assessment Group, formed by U.S.

EPA, the ozone problem in the Northeast would remain essentially unchanged even if all man-made emissions from the Midwest were eliminated.

We are confident that all our plants, including Sammis, are in compliance with the Clean Air Act.

(Rightt) We ,c, spent,ahalf billion dollars oil cnv-iromnental protection (it sconiis: (fur left, cl~ch-'Z'isc) rccy'cled plant matrials are bein** used to prodoce"

.-Wallbo~ard; anr Seneca Pallpetd-StorIýac ltsdroelectric Generatin,6 Station: the fl'" petroleum coke'fi red t)ailer ander c'onstnic'tion at oaur Ba\' Shore' Plant.

Retainin g and Expanding Our C U S T 0 M E R BASE in Ohio (Abo-ze() Ou~r In addition, we spent O ur work to enhance Care Web $30 million to prune and customer and community site otters remove trees that interfere Conv'enient service will be a key scrz*icc's; with our lines - the primary advantage when Ohio's (lipper rgt cause of service interrup electricity market opens cloeuz wisc) tions. We were the only (I elistonller to competition next year.

investor-owned electric Servi1ce rupC,,?*!C I tativ'e The Interactive Voice utility in Ohio to receive (tit onr hiPh-wech Response System at our the Tree Line USA award Call Center: ine new state-of-the-art from The National Arbor c/'eec hie serine customer call center in Day Foundation, which

,hectric Scrvice reliubheý tile Akron is helping us respond honors environmentally

/uan ce River faster to more customer sensitive utility tree-care in Toledo. Ohio, calls. When severe weather programs.

one of tie Co*m mun iic~s hits, the new technology Reliability was further also enables our crews to enhanced with high-tech restore power more quickly.

services. We're working with vocational continuing our agencies to recruit workers tradition of sup with physical or mental porting efforts challenges.

that make our In addition, we're providing neighborhoods financial support to better places to hundreds of community systems that provide live and work. based educational, civic, instantaneous assessments For example, a Girl Scout health and human services, and remote operation of camp and a Youngstown and cultural organi critical distribution sports arena are just two zations, through the system equipment.

of the many organizations FirstEnergy We plan to spend in our service area Foundation. We

$200 million this year on benefiting from our also offer program additional maintenance Investment Recovery support to schools and system improvements, Facility. Investment and social service such as substation upgrades, Recovery - which has agencies in an effort equipment replacements generated $15 million in to help improve the and distribution system revenues and avoided quality of life in expansions. costs by selling recycled the communities We're also using new and reusable equipment we serve. Our technology to make it and material from our corporate philosophy is more convenient for operations - donated that community service is customers to do business refurbished lighting to good business.

with us. Our new each organization.

Customer Care Web site Investment Recovery also www.firstenergycorp.corn supports the diverse needs

- enables customers to of our service area by Electric Customers Served pay bills, obtain account 2,185,533 information, conduct 2,166,912 2,159,636 transactions, and learn 2,141,829 more about programs we offer.

Our commitment to customers goes beyond providing reliable energy 13

Board of DIRECTOR S

"';(.tcd - ?cft to righlt: ,Jesse T" iltlliuams, Sr., AnIthol( ,. Alcxander, i.. Peter ouri, DI* Carol A. cUortwerlit.

,Stmlit lcit touright: Robert (. Suq'uc, llio i, F Cout -uv, (ucie M. Sm'rt, Russell IV Mui*i: Robe rt 13.licisic?; It.

li/L')rt I." it t/ildicad, Puu! .1. Polzeers, Glennll Il, tlcudh:c)s.

1.I PIL I R B URG. 53 ROBERT B. HEISLER, JR., 51 GILENN H. MEADOWS, 70 GEORGE NI. SMART, 54 Chairman of the Board and President of Key Capital Retired, formerly President Chairman of the Board and Chief Executive Officer of Partners, Cleveland, Ohio; and and Chief Executive Officer President of Phoenix Packaging FirstEnergy Corp. Director of Group Executive Vice President of McNeil Corporation, Akron, Corporation, North Canton, FirstEnergy Corp. since 1997 of KeyCorp. Member, Ohio. Chairperson, Audit Ohio. Member, Audit and and of Ohio Edison since 1989. Compensation and Nominating Committee; Member, Finance committees. Director committees. Director of Compensation and Nuclear of FirstEnergy Corp. since ANTI I\'i J. AIAIXANDER. 48 FirstEnergy Corp. since 1998. committees. Director of 1997 and of Ohio Edison from President of FirstEnergy Corp. FirstEnergy Corp. since 1997 1988-1997.

and Director of FirstEnergy ROBERT I I H1OIADI). 70 and of Ohio Edison from Corp. since February 1, 2000. Retired, formerly Chairman of 1981-1997. JFSSET. I XIIAJIAXS. SR., 00 the Board, President and Chief Retired, formerly Vice President DR. CAROl A. CAP \TWRIGIfI, 58 Executive Officer of Weirton PAUL J. POWERS. 65 of Human Resources Policy, President, Kent State Steel Corporation, Weirton, Chairman of the Board and Employment Practices and University, Kent, Ohio. West Virginia. Chairperson, Chief Executive Officer of Systems of The Goodyear Tire Chairperson, Nominating Compensation Committee; Commercial Intertech Corp., & Rubber Company, Akron, Committee; Member, Finance Member, Audit Committee. Youngstown, Ohio. Chairperson, Ohio. Member, Audit and Committee. Director of Director of FirstEnergy Corp. Finance Committee; Member, Nominating committees.

FirstEnergy Corp. since 1997 since 1997 and of Ohio Edison Compensation Committee. Director of FirstEnergy Corp.

and of Ohio Edison from from 1980-1997. Director of FirstEnergy Corp. since 1997 and of Ohio Edison 1992-1997. since 1997 and of Ohio Edison from 1992-1997.

RUSSEII, NV.MAIERI, 63 from 1992-1997.

VILLIA.M F.CO\M\AY, 09 Retired, formerly Chairman of the Board and Chief Executive ROBERT C_SAVAGE. 62 President of William F. Conway

& Associates, Inc., Scottsdale, Officer of Republic Engineered President and Chief Executive Arizona. Chairperson, Nuclear Steels, Inc., Massillon, Ohio. Officer of Savage & Associates, Committee; Member, Audit Member, Compensation and Inc., Toledo, Ohio. Member, Committee. Director of Nuclear committees. Director Finance and Nominating commit FirstEnergy Corp. since 1997 of FirstEnergy Corp. since 1997 tees. Director of FirstEnergy and of the former Centerior and of Ohio Edison from Corp. since 1997 and of the Energy Corporation from 1995-1997. former Centerior Energy 1994-1997. Corporation from 1990-1997.

Ii

Manag e m e n t CHANGES H. Peter Burg, formerly president and chief executive FIRSTENERGY NUCLEAR CORP. OFFICERS officer, was elected chairman and chief executive officer.

OFFICERS Robert F Saunders Anthony J. Alexander, formerly executive vice president Presidentand Chief H. Peter Burg Nuclear Officer of and general counsel, was elected president and a member Chairman and Chief FENOC Executive Officer of the Board of Directors.

Anthony J. Alexander Lew W. Myers Senior Vice President Arthur R. Garfield, formerly vice president, was elected President FENOC - Beaver Valley senior vice president and president of FirstEnergy Arthur R. Garfield Senior Vice President Guy G. Campbell Services Corp. Leila L. Vespoli, formerly associate Vice President John A. Gill FENOC- Davis-Besse general counsel, was elected vice president and general Senior Vice President John K. Wood counsel.

Richard H. Marsh Vice President Vice Presidentand FENOC - Perry Kevin J. Keough, formerly partner at the Cleveland Chief FinancialOfficer office of McKinsey & Company, was elected vice Leila L. Vespoli REGIONAL president. Mark T. Clark, formerly managing director Vice Presidentand OFFICERS General Counsel Lynn M. Cavalier of business development for FirstEnergy Services Corp.,

Earl T. Carey Regional President was elected vice president of the subsidiary. Jeffrey R. Vice President Eastern Kalata, formerly group accounting manager for North Mary Beth Carroll Thomas A. Clark Regional President American Refractories Co., was elected assistant Vice President Southern controller. Kathryn W. Dindo Vice President R. Joseph Hrach President Robert F. Saunders, formerly vice president, nuclear Douglas S. Elliott PennsylvaniaPower operations, Susquehanna Nuclear Site, for PP&L, Inc., Vice President Charles E. Jones was named president and chief nuclear officer of Kevin J. Keough Regional President Vice President Northern FirstEnergy Nuclear Operating Company (FENOC).

Guy L. Pipitone Stephen E. Morgan Lew W. Myers, formerly vice president FENOC Vice President Regional President Perry, was named senior vice president FENOC Stanley F. Szwed Central Beaver Valley. Vice President James M. Murray Regional President Nancy C. Ashcom Western Corporate Secretary Thomas C. Navin John E. Paganie Treasurer Regional Vice President Western Harvey L. Wagner Controller David W. Whitehead Regional Vice President Jeffrey R. Kalata Northern Assistant Controller Randy Scilla Assistant Treasurer Edward J. Udovich Assistant Corporate Secretary

Mana g e m en t REPORT The consolidated financial statements were prepared accountants and the internal auditors; recommendation to by the management of FirstEnergy Corp., who takes the Board of Directors of independent accountants to conduct responsibility for their integrity and objectivity. The the normal annual audit and special purpose audits as may statements were prepared in conformity with generally be required; and reporting to the Board of Directors the accepted accounting principles and are consistent with Committee's findings and any recommendation for changes other financial information appearing elsewhere in in scope, methods or procedures of the auditing functions.

this report. Arthur Andersen LLP, independent public The Committee also reviews the results of management's accountants, have expressed an opinion on the programs to monitor compliance with the Company's Company's consolidated financial statements. policies on business ethics and risk management. The Audit Committee held six meetings in 1999.

The Company's internal auditors, who are responsible to the Audit Committee of the Board of Directors, review the results and performance of operating units within the Company for adequacy, effectiveness and reliability of Richard H. Marsh accounting and reporting systems, as well as managerial Vice President and and operating controls.

Chief Financial Officer The Audit Committee consists of five nonemployee directors whose duties include: consideration of the adequacy of the internal controls of the Company and the objectivity of financial reporting; inquiry into the Harvey L. Wagner number, extent, adequacy and validity of regular and Controller and special audits conducted by independent public Chief Accounting Officer Report of INDEPENDENT PUBLIC ACCOUNTANT S TO TIlE STOC(HIOIL(I DE S AND BOARI) OF 1)IR( T(ORS O(F FIRSTLN! RGY CORP.:

We have audited the accompanying consolidated bal includes assessing the accounting principles used and ance sheets and consolidated statements of capitalization significant estimates made by management, as well as of FirstEnergy Corp. (an Ohio corporation) and sub evaluating the overall financial statement presentation.

sidiaries as of December 31, 1999 and 1998, and the We believe that our audits provide a reasonable basis related consolidated statements of income, common stock for our opinion.

holders' equity, preferred stock, cash flows and taxes for In our opinion, the financial statements referred to each of the three years in the period ended December 31, above present fairly, in all material respects, the financial 1999. These financial statements are the responsibility of position of FirstEnergy Corp. and subsidiaries as of the Company's management. Our responsibility is to December 31, 1999 and 1998, and the results of their express an opinion on these financial statements based on operations and their cash flows for each of the three years our audits.

in the period ended December 31, 1999, in conformity We conducted our audits in accordance with generally with generally accepted accounting principles.

accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, ARTHUR ANDERSEN LLP on a test basis, evidence supporting the amounts and Cleveland, Ohio disclosures in the financial statements. An audit also February 11, 2000 16

FIRSTENERcY CORP.

Selected Financial Data (In thousands, except per share amounts)

For the Years Ended December 31, 1999 1998 1997 1996 1995 Revenues $ 6,319,647 $ 5,874,906 $ 2,961,125 $2,521,788 $2,500,770 Income Before Extraordinary Item $ 568,299 $ 441,396 $ 305,774 $ 302,673 $ 294,747 Net Income $ 568,299 $ 410,874 $ 305,774 $ 302,673 $ 294,747 Earnings per Share of Common Stock:

Before Extraordinary Item $2.50 $1.95 $1.94 $2.10 $2.05 After Extraordinary Item $2.50 $1.82 $1.94 $2.10 $2.05 Dividends Declared per Share of Common Stock $1.50 $1.50 $1.50 $1.50 $1.50 Total Assets $18,224,047 $18,192,177 $18,261,481 $9,218,623 $9,035,112 Capitalization at December 31:

Common Stockholders' Equity $ 4,563,890 $ 4,449,158 $ 4,159,598 $2,503,359 $2,407,871 Preferred Stock:

Not Subject to Mandatory Redemption 648,395 660,195 660,195 211,870 211,870 Subject to Mandatory Redemption 256,246 294,710 334,864 155,000 160,000 Long-Term Debt 6,001,264 6,352,359 6,969,835 2,712,760 2,786,256 Total Capitalization $ 11,469,795 $11,756,422 $12,124,492 $5,582,989 $5,565,997 Price Range of Common Stock FirstEnergy Corp.'s Common Stock is listed on the New York Stock Exchange and is traded on other registered exchanges.

1999 1998 First Ouarter Hinh-Low 33-3/16 27-15/16 31-5/8 27-7/8 Second Quarter High-Low 32-1/8 27-15/16 31-7/8 28-1/2 Third Quarter High-Low 31-5/16 24-3/4 31-5/16 27-1/16 Fourth Quarter High-Low 26-9/16 22-1/8 34-1/16 29-3/16 Yearly High-Low 33-3/16 22-1/8 34-1/16 27-1/16 Pricesare based on reportspublished in The Wall Street Journalfor New York Stock Exchange Composite Transactions.

Holders of Common Stock There were 181,806 and 180,679 holders of the Company's Common Stock of the 232,454,287 shares as of December 31, 1999 and 231,959,541 shares as of January 31, 2000, respectively. Information regarding retained earnings available for payment of cash dividends is given in Note 3A.

17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations As Ohio approaches customer choice of energy suppliers in 2001, we continue to develop our unregulated retail sales FirstEnergy Corp. was formed when the merger of Ohio strategy, in part through acquisitions, which expand the Edison Company (OE) and Centerior Energy Corporation products and services we can offer customers. In addition, (Centerior) became effective on November 8, 1997. The related changes to our sales and marketing activities were merger was accounted for using purchase accounting under made during 1999 to further support our retail sales strategy.

the guidelines of Accounting Principles Board Opinion No.

As a result, we increased our functional integration across 16, "Business Combinations." Under these guidelines, the organization lines to improve economies and efficiencies to results of operations for the combined entity are reported better serve customers in unregulated markets. By taking from the point of consummation forward. As a result, our advantage of the new markets made available by advancing financial statements for 1997 reflect 12 months of operations deregulation, we now cover a 13-state market area in the for OE and its wholly owned subsidiary, Pennsylvania northeastern portion of the U.S. This expanded market has Power Company (Penn), but include only 7 weeks yielded significant multi-year contracts for us in 1999. We (November 8, to December 31, 1997) for the former also completed major information systems during 1999, Centerior companies - - The Cleveland Electric Illuminating which improve our capabilities while resolving Year 2000 Company (CEI) and The Toledo Edison Company (TE).

concerns.

Results for 1998 and 1999 include operations for the entire year for OE and Penn (OE companies), CEI and TE. Total revenues increased by $445 million in 1999 and

$2.9 billion in 1998 compared to the prior year results. In During 1998 and 1999, we took additional steps to 1999, the increased revenues resulted primarily from contri expand our portfolio of energy-related products and services butions from the Electric Utility Operating Companies' by completing a number of acquisitions and forming a joint (EUOC) business segment and newly acquired businesses, venture. During 1998, FirstEnergy Facilities Services Group, which were partially offset by reduced revenues from the LLC (FE Facilities), a wholly owned subsidiary, acquired FETS business segment due to refocusing its activities to eight companies, which mainly provide heating, ventilating support our retail marketing activities. The EUOC currently and air-conditioning (HVAC) services. FE Facilities made represent the more traditional vertically integrated electric one additional acquisition, in 1999, bringing its total number utility operations. In 1998, inclusion of a full 12 months of of acquisitions to 11 over the past three years. On June 8, results for the former Centerior companies in the EUOC 1998, we acquired MARBEL Energy Corporation (MARBEL),

business segment compared to only 7 weeks in 1997 was a fully integrated natural gas company. On September 30, the largest factor contributing to the change in electric 1999, MARBEL formed a joint venture with Range sales, adding $2.2 billion. The sources of the increases Resources Corporation that combines both companies' assets in revenues during 1999 and 1998 are summarized in the for the development of Appalachian Basin oil and natural following table.

gas properties and related gas-gathering and transportation Sources of Revenue Changes 1 999 1998 systems. This joint venture is accounted for using the equity method of accounting with our proportionate share of earn (In millions) ings reflected in our consolidated financial results. During Electric sales $213.2 $2,204.7 1999, three additional retail gas acquisitions were added to Other electric utility revenues 3.1 115.0 FirstEnergy Trading Services, Inc. (FETS). All acquisitions Total EUOC 216.3 2,319.7 in 1998 and 1999 were accounted for using purchase FETS (220.1) 367.6 accounting and are included in our consolidated results from New businesses acquired 341.5 220.0 Unregulated electric sales 54.0 6.5 their respective acquisition dates. 53.0 Gain on sale of investment Net Revenue Increase $444.7 $2,913.8 18

Electric Sales only 1% of total revenues in 1999, these sales increased substantially compared to 1998 and are expected to be a EUOC revenues increased by $216.3 million in 1999, major source of electric sales growth in future years.

compared to 1998, benefiting from increased kilowatt-hour sales, offset in part by lower unit prices. Residential, com mercial and industrial customers all contributed to higher Nonelectric Sales EUOC retail sales. Retail kilowatt-hour sales increased due Following an initial expansion of its trading activities to strong consumer-driven economic growth and, to a lesser in 1998, FETS revenues decreased significantly in 1999, extent, the weather. Over 6,500 new EUOC customers were compared to the prior year because of refocusing its activities added in 1999. Weather-induced electricity demand in the on supporting our retail marketing activities. Revenues from wholesale market and additional available internal genera new business acquisitions increased significantly in both tion combined to increase sales to wholesale customers. 1999 and 1998 due to acquisitions made by FE Facilities EUOC retail kilowatt-hour sales in 1998 increased and FETS. In addition, we recognized a gain of $53 million substantially over 1997 due to the merger with the former from the sale of a partnership investment in the fourth quarter Centerior companies. Excluding the impact of the merger, of 1999, which is reflected in other revenues. This one-time retail sales for the OE companies in 1998 were approximate gain was offset by nonrecurring expenses recognized in the ly the same as the previous year after setting a new record in fourth quarter of 1999, as further described below.

1997. Residential and commercial kilowatt-hour sales bene fited from continued growth in the retail customer base, with Operating Expenses over 11,000 new retail customers added in 1998 compared to Total expenses increased $255.5 million in 1999 compared 1997. The closure of an electric arc furnace by a large steel 1998 reflecting higher levels of other expenses for EUOC to customer in the latter part of 1997 and a general decline in and facilities services activities, as well as additional electricity demand by steel manufacturers due to intense depreciation and amortization. This increase in other expenses foreign competition contributed to lower industrial sales in was partially offset by lower fuel and purchased power 1998, compared to the prior year. Changes in EUOC kilo costs, as well as reduced expenses for FETS. In 1998, total watt-hour sales by customer class in 1999 and 1998 are expenses increased $2.4 billion from the previous year summarized in the following table. primarily due to the inclusion of a full 12 months of expenses EUOC MVII Sales Changes 1 99 9 1 9981 for the former Centerior companies, compared to only 7 Residential 6.7% 1.7% weeks of expenses in the 1997 results.

Commercial 3.9% 3.5%

Industrial 3.4% (3.6)% Fuel and purchased power costs were $106.7 million Total Retail 4.4% lower in 1999, compared to 1998. The EUOC purchased Wholesale 28.4% 8.9% power costs accounted for all of the reduction. Much of the Total Sales 6.6% 1.4% improvement occurred in the second quarter due to the

• Reflects OE companies only absence of unusual conditions experienced in 1998, which resulted in an additional $77.4 million of purchased power Unregulated kilowatt-hour sales showed strong sales costs. Those costs were incurred during a period of record growth in 1999, with sales to commercial customers heat and humidity in late June 1998, which coincided with a accounting for most of the increase. Revenues from com regional power shortage resulting in high prices for purchased mercial customers represented $53.1 million of the $60.5 power. Unscheduled outages at several of our power plants million of 1999 revenues from unregulated markets. Over at the same time required the EUOC to purchase significant 12,000 new unregulated customers were served in 1999. amounts of power on the spot market. Although above normal Several major contracts were entered into in 1999, including temperatures were also experienced in 1999, the EUOC one with Republic Technologies International, Inc. (RTI). On maintained a stronger capacity position compared to the August 17, 1999, FirstEnergy Services Corporation (FSC), a previous year and better met customer demand from their wholly owned subsidiary, signed a Master Energy Services own internal generation. In 1998, fuel and purchased power and Supply Agreement with RTI. They are expected to use costs were up $497.5 million compared to 1997. Excluding more than $1 billion in energy and related services over the the merger impact of the Centerior companies in 1998, fuel five-year contract period. FSC will manage: the supply and and purchased power costs for the OE companies increased delivery of all of RTI's electricity and natural gas needs; $74.4 million for the reasons discussed above.

RTI's HVAC requirements; and other energy-related services for RTI. Although unregulated kilowatt-hour sales comprised 19

Other expenses for the EUOC rose in 1999 compared to Interest Expense 1998 for several reasons. Refueling outages at Beaver Valley Interest expense decreased $33.7 million in 1999, from Unit 2 and the Perry Plant, as well as full ownership of those the prior year, because of long-term debt redemptions and units and Beaver Valley Unit 1 following the Duquesne refinancings. In 1998, interest expense increased, compared Light Company (Duquesne) asset swap in early December to 1997, due to the inclusion of the former Centerior 1999 and nonrecurring swap-related liabilities assumed, companies. Excluding the impact of the merger, interest increased our nuclear expenses. The EUOC incurred addi on long-term debt for the OE companies continued to trend tional costs in 1999 related to improving the availability of downward due to refinancings and redemptions of long their fossil generating units. Also contributing to the increase term debt.

in other EUOC expenses in 1999 were higher customer, sales and marketing expenses resulting from marketing pro grams and information system costs; higher distribution Extraordinary Item expenses from storm damage, as well as line and meter The Pennsylvania Public Utility Commission's (PPUC) maintenance; and a nonrecurring expense related to a change authorization of Penn's rate restructuring plan led to the dis in employee vacation benefits. In 1998, other expenses for continued application of Statement of Financial Accounting the EUOC increased from the previous year principally as a Standards No. 71 (SFAS 71), "Accounting for the Effects of result of the Centerior merger. Excluding the former Certain Types of Regulation," to Penn's generation business Centerior companies, 1998 nonnuclear costs decreased from in 1998. This resulted in a write-down of $30.5 million, or the previous year due primarily to the absence of expenses $. 13 per common share, of its nuclear generating unit invest related to a 1997 voluntary retirement program and estimat ment and the recognition of a portion of such investment -

ed severance costs which increased other expenses for that recoverable through future customer rates - - as a regulatory year. Lower nonnuclear expenses in 1998 were partially off asset.

set by higher nuclear costs at the Beaver Valley Plant.

With FETS activities changing in 1999 to support our Net Income retail marketing efforts, other expenses in this business As a result of higher sales revenues, the absence of segment decreased significantly from 1998. Also, FETS unusually high purchased power costs experienced in 1998 expenses were significantly lower in 1999 due to the and lower interest costs, net income increased significantly absence of costs incurred in 1998 associated with credit in 1999 to $568.3 million, compared to $410.9 million in losses and related replacement power costs resulting from 1998 and $305.8 million in 1997. Basic and diluted earnings the period of sharp price increases in the spot market for per share of common stock were $2.50 in 1999, compared to electricity in June 1998. The acquisitions in the facility ser $1.82 in 1998 and $1.94 in 1997.

vices and natural gas businesses, as well as costs attributable to unregulated sales activity, combined to increase other Capital Resources and Liquidity expenses in both 1999 and 1998 from the previous years.

We continue to pursue cost efficiencies to fund strategic Accelerated cost recovery in connection with the OE rate investments while also strengthening our financial position.

reduction plan was the primary factor contributing $160.6 During 1999, our financing costs continued their downward million to the increase in depreciation and amortization in trend. Net redemptions of long-term debt and preferred stock 1999, compared to the prior year. Excluding the effect of the totaled $528.9 million, including $18.3 million of optional former Centerior companies, depreciation and amortization redemptions in 1999. In addition, we completed $359.6 million in 1998 decreased $14.2 million from the prior year mainly of refinancings. Combined, these actions are expected to due to the net effect of the OE and Penn rate plans. generate annual savings of about $50 million. The average cost of long-term debt was reduced to 7.65% in 1999 from 8.02% at the end of 1997. As of December 31, 1999, our common equity as a percentage of capitalization increased to 40% from 34% at the end of 1997, following the merger with Centerior.

20

We had approximately $111.8 million of cash and in the Seneca pumped-storage hydroelectric generation plant temporary investments and $417.8 million of short-term from GPU, Inc. for $43 million. The purchase makes avail indebtedness on December 31, 1999. Our unused borrowing able 87 megawatts of additional capacity and provides CEI capability included $136.5 million under revolving lines of with full ownership of the plant. On December 3, the credit. At the end of 1999, the EUOC had the capability to generating asset transfer with Duquesne was completed.

issue $2.1 billion of additional first mortgage bonds on the Duquesne transferred 1,436 megawatts it owned at five basis of property additions and retired bonds. Based upon generating plants to us in exchange for 1,328 megawatts at applicable earnings coverage tests and their respective three plants owned by our EUOC. The transaction provides charters, OE, Penn and TE could issue $1.6 billion of us with exclusive ownership and operating control of all preferred stock (assuming no additional debt was issued). generating assets which were formerly jointly owned and CEI has no restrictions on the issuance of preferred stock. operated under the Central Area Power Coordination Group agreement.

Our cash requirements in 2000 for operating expenses, construction expenditures, scheduled debt maturities, pre Additional generating capacity is under construction, and ferred stock redemptions, and common stock repurchases is expected to go into service in early June 2000 to supply are expected to be met without issuing new securities. electricity for peak demand periods, reducing our requirements During 1999, we reduced our total debt by approximately for purchased power. In total, we will be adding 390

$300.0 million. We have cash requirements of approximately megawatts of gas-fired combustion turbines by the end of

$2.8 billion for the 2000-2004 period to meet scheduled 2000 to meet this need. Another 150 megawatts of diesel maturities of long-term debt and sinking fund requirements generation will be available to us on a limited basis during of preferred stock. Of that amount, approximately $494 mil the summer of 2000.

lion applies to 2000. During 1999, we repurchased and We completed four acquisitions during 1999, which retired 4.6 million shares of our common stock at an average further expand energy-related products and services available price of $28.08 per share. We have authority to repurchase to our customers. FE Facilities acquired one company up to 15 million shares of common stock. We also entered having total annual revenues of approximately $14 million.

into an equity forward purchase contract, which enables us Collectively, the FE Facilities companies now produce more to purchase an additional 1.4 million shares in November than $500 million in annual revenues and have approximately 2000 at an average price of $24.22 per share. 3,400 employees. In addition, FETS acquired three retail gas Our capital spending for the period 2000-2004 is expected companies having combined annual revenues of $239 million to be about $3.0 billion (excluding nuclear fuel), of which and more than 43,000 customers. These three acquisitions approximately $650 million applies to 2000. Investments for further expanded our retail natural gas business in Ohio and additional nuclear fuel during the 2000-2004 period are esti surrounding states, bringing our total annual revenues in mated to be approximately $497 million, of which about that business to approximately $500 million.

$159 million applies to 2000. During the same period, our MARBEL and Range Resources Corporation formed a nuclear fuel investments are expected to be reduced by joint venture, Great Lakes Energy Partners L.L.C., on approximately $480 million and $106 million, respectively, September 30, 1999. This joint venture combined each com as the nuclear fuel is consumed. Also, we have operating pany's Appalachian oil and natural gas properties and related lease commitments, net of trust cash receipts, of nearly $782 gas gathering and transportation systems with the objective million for the 2000-2004 period, of which approximately of lowering operating costs, and increasing natural gas mar

$146 million relates to 2000. ket share in the Appalachian Basin. As exclusive marketing Two transactions were completed in 1999, which modi agent for the new joint venture, we continue to expand our fied our portfolio of generation resources. On July 26, CEI network of gas assets to supply our retail customer base.

completed its purchase of the remaining 20 percent interest 21

Interest Rate Risk Our exposure to fluctuations in market interest rates is our investments in capital trusts effectively reduce future mitigated since a significant portion of our debt has fixed lease obligations, also reducing interest rate risk. Changes in interest rates, as noted in the table below. We are subject to the market value of our nuclear decommissioning trust funds the inherent interest rate risks related to refinancing maturing are recognized by making a corresponding change to the debt by issuing new debt securities. As discussed in Note 2, decommissioning liability, as described in Note 1.

Comparison of Carrying Value to Fair Value 2000 2001 2002 2003 2004 Thereafter Total Fair Value (Dollars in millions)

Investments other than Cash and Cash Equivalents:

Fixed Income $111 $ 60 $ 84 $ 97 $314 $1,370 $2,036 $2,022 Average interest rate 6.5% 7.0% 7.7% 7.7% 7.8% 7.5% 7.5%

Liabilities Long-term Debt:

Fixed rate $456 $105 $724 $459 $591 $3,009 $5,344 $5,307 Average interest rate 7.1% 8.6% 7.9% 8.0% 7.7% 7.5% 7.6%

Variable rate $190 $ 847 $1,037 $1,024 Average interest rate 7.5% 4.4% 5.0%

Short-term Borrowings $418 $ 418 $ 418 Average interest rate 6.5% 6.5%

Preferred Stock $ 38 $ 85 $ 20 $ 2 $ 2 $ 137 $ 284 $ 280 Average dividend rate 8.9% 8.9% 8.9% 7.5% 7.5% 8.8% 8.8%

Market Risk - Commodity Prices allows retail customers to purchase electricity from alterna tive energy suppliers. Recent legislation provides for similar We are exposed to market risk due to fluctuations in elec changes beginning in 2001 in Ohio. Our existing regulatory tricity, natural gas and oil prices. To manage the volatility plans provide us with a solid foundation to position us to relating to these exposures, we use a variety of derivative meet the challenges we are facing by significantly reducing instruments, including forward contracts, options and futures fixed costs and lowering rates to a more competitive level.

contracts. These derivatives are used principally for hedging The transition plan ultimately approved by the Public purposes and, to a lesser extent, for trading purposes. A sen Utilities Commission of Ohio (PUCO) will supersede our sitivity analysis has been prepared to estimate our exposure current Ohio rate plans.

to the market risk of our commodity position. A hypothetical 10 percent adverse shift in quoted market prices in the near OE's Rate Reduction and Economic Development Plan, term on both our trading and nontrading instruments would approved by the PUCO in 1995, and FirstEnergy's Rate not have a material effect on our consolidated financial posi Reduction and Economic Development Plan for CEI and tion, results of operations or cash flows as of or for the year TE, approved in January 1997, provide interim rate credits ended December 31, 1999. to customers during the periods covered by the plans. The OE regulatory plan provides for accelerated capital recovery.

The regulatory plan for CEI and TE includes a commitment Outlook to accelerate depreciation on the regulatory books. The We continue to face many competitive challenges as the CEIJTE plan does not provide for full recovery of nuclear electric utility industry undergoes significant changes, operations; accordingly, CEI and TE ceased application of including changing regulation and the entrance of more SFAS 71 for their nuclear operations when implementation energy suppliers into the marketplace. Retail wheeling, of the FirstEnergy regulatory plan became probable.

which began in 1999 in our Pennsylvania service area, 22

In July 1999, Ohio's new electric utility restructuring leg are expected to be recovered over the period of 2001 islation, which will allow Ohio electric customers to select through early 2004 for OE; 2001 through 2007 for TE; their generation suppliers beginning January 1, 2001, was and 2001 through 2010 for CEI.

signed into law. Among other things, the new law provides When the transition plan is approved by the PUCO, the for a 5% reduction on the generation portion of residential application of SFAS 71 to OE's generation business and customers' bills and the opportunity to recover transition the nonnuclear generation businesses of CEI and TE will costs, including regulatory assets, from January 1, 2001 be discontinued. In the meantime, we will continue to through December 31, 2005. The period for the recovery of bill and collect cost-based rates relating to CEI's and TE's regulatory assets only can be extended up to December 31, nonnuclear operations and all of OE's operations through 2010. The PUCO was authorized to determine the level of the end of 2000. If the transition plans ultimately approved transition cost recovery, as well as the recovery period for by the PUCO for OE, CEI and TE do not provide adequate the regulatory assets portion of those costs, in considering recovery of their nuclear generating unit investments and each Ohio electric utility's transition plan application. regulatory assets, there would be a charge to earnings On behalf of our Ohio electric utility operating compa which could have a material adverse effect on our results nies - - OE, CEI and TE - - we refiled our transition plan of operations and financial condition and those of our Ohio on December 22, 1999. The plan was originally filed with EUOC. The EUOC believe they will continue to bill and the PUCO on October 4, 1999, but was refiled to conform to collect cost-based rates for their transmission and distribu PUCO rules established on November 30, 1999. The new tion services, which will remain regulated; accordingly, it filing also included additional information on our plans to is appropriate that the EUOC continue the application of turn over control, and perhaps ownership, of our transmis SFAS 71 to those operations after December 31, 2000.

sion assets to the Alliance Regional Transmission For Penn, application of SFAS 71 was discontinued for Organization (Alliance), which is discussed below. the generation portion of its business in 1998 following The transition plan itemizes, or unbundles, the current PPUC approval of its restructuring plan. Under the plan, a price of electricity into separate components - including phase-in period for customer choice began with 66% of generation, transmission, distribution and transition charges. Penn's customers able to select their energy supplier begin As required by the PUCO's rules, our filing also included ning January 2, 1999, and all remaining customers able to our proposals on corporate separation of our regulated and select their energy providers starting January 1, 2001. Penn unregulated operations, operational and technical support is entitled to recover $236 million of stranded costs through changes needed to accommodate customer choice, an educa a competitive transition charge that started in 1999 and ends tion program to inform customers of their options under the in 2006.

law, and how our transmission system will be operated to In the second half of 1999, we received notification of ensure access to all users. Under the plan, customers who pending legal actions based on alleged violations of the remain with OE, CEI, or TE as their generation provider will Clean Air Act at our W. H. Sammis Plant involving the continue to receive savings under our rate plans, expected to states of New York and Connecticut as well as the U.S.

total $759 million between 2000 and 2005. In addition, cus Department of Justice. The civil complaint filed by the U.S.

tomers will save $358 million through reduced charges for Department of Justice requests installation of "best available taxes and a 5% reduction in the price of generation for resi control technology" as well as civil penalties of up to dential customers beginning January 1, 2001. Customer $27,500 per day. We believe the Sammis Plant is in full prices are expected to be frozen through a five-year market compliance with the Clean Air Act and the legal actions development period (2001-2005), except for certain limited are without merit. However, we are unable to predict the statutory exceptions including the 5% reduction in the price outcome of this litigation. Penalties could be imposed if the of generation for residential customers. The plan proposes Sammis Plant continues to operate without correcting the recovery of generation-related transition costs of approxi alleged violations and a court determines that the allegations mately $4.5 billion ($4.0 billion, net of deferred income are valid. We expect the Sammis Plant to continue to operate taxes) over the market development period; transition costs while the matter is being decided.

related to regulatory assets aggregating approximately

$4.2 billion ($2.9 billion, net of deferred income taxes) 23

CEI and TE have been named as "potentially responsible sheet as either an asset or liability measured at its fair value.

parties" (PRPs) for three sites listed on the Superfund SFAS 133 requires that changes in the derivative's fair value National Priorities List and are aware of their potential be recognized currently in earnings unless specific hedge involvement in the cleanup of several other sites. Allegations accounting criteria are met. Special accounting for qualify that CEI and TE disposed of hazardous waste at these sites, ing hedges allows a derivative's gains and losses to offset and the amount involved are often unsubstantiated and sub related results on the hedged item in the income statement.

ject to dispute. Federal law provides that all PRPs for a par We have not completed quantifying the impacts of adopting ticular site be held liable on a joint and several basis. If CEI SFAS 133 on our financial statements or determined the and TE were held liable for 100% of the cleanup costs of all method of its adoption. However, SFAS 133 could increase sites, the ultimate liability could be as high as $340 million. volatility in earnings and other comprehensive income. We However, we believe that the actual cleanup costs will be anticipate adopting the new statement on its amended effec substantially lower than $340 million, that CEI's and TE's tive date of January 1, 2001.

share of any cleanup costs will be substantially less than 100% and that most of the other PRPs are financially able to contribute their share. CEI and TE have accrued liabilities of Year 2000 Update

$5.4 million as of December 31, 1999, based on estimates of Based on the results of our remediation and testing the costs of cleanup and their proportionate responsibility efforts, we filed documents with the North American for such costs. CEI and TE believe that the waste disposal Electric Reliability Council, Nuclear Regulatory costs will not have a material adverse effect on their finan Commission, PUCO and PPUC that as of June 30, 1999, cial condition, cash flows or results of operations. our generation, transmission, and distribution systems were ready to serve customers in the year 2000. We have since On October 27, 1999, the Federal Energy Regulatory experienced no failures or interruptions of service to our Commission (FERC) approved our plan to transfer our customers resulting from the Year 2000 issue, which was transmission assets to American Transmission Systems Inc. consistent with our expectations. We spent $84.9 million on (ATSI), a wholly owned subsidiary. The PUCO approved Year 2000-related costs through December 31, 1999, which the transfer in February 2000. PPUC and Securities and was slightly lower than previously estimated. Of this total, Exchange Commission regulatory approvals are also $68.3 million was capitalized since those costs are attributable required. The new subsidiary represents a first step toward to the purchase of new software for total system replacements the goal of establishing or becoming part of a larger inde because the Year 2000 solution comprises only a portion of pendent, regional transmission organization (RTO). We the benefits resulting from the system replacements. The believe that such an entity better addresses the FERC's stated remaining $16.6 million was expensed as incurred. We do transmission objectives of non-discriminatory service, while not believe there are any continuing Year 2000 issues to be providing for streamlined and cost-effective operation. In addressed, nor any additional material Year 2000 expenditures.

working toward that goal, we joined with four other companies

- American Electric Power, Consumers Energy, Detroit Edison and Virginia Power - to form the Alliance RTO. Forward-Looking Information On June 3, 1999, the Alliance submitted an application to This discussion includes forward-looking statements the FERC to form an independent, for profit RTO. On based on information currently available to management December 15, 1999, the FERC issued an order conditionally that are subject to certain risks and uncertainties. These approving the Alliance's application. statements typically contain, but are not limited to, the terms anticipate,potential,expect, believe, estimate and similar words. Actual results may differ materially due to the speed Recently Issued Accounting Standard and nature of increased competition and deregulation in the In June 1998, the Financial Accounting Standards electric utility industry, economic or weather conditions Board (FASB) issued Statement of Financial Accounting affecting future sales and margins, changes in markets for Standards No. 133 (SFAS 133), "Accounting for Derivative energy services, changing energy market prices, legislative Instruments and Hedging Activities." SFAS 133 establishes and regulatory changes, and the availability and cost of accounting and reporting standards requiring that every capital and other similar factors.

derivative instrument (including derivative instruments embedded in other contracts) be recorded on the balance 24

FIRSTENERGY CORP.

(In thousands, except per share amounts)

Consolidated Statements of Income For the Years Ended December 31, 1999 1998 1997 REVENUES:

Electric sales $5,192,876 $4,979,718 $2,774,996 260,887 257,750 142,742 Other-electric utilities 198,336 502,990 Facilities services 43,145 190,634 410,728 Trading services 242 172,260 28,374 Other 6,319,647 5,874,906 2,961,125 Total revenues EXPENSES: 486,267 876,986 983,735 Fuel and purchased power Other expenses: 851,146 1,632,638 1,492,461 Electric utilities 469,176 184,440 Facilities services 44,032 196,474 517,001 Trading services 126,926 41,337 Other 474,679 937,976 758,865 Provision for depreciation and amortization 550,908 282,163 544,052 General taxes 4,784,228 4,528,747 2,138,287 Total expenses 1,535,419 1,346,159 822,838 INCOME BEFORE INTEREST AND INCOME TAXES I

NET INTEREST CHARGES: 284,180 542,819 Interest expense 509,169 Allowance for borrowed funds used during construction (7,642) (3,469)

(13,355) and capitalized interest 27,818 76,479 65,799 Subsidiaries' preferred stock dividends 572,293 600,976 308,529 Net interest charges 394,827 303,787 208,535 INCOME TAXES 441,396 305,774 INCOME BEFORE EXTRAORDINARY ITEM 568,299 EXTRAORDINARY ITEM (NET OF INCOME TAX BENEFIT OF

$21,208,000) (Note 1) -- (30,522) -_

$ 568,299 $ 410,874 $ 305,774 NET INCOME WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 227,227 226,373 157,464 BASIC AND DILUTED EARNINGS PER SHARE OF COMMON STOCK (Note 3C):

Income before extraordinary item $2.50 $1.95 $1.94

(.13)

Extraordinary item (Net of income taxes) (Note 1) _

$1.82 $1.94 Net income $2.50

$1.50 $1.50 DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $1.50 The accompanyingNotes to ConsolidatedFinancialStatements are an integralpart of these statements.

25

FIRST'IENERGY CORP.

Consolidated Balance Sheets (In thousands)

At December 31, 1999 1998 ASSETS CURRENT ASSETS:

Cash and cash equivalents $ 111,788 $ 77,798 Receivables Customers (less accumulated provisions of $6,719,000 and $6,397,000, respectively, for uncollectible accounts) 322,687 239,183 Other (less accumulated provisions of $5,359,000 and $46,251,000, respectively, for uncollectible accounts) 445,242 322,186 Materials and supplies, at average cost Owned 154,834 145,926 Under consignment 99,231 110,109 Prepayments and other 167,894 171,931 1,301,676 1,067,133 PROPERTY, PLANT AND EQUIPMENT:

In service 14,645,131 14,961,664 Less-Accumulated provision for depreciation 5,919,170 6,012,761 8,725,961 8,948,903 Construction work in progress 367,380 293,671 9,093,341 9,242,574 INVESTMENTS:

Capital trust investments (Note 2) 1,281,834 1,329,010 Letter of credit collateralization (Note 2) 277,763 277,763 Nuclear plant decommissioning trusts 543,694 358,371 Other 599,443 391,855 2,702,734 2,356,999 DEFERRED CHARGES:

Regulatory assets 2,543,427 2,887,437 Goodwill 2,129,902 2,167,968 Other 452,967 470,066 5,126,296 5,525,471

$18,224,047 $18,192,177 LIABILITIES AND CAPITALIZATION CURRENT LIABILITIES:

Currently payable long-term debt and preferred stock $ 762,520 $ 876,470 Short-term borrowings (Note 4) 417,819 254,470 Accounts payable 360,379 247,353 Accrued taxes 409,724 401,688 Accrued interest 125,397 141,575 Other 301,572 255,158 I

22377.411 2,176,714 I - '-

CAPITALIZATION (See Consolidated Statements of Capitalization):

Common stockholders' equity 4,563,890 4,449,158 Preferred stock of consolidated subsidiaries Not subject to mandatory redemption 648,395 660,195 Subject to mandatory redemption 136,246 174,710 Ohio Edison obligated mandatorily redeemable preferred securities of subsidiary trust holding solely Ohio Edison subordinated debentures 120,000 120,000 Long-term debt 6,001,264 6,352,359 11,469,795 11,756,422 DEFERRED CREDITS:

Accumulated deferred income taxes 2,231,265 2,282,864 Accumulated deferred investment tax credits 269,083 286,154 Other postretirement benefits 498,184 463,642 Nuclear plant decommissioning costs 562,295 375,958 Other 816,014 850,423 4,376,841 4,259,041 COMMITMENTS AND CONTINGENCIES (Notes 2 and 5)

$18,224,047 $18,192,177 The accompanying Notes to ConsolidatedFinancialStatements are an integralpart of these balance sheets.

26

FIRSTENERGY CORP.

Consolidated Statements of Capitalization (Dollarsin thousands, except per share amounts)

At December 3 1, 1999 1998 COMMON STOCKHOLDERS' EQUITY:

Common stock, $.10 par value-authorized 300,000,000 shares $ 23,707

$ 23,245 232,454,287 and 237,069,087 shares outstanding, respectively 3,722,375 3,846,513 Other paid-in capital (195) (439)

Accumulated other comprehensive income (Note 3D) 945,241 718,409 Retained earnings (Note 3A)

Unallocated employee stock ownership plan common stock (139,032)

(126,776) 6,778,905 and 7,406,332 shares, respectively (Note 3B) 4,563,890 4,449,158 Total common stockholders' e&iuity Total common stockholders' equity Optional Number of Shares Outstanding Redemption Price 1999 1998 Per Share Aggregate PREFERRED STOCK OF CONSOLIDATED SUBSIDIARIES (Note 3E):

Ohio Edison Company (OE)

Cumulative, $100 par value Authorized 6,000,000 shares Not Subject to Mandatory Redemption:

152,510 $103.63 $ 15,804 15,251 15,251 3.90% 152,510 176,280 176,280 108.00 19,038 17,628 17,628 4.40%

136,560 136,560 103.50 14,134 13,656 13,656 4.44%

144,300 144,300 103.38 14,917 14,430 14,430 4.56%

609,650 609,650 63,893 60,965 60,965 Cumulative, $25 par value Authorized 8,000,000 shares Not Subject to Mandatory Redemption:

7.75% 4,000,000 4,000,000 25.00 100,000 100,000 1 100,000 Total Not Subject to Mandatory Redemption 4,609,650 4,609,650 $163,893 160,965 160,965 Cumulative, $100 par value Subject to Mandatory Redemption (Note 3F):

8.45% 100,000 150,000 10,000 15,000 (5,000) (5,000)

Redemption Within One Year 150,000 5,000 10,000 Pennsylvania Power Company Cumulative, $100 par value Authorized 1,200,000 shares Not Subject to Mandatory Redemption:

40,000 4,000 4,000 4.24% 40,000 103.13 $ 4,125 41,049 41,049 105.00 4,310 4,105 4,105 4.25%

60,000 60,000 102.98 6,179 6,000 6,000 4.64%

60,000 6,000 7.64%

250,000 250,000 25,000 25,000 7.75%

58,000 5,800 8.00%

Total Not Subject to Mandatory Redemption 391,049 509,049 $ 14,6141 39,105 1 50,905 Subject to Mandatory Redemption (Note 3F):

7.625% 150,000 150,000 106.101 $ 15,9151 15,000 1 15,000 OE OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY TRUST HOLDING SOLELY OE SUBORDINATED DEBENTURES (Note 3G):

Cumulative, $25 par value Authorized 4,800,000 shares Subject to Mandatory Redemption:

9.00% 4,800,000 4,800,000 120,000 1 120,000 27

FIIRSTEINEREGY C ORP.

Consolidated Statements of Capitalization (Cont'd) (Dollarsin thousands, except per share amounts)

At December 31, 1999 1998 Number of Shares Optional Outstanding Redemption Price 1999 1998 Per Share Aggregate PREFERRED STOCK OF CONSOLIDATED SUBSIDIARIES (Cont'd)

Cleveland Electric Illuminating Company Cumulative, without par value Authorized 4,000,000 shares Not Subject to Mandatory Redemption:

$ 7.40 Series A 500,000 500,000 $ 101.00 $ 50,500 $ 50,000 $ 50,000

$ 7.56 Series B 450,000 450,000 102.26 46,017 45,071 45,071 Adjustable Series L 474,000 474,000 100.00 47,400 46,404 46,404

$42.40 Series T 200,000 200,000 500.00 100,000 96,850 96,850 Total Not Subject to Mandatory Redemption 1,624,000 1,624,000 $243,917 238,325 238,325 Subject to Mandatory Redemption

$ 7.35 Series C 90,000 100,000 101.00 $ 9,090 9,110 10,110

$88.00 Series E 3,000 6,000 1,000.00 3,000 3,000 6,000

$91.50 Series Q 21,430 32,144 1,000.00 21,430 21,430 32,144

$88.00 Series R 50,000 50,000 55,000 55,000

$90.00 Series S 55,250 74,000 61,170 79,920 219,680 262,144 33,520 149,710 183,174 Redemption Within One Year (33,464) (33,464)

Total Subject to Mandatory Redemption 219,680 262,144 $ 33,520 116,246 149,710 Toledo Edison Company Cumulative, $100 Par Value Authorized 3,000,000 shares Not Subject to Mandatory Redemption:

$ 4.25 160,000 160,000 104.63 $ 16,740 16,000 16,000

$ 4.56 50,000 50,000 101.00 5,050 5,000 5,000

$ 4.25 100,000 100,000 102.00 10,200 10,000 10,000

$ 8.32 100,000 100,000 102.46 10,246 10,000 10,000

$ 7.76 150,000 150,000 102.44 15,366 15,000 15,000

$ 7.80 150,000 150,000 101.65 15,248 15,000 15,000

$10.00 190,000 190,000 101.00 19,190 19,000 19,000 900,000 900,000 92,040 90,000 90,000 Cumulative, $25 Par Value Authorized 12,000,000 shares Not Subject to Mandatory Redemption:

$2.21 1,000,000 1,000,000 25.25 25,250 25,000 25,000

$2.365 1,400,000 1,400,000 27.75 38,850 35,000 35,000 Adjustable Series A 1,200,000 1,200,000 25.00 30,000 30,000 30,000 Adjustable Series B 1,200,000 1,200,000 25.00 30,000 30,000 30,000 4,800,000 4,800,000 124,100 120,000 120,000 Total Not Subject to Mandatory Redemption 5,700,000 5,700,000 $216,140 210,000 210,000 Cumulative, $100 par value Subject to Mandatory Redemption:

$9.375 16,900 $ -

-- 1,690 Redemption Within One Year -- (1,690)

Total Subject to Mandatory Redemption - 1 16,900 $ --

28

FiRSTENERGY CORP.

Consolidated Statements of Capitalization (Cont'd)

LONG-TERM DEBT (Note 3H) (Interest rates reflect weighted average rates) (In thousands)

FIRST MORTGAGE BONDS SECURED NOTES UNSECURED NOTES TOTAL At December 31, 1999 1998 1999 1998 1999 1998 1999 1998 Ohio Edison Co.

Due 1999-2004 7.81% $ 509,265 $ 659,265 7.57'* $ 269,152 $ 203,062 5.40% $ 742,225 $566,500 Due 2005-2009 6.88% 80,000 80,000 7.65'* 49,534 48,194 Due 2010-2014 Due 2015-2019 6.89'* 66,000 113,725 Due 2020-2024 7.99% 219,460 225,960 7.02'* 129,942 317,943 Due 2025-2029 5.75'* 119,734 119,734 Due 2030-2034 5.45'* 14,800 14,800 Total-Ohio Edison 808,725 965,225 649,162 817,458 742,225 566,500 $ 2,200,112 $ 2,349,183 Cleveland Electric Illuminating Co.

Due 1999-2004 7.54% 295,000 295,000 7.64% 559,650 704,180 5.58% 27,700 Due 2005-2009 8.72% 425,000 425,000 7.29% 271,700 271,700 Due 2010-2014 8.00% 78,700 78,700 Due 2015-2019 6.74% 412,630 412,630 Due 2020-2024 9.00% 150,000 150,000 6.66% 264,160 291,860 Due 2025-2029 7.59% 148,843 148,843 Due 2030-2034 4.56% 104,895 104,895 Total-Cleveland Electric 870,000 870,000 1,840,578 2,012,808 27,700 - 2,738,278 2,882,808 Toledo Edison Co.

Due 1999-2004 7.90% 179,925 265,325 7.84% 266,000 284,500 7.28% 226,100 138,750 Due 2005-2009 7.13% 30,000 30,000 10.00% 150 150 Due 2010-2014 4.98% 31,250 10.00% 700 700 Due 2015-2019 8.00% 67,300 67,300 Due 2020-2024 7.89% 210,600 266,700 Due 2025-2029 5.90% 13,851 13,851 Due 2030-2034 [

I Total-Toledo Edison 179,925 265,325 587,751 693,601 226,950 [ 139,6001 994,626 1,098,526 Pennsylvania Power Co.

Due 1999-2004 7.19% 79,370 79,857 6.45% 28,200 23,000 5.90% 5,200 Due 2005-2009 9.74% 4,870 4,870 Due 2010-2014 9.74% 4,870 4,870 5.40% 1,000 1,000 Due 2015-2019 9.74% 4,903 4,903 6.28% 45,325 45,325 Due 2020-2024 8.33% 33,750 33,750 6.68% 27,182 32,382 Due 2025-2029 6.03% 47,972 47,972 Due 2030-2034 Total-Penn Power 127,763 128,250 149,679 149,679 5,200 282,642 277,929 OES Fuel 6.85% 81,260 79,524 81,260 79,524 Bay Shore Power 6.72% 147,500 147,500 147,500 147,500 MARBEL Energy Corp. 6.40% 12,418 8.00% 692 692 12,418 6.61% 14,782 10,237 7.29% 1,887 3,917 16,669 14,154 Facilities Services Group Total $1,986,413 $2,228,800 $3,470,712 $3,923,225 $1,004,654 $710,017 6,461,779 6,862,042 Capital lease obligations 158,303 199,491 Net unamortized premium on debt 105,2381 127,142 Long-term debt due within one year (724,056ý (836,3161 6,001,264 6,352,359 Total long-term debt TOTAL CAPITALIZATION $11,469,795 $11,756,422 The accompanying Notes to ConsolidatedFinancialStatements are an integralpart of these statements.

29

FIRSTENlE1RGY CORP.

Consolidated Statements of Common Stockholders' Equity (Dollarsin thousands)

Accumulated Other Unallocated Comprehensive Other Comprehensive ESOP Income Number Par Paid-In Income Retained Common Note 3D of Shares Value Capital Note 3D Earnings Stock Balance, January 1, 1997 152,569,437 $1,373,125 $ 728,261 $(659) $ 557,642 $(155,010)

Net income $305,774 305,774 Minimum liability for unfunded retirement benefits, net of

$26,000 of income taxes 45 45 Comprehensive income $305,819 Centerior acquisition 77,637,704 (1,350,104) 2,907,387 Allocation of ESOP shares 1,874 8,033 Cash dividends on common stock (216,770)

Balance, December 31, 1997 230,207,141 23,021 3,637,522 (614) 646,646 (146,977)

Net income $410,874 410,874 Minimum liability for unfunded retirement benefits, net of

$53,000 of income taxes 175 175 Comprehensive income $411,049 Business acquisitions 6,861,946 686 203,496 Allocation of ESOP shares 5,495 7,945 Cash dividends on common stock (339,111)

Balance, December 31, 1998 237,069,087 23,707 3,846,513 (439) 718,409 (139,032)

Net income $568,299 568,299 Minimum liability for unfunded retirement benefits, net of

$160,000 of income taxes 244 244 Comprehensive income $568,543 Reacquired common stock (4,614,800) (462) (129,671)

Centerior acquisition adjustment (468)

Allocation of ESOP shares 6,001 12,256 Cash dividends on common stock (341,467)

Balance, December 31, 1999 232,454,287 $ 23,245 $3,722,375 $(195) $ 945,241 $(126,776)

Consolidated Statements of Preferred Stock (Dollars in thousands)

Not Subject to Subject to Mandatory Redemption Mandatory Redemption Par or Par or Number Stated Number Stated of Shares Value of Shares Value Balance, January 1, 1997 5,118,699 $211,870 5,200,000 $160,000 Centerior acquisition 7,324,000 448,325 319,408 201,243 Redemptions 8.45% Series (50,000) (5,000)

Balance, December 31, 1997 12,442,699 660,195 5,469,408 356,243 Redemptions 8.45% Series (50,000) (5,000)

$ 7.35 Series C (10,000) (1,000)

$88.00 Series E (3,000) (3,000)

$91.50 Series Q (10,714) (10,714)

$9.375 Series (16,650) (1,665)

Balance, December 31, 1998 12,442,699 660,195 5,379,044 334,864 Redemptions 7.64% Series (60,000) (6,000) 8.00% Series (58,000) (5,800) 8.45% Series (50,000) (5,000)

$ 7.35 Series C (10,000) (1,000)

$88.00 Series E (3,000) (3,000)

$91.50 Series Q (10,714) (10,714)

$90.00 Series S (18,750) (18,750)

$9.375 Series (16,900) (1,690)

Balance, December 31, 1999 12,324,699 $648,395 5,269,680 $294,710 30 The accompanying Notes to ConsolidatedFinancialStatements are an integralpart of these statements.

FIRSTENERGY CORP.

Consolidated Statements of Cash Flows (In thousands)

For the Years Ended December 31, 1999 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income $ 568,299 $ 410,874 $ 305,774 Adjustments to reconcile net income to net cash from operating activities:

Provision for depreciation and amortization 937,976 758,865 474,679 Nuclear fuel and lease amortization 104,928 94,348 61,960 Other amortization, net (10,730) (13,007) (1,187)

Deferred income taxes, net (45,054) (23,763) (29,093)

Investment tax credits, net (19,661) (22,070) (16,252)

Allowance for equity funds used during construction (201)

Extraordinary item 51,730 Receivables (203,567) 35,515 21,846 Materials and supplies 19,631 (14,235) (18,909)

Accounts payable 82,578 (73,205) 57,087 Other 53,906 (49,727) 733 Net cash provided from operating activities 1,488,306 1,155,325 856,437 CASH FLOWS FROM FINANCING ACTIVITIES:

New Financing Common stock 204,182 1,558,237 Long-term debt 364,832 499,975 89,773 Ohio Schools Council prepayment program 116,598 Short-term borrowings, net 163,327 Redemptions and Repayments Common stock 130,133 Preferred stock 52,159 21,379 5,000 Long-term debt 847,006 804,780 335,909 Short-term borrowings, net 48,354 47,251 Common Stock Dividend Payments 341,467 339,111 237,848 Net cash provided from (used for) financing activities (842,606) (392,869) 1,022,002 CASH FLOWS FROM INVESTING ACTIVITIES:

Centerior acquisition 1,582,459 Property additions 624,901 652,852 203,839 Cash investments (41,213) 47,804 8,934 Other 28,022 82,239 62,237 Net cash used for investing activities 611,710 782,895 1,857,469 Net increase (decrease) in cash and cash equivalents 33,990 (20,439) 20,970 Cash and cash equivalents at beginning of period* 77,798 98,237 77,267 Cash and cash equivalents at end of year $ 111,788 $ 77,798 $ 98,237 SUPPLEMENTAL CASH FLOWS INFORMATION:

Cash Paid During the Year Interest (net of amounts capitalized) $ 520,072 $ 536,064 $ 281,670 Income taxes $441,067 $ 326,268 $ 265,615

"*1997beginning balance includes Centeriorcash and cash equivalents as of the November 8, 1997 acquisitiondate.

The accompanying Notes to ConsolidatedFinancialStatements are an integralpart of these statements.

31

FI*RSTE NERGY CORIP.

Consolidated Statements of Taxes (In thousands)

For the Years Ended December 31, 1999 1998 1997 GENERAL TAXES:

Real and personal property $ 276,227 $ 292,503 $ 137,816 State gross receipts 220,117 217,633 118,390 Social security and unemployment 37,019 27,363 16,551 Other 10,689 13,409 9,406 Total general taxes $ 544,052 $ 550,908 $ 282,163 PROVISION FOR INCOME TAXES:

Currently payable Federal $ 433,872 $ 313,960 $ 235,728 State 25,670 14,452 18,152 459,542 328,412 253,880 Deferred, net Federal (36,021) (14,259) (23,204)

State (9,033) (9,504) (5,889)

(45,054) (23,763) (29,093)

Investment tax credit amortization (19,661) (22,070) (16,252)

Total provision for income taxes $ 394,827 $ 282,579 $ 208,535 RECONCILIATION OF FEDERAL INCOME TAX EXPENSE AT STATUTORY RATE TO TOTAL PROVISION FOR INCOME TAXES:

Book income before provision for income taxes $ 963,126 $ 693,453 $ 514,309 Federal income tax expense at statutory rate $ 337,094 $ 242,709 $ 180,008 Increases (reductions) in taxes resulting from Amortization of investment tax credits (19,661) (22,070) (16,252)

State income taxes, net of federal income tax benefit 10,814 3,216 7,971 Amortization of tax regulatory assets 23,908 28,915 30,735 Amortization of goodwill 19,341 17,868 2,685 Preferred stock dividends 22,988 19,250 5,956 Other, net 343 (7,309) (2,568)

Total provision for income taxes $ 394,827 $ 282,579 $ 208,535 ACCUMULATED DEFERRED INCOME TAXES AT DECEMBER 31:

Property basis differences $1,878,904 $1,938,735 $2,091,207 Deferred nuclear expense 421,837 436,601 454,902 Customer receivables for future income taxes 159,577 159,526 262,428 Competitive transition charge 115,277 135,730 Deferred sale and leaseback costs (129,775) (61,506) (121,974)

Unamortized investment tax credits (96,036) (102,085) (116,593)

Unused alternative minimum tax credits (101,185) (190,781) (243,039)

Other (17,334) (33,356) (22,626)

Net deferred income tax liability $2,231,265 $2,282,864 $2,304,305 The accompanying Notes to ConsolidatedFinancialStatements are an integralpart of these statements.

32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting CEI and TE sell substantially all of their retail customer Policies: accounts receivable to Centerior Funding Corp. under an asset-backed securitization agreement which expires in The consolidated financial statements include FirstEnergy 2001. Centerior Funding completed a public sale of $150 Corp. (Company) and its principal electric utility operating million of receivables-backed investor certificates in 1996 in subsidiaries, Ohio Edison Company (OE), The Cleveland a transaction that qualified for sale accounting treatment.

Electric Illuminating Company (CEI), Pennsylvania Power Company (Penn) and The Toledo Edison Company (TE). Regulatory Plans - The PUCO approved OE's The Company and its utility subsidiaries are referred to Rate Reduction and Economic Development Plan in 1995 throughout as "Companies." The Company's 1997 results of and FirstEnergy's Rate Reduction and Economic operations include the results of CEI and TE for the period Development Plan for CEI and TE in January 1997. These November 8, 1997 through December 31, 1997. The consol regulatory plans were to maintain current base electric rates idated financial statements also include the Company's other for OE, CEI and TE through December 31, 2005. At the end principal subsidiaries: FirstEnergy Facilities Services Group, of the regulatory plan periods, OE base rates were to be LLC. (FE Facilities); FirstEnergy Trading Services, Inc.

reduced by $300 million (approximately 20 percent below (FETS); and MARBEL Energy Corporation (MARBEL). FE current levels) and CEI and TE base rates were to be Facilities is the parent company of several heating, ventilat reduced by a combined $310 million (approximately 15 ing, air conditioning and energy management companies. percent below current levels). The plans also revised the FETS markets and trades electricity and natural gas in Companies' fuel cost recovery methods. The Companies unregulated markets. MARBEL is a fully integrated natural formerly recovered fuel-related costs not otherwise included gas company. Significant intercompany transactions have in base rates from retail customers through separate energy been eliminated. The Companies follow the accounting poli rates. In accordance with the respective regulatory plans, cies and practices prescribed by the Public Utilities OE's, CEI's and TE's fuel rates would be frozen through Commission of Ohio (PUCO), the Pennsylvania Public the regulatory plan period, subject to limited periodic adjust Utility Commission (PPUC) and the Federal Energy ments. As part of OE's and FirstEnergy's regulatory plans, Regulatory Commission (FERC). The preparation of finan transition rate credits were implemented for customers, cial statements in conformity with generally accepted which are expected to reduce operating revenues for OE by accounting principles requires management to make periodic approximately $600 million and CEI and TE by approxi estimates and assumptions that affect the reported amounts mately $391 million during the regulatory plan period.

of assets, liabilities, revenues and expenses. Certain prior In July 1999, Ohio's new electric utility restructuring year amounts have been reclassified to conform with the legislation which will allow Ohio electric customers to current year presentation.

select their generation suppliers beginning January 1, 2001, Revenues - The Companies' principal business is was signed into law. Among other things, the new law pro providing electric service to customers in central and north vides for a five percent reduction on the generation portion ern Ohio and western Pennsylvania. The Companies' retail of residential customers' bills and the opportunity to recover customers are metered on a cycle basis. Revenue is recog transition costs, including regulatory assets, from January 1, nized for unbilled electric service through the end of the 2001 through December 31, 2005. The period for the recov year. ery of regulatory assets only can be extended up to December 31, 2010. The PUCO was authorized to determine Receivables from customers include sales to residential, the level of transition cost recovery, as well as the recovery commercial and industrial customers located in the period for the regulatory assets portion of those costs, in Companies' service area and sales to wholesale customers.

considering each Ohio electric utility's transition plan There was no material concentration of receivables at application.

December 31, 1999 or 1998, with respect to any particular segment of the Companies' customers.

33

The Company, on behalf of its Ohio electric utility oper In June 1998, the PPUC authorized a rate restructuring ating companies - - OE, CEI and TE - - on December 22, plan for Penn which essentially resulted in the deregulation 1999 refiled its transition plan under Ohio's new electric of Penn's generation business as of June 30, 1998. Penn was utility restructuring law. The plan was originally filed with required to remove from its balance sheet all regulatory the PUCO on October 4, 1999, but was refiled to conform to assets and liabilities related to its generation business and PUCO rules established on November 30, 1999. The new assess all other assets for impairment. The Securities and filing also included additional information on FirstEnergy's Exchange Commission (SEC) issued interpretive guidance plans to turn over control, and perhaps ownership, of its regarding asset impairment measurement which concluded transmission assets to the Alliance Regional Transmission that any supplemental regulated cash flows such as a com Organization. The PUCO indicated that it will endeavor to petitive transition charge (CTC) should be excluded from the issue its order in the Company's case within 275 days of the cash flows of assets in a portion of the business not subject initial October filing date. to regulatory accounting practices. If those assets are impaired, a regulatory asset should be established if the The transition plan itemizes, or unbundles, the current costs are recoverable through regulatory cash flows.

price of electricity into its component elements - including Consistent with the SEC guidance, Penn reduced its nuclear generation, transmission, distribution and transition charges.

generating unit investments by approximately $305 million, As required by the PUCO's rules, the Company's filing also of which approximately $227 million was recognized as a included its proposals on corporate separation of its regulat regulatory asset to be recovered through a CTC over a ed and unregulated operations, operational and technical seven-year transition period; the remaining net amount of support changes needed to accommodate customer choice,

$78 million was written off. The charge of $51.7 million an education program to inform customers of their options

($30.5 million after income taxes) for discontinuing the under the new law, and how the Company's transmission application of Statement of Financial Accounting Standards system will be operated to ensure access to all users.

(SFAS) No. 71, "Accounting for the Effects of Certain Types Under the plan, customers who remain with OE, CEI, of Regulation" (SFAS 71), to Penn's generation business or TE as their generation provider will continue to receive was recorded as a 1998 extraordinary item on the savings under the Company's rate plans, expected to total Consolidated Statement of Income.

$759 million between 2000 and 2005. In addition, customers will save $358 million through reduced charges for taxes All of the Companies' regulatory assets are being recov and a five percent reduction in the price of generation for ered under provisions of the regulatory plans. In addition, residential customers beginning January 1, 2001. Customer the PUCO has authorized OE to recognize additional capital prices are expected to be frozen through a five-year market recovery related to its generating assets (which is reflected development period (2001-2005), except for certain limited as additional depreciation expense) and additional amortiza statutory exceptions including the five percent reduction in tion of regulatory assets during the regulatory plan period of the price of generation for residential customers. The plan at least $2 billion, and the PPUC had authorized Penn to proposes recovery of generation-related transition costs of accelerate at least $358 million, more than the amounts that approximately $4.5 billion ($4.0 billion, net of deferred would have been recognized if the regulatory plans were not income taxes) over the market development period; transi in effect. These additional amounts are being recovered tion costs related to regulatory assets aggregating approxi through current rates. As of December 31, 1999, OE's and mately $4.2 billion ($2.9 billion, net of deferred income Penn's cumulative additional capital recovery and regulatory taxes) will be recovered over the period of 2001 through asset amortization amounted to $1.048 billion (including early 2004 for OE; 2001 through 2007 for TE; and 2001 Penn's impairment discussed above and CTC recovery). CEI through 2010 for CEL. and TE recognized a fair value purchase accounting adjust ment of $2.55 billion in connection with the FirstEnergy 34

merger; that fair value adjustment recognized for financial Annual depreciation expense in 1999 included approxi reporting purposes will ultimately satisfy the $2 billion asset mately $31.0 million for future decommissioning costs reduction commitment contained in the CEI and TE regula applicable to the Companies' ownership and leasehold inter tory plan. For regulatory purposes, CEI and TE will recog ests in four nuclear generating units. The Companies' future nize the accelerated amortization over the period that their decommissioning costs reflect the increase in their owner rate plan is in effect. ship interests related to the asset transfer with Duquesne Light Company (Duquesne) discussed below in "Common Application of SFAS 71 was discontinued in 1997 Ownership of Generating Facilities." The Companies' share with respect to CEI's and TE's nuclear operations (see of the future obligation to decommission these units is "Regulatory Assets" below) and in 1998 with respect to approximately $1.8 billion in current dollars and (using a Penn's generation operations (as described above). The fol 4.0% escalation rate) approximately $4.5 billion in future dol lowing summarizes net assets included in property, plant and lars. The estimated obligation and the escalation rate were equipment relating to operations for which the application of developed based on site specific studies. Payments for SFAS 71 was discontinued, compared with the respective decommissioning are expected to begin in 2016, when actual company's total assets at December 31, 1999.

decommissioning work begins. The Companies have recov SFAS 71 ered approximately $315 million for decommissioning Discontinued Net Assets Total Assets through their electric rates from customers through (In millions) December 31, 1999. If the actual costs of decommissioning CEI $977 $6,209 the units exceed the funds accumulated from investing TE 530 2,667 amounts recovered from customers, the Companies expect Penn 76 1,016 that additional amount to be recoverable from their cus tomers. The Companies have approximately $543.7 million Property, Plant and Equipment - Property, invested in external decommissioning trust funds as of plant and equipment reflects original cost (except for CEI's, December 31, 1999. This includes additions to the trust TE's and Penn's nuclear generating units which were adjusted funds and the corresponding liability of $123 million as a to fair value), including payroll and related costs such as result of the asset transfer. Earnings on these funds are rein taxes, employee benefits, administrative and general costs, vested with a corresponding increase to the decommission and interest costs. ing liability. The Companies have also recognized an esti The Companies provide for depreciation on a straight mated liability of approximately $36.7 million related to line basis at various rates over the estimated lives of property decontamination and decommissioning of nuclear enrich included in plant in service. The annual composite rate for ment facilities operated by the United States Department of OE's electric plant was approximately 3.0% in 1999, 1998 Energy (DOE), as required by the Energy Policy Act of and 1997. The annual composite rate for Penn's electric 1992.

plant was approximately 2.5% in 1999 and 3.0% in 1998 The Financial Accounting Standards Board (FASB) and 1997. CEI's and TE's composite rates were both approx issued a proposed accounting standard for nuclear decom imately 3.4% in 1999 and 1998. In addition to the straight missioning costs in 1996. If the standard is adopted as pro line depreciation recognized in 1999, 1998 and 1997, OE posed: (1) annual provisions for decommissioning could and Penn recognized additional capital recovery of $95 mil increase; (2) the net present value of estimated decommis lion, $141 million (excluding Penn's impairment) and $172 sioning costs could be recorded as a liability; and (3) income million, respectively, as additional depreciation expense in from the external decommissioning trusts could be reported accordance with their regulatory plans. Such additional as investment income. The FASB subsequently expanded the charges in the accumulated provision for depreciation were scope of the proposed standard to include other closure and

$517 million and $422 million as of December 31, 1999 and removal obligations related to long-lived assets. A revised 1998, respectively. proposal may be issued by the FASB in the first quarter of 2000.

35

Common Ownership of Generating Income Taxes - Details of the total provision for Facilities - The Companies and Duquesne constituted income taxes are shown on the Consolidated Statements of the Central Area Power Coordination Group (CAPCO). The Taxes. Deferred income taxes result from timing differences CAPCO companies formerly owned and/or leased, as tenants in the recognition of revenues and expenses for tax and in common, various power generating facilities. Each of the accounting purposes. Investment tax credits, which were companies is obligated to pay a share of the costs associated deferred when utilized, are being amortized over the recovery with any jointly owned facility in the same proportion as period of the related property. The liability method is used its interest. The companies' portions of operating expenses to account for deferred income taxes. Deferred income tax associated with jointly owned facilities are included in the liabilities related to tax and accounting basis differences are corresponding operating expenses on the Consolidated recognized at the statutory income tax rates in effect when Statements of Income. the liabilities are expected to be paid. Alternative minimum On March 26, 1999, FirstEnergy completed its agree tax credits of $101 million, which may be carried forward ments with Duquesne to exchange certain generating assets. indefinitely, are available to reduce future federal income All regulatory approvals were received by October 1999. In taxes.

December 1999, Duquesne transferred 1,436 megawatts owned by Duquesne at eight CAPCO generating units in Retirement Benefits - The Companies' exchange for 1,328 megawatts at three non-CAPCO power trusteed, noncontributory defined benefit pension plan plants owned by the Companies. The agreements for the covers almost all full-time employees. Upon retirement, exchange of assets, which was structured as a like-kind employees receive a monthly pension based on length of exchange for tax purposes, provides the Companies with service and compensation. In 1998, the Centerior Energy exclusive ownership and operating control of all CAPCO Corporation (Centerior) pension plan was merged into the generating units. The three FirstEnergy plants transferred are FirstEnergy pension plan. The Companies use the projected being sold by Duquesne to a wholly owned subsidiary of unit credit method for funding purposes and were not Orion Power Holdings, Inc. (Orion). The Companies will required to make pension contributions during the three continue to operate those plants until the assets are transferred years ended December 31, 1999. The assets of the pension to the new owners. Duquesne funded decommissioning costs plan consist primarily of common stocks, United States equal to its percentage interest in the three nuclear generating government bonds and corporate bonds.

units that were transferred to FirstEnergy. The Duquesne The Companies provide a minimum amount of noncon asset transfer to the Orion subsidiary could take place by tributory life insurance to retired employees in addition to the middle of 2000. Under the agreements, Duquesne is optional contributory insurance. Health care benefits, which no longer a participant in the CAPCO arrangements after include certain employee deductibles and copayments, are the exchange. also available to retired employees, their dependents and, under certain circumstances, their survivors. The Companies Nuclear Fuel - OE's and Penn's nuclear fuel is pay insurance premiums to cover a portion of these benefits recorded at original cost, which includes material, enrichment, in excess of set limits; all amounts up to the limits are paid fabrication and interest costs incurred prior to reactor load. by the Companies. The Companies recognize the expected CEI and TE severally lease their respective portions of cost of providing other postretirement benefits to employees nuclear fuel and pay for the fuel as it is consumed (see Note and their beneficiaries and covered dependents from the 2). The Companies amortize the cost of nuclear fuel based time employees are hired until they become eligible to on the rate of consumption. The Companies' electric rates receive those benefits.

include amounts for the future disposal of spent nuclear fuel based upon the formula used to compute payments to the DOE.

36

The following sets forth the funded status of the plans and Net pension and other postretirement benefit costs for the three years ended December 31, 1999 were computed as follows:

amounts recognized on the Consolidated Balance Sheets as of Other December 31: Postretirement Benefits Pension Benefits Other 1998 1997 1999 1998 1997 1999 Pension Benefits Postretirement Benefits (In millions) 1999 1998 1999 1998 Service cost $ 28.3 $ 25.0 $ 15.2 $ 9.3 $ 7.5 $ 4.6 (In millions)

Interest cost 102.0 92.5 55.9 40.7 37.6 20.4 Change in benefit obligation: Expected return on plan assets (168.1) (152.7) (99.7) (0.4) (0.3) (0.2)

Benefit obligation as Amortization of transition of January 1 $1,500.1 $1,327.5 $ 601.3 $ 534.1 obligation (asset) (7.9) (8.0) (8.0) 9.2 9.2 8.2 Service cost 28.3 25.0 9.3 7.5 Amortization of prior Interest cost 102.0 92.5 40.7 37.6 service cost 5.7 2.3 2.1 3.3 (0.8) 0.3 Plan amendments - 44.3 - 40.1 Recognized net actuarial 101.6 (17.6) 10.7 loss (gain) - (2.6) (0.9) - -

Actuarial loss (gain) (155.6)

Net increase from Voluntary early retirement program expense - - 54.5 - - 1.9 asset swap 14.8 - 12.5 (95.5) (90.8) (37.8) (28.7) Net benefit cost $ (40.0) $ (43.5) $ 19.1 $62.1 $53.2 $35.2 Benefits paid Benefit obligation as of December 31 1,394.1 1,500.1 608.4 601.3 The health care trend rate assumption is 5.3% in 2000, 5.2% in 2001 and 5.0% for 2002 and later years. Assumed Change in plan assets:

Fair value of plan assets health care cost trend rates have a significant effect on the as of January 1 1,683.0 1,542.5 3.9 2.8 amounts reported for the health care plan. An increase in the Actual return on plan assets 220.0 231.3 0.6 0.7 health care trend rate assumption by one percentage point Company contribution - - 0.4 0.4 would increase the total service and interest cost compo Benefits paid (95.5) (90.8) -

assets nents by $4.5 million and the postretirement benefit obliga Fair value of plan 1,683.0 4.9 3.9 tion by $72.0 million. A decrease in the same assumption by as of December 31 1,807.5 one percentage point would decrease the total service and Funded status of plan 413.4 182.9 (603.5) (597.4)

Unrecognized actuarial interest cost components by $3.5 million and the postretire loss (gain) (303.5) (110.8) 24.9 30.6 ment benefit obligation by $58.2 million.

Unrecognized prior service cost 57.3 63.0 24.1 27.4 Supplemental Cash Flows Information Unrecognized net transition All temporary cash investments purchased with an initial obligation (asset) (10.1) (18.0) 120.1 129.3 maturity of three months or less are reported as cash equiva Prepaid (accrued)

$ 157.1 $ 117.1 $(434.4) $(410.1) lents on the Consolidated Balance Sheets. At December 31, benefit cost 1999 and 1998, cash and cash equivalents included $83 mil Assumptions used as of December 31: lion and $26 million, respectively, to be used for the Discount rate 7.75% 7.00% 7.75% 7.00% redemption of long-term debt in the first quarter of 2000 and Expected long-term return in 1999, respectively. The Companies reflect temporary cash on plan assets 10.25% 10.25% 10.25% 10.25% investments at cost, which approximates their fair market Rate of compensation increase 4.00% 4.00% 4.00% 4.00% value. Noncash financing and investing activities included capital lease transactions amounting to $36.2 million, $61.8 million and $3.0 million for the years 1999, 1998 and 1997, respectively. Commercial paper transactions of OES Fuel, Incorporated (OES Fuel) (a wholly owned subsidiary of OE) that have initial maturity periods of three months or less are reported net within financing activities under long-term debt and are reflected as long-term debt on the Consolidated Balance Sheets (see Note 3H).

37

All borrowings with initial maturities of less than one Effective December 31, 1998, the Company began year are defined as financial instruments under generally accounting for its commodity price derivatives, entered into accepted accounting principles and are reported on the specifically for trading purposes, on a mark-to-market basis Consolidated Balance Sheets at cost, which approximates in accordance with Emerging Issues Task Force Issue 98-10, their fair market value. The following sets forth the approxi "Accounting for Energy Trading and Risk Management mate fair value and related carrying amounts of all other Activities," with gains and losses recognized currently in the long-term debt, preferred stock subject to mandatory Consolidated Statements of Income. The contracts that were redemption and investments other than cash and cash equiv marked to market are included in the Consolidated Balance alents as of December 31: Sheets as Deferred Charges and Deferred Credits at their fair 1999 1998 values. The impact on the consolidated financial statements Carrying Fair Carrying Fair was immaterial.

Value Value Value Value (In millions) Regulatory Assets - The Companies recognize, Long-term debt $6,381 $6,331 $6,783 $7,247 as regulatory assets, costs which the FERC, PUCO and Preferred stock $ 295 $ 280 $ 335 $ 340 PPUC have authorized for recovery from customers in Investments other future periods. Without such authorization, the costs would than cash and have been charged to income as incurred. All regulatory cash equivalents: assets are being recovered from customers under the Debt securities Companies' respective regulatory plans. Based on those

-Maturity (5-10 years) $ 475 $ 476 $ 481 $ 520 regulatory plans, at this time, the Companies are continuing

-Maturity (more than to bill and collect cost-based rates relating to all of OE's 10 years) 1,068 1,013 1,109 1,139 operations, CEI's and TE's nonnuclear operations, and Equity securities 17 17 17 17 Penn's nongeneration operations and they continue the All other 852 874 520 533 application of SEAS 71 to those respective operations.

$2,412 $2,380 $2,127 $2,209 OE and Penn recognized additional cost recovery of $257 million, $50 million and $39 million in 1999, 1998 and The fair values of long-iterm debt and preferred stock 1997, respectively, as additional regulatory asset amortization reflect the present value of the cash outflows relating to in accordance with their regulatory plans. FirstEnergy's those securities based on thte current call price, the yield to regulatory plan does not provide for full recovery of CEI's maturity or the yield to call1,as deemed appropriate at the and TE's nuclear operations. As a result, in October 1997, end of each respective year. The yields assumed were based CEI and TE discontinued application of SEAS 71 for their on securities with similar c]haracteristics offered by a corpo- nuclear operations and decreased their regulatory assets of ration with credit ratings siimilar to the Companies' ratings. customer receivables for future income taxes related to the Tim for; -,li1 .vE f ,et . AI U U .4a i U nuclear assets by $794 million.

equivalents represent cost (which approximates fair value) The PUCO indicated that it will endeavor to issue its or the present value of the cash inflows based on the yield order related to the Company's transition plan by mid-2000.

to maturity. The yields assumed were based on financial The application of SIAS 71 to OE's generation business and instruments with similar characteristics and terms. the nonnuclear generation businesses of CEI and TE will be Investments other than cash and cash equivalents include discontinued at that time. If the transition plans ultimately decommissioning trust investments. Unrealized gains and approved by the PUCO for OE, CEI and TE do not provide losses applicable to the decommissioning trusts have been adequate recovery of their nuclear generating unit investments recognized in the trust investment with a corresponding and regulatory assets, there would be a charge to earnings change to the decommissioning liability. The debt and equity which could have a material adverse effect on the results securities referred to above are in the held-to-maturity category. of operations and financial condition for the Company, OE, The Companies have no securities held for trading purposes. CEI and TE. The Companies will continue to bill and collect cost-based rates for their transmission and distribution services, which will remain regulated; accordingly, it is appropriate that the Companies continue the application of SIAS 71 to those respective operations after December 31, 2000.

38

Net regulatory assets on the Consolidated Balance Sheets obligations to creditors before any of its assets could be are comprised of the following: made available to OE as sole owner of OES Finance 1999 1998 common stock.

(In millions)

Nuclear fuel is currently financed for CEI and TE Nuclear unit expenses $1,123.0 $1,164.8 through leases with a special-purpose corporation. As of Customer receivables for future income taxes 444.3 444.0 December 31, 1999, $116 million of nuclear fuel was Rate stabilization program deferrals 420.1 440.1 financed under a lease financing arrangement totaling $145 Sale and leaseback costs 17.8 218.7 million ($30 million of intermediate-term notes and $115 Competitive transition charge 280.4 331.0 million from bank credit arrangements). The notes mature in Loss on reacquired debt 173.9 183.5 August 2000 and the bank credit arrangements expire in Employee postretirement benefit costs 24.8 28.9 September 2000. Lease rates are based on intermediate-term DOE decommissioning and decontamination costs 29.5 32.9 note rates, bank rates and commercial paper rates.

Other 29.6 43.5 Consistent with the regulatory treatment, the rentals for Total $2,543.4 $2,887.4 capital and operating leases are charged to operating expens es on the Consolidated Statements of Income. Such costs for

2. Leases: the three years ended December 31, 1999, are summarized The Companies lease certain generating facilities, nuclear as follows:

fuel, office space and other property and equipment under 1999 1998 1997 cancelable and noncancelable leases. (In millions)

Operating leases OE sold portions of its ownership interests in Perry Unit Interest element $208.6 $201.2 $149.9 1 and Beaver Valley Unit 2 and entered into operating leases Other 110.3 147.8 45.2 on the portions sold for basic lease terms of approximately Capital leases Interest element 17.5 17.6 6.1 29 years. CEI and TE also sold portions of their ownership Other 76.1 66.3 6.0 interests in Beaver Valley Unit 2 and Bruce Mansfield Units $432.9 $207.2 Total rentals $412.5 1, 2 and 3 and entered into similar operating leases for lease terms of approximately 30 years. During the terms of their respective leases, OE, CEI and TE continue to be responsi The future minimum lease payments as of December 31, ble, to the extent of their individual combined ownership 1999, are:

and leasehold interests, for costs associated with the units Operating Leases including construction expenditures, operation and mainte Capital Lease Capital Leases Payments Trusts Net nance expenses, insurance, nuclear fuel, property taxes and (In millions) decommissioning. They have the right, at the end of the 2000 $75.4 $296.5 $ 150.6 $ 145.9 respective basic lease terms, to renew their respective leases. 2001 45.2 307.5 146.1 161.4 They also have the right to purchase the facilities at the 2002 29.7 312.7 169.5 143.2 expiration of the basic lease term or renewal term (if elect 2003 16.0 326.6 176.5 150.1 2004 12.1 291.8 110.7 181.1 ed) at a price equal to the fair market value of the facilities.

Years thereafter 71.6 3,645.8 1,364.3 2,281.5 The basic rental payments are adjusted when applicable fed Total minimum lease payments 250.0 $5,180.9 $2,117.7 $3,063.2 eral tax law changes.

Executory costs 26.9 OES Finance, Incorporated (OES Finance), a wholly Net minimum lease payments 223.1 owned subsidiary of OE, maintains deposits pledged as Interest portion 64.8 collateral to secure reimbursement obligations relating to Present value of net minimum certain letters of credit supporting OE's obligations to lease payments 158.3 lessors under the Beaver Valley Unit 2 sale and leaseback Less current portion 55.2 arrangements. The deposits pledged to the financial institu Noncurrent portion $103.1 tion providing those letters of credit are the sole property of OES Finance. In the event of liquidation, OES Finance, as a separate corporate entity, would have to satisfy its 39

OE invested in the PNBV Capital Trust, which was (C) Stock Compensation Plans - Under established to purchase a portion of the lease obligation the Centerior Equity Compensation Plan (Centerior Plan) bonds issued on behalf of lessors in OE's Perry Unit 1 and adopted in 1994, common stock options were granted to Beaver Valley Unit 2 sale and leaseback transactions. CEI management employees. Upon consummation of the merger, and TE established the Shippingport Capital Trust to pur outstanding options became exercisable for the Company's chase the lease obligation bonds issued on behalf of lessors common stock with option prices and the number of shares in their Bruce Mansfield Units 1, 2 and 3 sale and leaseback adjusted to reflect the merger conversion ratio. All options transactions. The PNBV and Shippingport capital trust under the Centerior Plan expire on or before February 25, arrangements effectively reduce lease costs related to those 2007.

transactions.

On April 30, 1998, the Company adopted the Executive and Director Incentive Compensation Plan (FE Plan). The

3. Capitalization: FE Plan permits awards to be made to key employees in the (A) Retained Earnings - There are no restric form of restricted stock, stock options, stock appreciation tions on retained earnings for payment of cash dividends rights, performance shares or cash. Common stock granted on the Company's common stock. under the FE Plan may not exceed 7.5 million shares. No stock appreciation rights or performance shares have been (B) Employee Stock Ownership Plan issued under the FE Plan. A total of 20,000 shares of restricted The Companies fund the matching contribution for their stock were granted in 1998, with a per share market price 401(k) savings plan through an ESOP Trust. All full-time of $30.78. Restrictions on the restricted stock lapse in 25%

employees eligible for participation in the 401(k) savings annual increments beginning in the fourth year from date plan are covered by the ESOP. The ESOP borrowed $200 of grant. Dividends on the 1998 grant are not restricted. An million from OE and acquired 10,654,114 shares of OE's additional 8,000 shares of restricted stock were granted in common stock through market purchases; the shares were 1999, in five separate awards with a weighted average converted into the Company's common stock in connection market price per share of $30.89 and weighted average cliff with the merger. Dividends on ESOP shares are used to vesting period of 5.8 years. Dividends on the 1999 grants service the debt. Shares are released from the ESOP on a are being restricted. Options were granted in 1998 and 1999, pro rata basis as debt service payments are made. In 1999, and are exercisable after four years from the date of grant 1998 and 1997, 627,427 shares, 423,206 shares and 429,515 with some acceleration of vesting possible based on perfor shares, respectively, were allocated to employees with the mance. Stock option activity for the converted Centerior corresponding expense recognized based on the shares allo Plan stock options and FE Plan stock options was as follows:

cated method. The fair value of 6,778,905 shares unallocated Weighted as of December 31, 1999, was approximately $153.8 Average Number of Exercise million. Total ESOP-related compensation expense was Stock Option Activity Options Price calculated as follows: Balance at December 31, 1996 $

Options granted (at merger) 743,086 23.85 1999 1998 1997 Options exercised 222,023 22.13 (In millions)

Options forfeited 3,675 22.75 Base compensation $18.3 $13.5 $ 9.9 Balance at December 31, 1997 517,388 24.59 Dividends on common stock (517,388 options exercisable) held by the ESOP and Options granted 189,491 29.82 used to service debt (4.5) (3.9) (3.4)

Options exercised 335,058 24.67 Net expense $ 13.8 $9.6 $ 6.5 Options forfeited 7,535 29.82 Balance at December 31, 1998 364,286 27.13 (182,330 options exercisable)

Options granted 1,811,658 24.90 Options exercised 22,575 21.42 Balance at December 31, 1999 2,153,369 25.32 (159,755 options exercisable) 40

As of December 31, 1999, the weighted average (D) Comprehensive Income - In 1998, the remaining contractual life of outstanding stock options Company adopted SFAS 130, "Reporting Comprehensive was 6.2 years. Income," and applied the standard to all periods presented in the Consolidated Statements of Common Stockholders' Under the Executive Deferred Compensation Plan, adopted Equity. Comprehensive income includes net income as January 1, 1999, employees can direct a portion of their reported on the Consolidated Statements of Income and all Annual Incentive Award and/or Long Term Incentive Award other changes in common stockholders' equity except those into an unfunded FirstEnergy Stock Account to receive vested resulting from transactions with common stockholders.

stock units. An additional 20% premium is received in the form of stock units based on the amount allocated to the (E) Preferred and Preference Stock FirstEnergy Stock Account. Dividends are calculated Penn's 7.75% series of preferred stock has a restriction quarterly on stock units outstanding and are paid in the which prevents early redemption prior to July 2003. OE's form of additional stock units. Upon withdrawal, stock units 8.45% series of preferred stock has no optional redemption are converted to FirstEnergy shares. Payout occurs three provision. CEI's $88.00 Series R preferred stock is not years from the date of deferral. As of December 31, 1999, redeemable before December 2001 and its $90.00 Series S there were 61,465.81 stock units outstanding. has no optional redemption provision. All other preferred stock may be redeemed by the Companies in whole, or in The Company continues to apply APB Opinion 25, part, with 30-90 days' notice.

"Accounting for Stock Issued to Employees." As required by Preference stock authorized for the Companies are 8 mil SFAS 123, "Accounting for Stock-Based Compensation,"

lion shares without par value for OE; 3 million shares with the Company has determined pro forma earnings as though out par value for CEI; and 5 million shares, $25 par value the Company had accounted for employee stock options for TE. No preference shares are currently outstanding.

under the fair value method. The weighted average assump tions used in valuing the options and their resulting fair (F) Preferred Stock Subject to values are as follows:

Mandatory Redemption - Annual sinking fund 1999 1998 1997 provisions for the Companies' preferred stock are as follows:

Valuation assumptions:

6.4 10 8 Redemption Expected option term (years) Price Per Expected volatility 20.03% 15.50% 16.00% Series Shares Share Date Beginning Expected dividend yield 5.97% 5.68% 5.80%

5.94% OE 8.45% 50,000 $ 100 (i)

Risk-free interest rate 5.97% 5.65%

CEI $ 7.35 C 10,000 100 (0)

Fair value per option $3.42 $3.25 $2.92 88.00 E 3,000 1,000 (i) 91.50 Q 10,714 1,000 (i)

The pro forma effects of applying fair value accounting 90.00 S 18,750 1,000 (i) to the Company's stock options would be to reduce net 88.00 R 50,000 1,000 December 1 2001 income and earnings per share. The following table Penn 7.625% 7,500 100 October 1 2002 summarizes the pro forma effect.

(i) Sinking fund provisions are in effect.

1999 1998 Net Income (000) Annual sinking fund requirements for the next five years As Reported $568,299 $410,874 Pro Forma $567,876 $410,839 are $38 million in 2000, $85 million in 2001, $19 million in 2002, $2 million in 2003 and $2 million in 2004. A liability Earnings Per Share of Common Stock of $19 million was included in the net assets acquired from Basic and Diluted CEI and TE for preferred dividends declared attributable to As Reported $2.50 $1.82 the post-merger period. Accordingly, no accruals for CEI Pro Forma $2.50 $1.82 and TE preferred dividends are included in the Company's Consolidated Statement of Income for the period November 8, 1997 through December 31, 1997.

41

(G) Ohio Edison Obligated Mandatorily Based on the amount of bonds authenticated by the Redeemable Preferred Securities of Trustees through December 31, 1999, OE's, TE's and Penn's Subsidiary Trust Holding Solely Ohio Edison annual sinking and improvement fund requirements for all Subordinated Debentures - Ohio Edison bonds issued under the mortgage amounts to $31 million.

Financing Trust, a wholly owned subsidiary of OE, has OE, TE and Penn expect to deposit funds in 2000 that will issued $120 million of 9% Cumulative Trust Preferred be withdrawn upon the surrender for cancellation of a like Capital Securities. OE purchased all of the Trust's Common principal amount of bonds, which are specifically authenti Securities and simultaneously issued to the Trust $123.7 mil cated for such purposes against unfunded property additions lion principal amount of 9% Junior Subordinated Debentures or against previously retired bonds. This method can result due 2025 in exchange for the proceeds that the Trust in minor increases in the amount of the annual sinking fund received from its sale of Preferred and Common Securities. requirement.

The sole assets of the Trust are the Subordinated Debentures Sinking fund requirements for first mortgage bonds and whose interest and other payment dates coincide with the maturing long-term debt (excluding capital leases) for the distribution and other payment dates on the Trust Securities.

next five years are:

Under certain circumstances, the Subordinated Debentures could be distributed to the holders of the outstanding Trust (In millions)

Securities in the event the Trust is liquidated. The 2000 $668.8 Subordinated Debentures may be optionally redeemed by 2001 375.7 2002 945.8 OE beginning December 31, 2000, at a redemption price of 2003 459.0

$25 per Subordinated Debenture plus accrued interest, in 2004 833.3 which event the Trust Securities will be redeemed on a pro rata basis at $25 per share plus accumulated distributions.

The Companies' obligations to repay certain pollution OE's obligations under the Subordinated Debentures along control revenue bonds are secured by several series of first with the related Indenture, amended and restated Trust mortgage bonds and, in some cases, by subordinate liens Agreement, Guarantee Agreement and the Agreement for on the related pollution control facilities. Certain pollution expenses and liabilities, constitute a full and unconditional control revenue bonds are entitled to the benefit of irrevocable guarantee by OE of payments due on the Preferred bank letters of credit of $397.3 million. To the extent that Securities.

drawings are made under those letters of credit to pay principal of, or interest on, the pollution control revenue (H) Long-Term Debt - The first mortgage indentures and their supplements, which secure all of the bonds, OE, Penn and/or CEI are entitled to a credit against Companies' first mortgage bonds, serve as direct first mort their obligation to repay those bonds. The Companies pay gage liens on substantially all property and franchises, other annual fees of 0.43% to 1.10% of the amounts of the letters of credit to the issuing banks and are obligated to reimburse than specifically excepted property, owned by the the banks for any drawings thereunder.

Companies.

42

OE had unsecured borrowings of $190 million at under various interest rate options. OE's short-term borrow December 31, 1999, supported by a $250 million long-term ings may be made under its lines of credit on its unsecured revolving credit facility agreement which expires November notes. To assure the availability of these lines, the 18, 2002. OE must pay an annual facility fee of 0.20% on Companies are required to pay annual commitment fees that the total credit facility amount. In addition, the credit agree vary from 0.125% to 0.50%. These lines expire at various ment provides that OE maintain unused first mortgage bond times during 2000. The weighted average interest rates on capability for the full credit agreement amount under OE's short-term borrowings outstanding at December 31, 1999 indenture as potential security for the unsecured borrowings. and 1998, were 6.51% and 5.67%, respectively.

CEI and TE have letters of credit of approximately $222 million in connection with the sale and leaseback of Beaver 5. Commitments and Contingencies:

Valley Unit 2 that expire in May 2002. The letters of credit Capital Expenditures - The Companies' are secured by first mortgage bonds of CEI and TE in the current forecasts reflect expenditures of approximately proportion of 40% and 60%, respectively (see Note 2). $3.0 billion for property additions and improvements from 2000-2004, of which approximately $650 million is OE's and Penn's nuclear fuel purchases are financed applicable to 2000. Investments for additional nuclear fuel through the issuance of OES Fuel commercial paper and during the 2000-2004 period are estimated to be approximately loans, both of which are supported by a $180.5 million long

$497 million, of which approximately $159 million applies term bank credit agreement which expires March 31, 2001.

to 2000. During the same periods, the Companies' nuclear Accordingly, the commercial paper and loans are reflected as fuel investments are expected to be reduced by approximately long-term debt on the Consolidated Balance Sheets. OES

$480 million and $106 million, respectively, as the nuclear Fuel must pay an annual facility fee of 0.20% on the total fuel is consumed.

line of credit and an annual commitment fee of 0.0625% on any unused amount.

Stock Repurchase Program - On November 17, 1998, the Board of Directors authorized the repurchase

4. Short-Term Borrowings and Bank Lines of up to 15 million shares of the Company's common stock of Credit: over a three-year period beginning in 1999. Repurchases are Short-term borrowings outstanding at December 31, made on the open market, at prevailing prices, and are funded 1999, consisted of $257.8 million of bank borrowings and primarily through the use of operating cash flows. During

$160.0 million of OES Capital, Incorporated (OES Capital) 1999, the Company repurchased and retired 4.6 million commercial paper. OES Capital is a wholly owned sub shares of its common stock at an average price of $28.08 per sidiary of OE whose borrowings are secured by customer share. The Company also entered into a forward contract accounts receivable. OES Capital can borrow up to $170 with Credit Suisse First Boston Corporation for the purchase million under a receivables financing agreement at rates of 1.4 million shares of the Company's common stock at an based on certain bank commercial paper and is required to average price of $24.22 per share to be settled on November pay an annual fee of 0.20% on the amount of the entire 3, 2000. The contract may be settled through gross physical finance limit. The receivables financing agreement expires settlement, net share settlement or net cash settlement at the in 2002. Company's election.

The Companies have various credit facilities with domestic banks that provide for borrowings of up to $205 million 43

Nuclear Insurance - The Price-Anderson Act reductions are being achieved by burning lower-sulfur fuel, limits the public liability relative to a single incident at a generating more electricity from lower-emitting plants, nuclear power plant to $9.5 billion. The amount is covered and/or purchasing emission allowances. NOx reductions are by a combination of private insurance and an industry retro being achieved through combustion controls and generating spective rating plan. The Companies' maximum potential more electricity from lower-emitting plants. In September assessment under the industry retrospective rating plan 1998, the Environmental Protection Agency (EPA) finalized would be $352.4 million per incident but not more than $40 regulations requiring additional NOx reductions from the million in any one year for each incident. Companies' Ohio and Pennsylvania facilities by May 2003.

The EPA's NOx Transport Rule imposes uniform reductions The Companies are also insured under policies for each of NOx emissions across a region of twenty-two states and nuclear plant. Under these policies, up to $2.75 billion is the District of Columbia, including Ohio and Pennsylvania, provided for property damage and decontamination and based on a conclusion that such NOx emissions are decommissioning costs. The Companies have also obtained contributing significantly to ozone pollution in the eastern approximately $1.43 billion of insurance coverage for United States. In May 1999, the U.S. Court of Appeals for replacement power costs. Under these policies, the the D.C. Circuit issued a stay which delays implementation Companies can be assessed a maximum of approximately

$44 million for incidents at any covered nuclear facility of EPA's NOx Transport Rule until the Court has ruled on occurring during a policy year which are in excess of the merits of various appeals. Under the NOx Transport Rule, each of the twenty-two states are required to submit accumulated funds available to the insurer for paying losses.

revised State Implementation Plans (SIP) which comply The Companies intend to maintain insurance against with individual state NOx budgets established by the EPA nuclear risks as described above as long as it is available. contemplating an approximate 85% reduction in utility plant To the extent that replacement power, property damage, NOx emissions from projected 2007 emissions. A proposed decontamination, decommissioning, repair and replacement Federal Implementation Plan accompanied the NOx costs and other such costs arising from a nuclear incident at Transport Rule and may be implemented by the EPA in any of the Companies' plants exceed the policy limits of the states which fail to revise their SIP. In another separate but insurance in effect with respect to that plant, to the extent related action, eight states filed petitions with the EPA under a nuclear incident is determined not to be covered by the Section 126 of the Clean Air Act seeking reductions of NOx Companies' insurance policies, or to the extent such insurance emissions which are alleged to contribute to ozone pollution becomes unavailable in the future, the Companies would in the eight petitioning states. The EPA suggests that the remain at risk for such costs. Section 126 petitions will be adequately addressed by the Environmental Matters - Various federal, NOx Transport Program, but a December 17, 1999 rulemaking state and local authorities regulate the Companies with regard established an alternative program which would require to air and water quality and other environmental matters. nearly identical 85% NOx reductions at 392 utility plants, The Companies estimate additional capital expenditures for including the Companies' Ohio and Pennsylvania plants, by environmental compliance of approximately $292 million, May 2003, in the event implementation of the NOx which is included in the construction forecast provided Transport Rule is delayed. New Section 126 petitions were under "Capital Expenditures" for 2000 through 2004. filed by New Jersey, Maryland, Delaware and the District of Columbia in mid-1999 and are still under evaluation by the The Companies are in compliance with the current sulfur EPA. The Companies continue to evaluate their compliance dioxide (S02) and nitrogen oxides (NOx) reduction require plans and other compliance options.

ments under the Clean Air Act Amendments of 1990. S02 44

The Companies are required to meet federally approved and complaint allege violations of the Clean Air Act based S02 regulations. Violations of such regulations can result in on operation and maintenance of the Sammis Plant dating shutdown of the generating unit involved and/or civil or back to 1984. The complaint requests permanent injunctive criminal penalties of up to $27,500 for each day the unit is relief to require the installation of "best available control in violation. The EPA has an interim enforcement policy for technology" and civil penalties of up to $27,500 per day of S02 regulations in Ohio that allows for compliance based on violation. Although unable to predict the outcome of this a 30-day averaging period. The Companies cannot predict litigation, the Company believes the Sammis Plant is in full what action the EPA may take in the future with respect to compliance with the Clean Air Act and the NOV and com the interim enforcement policy. plaint are without merit. Penalties could be imposed if the Sammis Plant continues to operate without correcting the In July 1997, the EPA promulgated changes in the alleged violations and a court determines that the allegations National Ambient Air Quality Standard (NAAQS) for ozone are valid. It is anticipated at this time that the Sammis Plant and proposed a new NAAQS for previously unregulated will continue to operate while the matter is being decided.

ultra-fine particulate matter. In May 1999, the U.S. Court of Appeals for the D.C. Circuit remanded both standards back CEI and TE have been named as "potentially responsible to the EPA finding constitutional and other defects in the parties" (PRPs) at waste disposal sites which may require new NAAQS rules. The D.C. Circuit Court, on October 29, cleanup under the Comprehensive Environmental Response, 1999, denied an EPA petition for rehearing. The Companies Compensation and Liability Act of 1980. Allegations of cannot predict the EPA's action in response to the Court's disposal of hazardous substances at historical sites and the remand order. The cost of compliance with these regulations, liability involved, are often unsubstantiated and subject to if they are reinstated, may be substantial and depends on the dispute. Federal law provides that all PRPs for a particular manner in which they are ultimately implemented, if at all, site be held liable on a joint and several basis. CEI and TE by the states in which the Companies operate affected have accrued liabilities totaling $5.4 million as of December facilities. 31, 1999, based on estimates of the costs of cleanup and the proportionate responsibility of other PRPs for such costs.

In September 1999, FirstEnergy received, and subse CEI and TE believe that waste disposal costs will not have quently in October 1999, OE and Penn received, a citizen a material adverse effect on their financial condition, cash suit notification letter from the New York Attorney General's flows or results of operations.

office alleging Clean Air Act violations at the W. H. Sammis Plant. In November 1999, OE and Penn received a citizen suit notification letter from the Connecticut Attorney 6. Segment Information:

General's office alleging Clean Air Act violations at the The Company's primary segment is its Electric Utility Sammis Plant. On November 3, 1999, the EPA issued Operating Companies which includes four regulated electric Notices of Violation (NOV) or a Compliance Order to eight utility operating companies that provide electric service in utilities covering 32 power plants, including the Sammis Ohio and Pennsylvania. Its other material business segment is Plant. In addition, the U.S. Department of Justice filed seven FETS which markets and trades electricity in nonregulated civil complaints against various investor-owned utilities, markets. Financial data for these business segments and which included a complaint against OE and Penn in the U.S. products and services are as shown on the following page:

District Court for the Southern District of Ohio. The NOV 45

Segment Financial Information Electric FE Trading All Reconciling Utilities Services Other Eliminations Totals (In millions) 1999 External revenues $5,421 $191 $ 708 $ - $6,320 Intersegment revenues 32 60 102 (194)

Total revenues 5,453 251 810 (194) 6,320 Depreciation and amortization 913 - 25 - 938 Net interest charges 549 6 66 (49) 572 Income taxes 377 (5) 23 - 395 Net income/Earnings on common stock 545 (8) 35 (4) 568 Total assets 17,105 181 1,864 (926) 18,224 Property additions 417 - 130 - 547 Acquisitions - 25 53 78 1998 External revenues $ 5,215 $411 $ 249 $ - $ 5,875 Intersegment revenues 32 26 97 (155)

Total revenues 5,247 437 346 (155) 5,875 Depreciation and amortization 748 - 11 - 759 Net interest charges 590 2 69 (60) 601 Income taxes 320 (35) (2) - 283 Extraordinary item:

Pennsylvania restructuring (31) - - - (31)

Net income/Earnings on common stock 478 (52) 1 (16) 411 Total assets 18,316 54 1,742 (1,920) 18,192 Property additions 304 - 64 368 Acquisitions - - 285 - 285 1997 External revenues $ 2,844 $ 43 $ 74 $ - $ 2,961 Intersegment revenues 33 - 106 (139)

Total revenues 2,877 43 180 (139) 2,961 Depreciation and amortization 470 - 5 - 475 Net interest charges 300 - 60 (51) 309 Income taxes 206 - 3 - 209 Net income/Earnings on common stock 335 (1) 4 (32) 306 Total assets 18,700 32 1,209 (1,680) 18,261 Property additions 166 - 38 - 204 Acquisitions - - 1,582 - 1,582 Products and Services Oil & Gas Energy Related Electricity Sales and Sales and Year Sales Production Services (In millions) 1999 $5,253 $203 $503 1998 4,980 26 198 1997 2,775 - -

46

7. Summary of Quarterly $1.582 billion, which also included approximately $20 mil Financial Data (Unaudited): lion of merger related costs. Goodwill of approximately $2.0 billion was recognized (to be amortized on a straight-line The following summarizes certain consolidated operating basis over forty years), which represented the excess of the results by quarter for 1999 and 1998.

purchase price over Centerior's net assets after fair value March 31, June 30, September 30, December 31, Three Months Ended 1999 1999 1999 1999 adjustments.

(In millions, except per share amounts)

Accumulated amortization of goodwill was approximately Revenues $1,417.4 $1,523.9 $1,732.4 $1,645.9 Expenses 1,041.7 1,149.8 1,291.0 1,301.7 $109 million as of December 31, 1999. The merger purchase Income Before Interest accounting adjustments, which were recorded in the records and Income Taxes 375.7 374.1 441.4 344.2 of Centerior's direct subsidiaries, included recognizing Net Interest Charges 146.1 147.4 141.3 137.5 estimated severance and other compensation liabilities ($80 Income Taxes 92.9 101.4 114.3 86.2 million). The amount charged against the liability in 1998 Net Income $ 136.7 $ 125.3 $ 185.8 $ 120.5 relating to the costs of involuntary employee separation Earnings per Share of Common Stock $.60 $.55 $.82 $.53 was $41 million. In addition, the liability was reduced to approximately $9 million as of December 31, 1998 to March 31, June 30, September 30, December 31, represent potential costs associated with the separation of Three Months Ended 1998 1998 1998 1998 493 CEI employees. The liability adjustment was offset (In millions, except per share amounts) by a corresponding reduction to goodwill recognized in Revenues $1,367.1 $1,464.0 $1,722.0 $1,321.8 Expenses 1,016.8 1,197.1 1,294.0 1,020.8 connection with the Centerior acquisition.

Income Before Interest The following pro forma statement of income of and Income Taxes 350.3 266.9 428.0 301.0 154.7 153.3 149.4 FirstEnergy gives effect to the OE/Centerior merger as if Net Interest Charges 143.6 Income Taxes 83.0 52.2 111.7 56.9 it had been consummated on January 1, 1997, with the Income Before purchase accounting adjustments actually recognized in Extraordinary Item 123.7 60.0 163.0 94.7 the business combination.

Extraordinary Item Year Ended (Net of Income Taxes) December 31, (Note 1) - (30.5) - 1997 Net Income $ 123.7 $ 29.5 $ 163.0 $ 94.7 (In millions, except per share amounts)

Earnings per Share of $5,206 Revenues Common Stock 3,800 Expenses Before Extraordinary Item $.56 $.27 $.71 $.41 Income Before Interest and Income Taxes 1,406 Extraordinary Item Net Interest Charges 643 (Net of Income Taxes)

- (.14) - Income Taxes 336 (Note 1)

Earnings per Share of Net Income $ 427 Common Stock $.56 $.13 $.71 $.41 Eamings per Share of Common Stoci $ 1.92

8. Pro Forma Combined Condensed Pro forma adjustments reflected above include: (1)

FirstEnergy Statement of Income adjusting CEI and TE nuclear generating units to fair value (Unaudited): based upon independent appraisals and estimated discounted The Company was formed on November 8, 1997 by the future cash flows based on management's estimate of cost merger of OE and Centerior. The merger was accounted for recovery; (2) goodwill recognized representing the excess of as a purchase of Centerior's net assets with 77,637,704 the purchase price over Centerior's adjusted net assets; (3) shares of FirstEnergy Common Stock through the conver elimination of revenue and expense transactions between OE sion of each outstanding Centerior Common Stock share and Centerior; (4) amortization of the fair value adjustment into 0.525 of a share of FirstEnergy Common Stock (frac for long-term debt; and (5) adjustments for estimated tax tional shares were paid in cash). Based on an imputed value effects on the above adjustments.

of $20.125 per share, the purchase price was approximately 47

F IRSTEN1ý.RGY COR P.

Consolidated Financial and Pro Forma Combined Operating Statistics (Unaudited) 1999 1998 1997 1996 1995 1994 1989 GENERAL FINANCIAL INFORMATION (Dollars in thousands)

Revenues $ 6,319,647 $ 5,874,906 $ 2,961,125 $2,521,788 $2,500,770 $2,390,957 $2,193,852 Net Income $ 568,299 $ 410,874 $ 305,774 $ 302,673 $ 294,747 $ 281,852 $ 332,932 SEC Ratio of Earnings to Fixed Charges 2.01 1.77 2.18 2.38 2.32 2.24 2.03 Net Property, Plant and Equipment $ 9,093,341 $ 9,242,574 $ 9,635,992 $5,534,382 $5,788,436 $5,904,445 $6,088,598 Capital Expenditures $ 474,118 $ 305,577 $ 188,145 $ 145,005 $ 196,041 $ 258,642 $ 258,041 Total Capitalization $ U,469,795 $11,756,422 $12,124,492 $5,582,989 $5,565,997 $5,852,030 $6,083,504 Capitalization Ratios:

Common Stockholders' Equity 39.8% 37.9% 34.3% 44.8% 43.3% 39.6% 42.2%

Preferred and Preference Stock:

Not Subject to Mandatory Redemption 5.7 5.6 5.5 3.8 3.8 5.6 5.8 Subject to Mandatory Redemption 2.2 2.5 2.7 2.8 2.9 0.7 1.5 Long-Term Debt 52.3 54.0 57.5 48.6 50.0 54.1 50.5 Total Capitalization 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Average Capital Costs:

Preferred and Preference Stock 7.99% 8.01% 8.02% 7.59% 7.59% 7.15% 8.72%

Long-Term Debt 7.65% 7.83% 8.02% 7.76% 8.00% 8.17% 9.67%

COMMON STOCK DATA (a)

Earnings per Share $2.50 $1.95 $1.94 $2.10 $2.05 $1.97 $2.18 Return on Average Common Equity 12.7% 10.3% 11.0% 12.4% 12.5% 12.4% 13.0%

Dividends Paid per Share $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.96 Dividend Payout Ratio 60% 77% 77% 71% 73% 76% 90%

Dividend Yield 6.6% 4.6% 5.2% 6.6% 6.4% 8.1% 8.3%

Price/Earnings Ratio 9.1 16.7 14.9 10.8 11.5 9.4 10.9 Book Value per Share $20.22 $19.37 $18.71 $17.35 $16.73 $16.15 $16.82 Market Price per Share $22.69 $32.56 $29.00 $22.75 $23.50 $18.50 $23.75 Ratio of Market Price to Book Value 112% 168% 155% 131% 140% 115% 141%

OPERATING STATISTICS (b)

Kilowatt-Hour Sales (Millions):

Residential 16,933 15,873 15,562 15,807 15,773 15,181 14,425 Commercial 18,295 16,255 15,868 14,944 14,845 14,366 13,064 Industrial 24,884 24,039 24,062 23,367 22,681 21,910 22,315 Other 371 378 372 1,158 1,196 1,218 1,135 Total Retail 60,483 56,545 55,864 55,276 54,495 52,675 50,939 Total Wholesale 7,135 5,557 7,870 9,670 9,295 7,039 9,416 Total Sales 67,618 62,102 63,734 64,946 63,790 59,714 60,355 Customers Served:

Residential 1,951,928 1,938,259 1,929,371 1,912,850 1,907,850 1,893,827 1,833,955 Commercial 219,761 214,698 215,307 212,092 210,745 207,362 195,888 Industrial 11,667 11,888 12,918 12,974 12,763 12,618 12,517 Other 2,177 2,067 2,040 3,913 3,869 3,760 3,965 Total 2,185,533 2,166,912 2,159,636 2,141,829 2,135,227 2,117,567 2,046,325 Number of Employees (Excludes Facilities Services Group and MARBEL) (c) 10,034"* 8,765 10,020 10,477 11,633 11,933 15,967 (a) Before extraordinarycharge in 1998.

(b) Years priorto 1998 reflect proforma combined Ohio Edison and Centeriorstatistics.

(c) 1999 number of employees includes approximately 1,100 Beaver Valley Power Station employees added as a result ofthe generationplant asset swap.

48 Printed on recycled paper.

Shareholder INFORMATION Investor Services, Transfer Agent and Safekeeping of Shares Registrar Shareholders can request that the Company hold their We act as our own transfer agent and registrar for all shares of FirstEnergy common stock in safekeeping. To take stock issues of FirstEnergy and its subsidiaries. Shareholders advantage of this service, shareholders should forward their wanting to transfer stock, or who need assistance or infor stock certificate(s) to the Company along with a signed let mation, can send their stock or write to Investor Services, ter requesting that the Company hold the shares. They FirstEnergy Corp., 76 South Main Street, Akron, Ohio should also state whether future dividends for the held 44308 -1890. Shareholders also can call the following toll shares are to be reinvested or paid in cash. The certificate(s) free telephone number, which is valid in the United States, should not be endorsed, and registered mail is suggested.

Canada, Puerto Rico and the Virgin Islands, weekdays The shares will be held in uncertificated form and we will between 8 a.m. and 4:30 p.m., Eastern time: 800-736-3402. make certificate(s) available to shareholders upon request at For Internet access to shareholder information and useful no cost. Shares held in safekeeping will be reported on divi forms, visit our Web site at: www.firstenergycorp.com/ir dend checks or Stock Investment Plan statements.

on the Internet.

Combining Stock Accounts Stock Listings and Trading If you have more than one stock account and want to Newspapers generally report FirstEnergy common stock combine them, please write or call Investor Services and under the abbreviation FSTENGY, but this can vary depend specify the account that you want to retain as well as the ing upon the newspaper. The common stock of FirstEnergy registration of each of your accounts.

and preferred stock of its electric utility subsidiaries are list ed on the following stock exchanges: Duplicate Mailings of the Annual Report If you hold stock in more than one registration and do not Company Stock Exchange Symbol wish to combine accounts, you can eliminate duplicate mail FirstEnergy New York FE ings of our annual report by informing us when voting your The Illuminating Company New York, OTC CVX shares for the Annual Meeting of Shareholders. You also can Ohio Edison New York OEC send a written request, including the exact registration of Pennsylvania Power Philadelphia PPC the account for which you want the mailing discontinued, Toledo Edison New York, OTC, TED to Investor Services.

American Form 10-K Annual Report Dividends Form 10-K, the Annual Report to the Securities and Proposed dates for the payment of FirstEnergy common Exchange Commission, will be sent without charge by writ stock dividends in 2000 are:

ing to Nancy C. Ashcom, Corporate Secretary, FirstEnergy Ex-Dividend Date Record Date Payment Date Corp., 76 South Main Street, Akron, Ohio 44308-1890.

February 3 February 7 March 1 May 3 May 5 June 1 Institutional Investor and August 3 August 7 September 1 Security Analyst Inquiries November 3 November 7 December 1 Institutional investors and security analysts should direct inquiries to: Kurt E. Turosky, Manager, Investor Relations, Direct Dividend Deposit Shareholders can have their dividend payments automati 330-384-5500.

cally deposited to checking and savings accounts at any Annual Meeting of Shareholders financial institution that accepts electronic direct deposits.

Shareholders are invited to attend the 2000 Annual Use of this free service ensures that payments will be avail Meeting of Shareholders on Thursday, April 27, at 10 a.m.,

able to you on the payment date, eliminating the possibility at the John S. Knight Center in Akron, Ohio. Registered of mail delay or lost checks. To receive an authorization holders of common stock not attending the meeting can form, contact Investor Services.

appoint a proxy and vote on the items of business by tele phone, Internet or by completing and returning the proxy Stock Investment Plan Shareholders and others can purchase or sell shares of card that is sent to them. Shareholders whose shares are held in the name of a broker can attend the meeting if they FirstEnergy common stock through the Company's Stock Investment Plan. Investors who are not registered share present a letter from their broker indicating ownership of FirstEnergy common stock on the record date of March 10, holders can enroll with an initial $250 cash investment.

2000.

Participants may invest all or some of their dividends or make optional cash payments at any time of at least $25 per payment up to $100,000 annually. To receive an enrollment form, contact Investor Services.

49

F irstEne r~j Presorted Std.

76 South Main Street Akron, Ohio 44308-1890 U.S. Postage www.firstenergycorp.com PAID Akron, Ohio Permit No. 561 1 9 9 9 A N N A 1, RR E POR O T

Form 1O-K FirstEnergy ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION Forthe Year Ended December 31, 1999

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K (Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Registrant; State of Incorporation; I.R.S. Employer Commission Address; and Telephone Number Identification No.

File Number FIRSTENERGY CORP. 34-1843785 333-21011 (An Ohio Corporation) 76 South Main Street Akron, OH 44308 Telephone (800)736-3402 OHIO EDISON COMPANY 34-0437786 1-2578 (An Ohio Corporation) 76 South Main Street Akron, OH 44308 Telephone (800)736-3402 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY 34-0150020 1-2323 (An Ohio Corporation) c/o FirstEnergy Corp.

76 South Main Street Akron, OH 44308 Telephone (800)736-3402 THE TOLEDO EDISON COMPANY 34-4375005 1-3583 (An Ohio Corporation) c/o FirstEnergy Corp.

76 South Main Street Akron, OH 44308 Telephone (800)736-3402 PENNSYLVANIA POWER COMPANY 25-0718810 1-3491 (A Pennsylvania Corporation) 1 East Washington Street P. 0. Box 891 New Castle, PA 16103 Telephone (412)652-5531

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Xn Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes (X) No U State the aggregate market value of the voting stock held by non-affiliates of the registrant:

$4,238,859,520 as of March 10, 2000. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:

OUTSTANDING CLASS AT MARCH 24, 2000 FirstEnergy Corp., $.10 par value 231,119,841 Ohio Edison Company, $9 par value 100 The Cleveland Electric Illuminating Company, no par value 79,590,689 The Toledo Edison Company, $5 par value 39,133,887 Pennsylvania Power Company, $30 par value 6,290,000 FirstEnergy Corp. is the sole holder of Ohio Edison Company, The Cleveland Electric Illuminating Company and The Toledo Edison Company common stock; Ohio Edison Company is the sole holder of Pennsylvania Power Company common stock.

Documents incorporated by reference (to the extent indicatedherein):

PART OF FORM 10-K INTO WHICH DOCUMENT DOCUMENT IS INCORPORTED FirstEnergy Corp. Annual Report to Stockholders for the fiscal year ended December 31, 1999 (Pages 16-47) Part II Proxy Statement for 2000 Annual Meeting of Stockholders to be held April 27, 2000 Part III

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of Each Exchange Title of Each Class on Which Registered Registrant Common Stock, $.10 par value New York Stock Exchange FirstEnergy Corp.

Ohio Edison Company Cumulative Preferred Stock, $100 par value 3.90% Series All series registered on New 4.40% Series York Stock Exchange and 4.44% Series Chicago Stock Exchange 4.56% Series Cumulative Preferred Stock, $25 par value 7.75% Series Registered on New York Stock Exchange and Chicago Stock Exchange The Cleveland Electric Cumulative Serial Preferred Stock, without Illuminating Company par value:

$7.40 Series A All series registered on New

$7.56 Series B York Stock Exchange Adjustable Rate, Series L Depository Shares:

1993 Series A, each share New York Stock Exchange representing 1/20 of a share of Serial Preferred Stock,

$42.40 Series T (without par value)

The Toledo Edison Cumulative Preferred Stock, par value Company $100 per share:

4-1/4% Series All series registered on 8.32% Series American Stock Exchange 7.76% Series 10% Series Cumulative Preferred Stock, par value

$25 per share:

8.84% Series All series registered on

$2.365 Series New York Stock Exchange Adjustable Rate, Series A Adjustable Rate, Series B First Mortgage Bonds:

8% Series due 2003 All series registered on New York Stock Exchange Pennsylvania Power Cumulative Preferred Stock, $100 Company par value:

4.24% Series All series registered on 4.25% Series Philadelphia Stock Exchange, 4.64% Series Inc.

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: (Cont'd)

This combined Form 10-K is separately filed by FirstEnergy Corp., Ohio Edison Company, Pennsylvania Power Company, The Cleveland Electric Illuminating Company and The Toledo Edison Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. No registrant makes any representation as to information relating to any other registrant, except that information relating to any of the four FirstEnergy subsidiaries is also attributed to FirstEnergy.

FORM 10-K TABLE OF CONTENTS Page Part I Item 1. Business .............................................................................................................................................. 1 The Com pany ................................................................................................................................... 1 Utility Regulation .............................................................................................................................. 1 PUCO Rate Matters ..................................................................................................................... 2 PPUC Rate Matters ..................................................................................................................... 3 FERC Rate Matters ...................................................................................................................... 3 Fuel Recovery Procedures ......................................................................................................... 4 Capital Requirements ....................................................................................................................... 4 Central Area Power Coordination Group ......................................................................................... 6 Nuclear Regulation ........................................................................................................................... 6 Nuclear Insurance ............................................................................................................................ 7 Environm ental Matters ..................................................................................................................... 7 Air Regulation ............................................................................................................................... 8 W ater Regulation ......................................................................................................................... 9 W aste Disposal ............................................................................................................................ 9 Sum mary ...................................................................................................................................... 9 Fuel Supply ...................................................................................................................................... 10 System Capacity and Reserves ...................................................................................................... 10 Regional Reliability ........................................................................................................................... 11 Competition ...................................................................................................................................... 11 Research and Development ........................................................................................................... 11 Executive Officers ............................................................................................................................ 11 Item 2. Properties ............................................................................................................................................ 13 Item 3. Legal Proceedings ............................................................................................................................... 14 Item 4. Subm ission of Matters to a Vote of Security Holders ....................................................................... 14 Part II Item 5. Market for Registrant's Com mon Equity and Related Stockholder M atters ....................................... 14 Item 6. Selected Financial Data ...................................................................................................................... 14 Item 7. Managemenrs Discussion and Analysis of Financial Condition and Results of Operations ............. 14 Item 8. Financial Statements and Supplem entary Data ................................................................................. 15 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure ............ 15 Part III Item 10. Directors and Executive Officers of the Registrant ............................................................................ 15 Item 11. Executive Compensation .................................................................................................................... 15 Item 12. Security Ownership of Certain Beneficial Owners and Management ................................................ 15 Item 13. Certain Relationships and Related Transactions .............................................................................. 15 Part IV 16 Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K .................................................

PART 1 ITEM 1. BUSINESS The Company FirstEnergy Corp. (Company) was organized under the laws of the State of Ohio in 1996 and became a holding company on November 8, 1997 in connection with the merger of Ohio Edison Company (OE) and Centerior Energy Corporation (Centerior). The Company's principal business is the holding, directly or indirectly, of all of the outstanding common stock of its four principal electric utility operating subsidiaries, OE, The Cleveland Electric Illuminating Company (CEI), Pennsylvania Power Company (Penn) and The Toledo Edison Company (TE). These utility subsidiaries are referred to throughout as "Companies." The Company's consolidated revenues are primarily derived from electric service provided by its utility operating subsidiaries and the revenues of its other principal subsidiaries: FirstEnergy Services Corp. (FE Services), FirstEnergy Facilities Services Group, LLC. (FE Facilities);

FirstEnergy Trading Services, Inc. (FETS), and MARBEL Energy Corporation (MARBEL). In addition, the Company holds all of the outstanding common stock of five other direct subsidiaries: FirstEnergy Properties, Inc., FirstEnergy Ventures, Corp., FirstEnergy Nuclear Operating Co. (FENOC), American Transmission Systems, Inc., and FirstEnergy Securities Transfer Company.

The Companies' combined service areas encompass approximately 13,200 square miles in central and northern Ohio and western Pennsylvania. The areas they serve have combined populations of approximately 5.8 million.

OE was organized under the laws of the State of Ohio in 1930 and owns property and does business as an electric public utility in that state. OE also has ownership interests in certain generating facilities located in the Commonwealth of Pennsylvania. OE furnishes electric service to communities in a 7,500 square mile area of central and northeastern Ohio. It also provides transmission services and electric energy for resale to certain municipalities in OE's service area and transmission services to certain rural cooperatives. OE also engages in the sale, purchase and interchange of electric energy with other electric companies. The area it serves has a population of approximately 2.7 million.

OE owns all of the outstanding common stock of Penn, a Pennsylvania corporation, which furnishes electric service to communities in a 1,500 square mile area of western Pennsylvania. Penn also provides transmission services and electric energy for resale to certain municipalities in Pennsylvania. The area served by Penn has a population of approximately 0.4 million.

CEI was organized under the laws of the State of Ohio in 1892 and does business as an electric public utility in that state. It also has ownership interests in certain generating facilities in Pennsylvania. CEI furnishes electric service in an area of approximately 1,700 square miles in northeastern Ohio, including the City of Cleveland.

The area CEI serves has a population of approximately 1.9 million.

TE was organized under the laws of the State of Ohio in 1901 and does business as an electric public utility in that state. It also has ownership interests in certain generating facilities in Pennsylvania. TE furnishes electric service in an area of approximately 2,500 square miles in northwestern Ohio, including the City of Toledo. The area TE serves has a population of approximately 0.8 million.

FE Services was organized under the laws of the State of Ohio in 1997 and offers energy-related products and services primarily on a regional basis. FE Services has one subsidiary, Penn Power Energy, Inc. (a Pennsylvania corporation) which provides electric generation services and other energy services to Pennsylvania customers under Pennsylvania's deregulated environment. FE Facilities is the parent company of eleven direct subsidiaries, which are heating, ventilating, air conditioning and energy management companies. FETS, which was organized as a corporation in Delaware in 1995, acquires and arranges for the delivery of electricity and natural gas to FE Services' retail customers. MARBEL, which was acquired by the Company in June 1998, is a company whose subsidiaries include Marbel HoldCo, Inc. a holding company which has a 50% ownership in Great Lakes Energy Partners, LLC, an oil and natural gas exploration and production venture and other subsidiaries owning interests in natural gas distribution and transmission facilities.

Utility Regulation The Companies are subject to broad regulation as to rates and other matters by the Public Utilities Commission of Ohio (PUCO) and the Pennsylvania Public Utility Commission (PPUC). With respect to their wholesale and interstate electric operation and rates, the Companies are subject to regulation, including regulation of I

Commission (FERC). Under Ohio law, their accounting policies and practices, by the Federal Energy Regulatory subject to appeal to the PUCO if not acceptable to the utility.

municipalities may regulate rates, 1935 Act, providing independent The Energy Policy Act of 1992 (1992 Act) amended portions of the into electric generation markets. The 1992 power producers and other nonregulated generating facilities easier entry circumstances, to mandate Act, authorizing the FERC, under certain Act also amended portions of the Federal Power the FERC has ordered all of the 1992 Act, access to utility-owned transmission facilities. Following the enactment which require utilities to facilities, including provisions utilities to file open access tariffs applicable to transmission an open access tariff in system has such offer comparable services on a nondiscriminatory basis. The FirstEnergy effect (see "FERC Rate Matters").

PUCO Rate Matters Plan in 1995 and a Rate The PUCO approved OE's Rate Reduction and Economic Development 1997. These plans were designed to enhance Reduction and Economic Development Plan for CEI and TE in January to assure the Companies' Companies' Ohio service areas and and accelerate economic development within the areas of long-term competitive pricing for energy services.

customers in those service and TE through December 31, 2005, These plans were to maintain current base electric rates for OE, CEI in environmental, regulatory or tax laws or unless additional revenues were needed to recover the costs of changes million (approximately 20 rates were to be reduced by $300 regulations. At the end of the plan periods, OE base by a combined $310 million to be reduced percent below current levels) and CEI and TE base rates were were implemented for plans, transition rate credits (approximately 15 percent below current levels). As part of these $600 million and CEI and TE revenues for OE by approximately customers, which are expected to reduce operating established revised fuel recovery rate formulas by approximately $391 million during the plan period. The plans also their retail customers (see "Fuel Recovery Procedures").

which eliminated the automatic pass-through of fuel costs to will allow Ohio electric customers to In July 1999, Ohio's new electric utility restructuring legislation, which 1, 2001, was signed into law. Among other things, the new law select their generation suppliers beginning January customers' bills and the opportunity to recover provides for a 5% reduction on the generation portion of residential 1, 2001 through December 31, 2005. The period for the transition costs, including regulatory assets, from January can be extended up to December 31, 2010. The PUCO was authorized to recovery of regulatory assets only assets portion of period for the regulatory determine the level of transition cost recovery, as well as the recovery transition plan application.

those costs, in considering each Ohio electric utility's

-- OE, CEI and TE -- on The Company, on behalf of its Ohio electric utility operating companies plan under Ohio's new electric utility restructuring law. The plan was originally December 22, 1999 refiled its transition on November 30, to PUCO rules established filed with the PUCO on October 4, 1999, but was refiled to conform over control, and perhaps on the Company's plans to turn 1999. The new filing also included additional information The PUCO indicated that it assets to the Alliance Regional Transmission Organization.

ownership, of its transmission of the initial October filing date.

will endeavor to issue its order in the Company's case within 275 days into its component elements The transition plan itemizes, or unbundles, the current price of electricity transition charges. As required by the PUCO's rules, the including generation, transmission, distribution and and unregulated operations, of its regulated Company's filing also included its proposals on corporate separation choice, an education program to customer operational and technical support changes needed to accommodate system will be operated to the law, and how the Company's transmission inform customers of their options under as their generation provider with OE, CEI, or TE ensure access to all users. Under the plan, customers who remain $759 million between 2000 and rate plans, expected to total will continue to receive savings under the Company's the 5% reduction in the charges for taxes and 2005. In addition, customers will save $358 million through reduced are expected to be frozen 2001. Customer prices price of generation for residential customers beginning January 1, for certain limited statutory exceptions including through a five-year market development period (2001-2005), except The plan proposes recovery of generation the 5% reduction in the price of generation for residential customers.

net of deferred income taxes), $1.9 billion ($1.7 related transition costs of approximately $1.8 billion ($1.6 billion,

$0.8 billion ($0.7 billion, net of deferred income taxes) for OE, CEI and TE, billion, net of deferred income taxes) and costs related to regulatory assets aggregating respectively, over the market development period; transition income taxes), $1.9 billion ($1.4 billion, net of deferred income approximately $1.5 billion ($1.0 billion, net of deferred for OE, CEI and TE, respectively, will be recovered taxes) and $0.8 billion ($0.5 billion, net of deferred income taxes) forTE; and 2001 through 2010 for CEI.

over the period of 2001 through 2004 for OE; 2001 through 2007 2

The PUCO indicated that it will endeavor to issue its order related to the transition plan filing by mid-2000.

The application of Statement of Financial Accounting Standards (SFAS) No. 71 "Accounting for the Effect of Certain Types of Regulation" (SFAS 71) to OE's generation business and the nonnuclear generation businesses of CEI and TE will be discontinued at that time. If the transition plans ultimately approved by the PUCO for OE, CEI and TE do not provide adequate recovery of their nuclear generating unit investments and regulatory assets, there would be a charge to earnings which could have a material adverse effect on the results of operations and financial condition for the Company, OE, CEI and TE. The Companies will continue to bill and collect cost-based rates for their transmission and distribution services, which will remain regulated; accordingly, it is appropriate that the Companies continue the application of SFAS 71 to those respective operations after December 31, 2000.

All of OE's regulatory assets and CEI's and TE's regulatory assets related to their nonnuclear operations are being recovered under provisions of the regulatory plans currently in effect. In addition, the PUCO has authorized OE to recognize additional capital recovery related to its generating assets (which is reflected as additional depreciation expense) and additional amortization of regulatory assets during the plan period of at least $2 billion more than the amount that would have been recognized if OE's plan were not in effect. These additional amounts are being recovered through current rates. CEI and TE recognized fair value purchase accounting adjustments to reduce nuclear plant by $1.71 billion and $.84 billion, respectively, in connection with the FirstEnergy merger. These fair value adjustments recognized for financial reporting purposes will ultimately satisfy the asset reduction commitments of at least $1.4 billion for CEI and $0.6 billion for TE contained in the CEI and TE plan. For regulatory purposes, CEI and TE will recognize the accelerated amortization over the period that their rate plan is in effect.

Based on the Ohio plans, at this time, OE, CEI and TE are continuing to bill and collect cost-based rates (with the exception of CEI's and TE's nuclear operations) and they continue the application of SFAS 71 to those respective operations. CEI's and TE's plan does not provide for full recovery of their nuclear operations. As a result, in October 1997 CEI and TE discontinued application of SFAS 71 for their nuclear operations and decreased their regulatory assets of customer receivables for future income taxes related to the nuclear assets by $499 million and

$295 million, respectively, in addition to the fair value adjustments referred to above.

PPUCRate Matters In December 1996, Pennsylvania enacted "The Electricity Generation Customer Choice and Competition Act," which permitted customers, including Penn's customers, to choose their electric generation supplier, while transmission and distribution services will continue to be supplied by their current providers. In June 1998, the PPUC authorized a rate-restructuring plan for Penn in accordance with this law, which essentially resulted in the deregulation of Penn's generation business as of June 30, 1998. Penn was required to remove from its balance sheet all regulatory assets and liabilities related to its generation business and assess all other assets for impairment. The Securities and Exchange Commission (SEC) issued interpretive guidance regarding asset impairment measurement which concluded that any supplemental regulated cash flows such as a competitive transition charge (CTC) should be excluded from the cash flows of assets in a portion of the business not subject to regulatory accounting practices.

If those assets are impaired, a regulatory asset should be established if the costs are recoverable through regulatory cash flows. Consistent with the SEC guidance, Penn reduced its nuclear generating unit investments by approximately $305 million, of which approximately $227 million was recognized as a regulatory asset to be recovered through a CTC over a seven-year transition period; the remaining net amount of $78 million was written off.

The charge of $51.7 million ($30.5 million after income taxes) for discontinuing the application of SFAS 71 to Penn's generation business was recorded as a 1998 extraordinary item on the Company's, OE's and Penn's respective Statement of Income.

Customer choice is being phased in over three years with 66% of each customer class able to choose 1,

alternative suppliers of generation by January 2, 2000, and all remaining customers having choice as of January 2001. Under the plan, Penn continues to deliver power to homes and businesses through its transmission and distribution systems, which remain regulated by the PPUC. Penn's rates have been restructured to establish separate In charges for transmission and distribution; generation, which is subject to competition; and stranded cost recovery.

the event customers obtain power from an alternative source, the generation portion of Penn's rates will be excluded cost from their bill and the customers will receive a generation charge from the alternative supplier. The stranded for recovery of certain amounts not otherwise considered recoverable in a recovery portion of rates provides generation market, including regulatory assets. Penn is entitled to recover $236 million of stranded costs competitive through a competitive transition charge that started in 1999 and ends in 2006.

FERC Rate Matters Rates for wholesale customers are regulated by the FERC. The FirstEnergy merger was approved by the 1997. An FERC on October 29, 1997, and the Companies have operated as a single utility system since December 3

FirstEnergy system submitted with the merger open access transmission tariff and joint dispatch agreement for the FirstEnergy open access rates were application were approved by the FERC on February 9, 2000. The current approved by the FERC on March 16, 2000.

Companies' transmission assets into a In October 1998, the Company announced plans to transfer the Systems, Inc. (ATSI), with the transfer expected to be finalized in 2000. The new subsidiary, American Transmission part of a larger independent or becoming new subsidiary represents a first step toward the goal of establishing the FERC's stated believes that a TransCo better addresses transmission company (TransCo). The Company streamlined and cost-efficient providing for transmission objectives of providing non-discriminatory service, while assets to ATSI.

to transfer the Company's transmission operation. On October 27, 1999, the FERC approved the plan are also required. The new 2000. PPUC and SEC regulatory approvals The PUCO approved the transfer in February a larger independent, regional or becoming part of subsidiary represents a first step toward the goal of establishing four other companies -

that goal, the Company joined with transmission organization (RTO). In working toward to form the Alliance RTO. On Power --

American Electric Power, Consumers Energy, Detroit Edison and Virginia the Alliance submitted an application to the FERC to form an independent, for profit RTO. On June 3, 1999, conditionally approving the Alliance's application.

December 15, 1999, the FERC issued an order Fuel Recovery Procedures recovery rates have been frozen, In accordance with their respective rate plans, OE's, CEI's and TE's fuel respective rates are adjusted annually based on changes in the subject only to limited periodic adjustments. The or tax laws or regulations regulatory GDP Implicit Price Deflator, unless significant changes in environmental, require PUCO approval regulations and/or taxes would increase or decrease the cost of fuel. Such changes in laws, to the Electric Fuel Component (EFC) rate.

in order to be reflected as an adjustment OE EFC rate is limited to the average Furthermore, for the period July 1, 1999 through June 30, 2000, the within the state. Commencing July 1, 2000, the OE EFC rate will be limited to 97% of fuel cost rate of certain utilities fuel cost rate for these three utilities may be the average fuel cost rate of three of these companies. The average compliance plans of such changes in the Phase II environmental adjusted by the PUCO to reflect any significant companies involving capital additions or equipment utilization.

and TE were reduced to reflect the On March 1, 2000, the respective EFC rates in effect for CEI coal supply contract (see "Fuel Supply"), which elimination of annual fixed charges related to a Bruce Mansfield Plant for TE. The resulting reduced EFC rates will be used as the basis amounts to $13.96 million for CEI and $8.74 million rate exceed 1.465 cents per annual EFC for the annual GDP adjustment, but, in no event, would either company's kWh during the rate plan period.

effective with the beginning of the market Under the Ohio deregulation legislation the EFC will be repealed unbundled retail electric rates for OE, CEI and TE during the market development period on January 1, 2001. The when the legislation was effective in 1999.

development period will reflect the respective EFC rates in effect of fuel and net purchased power Under its 1996 plan, Penn eliminated its energy cost rate for the recovery were rolled into Penn's base electric rates at their costs as a separate component of customer charges. Energy costs projected 1996-1997 level.

Capital Requirements for the years 1999 through 2004, excluding Capital expenditures for the Company and its subsidiaries costs include expenditures for the betterment of existing facilities nuclear fuel, are shown on the following table. Such distribution lines, substations and other additions.

and for the construction of generating capacity, transmission lines, expenditures not included in the environment-related See "Environmental Matters" below with regard to possible forecast.

1999 2000-2004 Capital Expenditures Forecast Actual 2000 2001-2004 Total (in millions)

$167 $213 $ 553 $ 766 OE ............... 234 Penn .......................... 22 38 196 122 112 417 529 CEI ............................. 259

.............................. 107 97 162 TE 1,

...... 81 190 1" 02 Other subsidiaries $3,000 Total ........................... $499 $650 $2,350 4

During the 2000-2004 period, maturities of, and sinking fund requirements for, long-term debt and preferred stock of the Company and its subsidiaries are:

Preferred Stock and Long-Term Debt 2000-2004 Redemption Schedule 2000 2001-2004 Total (In millions)

O E.................................................... $177 $ 883 $1,060 Penn ................................................ 29 81 110 CEI................................................... 209 780 989 T E .................................................... 76 505 581 Other subsidiaries ............................ 3 10 13 Total ................................................. $494 $2,259 $2,753 OE's and Penn's nuclear fuel purchases are financed through OES Fuel (a wholly owned subsidiary of OE) commercial paper and loans, both of which are supported by a $180.5 million long-term bank credit agreement.

CEI and TE severally lease their respective portions of nuclear fuel and pay for the fuel as it is consumed. The Companies' respective investments for additional nuclear fuel, and nuclear fuel investment reductions as the fuel is consumed, during the 2000-2004 period are presented in the following table. The table also shows the Companies' operating lease commitments, net of capital trust cash receipts for the 2000-2004 period.

Other Net Nuclear Fuel 2000-2004 Forecasts Operating Lease Commitments New Investments Consumption 2000-2004 Schedule 2000 2001-2004 Total 2000 2001-2004 Total 2000 2001-2004 Total (In millions)

OE ............................. $ 40 $ 88 $128 $ 28 $101 $129 $71 $286 $357 Penn .......................... 24 66 90 18 68 86 - 1 1 CEI ............................ 56 110 166 36 123 159 6 55 61 TE .............................. 39 74 113 24 82 106 69 294 363 Total .......................... $159 $33-8 $497 $106 $374 $480 $146 $636 $782 Short-term borrowings outstanding at December 31, 1999, consisted of $257.8 million of bank borrowings (Company - $90.0 million, OE-$162.7 and FE Facilities - $5.1) and $160.0 million of OES Capital, Incorporated commercial paper. OES Capital is a wholly owned subsidiary of OE whose borrowings are secured by customer accounts receivable. OES Capital can borrow up to $170 million under a receivables financing agreement at rates based on certain bank commercial paper. The Company and its utility operating subsidiaries also had $137 million (Company-$60 million and OE-$77 million) available under revolving lines of credit as of December 31, 1999. The Company may borrow under the facility and could transfer any of its borrowings under its $150 million line of credit to CEI and/or TE. In addition, Penn had a $2 million bank facility available that provides for borrowings on a short-term basis at the bank's discretion.

Based on their present plans, the Companies could provide for their cash requirements in 2000 from the following sources: funds to be received from operations; available cash and temporary cash investments (approximate amounts as of December 31, 1999: Company's nonutility subsidiaries-$24 million, OE-$81 million, Penn-$6 million and CEI-$1 million); the issuance of long-term debt (for refunding purposes) and funds available under revolving credit arrangements.

The extent and type of future financings will depend on the need for external funds as well as market conditions, the maintenance of an appropriate capital structure and the ability of the Companies to comply with coverage requirements in order to issue first mortgage bonds and preferred stock. The Companies will continue to monitor financial market conditions and, where appropriate, may take advantage of economic opportunities to refund debt and preferred stock to the extent that their financial resources permit.

The coverage requirements contained in the first mortgage indentures under which the Companies issue first mortgage bonds provide that, except for certain refunding purposes, the Companies may not issue first mortgage bonds unless applicable net earnings (before income taxes), calculated as provided in the indentures, for any period bonds of twelve consecutive months within the fifteen calendar months preceding the month in which such additional are issued, are at least twice annual interest requirements on outstanding first mortgage bonds, including those being issued. Under OE's first mortgage indenture, the availability of property additions is more restrictive than the earnings to test at the present time and would limit the amount of first mortgage bonds issuable against property additions

$162 million. OE is currently able to issue $833 million principal amount of first mortgage bonds against previously 5

retired bonds without the need to meet the above restrictions. Under Penn's first mortgage indenture, other requirements also apply and are more restrictive than the earnings test at the present time. Penn is currently able to issue $114 million principal amount of first mortgage bonds, with up to $94 million of such amount issuable against property additions; the remainder could be issued against previously retired bonds. CEI and TE can issue $615 million and $367 million, respectively, principal amount of first mortgage bonds against previously retired bonds and against property additions.

OE's, Penn's and TE's respective articles of incorporation prohibit the sale of preferred stock unless applicable gross income, calculated as provided in the articles of incorporation, is equal to at least 1-1/2 times the aggregate of the annual interest requirements on indebtedness and annual dividend requirements on preferred stock outstanding immediately thereafter. Based upon earnings for 1999 and an assumed dividend rate of 10.25%, OE would be permitted, under the earnings coverage test contained in its charter, to issue at least $1.3 billion of preferred stock. Based on its 1999 earnings, TE could issue $250 million of additional preferred stock. There are no restrictions on CEI' s ability to issue preferred stock.

To the extent that coverage requirements or market conditions restrict the Companies' abilities to issue desired amounts of first mortgage bonds or preferred stock, the Companies may seek other methods of financing.

Such financings could include the sale of preferred and/or preference stock or of such other types of securities as might be authorized by applicable regulatory authorities which would not otherwise be sold and could result in annual interest charges and/or dividend requirements in excess of those that would otherwise be incurred.

Central Area Power Coordination Group (CAPCO)

In September 1967, the CAPCO companies, which consisted of the Companies and Duquesne Light Company (Duquesne), announced a program for joint development of power generation and transmission facilities.

Included in the program are Unit 7 at the W H Sammis Plant, Unit 5 at the Eastlake Plant, Units 1, 2 and 3 at the Bruce Mansfield Plant, Units 1 and 2 at the Beaver Valley Power Station, the Perry Nuclear Power Plant and the Davis-Besse Nuclear Power Station, each now in service.

On March 26, 1999, the Company completed its agreements with Duquesne to exchange certain generating assets. All regulatory approvals were received by October 1999. In December 1999, Duquesne transferred 1,436 megawatts owned by Duquesne at eight CAPCO generating units in exchange for 1,328 megawatts at three non-CAPCO power plants owned by the Companies. The agreements for the exchange of assets, which was structured as a like-kind exchange for tax purposes, provides the Companies with exclusive ownership and operating control of all CAPCO generating units. The three FirstEnergy plants transferred are being sold by Duquesne to a wholly owned subsidiary of Orion Power Holdings, Inc. (Orion). The Companies will continue to operate those plants until the assets are transferred to the new owners. Duquesne funded. decommissioning costs equal to its percentage interest in the three nuclear generating units that were transferred to FirstEnergy. The Duquesne asset transfer to the Orion subsidiary could take place by the middle of 2000. Under the agreements, Duquesne is no longer a participant in the CAPCO arrangements after the exchange.

Nuclear Regulation The construction and operation of nuclear generating units are subject to the regulatory jurisdiction of the Nuclear Regulatory Commission (NRC) including the issuance by it of construction permits and operating licenses.

for The NRC's procedures with respect to the amendment of nuclear reactor operating licenses afford opportunities request adjudicatory hearings on health, safety and environmental issues subject to meeting interested parties to NRC "standing" requirements. In this connection, the NRC may require substantial changes in operation or the installation of additional equipment to meet safety or environmental standards, subject to the backfit rule requiring the The NRC to justify such new requirements as necessary for the overall protection of public health and safety.

of licenses in the event of substantial safety concerns at possibility also exists for modification, denial or revocation was placed in commercial operation in 1977, and its operating license expires in the nuclear facility. Davis-Besse license expires in 2016.

2017. Beaver Valley Unit 1 was placed in commercial operation in 1976, and its operating licenses Perry Unit 1 and Beaver Valley Unit 2 were placed in commercial operation in 1987, and their operating expire in 2026 and 2027, respectively.

The NRC has promulgated and continues to promulgate regulations related to the safe operation of nuclear power plants. The Companies cannot predict what additional regulations will be promulgated or design may have changes required or the effect that any such regulations or design changes, or the consideration thereof, plants. Although the Companies have no reason to anticipate an accident at any of their nuclear upon their nuclear currently undeterminable adverse effect on the plants, if such an accident did happen, it could have a material but position. In addition, such an accident at any operating nuclear plant, whether or Company's consolidated financial 6

not owned by the Companies, could result in regulations or requirements that could affect the operation or licensing of plants that the Companies do own with a consequent but currently undeterminable adverse impact, and could affect the Companies' abilities to raise funds in the capital markets.

Nuclear Insurance The Price-Anderson Act limits the public liability which can be assessed with respect to a nuclear power plant to $9.5 billion (assuming 106 units licensed to operate) for a single nuclear incident, which amount is covered by: (i) private insurance amounting to $200 million; and (ii) $9.3 billion provided by an industry retrospective rating plan required by the NRC pursuant thereto. Under such retrospective rating plan, in the event of a nuclear incident at any unit in the United States resulting in losses in excess of private insurance, up to $88.1 million (but not more than

$10 million per unit per year in the event of more than one incident) must be contributed for each nuclear unit licensed to operate in the country by the licensees thereof to cover liabilities arising out of the incident. Based on their present nuclear ownership and leasehold interests, the Companies' maximum potential assessment under these provisions would be $352.4 million (OE-$94.2 million, Penn-$74.0 million, CEI-$106.3 million and TE-$77.9 million) per incident but not more than $40.0 million (OE-$10.7 million, Penn-$8.4 million, CEI-$12.1 million and TE-$8.8 million) in any one year for each incident.

In addition to the public liability insurance provided pursuant to the Price-Anderson Act, the Companies have also obtained insurance coverage in limited amounts for economic loss and property damage arising out of nuclear incidents. The Companies are members of Nuclear Electric Insurance Limited (NEIL) which provides coverage (NEIL I) for the extra expense of replacement power incurred due to prolonged accidental outages of nuclear units. Under NEIL I, the Companies have policies, renewable yearly, corresponding to their respective nuclear interests, which provide an aggregate indemnity of up to approximately $1.43 billion (OE-$339 million, Penn

$367 million, CEI-$443 million and TE-$276 million) for replacement power costs incurred during an outage after an initial 12-week waiting period. Members of NEIL I pay annual premiums and are subject to assessments if losses exceed the accumulated funds available to the insurer. The Companies' present maximum aggregate assessment for incidents at any covered nuclear facility occurring during a policy year would be approximately $7.9 million (OE-$2.0 million, Penn-$2.3 million, CEI-$2.2 million and TE-$1.4 million).

The Companies are insured as to their respective nuclear interests under property damage insurance provided by NEIL to the operating company for each plant. Under these arrangements, $2.75 billion of coverage for decontamination costs, decommissioning costs, debris removal and repair and/or replacement of property is provided. The Companies pay annual premiums for this coverage and are liable for retrospective assessments of up to approximately $36.1 million (OE-$10.3 million, Penn-$7.5 million, CEI-$10.9 million and TE-$7.4 million) during a policy year.

The Companies intend to maintain insurance against nuclear risks as described above as long as it is available. To the extent that replacement power, property damage, decontamination, decommissioning, repair and replacement costs and other such costs arising from a nuclear incident at any of the Companies' plants exceed the policy limits of the insurance in effect with respect to that plant, to the extent a nuclear incident is determined not to be covered by the Companies' insurance policies, or to the extent such insurance becomes unavailable in the future, the Companies would remain at risk for such costs.

The NRC requires nuclear power plant licensees to obtain minimum property insurance coverage of $1.06 billion or the amount generally available from private sources, whichever is less. The proceeds of this insurance are required to be used first to ensure that the licensed reactor is in a safe and stable condition and can be maintained in that condition so as to prevent any significant risk to the public health and safety. Within 30 days of stabilization, the licensee is required to prepare and submit to the NRC a cleanup plan for approval. The plan is required to identify all cleanup operations necessary to decontaminate the reactor sufficiently to permit the resumption of operations or to commence decommissioning. Any property insurance proceeds not already expended to place the reactor in a safe and stable condition must be used first to complete those decontamination operations that :are ordered by the NRC.

The Companies are unable to predict what effect these requirements may have on the availability of insurance proceeds to the Companies for the Companies' bondholders.

Environmental Matters Various federal, state and local authorities regulate the Companies with regard to air and water quality and other environmental matters. The Companies have estimated capital expenditures for environmental compliance of approximately $292 million, which is included in the construction estimate given under "Capital Requirements" for 2000 through 2004.

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Air Regulation Ohio and the Commonwealth of Under the provisions of the Clean Air Act of 1970, both the State of standards, and related emission limits, including limits for sulfur dioxide Pennsylvania adopted ambient air quality Agency (EPA) promulgated an SO 2 regulatory (SO 2) and particulates. In addition, the U.S. Environmental Protection TE's plants in 1977. Generating plants to be constructed in plan for Ohio which became effective for OE's, CEI's and be covered not only by the applicable state the future and some future modifications of existing facilities will new sources. In both Ohio and Pennsylvania the standards but also by EPA emission performance standards for sources requires approval from appropriate environmental authorities, and construction or modification of emission to do so has been issued by those same the facilities involved may not be operated unless a permit or variance authorities.

oxides (NO.) reduction requirements The Companies are in compliance with the current SO2 and nitrogen 1990. SO reductions are being achieved by burning lower-sulfur fuel, under the Clean Air Act Amendments of 2 NOx reductions are emission allowances.

generating more electricity from lower-emitting plants, and/or purchasing plants. In September more electricity from lower-emitting being achieved through combustion controls and generating Ohio and Pennsylvania requiring additional NO, reductions from the Companies' 1998, the EPA finalized regulations reductions of NO, emissions across a region facilities by May 2003. The EPA's NO, Transport Rule imposes uniform including Ohio and Pennsylvania, based on a conclusion that such of twenty-two states and the District of Columbia, eastern United States. In March 2000, the U.S.

NO. emissions are contributing significantly to ozone pollution in the Rule except as applied to the State of Wisconsin Court of Appeals for the D.C. Circuit upheld EPA's NO, Transport Court's decision left in place a stay which delays the requirement for states and portions of Georgia and Missouri. The individual state NO, budgets established by to submit revised State Implementation Plans (SIP) which comply with in utility plant NO, emissions from projected 2007 emissions.

the EPA contemplating an approximate 85% reduction Plan accompanied the NO, Transport Rule and may be implemented by the EPA A proposed Federal Implementation action, eight states filed petitions with the EPA in states which fail to revise their SIP. In another separate but related reductions of NO, emissions which are alleged to contribute to ozone under Section 126 of the Clean Air Act seeking 126 petitions will be adequately addressed pollution in the eight petitioning states. The EPA suggests that the Section rulemaking established an alternative program which would by the NO, Transport Program, but a December 17, 1999 reductions at 392 utility plants, including the Companies' Ohio and Pennsylvania require nearly identical 85% NO, Section 126 petitions Rule is delayed. New plants, by May 2003, in the event implementation of the NO, Transport still under evaluation the District of Columbia in mid-1999 and are were filed by New Jersey, Maryland, Delaware and options.

continue to evaluate their compliance plans and other compliance by the EPA. The Companies Violations of such regulations The Companies are required to meet federally approved SO 2 regulations.

penalties of up to $27,500 for each day can result in shutdown of the generating unit involved and/or civil or criminal in Ohio that allows for policy for SO 2 regulations the unit is in violation. The EPA has an interim enforcement the EPA may take in the averaging period. The Companies cannot predict what action compliance based on a 30-day future with respect to the interim enforcement policy.

Standard (NAAQS) for ozone In July 1997, EPA promulgated changes in the National Ambient Air Quality unregulated ultra-fine particulate matter. In May 1999, the U.S. Court of and proposed a new NAAQS for previously finding constitutional and other defects in the Appeals for the D.C. Circuit remanded both standards back to the EPA 1999, denied an EPA petition for rehearing. The new NAAQS rules. The D.C. Circuit Court, on October 29, in response to the Courts remand order. The cost of compliance with Companies cannot predict the EPA's action on the manner in which they are ultimately these regulations, if they are reinstated, may be substantial and depends operate affected facilities.

implemented, if at all, by the states in which the Companies 1999, OE and Penn received, a In September 1999, the Company received, and subsequently in October York Attorney General's office alleging Clean Air Act violations at the W. H.

citizen suit notification letter from the New letter from the Connecticut suit notification Sammis Plant. In November 1999, OE and Penn received a citizen 1999 and March 2000, violations at the Sammis Plant. In November Attorney General's office alleging Clean Air Act power plants, including to eight utilities covering 36 the EPA issued Notices of Violation (NOV) or a Compliance Order against various investor filed seven civil complaints the Sammis Plant. In addition, the U.S. Department of Justice for the Southern District of against OE and Penn in the U.S. District Court owned utilities, which included a complaint the other utilities to the plants owned by Ohio. On March 1, 2000, the Department of Justice added 12 additional and maintenance of the Air Act based on operation complaints. The NOV and complaint allege violations of the Clean to require the installation of complaint requests permanent injunctive relief Sammis Plant dating back to 1984. The per day of violation. Although unable to predict "best available control technology" and civil penalties of up to $27,500 Sammis Plant is in full compliance with the Clean Air Act and the outcome of this litigation, the Company believes the imposed if the Sammis Plant continues to operate the NOV and complaint are without merit. Penalties could be 8

without correcting the alleged violations and a court determines that the allegations are valid. It is anticipated at this time that the Sammis Plant will continue to operate while the matter is being decided.

Water Regulation Various water quality regulations, the majority of which are the result of the federal Clean Water Act and its amendments, apply to the Companies' plants. In addition, Ohio and Pennsylvania have water quality standards applicable to the Companies' operations. As provided in the Clean Water Act, authority to grant federal National Pollutant Discharge Elimination System (NPDES) water discharge permits can be assumed by a state. Ohio and Pennsylvania have assumed such authority.

Waste Disposal As a result of the Resource Conservation and Recovery Act of 1976, as amended, and the Toxic Substances Control Act of 1976, federal and state hazardous waste regulations have been promulgated. Certain fossil-fuel combustion waste products, such as coal ash, were exempted from hazardous waste disposal requirements pending EPA's evaluation of the need for future regulation. EPA has issued its final regulatory determination that regulation of coal ash as a hazardous waste is unnecessary.

CEI and TE have been named as "potentially responsible parties" (PRPs) at waste disposal sites which may require cleanup under the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

Federal law provides that all PRPs for a particular site be held liable on a joint and several basis. CEI and TE have accrued a liability totaling $5.4 million at December 31, 1999 based on estimates of the costs of cleanup and the proportionate responsibility of other PRPs for such costs. CEI and TE believe that waste disposal costs will not have a material adverse effect on their financial condition, cash flows or results of operations.

In 1980, Congress passed the Low-Level Radioactive Waste Policy Act which provides that the disposal of low-level radioactive waste is the responsibility of the state where such waste is generated. The Act encourages states to form compacts among themselves to develop regional disposal facilities. Failure by a state or compact to begin implementation of a program could result in access denial to the two facilities currently accepting low-level radioactive waste. Ohio is part of the Midwest Compact and has responsibility for siting and constructing a disposal facility. On June 26, 1997, the Midwest Compact Commission (Compact) voted to cease all siting activities in the host state of Ohio and to dismantle the Ohio Low-Level Radioactive Waste Facility Development Authority, the statutory agency charged with siting and constructing the low-level radioactive waste disposal facility. While the Compact remains intact, it has no plans to site or construct a low-level radioactive waste disposal facility in the Midwest. The Companies continue to ship low-level radioactive waste from their nuclear facilities to the Bamwell, South Carolina waste disposal facility.

Summary Environmental controls are still in the process of development and require, in many instances, balancing the needs for additional quantities of energy in future years and the need to protect the environment. As a result, the any of Companies cannot now estimate the precise effect of existing and potential regulations and legislation upon and operations or upon their ability to issue additional first mortgage bonds under their existing and proposed facilities to all their respective mortgages. These mortgages contain covenants by the Companies to observe and conform valid governmental requirements at the time applicable unless in course of contest, and provisions which, in effect, of prevent the issuance of additional bonds if there is a completed default under the mortgage. The provisions of each the respective Companies, that certification of the mortgages, in effect, also require, in the opinion of counsel for for the issuance of bonds or other action under the mortgages be accompanied by an property additions as the basis the time opinion of counsel that the company certifying such property additions has all governmental permissions at of such property additions. The Companies intend to contest necessary for its then current ownership and operation unreasonable or impossible for compliance or otherwise contrary to the public interest.

any requirements they deem or replace Developments in these and other areas of regulation may require the Companies to modify, supplement the construction and operation of new facilities, at costs which equipment and facilities, and may delay or impede could be substantial.

9

Fuel Supply The Companies' sources of generation during 1999 were:

Coal Nuclear OE .................................. 75.2% 24.8%

Penn ............................... 61.1% 38.9%

CEI ................................. 59.0% 41.0%

TE .................................. 42.3% 57.7%

The Company currently has long-term coal contracts which will provide approximately 6,300,000 tons for the year 2000. The contracts are shared between the Companies based on various economic considerations and the coal is produced primarily from mines located in Pennsylvania, Kentucky and West Virginia. The contracts expire at various times through December 31, 2004.

The Companies estimate their 2000 coal requirements to be approximately 17,950,000 tons (OE 8,420,000, Penn - 1,160,000, CEI - 6,030,000, and TE - 2,340,000). See "Environmental Matters" for factors pertaining to meeting environmental regulations affecting coal-fired generating units.

OES Fuel is the sole lessor for OE's and Penn's nuclear fuel requirements (see "Capital Requirements" and Note 3G of Notes to OE's Consolidated Financial Statements). Nuclear fuel is currently financed for CEI and TE through leases with a special-purpose corporation.

The Company has contracts for uranium material through 2002 and conversion services through 2002.

The enrichment services are contracted for the majority of the enrichment requirements for nuclear fuel through 2005.

Fabrication services for fuel assemblies are contracted for the next four reloads for Beaver Valley Unit 1, three reloads for Beaver Valley Unit 2 (through approximately 2006 and 2005, respectively), the next four reloads for Davis Besse (through approximately 2005) and through the life of the plant for Perry (through approximately 2026). In addition to the existing commitments, the Company intends to make additional arrangements for the supply of uranium and for the subsequent conversion, enrichment, fabrication, and waste disposal services.

Due to the present lack of availability of domestic reprocessing services, to the continuing absence of any program to begin development of such reprocessing capability and questions as to the economics of reprocessing, nuclear fuel costs are calculated based on the assumption that spent fuel will not be reprocessed. On-site spent fuel 2 are storage facilities are expected to be adequate for Perry through 2011; facilities at Beaver Valley Units 1 and 2009, respectively. After scheduled plant modifications are completed in expected to be adequate through 2018 and 2002, Davis-Besse will have adequate storage through 2022. After on-site storage capacity is exhausted, additional storage capacity will have to be obtained which could result in significant additional costs unless reprocessing Nuclear services, interim off-site disposal, or permanent waste disposal facilities become available. The Federal Waste Policy Act of 1982 provides for the construction of facilities for the disposal of high-level nuclear wastes, site including spent fuel from nuclear power plants operated by electric utilities; however, the selection of a suitable embroiled in the political process. The Company has contracts with the U.S. Department of Energy has become be unable (DOE) for the disposal of spent fuel. On December 17, 1996, the DOE notified the Companies that it would fuel for disposal by January 31, 1998 as mandated by Section 302(a)(5)(B) of the to begin acceptance of spent Impact Nuclear Waste Policy Act (NPA). Based on the DOE schedule published in the July 1999 Draft Environmental Statement, the Yucca Mountain Repository is currently projected to start receiving spent fuel in 2010.

System Capacity and Reserves The respective 1999 net maximum hourly demand on each of the Companies was OE-5,750,000 kilowatts on (kW) (including 301,000 kW of firm power sales which extend through 2005 as discussed under "Competition")

Penn-905,000 kW (including 63,000 kW of firm power sales which extend through 2005 as discussed July 30, 1999; sales which under "Competition") on September 2, 1999; CEI-4,451,000 kW (including 18,000 kW of firm power under "Competition") on July 30, 1999; and TE-2,085,000 kW on July 30, 1999.

extend through 2002 as discussed to the During the next three years, twelve combustion turbines (CT) are scheduled to be added The timing of the capacity additions is: three CTs (390 MW) in 2000; five CTs (425 MW) in 2001; FirstEnergy system.

in November 1999, and and four CTs (340 MW) in 2002. Based on existing capacity plans, the load forecast made the capacity margin anticipated for the year 2000 is 13%. With the start anticipated term power sales to other utilities, industry deregulation in Ohio in 2001, the Company's risk management strategy with respect to of electric utility 10

power supply is addressing existing capacity, new capacity additions, retail risk products such as interruptible contracts and demand-side management options, and financial hedges such as call options, futures and forwards.

Regional Reliability The Companies participate with 24 other electric companies operating in nine states in the East Central Area Reliability Coordination Agreement (ECAR), which was organized for the purpose of furthering the reliability of bulk power supply in the area through coordination of the planning and operation by the ECAR members of their bulk power supply facilities. The ECAR members have established principles and procedures regarding matters affecting the reliability of the bulk power supply within the ECAR region. Procedures have been adopted regarding: i) the evaluation and simulated testing of systems' performance; ii) the establishment of minimum levels of daily operating reserves; iii) the development of a program regarding emergency procedures during conditions of declining system frequency; and iv) the basis for uniform rating of generating equipment.

Competition The Companies have traditionally competed with other utilities for intersystem bulk power sales and for sales to municipalities and cooperatives. The Companies compete with suppliers of natural gas and other forms of energy in connection with their industrial and commercial sales and in the home climate control market, both with respect to new customers and conversions, and with all other suppliers of electricity. To date, there has been no substantial cogeneration by the Companies' customers.

In an effort to more fully utilize their facilities and hold down rates to their other customers, OE and Penn have entered into a long-term power sales agreement with another utility. Currently, OE and Penn are selling 450,000 kW annually under this contract through December 31, 2005. OE and Penn have the option to reduce this commitment by 150,000 kW, with three years' advance notice. In addition, CEI has entered into a long-term power sales contract with another utility and is currently selling up to 20,000 kW under this contract through December 31, 2002.

As a result of the actions taken by state legislative bodies over the last few years, major changes in the retail utility business are now occurring in some parts of the United States, including states in which the Company's utility companies operate. Although it is too early to accurately predict all of the effects of the changes that are beginning to take place in the retail energy market, it is anticipated that these changes will result in fundamental alterations in the way traditional integrated utilities and holding company systems, like FirstEnergy, conduct their business. These changes will likely result in increased costs associated with utility unbundling and transitioning to new organizational structures and ways of conducting business.

Sales of electricity in these deregulated markets are diversifying the Company's revenue sources through its competitive subsidiaries in areas outside of its traditional native load. This strategy has positioned the Company to compete in the northeast quadrant of the United States - the region targeted by the Company for growth. The Company's competitive subsidiaries have actively participated in three of the deregulated energy markets:

Pennsylvania, New Jersey and Delaware. Currently, FE Services is providing electric generation to more than 20,000 accounts within these states. As additional states within the northeast region of the United States become deregulated, FE Services is preparing to enter into these markets.

Research and Development The Companies participate in funding the Electric Power Research Institute (EPRI), which was formed for the purpose of expanding electric research and development under the voluntary sponsorship of the nation's electric utility industry - public, private and cooperative. Its goal is to mutually benefit utilities and their customers by promoting the development of new and improved technologies to help the utility industry meet present and future electric energy needs in environmentally and economically acceptable ways. EPRI conducts research on all aspects of electric power production and use, including fuels, generating, delivery, energy management and conservation, environment effects and energy analysis. The major portion of EPRI research and development projects is directed toward practical solutions and their applications to problems currently facing the electric utility industry. In 1999, approximately 60% of the Companies' research and development expenditures were related to EPRI.

Executive Officers The executive officers are elected at the annual organization meeting of the Board of Directors, held immediately after the annual meeting of stockholders, and hold office until the next such organization meeting, unless the Board of Directors shall otherwise determine, or unless a resignation is submitted.

1I

Position Held During Name Aa e Past Five Years Dates 2000-present H. P. Burg 53 Chairman of the Board and Chief Executive Officer President and Chief Executive Officer 1999-2000 President and Chief Operating Officer 1998-1999 1997-1998 President and Chief Financial Officer President, Chief Operating Officer and Chief Financial Officer-OE 1996-1997 Senior Vice President and Chief Financial Officer-OE *-1996 48 President 2000-present A. J. Alexander Executive Vice President and General Counsel 1997-2000

• -1997 Senior Vice President and General Counsel-OE 57 Vice President - Distribution 1997-present E. T. Carey 1995-1997 Vice President - Regional Operations and Customer Service-OE *-1995 Vice President - Marketing and Customer Service Support-OE Vice President - Corporate Affairs 1997-present M. B. Carroll 48 *-1997 Manager - Sandusky Area-OE 1998-present K. W. Dindo 50 Vice President - Energy Services *-1998 Vice President and Controller - Caliber System, Inc.

45 Vice President - Sales and Marketing 1997-present D. S. Elliott 1997 Manager - FirstEnergy Services - OE Manager - Eastern Division - OE 1996-1997 Manager - Youngstown Division - OE *-1996 61 Senior Vice President 2000-present A. R. Garfield 1997-2000 Vice President - Business Development *-1997 Vice President - System Operations - OE Senior Vice President - Administrative Services 1998-present J. A. Gill 63 Vice President - Administrative Services 1997-1998 Vice President - Administration - OE *-1997 Vice President and Chief Financial Officer 1998-present R. H. Marsh 49 Vice President - Finance 1997-1998

• -1997 Treasurer - OE 1997-present G. L. Pipitone 50 Vice President - Fossil Production Vice President - Generation and Transmission - OE 1996-1997

• -1996 Manager - Akron Division - OE 1997-present S. F. Szwed 47 Vice President - Transmission 1995-1997 Vice President - Engineering & Planning - Centerior Service Company

• -1995 Director - System Planning & Operations - Centerior Service Company 40 Vice President and General Counsel 2000-present L. L. Vespoli 1997-2000 Associate General Counsel 1995-1997 Senior Attorney - OE

• -1995 Attorney - OE 52 Corporate Secretary 1997-present N. C. Ashcom *-1997 Secretary - OE 1998-present T. C. Navin 42 Treasurer Assistant Treasurer 1998-1998 Director, Treasury Services 1998-1998 1997-1998 Director, Asset Strategy 1997-1997 Staff Business Analyst - OE Senior Business Analyst - OE 1995-1997 Senior Planning Analyst - OE *-1995 1997-present H. L. Wagner 47 Controller *-1997 Comptroller - OE Except for H. P. Burg, A. J. Alexander, M. B. Carroll, K. W. Dindo and D. S. Elliott, the officers above hold the same office for FirstEnergy, OE, CEI and TE.

Except for R. Joseph Hrach holding the office of President and J. A. Gill and A. R. Garfield holding the offices of Vice President, and except for H. P. Burg, A. J. Alexander, M. B. Carroll, K. W. Dindo and D. S. Elliott, the officers above hold the same offices for Penn.

• Indicates position held at least since January 1, 1995.

12

At December 31, 1999, the Company's nonutility subsidiaries and the Companies had a total of 13,461 employees consisting of the following: Company - 1,942, OE - 1,839, CEI - 1,694, TE - 977, Penn - 895, FE Services - 409, FENOC - 2,278, FE Facilities - 3,383 and MARBEL - 44 employees.

ITEM 2. PROPERTIES The Companies' respective first mortgage indentures constitute, in the opinion of the Companies' counsel, direct first liens on substantially all of the respective Companies' physical property, subject only to excepted encumbrances, as defined in the indentures. See "Leases" and "Capitalization" notes to the respective financial statements for information concerning leases and financing encumbrances affecting certain of the Companies' properties.

The Companies own, individually or together as tenants in common, and/or lease, the generating units in service as of March 1, 2000, shown on the table below.

Net Demonstrated Capacity (MWI OE Penn CEI TE

% MW  % MW  % MW Unit Total  % MW Plant - Location Coal-Fired Units - 100.00% 376 5,7,8,9 376 - - -

Ashtabula-. .........................................

Ashtabula, OH 1-4 631 -. . . . .. 100.00% 631 Bay Shore- ...........................................

Toledo, OH R. E. Burger-. ....................................... 3-5 406 100.00% 406 Shadyside, OH 1-5 1,233 - -. . . 100.00% 1,233 Eastlake-Eastlake, OH .......................... 100.00% 245 18 245 -. . . .

Lakeshore- ...........................................

Cleveland. OH B. Mansfield-. ....................................... 1 780 60.00% 468 33.50% 261 6.50%(b) 51 780 43.06% 336 9.36% 73 30.28%(b) 236 17.30%(b) 135 Shippingport, PA .............................. 2 49.34% 395 6.28% 50 24.47%(b) 196 19.91%(b) 159 3 800 1-6 1.620 100.00% 1,620 W . H. Sammis-. .................................... 125 31.20% 187 7 600 48.00% 288 20.80%

Stratton, OH ..................................... 2,524 92,5 7,471 3.513 509 T ota l .............................................

Nuclear Units Beaver Valley-. ..................................... 1 810 35.00% 283 65.00% 527 2 820 41.88%(a) 343 13.74% 113 24.47% 201 19.91%(c) 163 Shippingport, PA .............................. 51.38% 454 48.62% 429 Davis-Besse- ........................................ 1 883 Oak Harbor, OH 1,194 30.00%(a) 358 5.24% 63 44.85% 535 19.91% 238 Pe rry -. ...................................................

N. Perry Village, OH (d) 3,707 984 703 1_190 830 Total .....................................

Oil/Gas-Fired/

Pumped Storage Units Edgewater-Lorain, OH .......................... 4 100 100.00% 100 435 100.00% 435 Seneca-W arren, PA ..............................

1 120 100.00% 120 West Lorain-.........................

Lorain, OH 238 109 33 77 O th e r ..................................................... 19 468 77 893 19 T ota l ............................................. 329 4.826 1 2_31 41-82 1 8_32 T ota l............................................. 1207 Notes: (a) OE's interests consist of 20.22% owned and 21.66% leased for Beaver Valley Unit 2; and 17.42% owned (representing portion leased from a wholly owned subsidiary of OE) and 12.58% leased for Perry.

(b) CEI's interests consist of 1.68% owned and 28.60% leased and TE's interests are leased.

(c) TE's interests consist of 1.65% owned and 18.26% leased.

Prolonged outages of existing generating units might make it necessary for the Companies, depending upon the demand for electric service upon their system, to use to a greater extent than otherwise, less efficient and less economic generating units, or purchased power, and in some cases may require the reduction of load during peak periods under the Companies' interruptible programs, all to an extent not presently determinable.

13

of The Companies' generating plants and load centers are connected by a transmission system consisting voltage ratings ranging from 23 kilovolts (kV) to 345 kV. The Companies' overhead and elements having various underground transmission lines aggregate 8,752 miles.

underground The Companies' electric distribution systems include 55,932 miles of overhead pole line and circuits. They own substations with a total installed conduit carrying primary, secondary and street lighting transformer capacity of 50,456,000 kilovolt-amperes.

and Light The Companies' transmission lines also interconnect with those of AEP, The Dayton Power Monogahela Power Company, West Penn Power Company, Detroit Edison Company and Company, Duquesne, utilization by the Companies of generating Pennsylvania Electric Company. These interconnections make possible the sale of power to capacity constructed as a part of the CAPCO program, as well as providing opportunities for other utilities.

Substation Distribution Transmission Transformer Lines Lines Capacity (Miles) (ky-amperes)

OE .................................. 26,668 4,040 20,468,000 Penn .............................. 5,183 651 4,282,000 CEI ................................. 23,518 3,013 17,304,000 TE .................................. 563 1.048 8,402,000 Total ............................... 55,932 8,752 50,456,000 gas MARBEL is a company owning interests in crude oil and natural gas production, as well as natural include Marbel HoldCo, Inc. a holding company which distribution and transmission facilities. MARBELs subsidiaries and production has a 50% ownership in Great Lakes Energy Partners, LLC, an oil and natural gas exploration Inc. and NEO venture and Northeast Ohio Operating Companies, Inc. which has as subsidiaries Gas Transport, Lakes Energy Partners, LLC includes interests in more than 7,700 Construction Company. The joint venture in Great gas wells, drilling rights to nearly one million acres, proved reserves of 450 billion cubic feet equivalent oil and natural of natural gas and oil and 5,000 miles of pipelines in the Appalachian Basin.

ITEM 3. LEGAL PROCEEDINGS See Environmental Matters section.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None.

PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 1999 Annual The information required for this item for FirstEnergy is included on page 17 of FirstEnergy's Stockholders (Exhibit 13). The information required for OE, CEI, TE and Penn is not applicable because Report to they are wholly owned subsidiaries.

ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 14

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by items 6 through 8 is incorporated herein by reference to Selected Financial Data, Management's Discussion and Analysis of Results of Operations and Financial Condition, and Financial Statements included on the pages shown in the following table in the respective company's 1999 Annual Report to Stockholders (Exhibit 13).

Item 6 Item 7 Item 8 FirstEnergy ......................... 17 18-24 25-47 O E ...................................... 1 2-6 7-25 Penn ................................... 1 2-5 6-21 C EI..................................... 1 2-7 8-27 TE ...................................... 1 2-7 8-27 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT FirstEnergy The information required by Item 10, with respect to Identification of FirstEnergy's Directors and with respect to reports required to be filed under Section 16 of the Securities Exchange Act of 1934, is incorporated herein by reference to the Company's 2000 Proxy Statement filed with the Securities and Exchange Commission (SEC) pursuant to Regulation 14A and, with respect to Identification of Executive Officers, to "Part I, Item 1. Business Executive Officers" herein.

OE, Penn, CEI and TE H. P. Burg, A. J. Alexander and R. H. Marsh are the Directors of OE, Penn, CEI and TE. Information concerning these individuals is shown in the "Executive Officers" section of Item 1.

ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS FirstEnergy, OE, CEI, TE and Penn The information required by Items 11, 12 and 13 is incorporated herein by reference to the Company's 2000 Proxy Statement filed with the SEC pursuant to Regulation 14A.

15

PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. FinancialStatements 1999 Included in Part II of this report and incorporated herein by reference to the respective company's Annual Report to Stockholders (Exhibit 13 below) at the pages indicated.

FE OE Penn GEl TE 16 25 21 27 27 Report of Independent Public Accountants ................................................... 8 25 7 6 8 Statements of Income-Three Years Ended December 31, 1999 ................... 9 26 8 7 9 Balance Sheets-December 31, 1999 and 1998 ............................................

27-29 9-10 8 10-11 10-11 Statements of Capitalization-December 31, 1999 and 1998 .........................

Statements of Common Stockholders' Equity-Three Years 30 11 9 12 12 Ended Decem ber 31, 1999 .......................................................................

30 11 9 12 12 Statements of Preferred Stock-Three Years Ended December 31, 1999 ......

31 12 10 13 13 Statements of Cash Flows-Three Years Ended December 31, 1999 ............ 14 32 13 11 14 Statements of Taxes-Three Years Ended December 31, 1999 .....................

33-47 14-24 12-20 15-26 15-26 Notes to Financial Statements ......................................................................

2. FinancialStatement Schedules Included in Part IV of this report:

FE OE Penn CEI TE Report of Independent Public Accountants ............................ 47 48 51 49 50 Schedule - Three Years Ended December 31, 1999:

II- Consolidated Valuation and Qualifying Accounts ............. 52 53 56 54 55 Schedules other than the schedule listed above are omitted for the reason that they are not required or are not applicable, or the required information is show in the financial statements or notes thereto.

3. Exhibits - FirstEnergy Exhibit Number 3-1 - Articles of Incorporation constituting FirstEnergy Corp.'s Articles of Incorporation, dated September 17, 1996. (September 17, 1996 Form 8-K, Exhibit C) 3-1(a) - Amended Articles of Incorporation of FirstEnergy Corp. (Registration No. 333-21011, Exhibit (3)-1.)

3-2 - Regulations of FirstEnergy Corp. (September 17, 1996 Form 8-K, Exhibit D) 3-2(a) - FirstEnergy Corp. Amended Code of Regulations. (Registration No. 333-21011, Exhibit (3) 2.)

4-1 - Rights Agreement (December 1, 1997 Form 8-K, Exhibit 4.1)

- FirstEnergy Corp. Executive and Director Incentive Compensation Plan, revised (A) 10-1 November 15,1999.

Amended FirstEnergy Corp. Deferred Compensation Plan for Directors, revised (A) 10-2 -

November 15, 1999.

(A) 10-3 - Employment, severance and change of control agreement between FirstEnergy Corp. and executive officers.

16

Exhibit Number (A) 10-4 - FirstEnergy Corp. Supplemental Executive Retirement Plan, amended January 1, 1999.

(A) 10-5 - FirstEnergy Corp. Executive Incentive Compensation Plan.

(A) 10-6 - Restricted stock agreement between FirstEnergy Corp. and A. J. Alexander.

10-7 - FirstEnergy Corp. Executive and Director Incentive Compensation Plan. (1998 Form 10-K, Exhibit 10-1) 10-8 - Amended FirstEnergy Corp. Deferred Compensation Plan for Directors, amended February 15, 1999. (1998 Form 10-K, Exhibit 10-2)

(A) 12.1 - Consolidated fixed charge ratios.

(A) 13 - 1999 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)

(A) 21 - List of Subsidiaries of the Registrant at December 31, 1999.

(A) 23 - Consent of Independent Public Accountants.

(A) 27 - Financial Data Schedule.

(A) - Provided herein in electronic format as an exhibit.

3. Exhibits - Ohio Edison 2-1 - Agreement and Plan of Merger, dated as of September 13, 1996, between Ohio Edison Company (OE) and Centerior Energy Corporation. (September 17, 1996 Form 8-K, Exhibit 2-1).

3-1 - Amended Articles of Incorporation, Effective June 21, 1994, constituting OE's Articles of Incorporation. (1994 Form 10-K, Exhibit 3-1.)

3-2 - Code of Regulations of OE as amended April 24, 1986. (Registration No. 33-5081, Exhibit (4)(d).)

(A) 3-3 - Code of Regulations of OE as amended September 27, 1999.

(B) 4-1 - Indenture dated as of August 1, 1930 between OE and Bankers Trust Company, (now the Bank of New York), as Trustee, as amended and supplemented by Supplemental Indentures:

Dated as of File Reference Exhibit No.

March 3, 1931 2-1725 B1, B-1(a),B-1(b)

November 1, 1935 2-2721 B-4 January 1, 1937 2-3402 B-5 September 1, 1937 Form 8-A B-6 June 13, 1939 2-5462 7(a)-7 August 1, 1974 Form 8-A, August 28, 1974 2(b)

July 1, 1976 Form 8-A, July 28, 1976 2(b)

December 1, 1976 Form 8-A, December 15, 1976 2(b)

June 15, 1977 Form 8-A, June 27, 1977 2(b)

Supplemental Indentures:

September 1, 1944 2-61146 2(b)(2)

April 1, 1945 2-61146 2(b)(2)

September 1, 1948 2-61146 2(b)(2)

May 1, 1950 2-61146 2(b)(2)

January 1, 1954 2-61146 2(b)(2)

May 1, 1955 2-61146 2(b)(2) 2-61146 2(b)(2)

August 1, 1956 17

Exhibit Number Dated as of File Reference Exhibit No 2-61146 2(b)(2)

March 1, 1958 2(b)(2)

April 1, 1959 2-61146 2-61146 2(b)(2)

June 1, 1961 2(b)(2)

September 1, 1969 2-34351 2-37146 2(b)(2)

May 1, 1970 2(b)(2)

September 1, 1970 2-38172 2-40379 2(b)(2)

June 1, 1971 2-44803 2(b)(2)

August 1,1972 2-48867 2(b)(2)

September 1, 1973 2(b)(4)

May 15, 1978 2-66957 2-66957 2(b)(5)

February 1, 1980 2-66957 2(b)(6)

April 15, 1980 2-68023 (b)(4)(b)(5)

June 15, 1980 2-74059 (4)(d)

October 1, 1981 (4)(e)

October 15, 1981 2-75917 2-75917 (4)(e)

February 15, 1982 (4)(d)

July 1, 1982 2-89360 2-89360 (4)(e)

March 1, 1983 March 1, 1984 2-89360 (4)(f) 2-92918 (4)(d)

September 15, 1984 (4)(d)

September 27, 1984 33-2576 33-2576 (4)(d)

November 8, 1984 (4)(d)

December 1, 1984 33-2576 33-2576 (4)(e)

December 5, 1984 (4)(e)

January 30, 1985 33-2576 33-2576 (4)(e)

February 25, 1985 33-2576 (4)(e)

July 1, 1985 33-2576 (4)(e)

October 1, 1985 (4)(d)

January 15, 1986 33-8791 33-8791 (4)(d)

May 20, 1986 33-8791 (4)(e)

June 3, 1986 (4)(d)

October 1, 1986 33-29827 33-34663 (4)(d)

August25, 1989 (4)(d)

February 15, 1991 33-39713 33-45751 (4)(d)

May 1, 1991 33-45751 (4)(d)

May 15, 1991 33-45751 (4)(d)

September 15, 1991 (4)(d)

April 1, 1992 33-48931 33-48931 (4)(d)

June 15, 1992 (4)(e)

September 15, 1992 33-48931 33-51139 (4)(d)

April 1, 1993 (4)(d)

June 15, 1993 33-51139 33-51139 (4)(d)

September 15, 1993 (4)(2)

November 15,1993 1-2578 1-2578 (4)(2)

April 1, 1995 (4)(2)

May 1, 1995 1-2578 1-2578 (4)(2)

July 1, 1995 (4)(2)

June 1, 1997 1-2578 1-2578 (4)(2)

April 1, 1998 (4)(2)

June 1, 1998 1-2578 (A) (4)(2)

September 29, 1999 (B) 4-2 - General Mortgage Indenture and Deed of Trust dated as of January 1, 1998 between OE and the Bank of New York, as Trustee. (Registration No. 333-05277, Exhibit 4(g).)

10-1 - Administration Agreement between the CAPCO Group dated as of September 14, 1967.

(Registration No. 2-43102, Exhibit 5(c)(2) 10-2 - Amendment No. 1 dated January 4, 1974 to Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-68906, Exhibit 5(c)(3).)

18

Exhibit Number 10-3 - Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-43102, Exhibit 5(c)(3).)

10-4 - Amendment No. 1 dated as of January 1, 1993 to Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (1993 Form 10-K, Exhibit 10 4.)

10-5 - Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group. (Registration No. 2-68906, Exhibit 10-4.)

10-6 - Amendment dated as of December 23, 1993 to Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group.

(1993 Form 10-K, Exhibit 10-6).

10-7 - CAPCO Basic Operating Agreement, as amended September 1, 1980. (Registration No. 2 68906, Exhibit 10-5.)

10-8 - Amendment No. 1 dated August 1, 1981, and Amendment No. 2 dated September 1, 1982 to CAPCO Basic Operating Agreement, as amended September 1, 1980. (September 30, 1981 Form 10-Q, Exhibit 20-1 and 1982 Form 10-K, Exhibit 19-3, respectively.)

10-9 - Amendment No. 3 dated July 1, 1984 to CAPCO Basic Operating Agreement, as amended September 1, 1980. (1985 Form 10-K, Exhibit 10-7.)

10-10 - Basic Operating Agreement between the CAPCO Companies as amended October 1, 1991.

(1991 Form 10-K, Exhibit 10-8.)

10-11 - Basic Operating Agreement between the CAPCO Companies as amended January 1, 1993.

(1993 Form 10-K, Exhibit 10-11.)

10-12 - Memorandum of Agreement effective as of September 1, 1980 among the CAPCO Group.

(1982 Form 10-K, Exhibit 19-2.)

10-13 - Operating Agreement for Beaver Valley Power Station Units Nos. 1 and 2 as Amended and Restated September 15, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 10-15.)

10-14 - Construction Agreement with respect to Perry Plant between the CAPCO Group dated as of July 22, 1974. (Registration No. 2-52251 of Toledo Edison Company, Exhibit 5(yy).)

10-15 - Participation Agreement No. 1 relating to the financing of the development of certain coal mines, dated as of October 1, 1973, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Registration No. 2-61146, Exhibit 5(e)(1).

10-16 Amendment No. 1 dated as of September 15, 1978 to Participation Agreement No. 1 dated as of October 1, 1973 among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland as Owner Trustee, National City Bank as Loan Trustee and National City Bank as Bond Trustee. (Registration No. 2 68906 of Pennsylvania Power Company, Exhibit 5(e)(2).)

10-17 - Participation Agreement No. 2 relating to the financing of the development of certain coal mines, dated as of August 1, 1974, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc. General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Registration No. 2 53059, Exhibit 5(h)(2).)

19

Exhibit Number 10-18 - Amendment No. 1 dated as of September 15, 1978 to Participation Agreement No. 2 dated as of August 1, 1974 among Quarto Mining Company, the CAPCO Group, Energy listed in Properties, Inc., General Electric Credit Corporation, the Loan Participants Schedules A and B thereto, Central National Bank of Cleveland as Owner Trustee, National 2

City Bank as Loan Trustee and National City Bank as Bond Trustee. (Registration No.

68906 of Pennsylvania Power Company, Exhibit 5(e)(4).)

10-19 Participation Agreement No. 3 dated as of September 15, 1978 among Quarto Mining Company, the CAPCO Companies, Energy Properties, Inc., General Electric Credit National Corporation, the Loan Participants listed in Schedules A and B thereto, Central Bank of Cleveland as Owner Trustee, and National City Bank as Loan Trustee and Bond Trustee. (Registration No. 2-68906 of Pennsylvania Power Company, Exhibit 5(e)(5).)

10-20 Participation Agreement No. 4 dated as of October 31, 1980 among Quarto Mining Company, the CAPCO Group, the Loan Participants listed in Schedule A thereto and Power National City Bank as Bond Trustee. (Registration No. 2-68906 of Pennsylvania Company, Exhibit 10-16.)

the 10-21 - Participation Agreement dated as of May 1, 1986, among Quarto Mining Company, thereto, and National City Bank as Bond Trustee.

CAPCO Companies, the Loan Participants (1986 Form 10-K, Exhibit 10-22.)

10-22 - Participation Agreement No. 6 dated as of December 1, 1991 among Quarto Mining Ohio Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Loan Edison Company, Pennsylvania Power Company, the Toledo Edison Company, the Participants listed in Schedule A thereto, National City Bank, as Mortgage Bond Trustee and National City Bank, as Refunding Bond Trustee. (1991 Form 10-K, Exhibit 10-19.)

10-23 - Agreement entered into as of October 20, 1981 among the CAPCO Companies regarding the use of Quarto coal at Mansfield Units 1, 2 and 3. (1981 Form 10-K, Exhibit 20-1.)

10-24 - Restated Option Agreement dated as of May 1, 1983 by and between the North American Coal Corporation and the CAPCO Companies. (1983 Form 10-K, Exhibit 19-1.)

10-25 - Trust Indenture and Mortgage dated as of October 1, 1973 between Quarto Mining Company and National City Bank, as Bond Trustee, together with Guaranty dated as of October 1, 1973 with respect thereto by the CAPCO Group. (Registration No. 2-61146, Exhibit 5(e)(5).)

of 10-26 - Amendment No. 1 dated August 1, 1974 to Trust Indenture and Mortgage dated as October 1, 1973 between Quarto Mining Company and National City Bank, as Bond Trustee, 1,

together with Amendment No. 1 dated August 1, 1974 to Guaranty dated as of October 1973 with respect thereto by the CAPCO Group. (Registration No. 2-53059, Exhibit 5(h)(2).)

10-27 - Amendment No. 2 dated as of September 15, 1978 to the Trust Indenture and Mortgage National dated as of October 1, 1973, as amended, between Quarto Mining Company and as Bond Trustee, together with Amendment No. 2 dated as of September 15, City Bank, with respect to the CAPCO Group.

1978 to Guaranty dated as of October 1, 1973 (Registration No. 2-68906 of Pennsylvania Power Company, Exhibits 5(e)(11) and 5(e)(12).)

dated as 10-28 - Amendment No. 3 dated as of October 31, 1980, to Trust Indenture and Mortgage as amended between Quarto Mining Company and National City Bank of October 1, 1973, Power Company, Exhibit 10 as Bond Trustee. (Registration No. 2-68906 of Pennsylvania 16.)

dated as of 10-29 - Amendment No. 4 dated as of July 1, 1985 to the Trust Indenture and Mortgage Quarto Mining Company and National City Bank as October 1, 1973, as amended between Bond Trustee. (1985 Form 10-K, Exhibit 10-28.)

between 10-30 - Amendment No. 5 dated as of May 1,1986, to the Trust Indenture and Mortgage Quarto and National City Bank as Bond Trustee. (1986 Form 10-K, Exhibit 10-30.)

20

Exhibit Number 10 Amendment No. 6 dated as of December 1, 1991, to the Trust Indenture and Mortgage dated as of October 1, 1973, between Quarto Mining Company and National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-28.)

10 Trust Indenture dated as of December 1, 1991, between Quarto Mining Company and National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-29.)

10 Amendment No. 3 dated as of October 31, 1980 to the Bond Guaranty dated as of October 1, 1973, as amended, with respect to the CAPCO Group. (Registration No. 2-68906 of Pennsylvania Power Company, Exhibit 10-16.)

10 Amendment No. 4 dated as of July 1, 1985 to the Bond Guaranty dated as October 1, 1973, as amended, by the CAPCO Companies to National City Bank as Bond Trustee. (1985 Form 10-K, Exhibit 10-30.)

10 Amendment No. 5 dated as of May 1, 1986, to the Bond Guaranty by the CAPCO Companies to National City Bank as Bond Trustee. (1986 Form 10-K, Exhibit 10-33.)

10 Amendment No. 6A dated as of December 1, 1991, to the Bond Guaranty dated as of October 1, 1973, by The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, the Toledo Edison Company to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-33.)

10 Amendment No. 6B dated as of December 30, 1991, to the Bond Guaranty dated as of October 1, 1973 by The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, the Toledo Edison Company to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-34.)

10 Bond Guaranty dated as of December 1, 1991, by The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, the Toledo Edison Company to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-35.)

10 Open end Mortgage dated as of October 1, 1973 between Quarto Mining Company and the CAPCO Companies and Amendment No. 1 thereto, dated as of September 15, 1978.

(Registration No. 2-68906 of Pennsylvania Power Company, Exhibit 10-23.)

10-40 - Repayment and Security Agreement and Assignment of Lease dated as of October 1, 1973 between Quarto Mining Company and Ohio Edison Company as Agent for the CAPCO Companies and Amendment No. 1 thereto, dated as of September 15, 1978. (1980 Form 10-K, Exhibit 20-2.)

10-41 - Restructuring Agreement dated as of April 1, 1985 among Quarto Mining Company, the Company and the other CAPCO Companies, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants signatories thereto, Central National Bank of Cleveland, as Owner Trustee and National City Bank as Loan Trustee and Bond Trustee. (1985 Form 10- K, Exhibit 10-33.)

10-42 - Unsecured Note Guaranty dated as of July 1, 1985 by the CAPCO Companies to General Electric Credit Corporation. (1985 Form 10-K, Exhibit 10-34.)

10-43 - Memorandum of Understanding dated March 31, 1985 among the CAPCO Companies.

(1985 Form 10-K, Exhibit 10-35.)

(C) 10-44 - Ohio Edison System Executive Supplemental Life Insurance Plan. (1995 Form 10-K, Exhibit 10- 44.)

(C) 10-45 - Ohio Edison System Executive Incentive Compensation Plan. (1995 Form 10-K, Exhibit 10 45.)

21

Exhibit Number (C) 10-46 - Ohio Edison System Restated and Amended Executive Deferred Compensation Plan. (1995 Form 10-K, Exhibit 10-46.)

(C) 10-47 - Ohio Edison System Restated and Amended Supplemental Executive Retirement Plan.

(1995 Form 10-K, Exhibit 10-47.)

(C) 10-48 - Severance pay agreement between Ohio Edison Company and W. R. Holland. (1995 Form 10-K, Exhibit 10-48.)

(C) 10-49 - Severance pay agreement between Ohio Edison Company and H. P. Burg. (1995 Form 10 K, Exhibit 10-49.)

(C) 10-50 - Severance pay agreement between Ohio Edison Company and A. J. Alexander. (1995 Form 10-K, Exhibit 10-50.)

(C) 10-51 - Severance pay agreement between Ohio Edison Company and J. A. Gill. (1995 Form 10K, Exhibit 10.51.)

(D) 10-52 - Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 Hereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company ,as Lessee. (1986 Form 10-K, Exhibit 28-1.)

(D) 10-53 Amendment No. 1 dated as of September 1, 1987 to Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 thereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company (now The Bank of New York), as Indenture Trustee, and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-46.)

(D) 10-54 Amendment No. 3 dated as of May 16, 1988 to Participation Agreement dated as of March 16, 1987, as amended among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-47.)

(D) 10-55 Amendment No. 4 dated as of November 1, 1991 to Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-47.)

(D) 10-56 Amendment No. 5 dated as of November 24, 1992 to Participation Agreement dated as of March 16, 1987, as amended, among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPPII Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company as Lessee. (1992 Form 10-K, Exhibit 10-49.)

(D) 10-57 Amendment No. 6 dated as of January 12, 1993 to Participation Agreement dated as of March 16, 1987 among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-50.)

(D) 10-58 - Amendment No. 7 dated as of October 12, 1994 to Participation Agreement dated as of March 16, 1987 as amended, among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding 22

Exhibit Number Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-54.)

(D) 10-59 - Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited Partnership, Lessor, and Ohio Edison Company, Lessee. (1986 Form 10-K, Exhibit 28-2.)

(D) 10-60 - Amendment No. 1 dated as of September 1, 1987 to Facility Lease dated as of March 16, 1997 between The First National Bank of Boston, as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-49.)

(D) 10-61 - Amendment No. 2 dated as of November 1, 1991, to Facility Lease dated as of March 16, 1987, between The First National Bank of Boston, as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-50.)

(D) 10-62 - Amendment No. 3 dated as of November 24, 1992 to Facility Lease dated as March 16, 1987 as amended, between The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited partnership, as Owner Participant and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-54.)

(D) 10 Amendment No. 4 dated as of January 12, 1993 to Facility Lease dated as of March 16, 1987 as amended, between, The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-59.)

(D) 10-64 - Amendment No. 5 dated as of October 12, 1994 to Facility Lease dated as of March 16, 1987 as amended, between, The First National Bank of Boston, as Owner Trustee, with Perry One Alpha Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-60.)

(D) 10-65 - Letter Agreement dated as of March 19, 1987 between Ohio Edison Company, Lessee, and The First National Bank of Boston, Owner Trustee under a Trust dated March 16, 1987 with Chase Manhattan Realty Leasing Corporation, required by Section 3(d) of the Facility Lease.

(1986 Form 10-K, Exhibit 28-3.)

(D) 10-66 - Ground Lease dated as of March 16, 1987 between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with the Owner Participant, Tenant. (1986 Form 10-K, Exhibit 28-4.)

(D) 10-67 - Trust Agreement dated as of March 16, 1987 between Perry One Alpha Limited Partnership, as Owner Participant, and The First National Bank of Boston. (1986 Form 10-K, Exhibit 28 5.)

(D) 10-68 - Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of March 16, 1987 with Perry One Alpha Limited Partnership, and Irving Trust Company, as Indenture Trustee. (1986 Form 10-K, Exhibit 28-6.)

(D) 10-69 - Supplemental Indenture No. 1 dated as of September 1, 1987 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston as Owner Trustee and Irving Trust Company (now The Bank of New York), as Indenture Trustee. (1991 Form 10-K, Exhibit 10-55.)

(D) 10-70 - Supplemental Indenture No. 2 dated as of November 1, 1991 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee and The Bank of New York, as Indenture Trustee. (1991 Form 10-K, Exhibit 10-56.)

23

Exhibit Number (D) 10-71 - Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee.

(1986 Form 10- K, Exhibit 28-7.)

(D) 10-72 - Amendment No. 1 dated as of November 1, 1991 to Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership and Ohio Edison Company. (1991 Form 10-K, Exhibit 10-58.)

(D) 10-73 - Amendment No. 2 dated as of January 12, 1993 to Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-69.)

(D) 10-74 - Amendment No. 3 dated as of October 12, 1994 to Tax Indemnification Agreement dated as of March 16, 1987 between Perry One, Inc. and PARock Limited Partnership and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-70.)

(D) 10-75 - Partial Mortgage Release dated as of March 19, 1987 under the Indenture between Ohio Edison Company and Bankers Trust Company, as Trustee, dated as of the 1st day of August, 1930. (1986 Form 10-K, Exhibit 28-8.)

(D) 10-76 - Assignment, Assumption and Further Agreement dated as of March 16, 1987 among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company and Toledo Edison Company. (1986 Form 10-K, Exhibit 28-9.)

(D) 10-77 - Additional Support Agreement dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, and Ohio Edison Company. (1986 Form 10-K, Exhibit 28-10.)

(D) 10-78 - Bill of Sale, Instrument of Transfer and Severance Agreement dated as of March 19, 1987 between Ohio Edison Company, Seller, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership. (1986 Form 10-K, Exhibit 28-11.)

(D) 10-79 - Easement dated as of March 16, 1987 from Ohio Edison Company, Grantor, to The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, Grantee. (1986 Form 10-K, File Exhibit 28 12.)

10-80 - Participation Agreement dated as of March 16, 1987 among Security Pacific Capital Leasing Corporation, as Owner Participant, the Original Loan Participants listed in Schedule 1 Hereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1986 Form 10-K, as Exhibit 28-13.)

10-81 Amendment No. 1 dated as of September 1, 1987 to Participation Agreement dated as of March 16, 1987 among Security Pacific Capital Leasing Corporation, as Owner Participant, The Original Loan Participants Listed in Schedule 1 thereto, as Original Loan Participants, PNPP Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-65.)

10-82 Amendment No. 4 dated as of November 1, 1991, to Participation Agreement dated as of March 16, 1987 among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-66.)

24

Exhibit Number 10 Amendment No. 5 dated as of November 24, 1992 to Participation Agreement dated as of March 16, 1987 as amended among Secudty Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNNP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-71.)

10-84 Amendment No. 6 dated as of January 12, 1993 to Participation Agreement dated as of March 16, 1987 as amended among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-80.)

10-85 Amendment No. 7 dated as of October 12, 1994 to Participation Agreement dated as of March 16, 1987 as amended among Security Pacific Capital Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-81.)

10 Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, Lessor, and Ohio Edison Company, as Lessee. (1986 Form 10-K, Exhibit 28-14.)

10 Amendment No. 1 dated as of September 1, 1987 to Facility Lease dated as of March 16, 1987 between The First National Bank of Boston as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-68.)

10 Amendment No. 2 dated as of November 1, 1991 to Facility Lease dated as of March 16, 1987 between The First National Bank of Boston as Owner Trustee, Lessor and Ohio Edison Company, Lessee. (1991 Form 10-K, Exhibit 10-69.)

10 Amendment No. 3 dated as of November 24, 1992 to Facility Lease dated as of March 16, 1987, as amended, between, The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, as Owner Participant and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-75.)

10 Amendment No. 4 dated as of January 12, 1993 to Facility Lease dated as of March 16, 1987 as amended between, The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-76.)

10 Amendment No. 5 dated as of October 12, 1994 to Facility Lease dated as of March 16, 1987 as amended between, The First National Bank of Boston, as Owner Trustee, with Security Pacific Capital Leasing Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 From 10-K, Exhibit 10-87.)

10 Letter Agreement dated as of March 19, 1987 between Ohio Edison Company, as Lessee, and The First National Bank of Boston, as Owner Trustee under a Trust, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, required by Section 3(d) of the Facility Lease. (1986 Form 10-K, Exhibit 28-15.)

10 Ground Lease dated as of March 16, 1987 between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Perry One Alpha Limited Partnership, Tenant. (1986 Form 10-K, Exhibit 28-16.)

10 Trust Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation, as Owner Participant, and The First National Bank of Boston. (1986 Form 10-K, Exhibit 28-17.)

25

Exhibit Number 10-95 Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, and Irving Trust Company, as Indenture Trustee. (1986 Form 10-K, Exhibit 28 18.)

10-96 Supplemental Indenture No. 1 dated as of September 1, 1987 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee and Irving Trust Company (now The Bank of New York), as Indenture Trustee. (1991 Form 10-K, Exhibit 10-74.)

10-97 - Supplemental Indenture No. 2 dated as of November 1, 1991 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee and The Bank of New York, as Indenture Trustee. (1991 Form 10-K, Exhibit 10-75.)

10-98 - Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1986 Form 10-K, Exhibit 28-19.)

10-99 - Amendment No. 1 dated as of November 1, 1991 to Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation and Ohio Edison Company. (1991 Form 10-K, Exhibit 10-77.)10-100 - Amendment No. 2 dated as of January 12, 1993 to Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-96.)10-101 - Amendment No. 3 dated as of October 12, 1994 to Tax Indemnification Agreement dated as of March 16, 1987 between Security Pacific Capital Leasing Corporation and Ohio Edison Company. (1994 Form 10-K, Exhibit 10-97.)10-102 - Assignment, Assumption and Further Agreement dated as of March 16, 1987 among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company and Toledo Edison Company. (1986 Form 10-K, Exhibit 28-20.)10-103 - Additional Support Agreement dated as of March 16, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, and Ohio Edison Company. (1986 Form 10-K, Exhibit 28-21.)10-104 - Bill of Sale, Instrument of Transfer and Severance Agreement dated as of March 19, 1987 between Ohio Edison Company, Seller, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, Buyer. (1986 Form 10-K, Exhibit 28-22.)10-105 - Easement dated as of March 16, 1987 from Ohio Edison Company, Grantor, to The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of March 16, 1987, with Security Pacific Capital Leasing Corporation, Grantee. (1986 Form 10-K, Exhibit 28-23.)10-106 - Refinancing Agreement dated as of November 1, 1991 among Perry One Alpha Limited Partnership, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee, The Bank of New York, as Collateral Trust Trustee, The Bank of New York, as New Collateral Trust Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-82.)

26

Exhibit Number 10-107 - Refinancing Agreement dated as of November 1, 1991 among Security Pacific Leasing Corporation, as Owner Participant, PNPP Funding Corporation, as Funding Corporation, PNPP II Funding Corporation, as New Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee, The Bank of New York, as Collateral Trust Trustee, The Bank of New York as New Collateral Trust Trustee and Ohio Edison Company, as Lessee. (1991 Form 10-K, Exhibit 10-83.)10-108 Ohio Edison Company Master Decommissioning Trust Agreement for Perry Nuclear Power Plant Unit One, Perry Nuclear Power Plant Unit Two, Beaver Valley Power Station Unit One and Beaver Valley Power Station Unit Two dated July 1, 1993. (1993 Form 10-K, Exhibit 10 94.)10-109 - Nuclear Fuel Lease dated as of March 31, 1989, between OES Fuel, Incorporated, as Lessor, and Ohio Edison Company, as Lessee. (1989 Form 10-K, Exhibit 10-62.)10-110 - Receivables Purchase Agreement dated as November 28, 1989, as amended and restated as of April 23, 1993, between OES Capital, Incorporated, Corporate Asset Funding Company, Inc. and Citicorp North America, Inc. (1994 Form 10-K, Exhibit 10-106.)10-111 - Guarantee Agreement entered into by Ohio Edison Company dated as of January 17, 1991.

(1990 Form 10-K, Exhibit 10-64.)10-112 - Transfer and Assignment Agreement among Ohio Edison Company and Chemical Bank, as trustee under the OE Power Contract Trust. (1990 Form 10-K, Exhibit 10-65.)10-113 - Renunciation of Payments and Assignment among Ohio Edison Company, Monongahela Power Company, West Penn Power Company, and the Potomac Edison Company dated as of January 4, 1991. (1990 Form 10-K, Exhibit 10-66.)10-114 - Transfer and Assignment Agreement dated May 20, 1994 among Ohio Edison Company and Chemical Bank, as trustee under the OE Power Contract Trust. (1994 Form 10-K, Exhibit 10-110.)10-115 - Renunciation of Payments and Assignment among Ohio Edison Company, Monongahela Power Company, West Penn Power Company, and the Potomac Edison Company dated as of May 20, 1994. (1994 Form 10-K, Exhibit 10-111.)10-116 - Transfer and Assignment Agreement dated October 12, 1994 among Ohio Edison Company and Chemical Bank, as trustee under the OE Power Contract Trust. (1994 Form .10-K, Exhibit 10-112.)10-117 - Renunciation of Payments and Assignment among Ohio Edison Company, Monongahela Power Company, West Penn Power Company, and the Potomac Edison Company dated as of October 12, 1994. (1994 Form 10-K, Exhibit 10-113.)

(E)10-118 Participation Agreement dated as of September 15, 1987, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company as Lessee. (1987 Form 10-K, Exhibit 28-1.)

(E)10-119 Amendment No. 1 dated as of February 1, 1988, to Participation Agreement dated as of September 15, 1987, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-2.)

(E)10-120 - Amendment No. 3 dated as of March 16, 1988 to Participation Agreement dated as of September 15, 1987, as amended, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, BVPS Funding Corporation, The First National Bank of Boston, as Owner 27

Exhibit Number Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee.

(1992 Form 10-K, Exhibit 10-99.)

(E)10-121 Amendment No. 4 dated as of November 5, 1992 to Participation Agreement dated as of September 15, 1987, as amended, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-100.)

(E)10-122 Amendment No. 5 dated as of September 30, 1994 to Participation Agreement dated as of September 15, 1987, as amended, among Beaver Valley Two Pi Limited Partnership, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-118.)

(E)10-123 Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, Lessor, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-3.)

(E)10-124 Amendment No. 1 dated as of February 1, 1988, to Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, Lessor, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-4.)

(E)10-125 - Amendment No. 2 dated as of November 5, 1992, to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-103.)

(E)10-126 - Amendment No. 3 dated as of September 30, 1994 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Beaver Valley Two Pi Limited Partnership, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-122.)

(E)10-127 Ground Lease and Easement Agreement dated as of September 15, 1987, between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, Tenant. (1987 Form 10-K, Exhibit 28-5.)

(E)10-128 Trust Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Limited Partnership, as Owner Participant, and The First National Bank of Boston. (1987 Form 10-K, Exhibit 28-6.)

(E)10-129 Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-7.)

(E)10-130 - Supplemental Indenture No. 1 dated as of February 1, 1988 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with Beaver Valley Two Pi Limited Partnership and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-8.)

(E)10-131 - Tax Indemnification Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-9.)

(E)10-132 - Amendment No. 1 dated as of November 5, 1992 to Tax Indemnification Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Inc. and PARock Limited 28

Exhibit Number Partnership as General Partners and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-128.)

(E)10-133 - Amendment No. 2 dated as of September 30, 1994 to Tax Indemnification Agreement dated as of September 15, 1987, between Beaver Valley Two Pi Inc. and PARock Limited Partnership as General Partners and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-129.)

(E)10-134 - Tax Indemnification Agreement dated as of September 15, 1987, between HG Power Plant, Inc., as Limited Partner and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-10.)

(E)10-135 Amendment No. 1 dated as of November 5, 1992 to Tax Indemnification Agreement dated as of September 15, 1987, between HG Power Plant, Inc., as Limited Partner and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-131.)

(E)10-136 Amendment No. 2 dated as of September 30, 1994 to Tax Indemnification Agreement dated as of September 15, 1987, between HG Power Plant, Inc., as Limited Partner and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-132.)

(E)10-137 Assignment, Assumption and Further Agreement dated as of September 15, 1987, among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company and Toledo Edison Company. (1987 Form 10-K, Exhibit 28-11.)

(E)10-138 Additional Support Agreement dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Beaver Valley Two Pi Limited Partnership, and Ohio Edison Company. (1987 Form 10-K, Exhibit 28-12.)

(F)10-139 Participation Agreement dated as of September 15, 1987, among Chrysler Consortium Corporation, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-13.)

(F)10-140 Amendment No. 1 dated as of February 1, 1988, to Participation Agreement dated as of September 15, 1987, among Chrysler Consortium Corporation, as Owner Participant, the Original Loan Participants listed in Schedule 1 Thereto, as Original Loan Participants, BVPS Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-14.)

(F)10-141 Amendment No. 3 dated as of March 16, 1988 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-114.)

(F)10-142 Amendment No. 4 dated as of November 5, 1992 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-115.)

(F)10-143 - Amendment No. 5 dated as of January 12, 1993 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, BVPS-II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-139.)

29

Exhibit Number (F)10-144 Amendment No. 6 dated as of September 30, 1994 to Participation Agreement dated as of September 15, 1987, as amended, among Chrysler Consortium Corporation, as Owner Participant, BVPS Funding Corporation, BVPS II Funding Corporation, The First National Bank of Boston, as Owner Trustee, The Bank of New York, as Indenture Trustee and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-140.)

(F)10-145 Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, Lessor, and Ohio Edison Company, as Lessee. (1987 Form 10-K, Exhibit 28-15.)

(F)10-146 Amendment No. 1 dated as of February 1, 1988, to Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, Lessor, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-16.)

(F)10-147 Amendment No. 2 dated as of November 5, 1992 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 118.)

(F)10-148 - Amendment No. 3 dated as of January 12, 1993 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1992 Form 10-K, Exhibit 10-119.)

(F)10-149 - Amendment No. 4 dated as of September 30, 1994 to Facility Lease dated as of September 15, 1987, as amended, between The First National Bank of Boston, as Owner Trustee, with Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-145.)

(F)10-150 - Ground Lease and Easement Agreement dated as of September 15, 1987, between Ohio Edison Company, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation, Tenant. (1987 Form 10-K, Exhibit 28-17.)

(F)10-151 - Trust Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and The First National Bank of Boston. (1987 Form 10-K, Exhibit 28-18.)

(F)10-152 Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28 19.)

(F)10-153 Supplemental Indenture No. 1 dated as of February 1, 1988 to Trust Indenture, Mortgage, Security Agreement and Assignment of Facility Lease dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with Chrysler Consortium Corporation and Irving Trust Company, as Indenture Trustee. (1987 Form 10-K, Exhibit 28-20.)

(F)10-154 Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, Lessee. (1987 Form 10-K, Exhibit 28-21.)

(F)10-155 - Amendment No. 1 dated as of November 5, 1992 to Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-151.)

30

Exhibit Number (F)10-156 Amendment No. 2 dated as of January 12, 1993 to Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-152.)

(F)10-157 Amendment No. 3 dated as of September 30, 1994 to Tax Indemnification Agreement dated as of September 15, 1987, between Chrysler Consortium Corporation, as Owner Participant, and Ohio Edison Company, as Lessee. (1994 Form 10-K, Exhibit 10-153.)

(F)10-158 Assignment, Assumption and Further Agreement dated as of September 15, 1987, among The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company, Pennsylvania Power Company, and Toledo Edison Company. (1987 Form 10-K, Exhibit 28-22.)

(F)10-159 - Additional Support Agreement dated as of September 15, 1987, between The First National Bank of Boston, as Owner Trustee under a Trust Agreement, dated as of September 15, 1987, with Chrysler Consortium Corporation, and Ohio Edison Company. (1987 Form 10-K, Exhibit 28-23.)10-160 - Operating Agreement dated March 10, 1987 with respect to Perry Unit No. 1 between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-24.)10-161 - Operating Agreement for Bruce Mansfield Units Nos. 1, 2 and 3 dated as of June 1, 1976, and executed on September 15, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-25.)10-162 - Operating Agreement for W. H. Sammis Unit No. 7 dated as of September 1, 1971 by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-26.)10-163 - OE-APS Power Interchange Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company, and Monongahela Power Company and West Penn Power Company and The Potomac Edison Company. (1987 Form 10-K, Exhibit 28 27.)10-164 - OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-28.)10-165 - Supplement No. 1 dated as of April 28, 1987, to the OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company, Pennsylvania Power Company, and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-29.)10-166 - APS-PEPCO Power Resale Agreement dated March 18, 1987, by and among Monongahela Power Company, West Penn Power Company, and The Potomac Edison Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-30.)

(A) 12.2 - Consolidated fixed charge ratios.

(A) 13.1 - 1999 Annual Report to Stockholders (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)

(A) 21.1 - List of Subsidiaries of the Registrant at December 31, 1999.

(A) 23.1 - Consent of Independent Public Accountants.

(A) 27.1 - Financial Data Schedule.

(A) Provided herein in electronic format as an exhibit.

(B) Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K, OE has not filed as an exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount of securities authorized 31

Exhibit Number basis, thereunder does not exceed 10% of the total assets of OE and its subsidiaries on a consolidated but hereby agrees to furnish to the SEC on request any such instruments.

to Item 601 of (C) Management contract or compensatory plan contract or arrangement filed pursuant Regulation S-K.

Owner Participants.

(D) Substantially similar documents have been entered into relating to three additional Participants.

(E) Substantially similar documents have been entered into relating to five additional Owner Participants.

(F) Substantially similar documents have been entered into relating to two additional Owner Note: Reports of OE on Forms 10-Q and 10-K are on file with the SEC under number 1-2578.

furnish any Pursuant to Rule 14a - 3 (10) of the Securities Exchange Act of 1934, the Company will expenses in furnishing such exhibit.

exhibit in this Report upon the payment of the Company's

3. Exhibits - Penn Power 3-1 - Agreement of Merger and Consolidation dated April 1, 1929, among Pennsylvania Company (Penn), Harmony Electric Company and Peoples Power Company (consummated May 31, 1930), copies of Letters Patent issued thereon, together with the Election Return and Treasurer's Return, relative to decrease of capital stock; Election Return authorizing of change of capital stock and increase of indebtedness; Election Return authorizing change Return establishing 4.24% Preferred Stock; Certificate with respect to capital stock; Election the establishment of 4.64% Preferred Stock; Election Returns and Certificates of Actual Sale in connection with the purchase by Penn Power of all the property of Pine-Mercer Electric Company, Industry Borough Electric Company, Ohio Township Electric Company, and Power's Shippingport Borough Electric Company; Certificate of Change of Location of Penn Certificate of Consent authorizing increase in authorized Common Stock; principal office; of Certificate of Consent with respect to the removal of limitations on the authorized amount indebtedness of Penn Power; Election Returns and Certificates of Actual Sale in connection with the purchase by Penn Power of all the property of Borolak Public Service Company, Service Eastfax Public Service Company, Norango Public Service Company, Sadwick Public Service Company, Surrick Public Service Company, Wesango Company, Sosango Public of Public Service Company, and Westfax Public Service Company; Certificate of Change Location of Penn Power's principal office; Amendment to the Charter extending the territory County, in which Penn Power may operate in the Borough of Shippingport, Beaver increase in authorized Common Stock; Pennsylvania; Certificate of Consent authorizing Certificate with respect to the establishment of the 8% Preferred Stock; Certificate accepting of Penn Business Corporation Law of Pennsylvania for government and regulation of affairs incorporating certain protective provisions relating to Power; Articles of Amendment Stock, increasing amount of authorized Preferred Stock and authorizing future Preferred holders of increases in amounts of authorized Preferred Stock without a vote of the of Amendment increasing the authorized number of shares of Preferred Stock; Articles with respect to the Common Stock; Statement Affecting Class or Series of Shares Stock; Articles of Amendment increasing the establishment of the 7.64% Preferred number of shares of Common Stock; Articles of Amendment increasing the authorized Statement Affecting Class or Series of number of authorized shares of Preferred Stock; the establishment of the 8.48% Preferred Stock; Articles of Shares with respect to authorizing sinking fund requirements for Preferred Stock; Statement Affecting Amendment Stock; Class or Series of Shares with respect to the establishment of the 11% Preferred increasing the authorized number of shares of Common Stock; Articles of Amendment to the establishment of the Statement Affecting Class or Series of Shares with respect of Amendment increasing authorized number of shares of 9.16% Preferred Stock; Articles of Preferred Common Stock; Articles of Amendment increasing authorized number of shares of Stock; Statement Affecting Class or Series of Shares with respect to the establishment Stock; Statement Affecting Class or Series of Shares with respect to the 8.24% Preferred Articles of Amendment increasing the establishment of the 10.50% Preferred Stock; increasing authorized number of shares of Common Stock; Articles of Amendment number of shares of Preferred Stock; Statement Affecting Class or Series of authorized Affecting Shares with respect to the establishment of the 15.00% Preferred Stock; Statement 32

Exhibit Number Class or Series of Shares with respect to the establishment of the 11.50% Preferred Stock; Articles of Amendment increasing authorized number of shares of Preferred Stock; Statement Affecting Class or Series of Shares with respect to the establishment of the 13.00% Preferred Stock; Statement Affecting Class or Series of Shares with respect to the establishment of the 11.50% Preferred Stock, Series B; Articles of Amendment effective April 2, 1987, adding a standard of care for, and limiting the personal liability of, officers and directors; Articles of Amendment effective April 1, 1992, setting forth corporate purposes of the Company; Statement With Respect to Shares with respect to the establishment of the 7.625% Preferred Stock and Statement with Respect to Shares with respect to the establishment of the 7.75% Preferred Stock. (Physically filed and designated respectively, as follows: in Form A-2, Registration No. 2-3889, as Exhibit A-i; in Form 1-MD for 1938, File No. 2-3889, as Exhibit (a)-1; in Form 1-MD for 1945, File No. 2-3889, as Exhibit A; in Form U-1, File No. 70-2310, as Exhibit A-3 (d); in Form 8-K for March 1951, File No. 1-3491, as Exhibit B; in Form 8-K for June 1958, File No. 1-3491B, as Exhibit 1; in Form 10-K for 1959 as Exhibits 1, 2, 3 and 4; in Form 8-K for March 1960, File No. 1-3491B as Exhibit A; in Form U-i, File No. 70-3971, as Exhibit A-2; in Form U-i, File No. 70-4055, as Exhibit A-2; as Exhibits 1 through 8 in Form 8-K for January 1962, File No. 1-3491; as Exhibit A in Form 8-K for August 1963, File No. 1-3491; as Exhibits A and B in Form 8-K for September 1969, File No. 1-3491; as Exhibit B in Form 8-K for April 1971, File No. 1-3491; as Exhibit B in Form 8-K for September 1971, File No. 1-3491; in Form U-i, File No. 70-5264, as Exhibit A 2; as Exhibit A in Form 8-K for September 1972, File No. 1-3491; as Exhibit A in Form 8-K for December 1972, File No. 1-3491; as Exhibit A in Form 8-K for March 1973, File No. 1 3491; as Exhibit A in Form 8-K for December 1973, File No. 1-3491; as Exhibits A and C in Form 8-K for February 1974, File No. 1-3491; as Exhibits A and B in Form 8-K for January 1975, File No. 1-3491; as Exhibit F in Form 8-K for May 1975, File No. 1-3491; as Exhibit A in Form 8-K for April 1976, File No. 1-3491; as Exhibit G in Form 10-Q for quarter ended June 30, 1977, File No. 1-3491; as Exhibit C in Form 10-K for 1977, File No. 1-3491; as Exhibit A in Form 10-K for 1977, File No. 1-3491, as Exhibit D in Form 10-Q for quarter ended June 30, 1980, File No. 1-3491; as Exhibit (4) in Form 10-Q for quarter ended June 30, 1981, File No. 1-3491; as Exhibit 4 in Form 10-Q for quarter ended June 30, 1982, File No. 1-3491; as Exhibit 4 in Form 10-Q for quarter ended September 30, 1982, File No. 1 3491; as Exhibit 4 in Form 10-Q for quarter ended September 30, 1983, File No. 1-3491; as Exhibit 4 in Form 10-0 for quarter ended March 31, 1984, File No. 1-3491; as Exhibit 4 in Form 10-Q for quarter ended June 30, 1984, File No. 1-3491; as Exhibit 4 in Form 10-Q for quarter ended September 30, 1985, File No. 1-3491; as Exhibit 3-2 in Form 10-K for 1987 File No. 1-3491; as Exhibit 3-2 in Form 10-K for 1992 File No. 1-3491; as Exhibit 19-2 in Form 10-K for 1992 File No. 1-3491; and as Exhibit 3-2 in Form 10-K for 1993 File No. 1 3491.)

3-2 - By-Laws of Penn as amended March 25, 1992. (1992 Form 10-K, Exhibit 3-3, File No. 1 3491.)

(A) 3-3 - By-Laws of Penn as amended September 27, 1999.

4-1 - Indenture dated as of November 1, 1945, between Penn and The First National Bank of the City of New York (now Citibank, N.A.), as Trustee, as supplemented and amended by Supplemental Indentures dated as of May 1, 1948, March 1, 1950, February 1, 1952, October 1, 1957, September 1, 1962, June 1, 1963, June 1, 1969, May 1, 1970, April 1, 1971, October 1, 1971, May 1, 1972, December 1, 1974, October 1, 1975, September 1, 1976, April 15, 1978, June 28, 1979, January 1, 1980, June 1, 1981, January 14, 1982, August 1, 1982, December 15, 1982, December 1, 1983, September 6, 1984, December 1, 1984, May 30, 1985, October 29, 1985, August 1, 1987, May 1, 1988, November 1, 1989, December 1, 1990, September 1, 1991, May 1, 1992, July 15, 1992, August 1, 1992, and May 1, 1993, July 1, 1993, August 31, 1993, September 1, 1993, September 15, 1993, October 1, 1993, November 1, 1993, and August 1, 1994. (Physically filed and designated as Exhibits 2(b) (1)-1 through 2(b) (1)-15 in Registration Statement File No. 2-60837; as Pursuant to paragraph (b) (4) (iii) (A) of Item 601 of Regulation S-K, Penn has not filed as an exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount of securities authorized thereunder does not exceed 10% of the total assets of Penn, but hereby agrees to furnish to the Commission on request any such instruments.

33

Exhibit Number Exhibits 2(b) (2), 2(b) (3), and 2 (b) (4) in Registration Statement File No. 2-68906; as Exhibit 4-2 in Form 10-Kfor 1981 File No. 1-3491; as Exhibit 19-1 in Form 10-Kfor 1982 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1983 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1984 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1985 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1987 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1988 File No. 1-3491; as Exhibit 19 in Form 10-K for 1989 File No. 1-3491; as Exhibit 19 in Form 10-K for 1990 File No. 1-3491; as Exhibit 19 in Form 10-K for 1991 File No. 1-3491; as Exhibit 19-1 in Form 10-K for 1992 File No. 1-3491; as Exhibit 4-2 in Form 10-K for 1993 File No. 1-3491; and as Exhibit 4-2 in Form 10-K for 1994 File No. 1-3491.)

4-2 - Supplemental Indenture dated as of September 1, 1995, between Penn and Citibank, N.A.,

as Trustee. (1995 Form 10-K, Exhibit 4-2.)

4-3 - Supplemental Indenture dated as of June 1, 1997, between Penn and Citibank, N.A., as Trustee. (1997 Form 10-K, Exhibit 4-3.)

4-4 - Supplemental Indenture dated as of June 1, 1998, between Penn and Citibank, N. A., as Trustee. (1998 Form 10-K, Exhibit 4-4.)

(A) 4-5 - Supplemental Indenture dated as of September 29, 1999, between Penn and Citibank, N.A.,

as Trustee.

(A) 4-6 - Supplemental Indenture dated as of November 15, 1999, between Penn and Citibank, N.A.,

as Trustee.

10-1 - Administration Agreement between the CAPCO Group dated as of September 14, 1967.

(Registration Statement of Ohio Edison Company, File No. 2-43102, Exhibit 5 (c) (2).)

10-2 - Amendment No. I dated January 4, 1974 to Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration Statement No. 2-68906, Exhibit 5 (c)

(3).)

10-3 - Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (Registration Statement of Ohio Edison Company, File No. 2-43102, Exhibit 5 (c) (3).)

10-4 - Amendment No. 1 dated as of January 1, 1993 to Transmission Facilities Agreement between the CAPCO Group dated as of'September 14, 1967. (1993 Form 10-K, Exhibit 10 4, Ohio Edison Company.)

10-5 - Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group. (Registration Statement No. 2-68906, Exhibit 10-4.)

10-6 - Amendment dated as of December 23, 1993 to Agreement for the Termination or Construction of Certain Agreements effective September 1, 1980 among the CAPCO Group.

(1993 Form 10-K, Exhibit 10-6, Ohio Edison Company.)

10-7 - CAPCO Basic Operating Agreement, as amended September 1, 1980. (Registration Statement No. 2-68906, as Exhibit 10-5.)

10-8 - Amendment No. 1 dated August 1, 1981 and Amendment No. 2 dated September 1, 1982, to CAPCO Basic Operating Agreement as amended September 1, 1980. (September 30, 1981 Form 10-Q, Exhibit 20-1 and 1982 Form 10-K, Exhibit 19-3, File No. 1-2578, of Ohio Edison Company.)

10-9 - Amendment No. 3 dated as of July 1, 1984, to CAPCO Basic Operating Agreement as amended September 1, 1980. (1985 Form 10-K, Exhibit 10-7, File No 1-2578, of Ohio Edison Company.)

10-10 - Basic Operating Agreement between the CAPCO Companies as amended October 1, 1991.

(1991 Form 10-K, Exhibit 10-8, File No. 1-2578, of Ohio Edison Company.)

34

Exhibit Number 10-11 - Basic Operating Agreement between the CAPCO Companies as amended January 1, 1993.

(1993 Form 10-K, Exhibit 10-11, Ohio Edison.)

10-12 - Memorandum of Agreement effective as of September 1, 1980, among the CAPCO Group.

(1991 Form 10-K, Exhibit 19-2, Ohio Edison Company.)

10-13 - Operating Agreement for Beaver Valley Power Station Units Nos. 1 and 2 as Amended and Restated September 15, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 10-15, File No. 1-2578, of Ohio Edison Company.)

10-14 - Construction Agreement with respect to Perry Plant between the CAPCO Group dated as of July 22, 1974. (Registration Statement of Toledo Edison Company, File No. 2-52251, as Exhibit 5 (yy).)

10-15 - Participation Agreement No. 1 relating to the financing of the development of certain coal mines, dated as of October 1, 1973, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Registration Statement of Ohio Edison Company, File No. 2-61146, Exhibit 5 (e) (1).)

10-16 Amendment No. 1 dated as of September, 15, 1978, to Participation Agreement No. 1 dated as of October 1, 1973, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Registration Statement No. 2-68906, Exhibit 5 (e) (2).)

10-17 Participation Agreement No. 2 relating to the financing of the development of certain coal mines, dated as of August 1, 1974, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Ohio Edison Company, File No. 2-53059, Exhibit 5 (h) (2).)

10-18 Amendment No. 1 dated as of September 15, 1978, to Participation Agreement No. 2 dated as of August 1, 1974, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Registration Statement No. 2-68906, Exhibit 5(e) (4).)

10-19 Participation Agreement No. 3 relating to the financing of the development of certain coal mines, dated as of September 15, 1978, among Quarto Mining Company, the CAPCO Group, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in Schedules A and B thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee. (Registration Statement No. 2-68906, Exhibit 5 (e) (5).)

10-20 - Participation Agreement No. 4 relating to the financing of the development of certain coal mines, dated as of October 31, 1980, among Quarto Mining Company, the CAPCO Group, the Loan Participants listed in Schedule A thereto and National City Bank, as Bond Trustee.

(Registration Statement No. 2-68906, Exhibit 10-16.)

10-21 - Participation Agreement No. 5 dated as of May 1, 1986, among Quarto Mining Company, the CAPCO Companies, the Loan Participants listed in Schedule A thereto, and National City Bank, as Bond Trustee. (1986 Form 10-K, Exhibit 10-22, File No. 1-2578, Ohio Edison Company.)

10-22 - Participation Agreement No. 6 dated as of December 1, 1991, among Quarto Mining Company, the CAPCO Companies, the Loan Participants listed in Schedule A thereto, 35

Exhibit Number National City Bank, as Mortgage Bond Trustee, and National City Bank, as Refunding Bond Trustee. (1991 Form 10-K, Exhibit 10-19, File No. 1-2578, Ohio Edison Company.)

10-23 - Agreement entered into as of October 20, 1981, among the CAPCO Companies regarding 20-1, the use of Quarto Coal at Mansfield Units Nos. 1, 2 and 3. (1981 Form 10-K, Exhibit File No. 1-2578, Ohio Edison Company.)

10-24 - Restated Option Agreement dated as of May 1, 1983, by and between The North American 1

Coal Corporation and the CAPCO Companies. (1983 Form 10-K, Exhibit 19-1, File No.

2578, Ohio Edison Company.)

Mining 10-25 - Trust Indenture and Mortgage dated as of October 1, 1973, between Quarto as of Company and National City Bank, as Bond Trustee, together with Guaranty, dated the CAPCO Group. (Registration Statement of Ohio October 1, 1973, with respect thereto by Edison Company, File No. 2-61146, Exhibit 5 (e) (5).)

of 10-26 - Amendment No. 1 dated August 1, 1974, to Trust Indenture and Mortgage dated as between Quarto Mining Company and National City Bank, as Bond October 1, 1973, of Trustee, together with Amendment No. 1 dated August 1, 1974, to Guaranty dated as thereto by the CAPCO Group. (Registration Statement of Ohio October 1, 1973, with respect Edison Company, File No. 2-53059, Exhibit 5 (h) (2).)

dated 10-27 - Amendment No. 2 dated as of September 15, 1978, to Trust Indenture and Mortgage October 1, 1973, as amended, between Quarto Mining Company and National City as of No. 2 dated as of September 15, 1978, to Bank, as Bond Trustee, together with Amendment of October 1, 1973, as amended, between the CAPCO Group and Bond Guaranty dated as 5 (e)

National City Bank, as Bond Trustee. (Registration Statement No. 2-68906, Exhibits (11) and 5 (e) (12).)

as 10-28 - Amendment No. 3 dated as of October 31, 1980, to Trust Indenture and Mortgage dated Quarto Mining Company and National City Bank, of October 1, 1973, as amended, between as Bond Trustee. (Registration Statement No. 2-68906, Exhibit 10-16.)

as of 10-29 - Amendment No. 4 dated as of July 1, 1985, to Trust Indenture and Mortgage dated 1, 1973, as amended, between Quarto Mining Company and National City Bank, as October Bond Trustee. (1985 Form 10-K, Exhibit 10-28, File No. 1-2578, Ohio Edison Company.)

of 10-30 - Amendment No. 5 dated as of May 1, 1986, to Trust Indenture and Mortgage dated as and National City Bank, as October 1, 1973, as amended, between Quarto Mining Company Bond Trustee. (1986 Form 10-K, Exhibit 10-30, File No. 1-2578, Ohio Edison Company.)

as 10-31 - Amendment No. 6 dated as of December 1, 1991, to Trust Indenture and Mortgage dated 1, 1973, as amended, between Quarto Mining Company and National City Bank, of October as Bond Trustee. (1991 Form 10-K, Exhibit 10-28, File No. 1-2578, Ohio Edison Company.)

Company and 10-32 - Trust Indenture dated as of December 1, 1991, between Quarto Mining Exhibit 10-29, File No. 1-25-78, National City Bank, as Bond Trustee. (1991 Form 10-K, Ohio Edison Company.)

as of 10-33 - Amendment No. 3 dated as of October 31, 1980, to the Bond Guaranty dated October 1, 1973, as amended, with respect to the CAPCO Group. (Registration Statement No. 2-68906, Exhibit 10-16.)

1, 10-34 - Amendment No. 4 dated as of July 1, 1985, to the Bond Guaranty dated as of October Trustee.

1973, as amended, by the CAPCO Companies to National City Bank, as Bond (1985 Form 10-K, Exhibit 10-30, File No. 1-2578, Ohio Edison Company.)

October 1, 10-35 - Amendment No. 5 dated as of May 1, 1986, to the Bond Guaranty dated as of National City Bank, as Bond Trustee.

1973, as amended, by the CAPCO Companies to (1986 Form 10-K, Exhibit 10-33, File No. 1-2578, Ohio Edison Company.)

36

Exhibit Number 10 Amendment No. 6A dated as of December 1, 1991, to the Bond Guaranty dated as of October 1, 1973, as amended, by the CAPCO Companies to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-33, File No. 1-2578, Ohio Edison Company.)

10 Amendment No. 6B dated as of December 30, 1991, to the Bond Guaranty dated as of October 1, 1973, as amended, by the CAPCO Companies to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-34, File No. 1-2578, Ohio Edison Company.)

10 Bond Guaranty dated as of December 1, 1991, by the CAPCO Companies to National City Bank, as Bond Trustee. (1991 Form 10-K, Exhibit 10-35, File No. 1-2578, Ohio Edison Company.)

10 Open End Mortgage dated as of October 1, 1973, between Quarto Mining Company and the CAPCO Companies and Amendment No. 1 thereto dated as of September 15, 1978.

(Registration Statement No. 2-68906, Exhibit 10-23.)

10 Restructuring Agreement dated as of April 1, 1985, among Quarto Mining Company, the CAPCO Companies, Energy Properties, Inc., General Electric Credit Corporation, the Loan Participants listed in schedules thereto, Central National Bank of Cleveland, as Owner Trustee, National City Bank, as Loan Trustee, and National City Bank, as Bond Trustee.

(1985 Form 10-K, Exhibit 10-33, File No. 1-2578, Ohio Edison Company.)

10 Unsecured Note Guaranty dated as of July 1, 1985, by the CAPCO Companies to General Electric Credit Corporation. (1985 Form 10-K, Exhibit 10-34, File No. 1-2578, Ohio Edison Company.)

10 Memorandum of Understanding dated as of March 31, 1985, among the CAPCO Companies. (1985 Form 10-K, Exhibit 10-35, File No. 1-2578, Ohio Edison Company.)

(B) 10 Ohio Edison System Executive Supplemental Life Insurance Plan. (1995 Form 10-K, Exhibit 10-44, File No. 1-2578, Ohio Edison Company.)

(B) 10 Ohio Edison System Executive Incentive Compensation Plan. (1995 Form 10-K, Exhibit 10 45, File No. 1-2578, Ohio Edison Company.)

(B) 10 Ohio Edison System Restated and Amended Executive Deferred Compensation Plan. (1995 Form 10-K, Exhibit 10-46, File No. 1-2578, Ohio Edison Company.)

(B) 10 Ohio Edison System Restated and Amended Supplemental Executive Retirement Plan.

(1995 Form 10-K, Exhibit 10-47, File No. 1-2578, Ohio Edison Company.)

10 Operating Agreement for Perry Unit No. 1 dated March 10, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-24, File No. 1-2578, Ohio Edison Company.)

10 Operating Agreement for Bruce Mansfield Units Nos. 1, 2 and 3 dated as of June 1, 1976, and executed on September 15, 1987, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-25, File No. 1-2578, Ohio Edison Company.)

10 Operating Agreement for W. H. Sammis Unit No. 7 dated as of September 1, 1971, by and between the CAPCO Companies. (1987 Form 10-K, Exhibit 28-26, File No. 1-2578, Ohio Edison Company.)

10 OE-APS Power Interchange Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company, and Monongahela Power Company and West Penn Power Company and The Potomac Edison Company. (1987 Form 10-K, Exhibit 28-27, File No. 1-2578, of Ohio Edison Company.)

10 OE-PEPCO Power Supply Agreement dated March 18, 1987, by and among Ohio Edison Company and Pennsylvania Power Company and Potomac Electric Power Company. (1987 Form 10-K, Exhibit 28-28, File No. 1-2578, of Ohio Edison Company.)

37

Exhibit Number Agreement 10-52 - Supplement No. 1 dated as of April 28, 1987, to the OE-PEPCO Power Supply 18, 1987, by and among Ohio Edison Company, Pennsylvania Power dated March (1987 Form 10-K, Exhibit 28-29, File No.

Company and Potomac Electric Power Company.

1-2578, of Ohio Edison Company.)

Monongahela 10-53 - APS-PEPCO Power Resale Agreement dated March 18, 1987, by and among West Penn Power Company, and The Potomac Edison Company and Power Company, Exhibit 28-30, File No. 1-2578, of Ohio Potomac Electric Power Company. (1987 Form 10-K, Edison Company.)

for Beaver Valley 10-54 - Pennsylvania Power Company Master Decommissioning Trust Agreement Power Plant dated as of April 21, 1995. (Quarter ended Power Station and Perry Nuclear June 30, 1995 Form 10-Q, Exhibit 10, File No. 1-3491.)

Incorporated, as 10 Nuclear Fuel Lease dated as of March 31, 1989, between OES Fuel, and Pennsylvania Power Company, as Lessee. (1989 Form 10-K, Exhibit 10-39, File Lessor, No. 1-3491.)

(A) 12.5 - Fixed Charge Ratios by (A) 13.4 - 1999 Annual Report to Stockholders. (Only those portions expressly incorporated in this Form 10-K are to be deemed "filed" with the Securities and Exchange reference Commission.)

(A) 23.3 - Consent of Independent Public Accountants.

(A) 27.4 - Financial Data Schedule.

(A) - Provided herein in electronic format as an exhibit.

to Item (B) - Management contract or compensatory plan contract or arrangement filed pursuant 601 of Regulation S-K.

the Company will Pursuant to Rule 14a-3(10) of the Securities Exchange Act of 1934, of the Company's expenses in furnishing furnish any exhibit in this Report upon the payment such exhibit.

3. Exhibits - Common Exhibits to CEI and TE Exhibit Number Energy dated as of 2(a) - Agreement and Plan of Merger between Ohio Edison and Centerior (2)-1, Form S-4 File No. 333-21011, filed by FirstEnergy).

September 13, 1996 (Exhibit and Centerior 2(b) - Merger Agreement by and among Centerior Acquisition Corp., FirstEnergy (Exhibit (2)-3, Form S-4 File No. 333-21011, filed by FirstEnergy).

1-9130, 1-2323 and 1 4(a) - Rights Agreement (Exhibit 4, June 25, 1996 Form 8-K, File Nos.

3583).

and The Chase 4(b)(1) - Form of Note Indenture between Cleveland Electric, Toledo Edison dated as of June 13, 1997 (Exhibit 4(c), Form S-4 File No. 333 Manhattan Bank, as Trustee 35931, filed by Cleveland Electric and Toledo Edison).

Toledo Edison and 4(b)(2) - Form of First Supplemental Note Indenture between Cleveland Electric, June 13, 1997 (Exhibit 4(d), Form S-4 The Chase Manhattan Bank, as Trustee dated as of File No. 333-35931, filed by Cleveland Electric and Toledo Edison).

of September 14, 1967, 10b(1)(a) CAPCO Administration Agreement dated November 1, 1971, as regarding the organization and procedures for among the CAPCO Group members 38

Exhibit Number implementing the objectives of the CAPCO Group (Exhibit 5(p), Amendment No. 1, File No.

2-42230, filed by Cleveland Electric).

10b(1)(b) - Amendment No. 1, dated January 4, 1974, to CAPCO Administration Agreement among the CAPCO Group members (Exhibit 5(c)(3), File No. 2-68906, filed by Ohio Edison).

10b(2) - CAPCO Transmission Facilities Agreement dated November 1, 1971, as of September 14, 1967, among the CAPCO Group members regarding the installation, operation and maintenance of transmission facilities to carry out the objectives of the CAPCO Group (Exhibit 5(q), Amendment No. 1, File No. 2-42230, filed by Cleveland Electric).

10b(2)(1) - Amendment No. 1 to CAPCO Transmission Facilities Agreement, dated December 23, 1993 and effective as of January 1, 1993, among the CAPCO Group members regarding requirements for payment of invoices at specified times, for payment of interest on non timely paid invoices, for restricting adjustment of invoices after a four-year period, and for revising the method for computing the Investment Responsibility charge for use of a member's transmission facilities (Exhibit 10b(2)(1), 1993 Form 10-K, File Nos. 1-9130, 1 2323 and 1-3583).

10b(3) - CAPCO Basic Operating Agreement As Amended January 1, 1993 among the CAPCO Group members regarding coordinated operation of the members' systems (Exhibit 10b(3),

1993 Form 10-K, File Nos. 1-9130, 1-2323 and 1-3583).

10b(4) - Agreement for the Termination or Construction of Certain Agreement By and Among the CAPCO Group members, dated December 23, 1993 and effective as of September 1, 1980 (Exhibit 10b(4), 1993 Form 10-K, File Nos. 1-9130, 1-2323 and 1-3583).

1Ob(5) - Construction Agreement, dated July 22, 1974, among the CAPCO Group members and relating to the Perry Nuclear Plant (Exhibit 5 (yy), File No. 2-52251, filed by Toledo Edison).

1Ob(6) - Contract, dated as of December 5, 1975, among the CAPCO Group members for the construction of Beaver Valley Unit No. 2 (Exhibit 5 (g), File No. 2-52996, filed by Cleveland Electric).

10b(7) - Amendment No. 1, dated May 1, 1977, to Contract, dated as of December 5, 1975, among the CAPCO Group members for the construction of Beaver Valley Unit No. 2 (Exhibit 5(d)(4),

File No. 2-60109, filed by Ohio Edison).

10d(1)(a) - Form of Collateral Trust Indenture among CTC Beaver Valley Funding Corporation, Cleveland Electric, Toledo Edison and Irving Trust Company, as Trustee (Exhibit 4(a), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

10d(1)(b) - Form of Supplemental Indenture to Collateral Trust Indenture constituting Exhibit 10d(1)(a) above, including form of Secured Lease Obligation bond (Exhibit 4(b), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

10d(1)(c) - Form of Collateral Trust Indenture among Beaver Valley 11 Funding Corporation, The Cleveland Electric Illuminating Company and The Toledo Edison Company and The Bank of New York, as Trustee (Exhibit (4) (a), File No. 33-46665, filed by Cleveland Electric and Toledo Edison).

10d(1)(d) - Form of Supplemental Indenture to Collateral Trust Indenture constituting Exhibit 10d(1)(c) above, including form of Secured Lease Obligation Bond (Exhibit (4) (b), File No. 33-46665, filed by Cleveland Electric and Toledo Edison).

1Od(2)(a) - Form of Collateral Trust Indenture among CTC Mansfield Funding Corporation, Cleveland Electric, Toledo Edison and IBJ Schroder Bank & Trust Company, as Trustee (Exhibit 4(a),

File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

39

Exhibit Number 1Od(2)(b) - Form of Supplemental Indenture to Collateral Trust Indenture constituting Exhibit 10d(2)(a) above, including forms of Secured Lease Obligation bonds (Exhibit 4(b), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

1Od(3)(a) - Form of Facility Lease dated as of September 15, 1987 between The First National Bank of with Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 the limited partnership Owner Participant named therein, Lessor, and Cleveland Electric and and Toledo Edison, Lessee (Exhibit 4(c), File No. 33-18755, filed by Cleveland Electric Toledo Edison).

10d(3)(b) - Form of Amendment No. 1 to Facility Lease constituting Exhibit 10d(3)(a) above (Exhibit 4(e), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

1Od(4)(a) - Form of Facility Lease dated as of September 15, 1987 between The First NatiOnal Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the corporate Owner Participant named therein, Lessor, and Cleveland Electric and Toledo Edison, Lessees (Exhibit 4(d), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

10d(4)(b) - Form of Amendment No. 1 to Facility Lease constituting Exhibit 10d(4)(a) above (Exhibit 4(f),

File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

1Od(5)(a) - Form of Facility Lease dated as of September 30, 1987 between Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Lessor, and Cleveland Electric and Toledo Edison, Lessees (Exhibit 4(c), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

10d(5)(b) - Form of Amendment No. 1 to the Facility Lease constituting Exhibit 10d(5)(a) above (Exhibit 4(f), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

1Od(6)(a) - Form of Participation Agreement dated as of September 15, 1987 among the limited partnership Owner Participant named therein, the Original Loan Participants listed in Schedule 1 thereto, as Original Loan Participants, CTC Beaver Valley Fund Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Cleveland Electric and Toledo Edison, as Lessees (Exhibit 28(a), File No. 33-18755, filed by Cleveland Electric And Toledo Edison).

10d(6)(b) - Form of Amendment No. 1 to Participation Agreement constituting Exhibit 10d(6)(a) above (Exhibit 28(c), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

1Od(7)(a) - Form of Participation Agreement dated as of September 15, 1987 among the corporate Owner Participant named therein, the Original Loan Participants listed in Schedule 1 thereto, as Owner Loan Participants, CTC Beaver Valley Funding Corporation, as Funding Corporation, The First National Bank of Boston, as Owner Trustee, Irving Trust Company, as Indenture Trustee, and Cleveland Electric and Toledo Edison, as Lessees (Exhibit 28(b),

File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

1Od(7)(b) - Form of Amendment No. 1 to Participation Agreement constituting Exhibit 10d(7)(a) above (Exhibit 28(d), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

10d(8)(a) - Form of Participation Agreement dated as of September 30, 1987 among the Owner as Participant named therein, the Original Loan Participants listed in Schedule II thereto, Loan Participants, CTC Mansfield Funding Corporation, Meridian Trust Company, as Owner Owner Trustee, IBJ Schroder Bank & Trust Company, as Indenture Trustee, and Cleveland Electric and Toledo Edison, as Lessees (Exhibit 28(a), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

10d(8)(b) Form of Amendment No. 1 to the Participation Agreement constituting Exhibit 10d(8)(a) above (Exhibit 28(b), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

40

Exhibit Number 10d(9) - Form of Ground Lease dated as of September 15, 1987 between Toledo Edison, Ground Lessor, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, Tenant (Exhibit 28(e), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

10d(10) - Form of Site Lease dated as of September 30, 1987 between Toledo Edison, Lessor, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Tenant (Exhibit 28(c), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

10d(1 1) - Form of Site Lease dated as of September 30, 1987 between Cleveland Electric, Lessor, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Tenant (Exhibit 28(d), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

10d(12) - Form of Amendment No. 1 to the Site Leases constituting Exhibits 10d(10) and 10d(11) above (Exhibit 4(f), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

1Od(13) - Form of Assignment, Assumption and Further Agreement dated as of September 15, 1987 among The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, Cleveland Electric, Duquesne, Ohio Edison, Pennsylvania Power and Toledo Edison (Exhibit 28(f), File No. 33 18755, filed by Cleveland Electric and Toledo Edison).

10d(14) - Form of Additional Support Agreement dated as of September 15, 1987 between The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, and Toledo Edison (Exhibit 28(g), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

10d(15) - Form of Support Agreement dated as of September 30, 1987 between Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Toledo Edison, Cleveland Electric, Duquesne, Ohio Edison and Pennsylvania Power (Exhibit 28(e), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

10d(16) Form of Indenture, Bill of Sale, Instrument of Transfer and Severance Agreement dated as of September 30, 1987 between Toledo Edison, Seller, and The First National Bank of Boston, as Owner Trustee under a Trust Agreement dated as of September 15, 1987 with the Owner Participant named therein, Buyer (Exhibit 28(h), File No. 33-18755, filed by Cleveland Electric and Toledo Edison).

1Od(17) Form of Bill of Sale, Instrument of Transfer and Severance Agreement dated as of September 30, 1987 between Toledo Edison, Seller, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Buyer (Exhibit 28(f), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

1Od(18) Form of Bill of Sale, Instrument of Transfer and Severance Agreement dated as of September 30, 1987 between Cleveland Electric, Seller, and Meridian Trust Company, as Owner Trustee under a Trust Agreement dated as of September 30, 1987 with the Owner Participant named therein, Buyer (Exhibit 28(g), File No. 33-20128, filed by Cleveland Electric and Toledo Edison).

1Od(19) Forms of Refinancing Agreement, including exhibits thereto, among the Owner Participant named therein, as Owner Participant, CTC Beaver Valley Funding Corporation, as Funding Corporation, Beaver Valley II Funding Corporation, as New Funding Corporation, The Bank of New York, as Indenture Trustee, The Bank of New York, as New Collateral Trust Trustee, and The Cleveland Electric Illuminating Company and The Toledo Edison Company, as Lessees (Exhibit (28)(e)(i), File No. 33-46665, filed by Cleveland Electric and Toledo Edison).

41

Exhibit Number 10d(20)(a) - Form of Amendment No. 2 to Facility Lease among Citicorp Lescaman, Inc., Cleveland Cleveland Electric and Toledo Edison (Exhibit 10(a), Form S-4 File No. 333-47651, filed by Electric).

Inc., Cleveland 10d(20)(b) - Form of Amendment No. 3 to Facility Lease among Citicorp Lescaman, S-4 File No. 333-47651, filed by Cleveland Electric and Toledo Edison (Exhibit 10(b), Form Electric).

Services, Inc.,

10d(21)(a) - Form of Amendment No. 2 to Facility Lease among US West Financial and Toledo Edison (Exhibit 10(c), Form S-4 File No. 333-47651, filed by Cleveland Electric Cleveland Electric).

Services, Inc.,

10d(21)(b) - Form of Amendment No. 3 to Facility Lease among US West Financial File No. 333-47651, filed by Cleveland Electric and Toledo Edison (Exhibit 10(d), Form S-4 Cleveland Electric).

Cleveland 1Od(22) - Form of Amendment No. 2 to Facility Lease among Midwest Power Company, Form S-4 File No. 333-47651, filed by Cleveland Electric and Toledo Edison (Exhibit 10(e),

Electric).

No. 33 10e(1) - Centerior Energy Corporation Equity Compensation Plan (Exhibit 99, Form S-8, File 59635).

3. Exhibits - Cleveland Electric Illuminating (CEI)

(Exhibit 3a, 3a - Amended Articles of Incorporation of CEI, as amended, effective May 28, 1993 1993 Form 10-K, File No. 1-2323).

1988 and 3b - Regulations of CEI, dated April 29, 1981, as amended effective October 1, April 24, 1990 (Exhibit 3b, 1990 Form 10-K, File No. 1-2323).

(now (B)4b(1) - Mortgage and Deed of Trust between CEI and Guaranty Trust Company of New York Association)), as Trustee, dated July 1, 1940 (Exhibit The Chase Manhattan Bank (National 7(a), File No. 2-4450).

4b(1), dated Supplemental Indentures between CEI and the Trustee, supplemental to Exhibit as follows:

4b(2) - July 1, 1940 (Exhibit 7(b), File No. 2-4450).

4b(3) - August 18, 1944 (Exhibit 4(c), File No. 2-9887).

4b(4) - December 1, 1947 (Exhibit 7(d), File No. 2-7306).

4b(5) - September 1, 1950 (Exhibit 7(c), File No. 2-8587).

4b(6) - June 1, 1951 (Exhibit 7(f), File No. 2-8994).

4b(7) - May 1, 1954 (Exhibit 4(d), File No. 2-10830).

4b(8) - March 1, 1958 (Exhibit 2(a)(4), File No. 2-13839).

4b(9) - April 1, 1959 (Exhibit 2(a)(4), File No. 2-14753).

4b(1 0) - December 20, 1967 (Exhibit 2(a)(4), File No. 2-30759).

4b(11) - January 15, 1969 (Exhibit 2(a)(5), File No. 2-30759).

4b(12) - November 1, 1969 (Exhibit 2(a)(4), File No. 2-35008).

4b(13) - June 1, 1970 (Exhibit 2(a)(4), File No. 2-37235).

4b(14) - November 15, 1970 (Exhibit 2(a)(4), File No. 2-38460).

4b(1 5) - May 1, 1974 (Exhibit 2(a)(4), File No. 2-50537).

4b(16) - April 15, 1975 (Exhibit 2(a)(4), File No. 2-52995).

4b(17) - April 16, 1975 (Exhibit 2(a)(4), File No. 2-53309).

4b(18) - May 28, 1975 (Exhibit 2(c), June 5, 1975 Form 8-A, File No. 1-2323).

4b(19) - February 1, 1976 (Exhibit 3(d)(6), 1975 Form 10-K, File No. 1-2323).

4b(20) - November 23, 1976 (Exhibit 2(a)(4), File No. 2-57375).

4b(21) - July 26, 1977 (Exhibit 2(a)(4), File No. 2-59401).

4b(22) - September 27, 1977 (Exhibit 2(a)(5), File No. 2-67221).

4b(23) - May 1, 1978 (Exhibit 2(b), June 30, 1978 Form 10-Q, File No. 1-2323).

42

Exhibit Number 4b(24) - September 1, 1979 (Exhibit 2(a), September 30, 1979 Form 10-Q, File No. 1-2323).

4b(25) - April 1, 1980 (Exhibit 4(a)(2), September 30, 1980 Form 10-Q, File No. 1-2323).

4b(26) - April 15, 1980 (Exhibit 4(b), September 30,1980 Form 10-Q, File No. 1-2323).

4b(27) - May 28, 1980 (Exhibit 2(a)(4), Amendment No. 1, File No. 2-67221).

4b(28) - June 9, 1980 (Exhibit 4(d), September 30, 1980 Form 10-Q, File No. 1-2323).

4b(29) - December 1, 1980 (Exhibit 4(b)(29), 1980 Form 10-K, File No. 1-2323).

4b(30) - July 28, 1981 (Exhibit 4(a), September 30, 1981, Form 10-Q, File No. 1-2323).

4b(31) - August 1, 1981 (Exhibit 4(b), September 30, 1981, Form 10-Q, File No. 1-2323).

4b(32) - March 1, 1982 (Exhibit 4(b)(3), Amendment No. 1, File No. 2-76029).

4b(33) - July 15, 1982 (Exhibit 4(a), September 30, 1982 Form 10-Q, File No. 1-2323).

4b(34) - September 1, 1982 (Exhibit 4(a)(1), September 30, 1982 Form 10-Q, File No. 1-2323).

4b(35) - November 1, 1982 (Exhibit 4(a)(2), September 30, 1982 Form 10-Q, File No. 1-2323).

4b(36) - November 15, 1982 (Exhibit 4(b)(36), 1982 Form 10-K, File No. 1-2323).

4b(37) - May 24, 1983 (Exhibit 4(a), June 30, 1983 Form 10-Q, File No. 1-2323).

4b(38) - May 1, 1984 (Exhibit 4, June 30, 1984 Form 10-Q, File No. 1-2323).

4b(39) - May 23, 1984 (Exhibit 4, May 22, 1984 Form 8-K, File No. 1-2323).

4b(40) - June 27, 1984 (Exhibit 4, June 11, 1984 Form 8-K, File No. 1-2323).

4b(41) - September4, 1984 (Exhibit 4b(41), 1984 Form 10-K, File No. 1-2323).

4b(42) - November 14, 1984 (Exhibit 4b(42), 1984 Form 10-K, File No. 1-2323).

4b(43) - November 15, 1984 (Exhibit 4b(43), 1984 Form 10-K, File No. 1-2323).

4b(44) - April 15, 1985 (Exhibit 4(a), May 8, 1985 Form 8-K, File No. 1-2323).

4b(45) - May 28, 1985 (Exhibit 4(b), May 8, 1985 Form 8-K, File No. 1-2323).

4b(46) - August 1, 1985 (Exhibit 4, September 30, 1985 Form 10-Q, File No. 1-2323).

4b(47) - September 1, 1985 (Exhibit 4, September 30, 1985 Form 8-K, File No. 1-2323).

4b(48) - November 1, 1985 (Exhibit 4, January 31, 1986 Form 8-K, File No. 1-2323).

4b(49) - April 15, 1986 (Exhibit 4, March 31, 1986 Form 10-Q, File No. 1-2323).

4b(50) - May 14, 1986 (Exhibit 4(a), June 30, 1986 Form 10-Q, File No. 1-2323).

4b(51) - May 15, 1986 (Exhibit 4(b), June 30, 1986 Form 10-Q, File No. 1-2323).

4b(52) - February 25, 1987 (Exhibit 4b(52), 1986 Form 10-K, File No. 1-2323).

4b(53) - October 15, 1987 (Exhibit 4, September 30, 1987 Form 10-Q, File No. 1-2323).

4b(54) - February 24, 1988 (Exhibit 4b(54), 1987 Form 10-K, File No. 1-2323).

4b(55) - September 15, 1988 (Exhibit 4b(55), 1988 Form 10-K, File No. 1-2323).

4b(56) - May 15,1989 (Exhibit 4(a)(2)(i), File No. 33-32724).

4b(57) - June 13, 1989 (Exhibit 4(a)(2)(ii), File No. 33-32724).

4b(58) - October 15, 1989 (Exhibit 4(a)(2)(iii), File No. 33-32724).

4b(59) - January 1, 1990 (Exhibit 4b(59), 1989 Form 10-K, File No. 1-2323).

4b(60) - June 1, 1990 (Exhibit 4(a). September 30, 1990 Form 10-Q, File No. 1-2323).

4b(61) - August 1, 1990 (Exhibit 4(b), September 30, 1990 Form 10-Q, File No. 1-2323).

4b(62) - May 1, 1991 (Exhibit 4(a), June 30, 1991 Form 10-Q, File No. 1-2323).

4b(63) - May 1, 1992 (Exhibit 4(a)(3), File No. 33-48845).

4b(64) - July 31, 1992 (Exhibit 4(a)(3), File No. 33-57292).

4b(65) - January 1, 1993 (Exhibit 4b(65), 1992 Form 10-K, File No. 1-2323).

4b(66) - February 1, 1993 (Exhibit 4b(66), 1992 Form 10-K, File No. 1-2323).

4b(67) - May 20, 1993 (Exhibit 4(a), July 14, 1993 Form 8-K, File No. 1-2323).

4b(68) - June 1, 1993 (Exhibit 4(b), July 14, 1993 Form 8-K, File No. 1-2323).

4b(69) - September 15, 1994 (Exhibit 4(a), September 30, 1994 Form 10-Q, File No. 1-2323).

4b(70) - May 1, 1995 (Exhibit 4(a), September 30, 1995 Form 10-Q, File No. 1-2323).

4b(71) - May 2, 1995 (Exhibit 4(b), September 30, 1995 Form 10-Q, File No. 1-2323).

4b(72) - June 1, 1995 (Exhibit 4(c), September 30, 1995 Form 10-Q, File No. 1-2323).

4b(73) - July 15, 1995 (Exhibit 4b(73), 1995 Form 10-K, File No. 1-2323).

4b(74) - August 1, 1995 (Exhibit 4b(74), 1995 Form 10-K, File No. 1-2323).

4b(75) - June 15, 1997 (Exhibit 4(a), Form S-4 File No. 333-35931, filed by Cleveland Electric and Toledo Edison).

4b(76) - October 15, 1997 (Exhibit 4(a), Form S-4 File No. 333-47651, filed by Cleveland Electric).

4b(77) - June 1, 1998 (Exhibit 4b(77), Form S-4 File No. 333-72891).

4b(78) - October 1, 1998 (Exhibit 4b(78), Form S-4 File No. 333-72891).

4b(79) - October 1, 1998 (Exhibit 4b(79), Form S-4 File No. 333-72891).

4b(80) - February 24, 1999 (Exhibit 4b(80), Form S-4 File No. 333-72891).

43

Exhibit Number (A) 4b(81) - September29, 1999.

(A) 4b(82) - January 15, 2000.

4c - Open-End Subordinate Indenture of Mortgage between The Cleveland Electric Illuminating Company and Bank One, Columbus N.A., as Trustee, Dated as of June 1, 1994 (Exhibit 4(a), August 26, 1994 Form 8-K, File No. 1-2323).

as 4d - Form of Note Indenture between Cleveland Electric and The Chase Manhattan Bank, 1997 (Exhibit 4(b), Form S-4 File No. 333-47651, filed by Trustee dated as of October 24, Cleveland Electric).

4d(1) - Form of Supplemental Note Indenture between Cleveland Electric and The Chase No.

Manhattan Bank, as Trustee dated as of October 24, 1997 (Exhibit 4(c), Form S-4 File 333-47651, filed by Cleveland Electric).

10-1 - Administration Agreement between the CAPCO Group dated as of September 14, 1967.

(Registration No. 2-43102, Exhibit 5(c)(2).)

10-2 - Amendment No. 1 dated January 4, 1974 to Administration Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-68906, Exhibit 5(c)(3).)

10-3 - Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (Registration No. 2-43102, Exhibit 5(c)(3).)

10-4 - Amendment No. I dated as of January 1, 1993 to Transmission Facilities Agreement between the CAPCO Group dated as of September 14, 1967. (1993 Form 10-K, Exhibit 10 4.)

10-5 - Agreement for the Termination or Construction of Certain Agreements effective by September 1, 1980, October 15, 1997 (Exhibit 4(a), Form S-4 File No. 333-47651, filed Cleveland Electric).

(A)12.3 - Consolidated fixed charge ratios.

(A)13.2 - 1999 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)

(A)21.2 - List of Subsidiaries of the Registrant at December 31, 1999.

(A)23.2 - Consent of Independent Public Accountants.

(A)27.2 - Financial Data Schedule.

(A) - Provided herein in electronic format as an exhibit.

(B) - Pursuant to paragraph (b) (4) (iii) (A) of Item 601 of Regulation S-K, CEI has not filed as an of exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount does not exceed 10% of the total assets of CEI, but hereby securities authorized thereunder agrees to furnish to the Commission on request any such instruments.

3. Exhibits - Toledo Edison (TE)

Exhibit Number 3a, 3a - Amended Articles of Incorporation of TE, as amended effective October 2, 1992 (Exhibit 1992 Form 10-K, File No. 1-3583).

July 1 and 3b - Code of Regulations of TE dated January 28, 1987, as amended effective October 1, 1988 and April 24, 1990 (Exhibit 3b, 1990 Form 10-K, File No. 1-3583).

44

Exhibit Number (B)4b(1) - Indenture, dated as of April 1, 1947, between TE and The Chase National Bank of the City of New York (now The Chase Manhattan Bank (National Association)) (Exhibit 2(b), File No.

2-26908).

4b(2) - September 1, 1948 (Exhibit 2(d), File No. 2-26908).

4b(3) - April 1, 1949 (Exhibit 2(e), File No. 2-26908).

4b(4) - December 1, 1950 (Exhibit 2(f), File No. 2-26908).

4b(5) - March 1, 1954 (Exhibit 2(g), File No. 2-26908).

4b(6) - February 1, 1956 (Exhibit 2(h), File No. 2-26908).

4b(7) - May 1, 1958 (Exhibit 5(g), File No. 2-59794).

4b(8) - August 1, 1967 (Exhibit 2(c), File No. 2-26908).

4b(9) - November 1, 1970 (Exhibit 2(c), File No. 2-38569).

4b(10) - August 1, 1972 (Exhibit 2(c), File No. 2-44873).

4b(11) - November 1, 1973 (Exhibit 2(c), File No. 2-49428).

4b(12) - July 1, 1974 (Exhibit 2(c), File No. 2-51429).

4b(13) - October 1, 1975 (Exhibit 2(c), File No. 2-54627).

4b(14) - June 1, 1976 (Exhibit 2(c), File No. 2-56396).

4b(15) - October 1, 1978 (Exhibit 2(c), File No. 2-62568).

4b(16) - September 1, 1979 (Exhibit 2(c), File No. 2-65350).

4b(17) - September 1, 1980 (Exhibit 4(s), File No. 2-69190).

4b(18) - October 1, 1980 (Exhibit 4(c), File No. 2-69190).

4b(19) - April 1, 1981 (Exhibit4(c), File No. 2-71580).

4b(20) - November 1, 1981 (Exhibit 4(c), File No. 2-74485).

4b(21) - June 1, 1982 (Exhibit 4(c), File No. 2-77763).

4b(22) - September 1, 1982 (Exhibit 4(x), File No. 2-87323).

4b(23) - April 1, 1983 (Exhibit 4(c), March 31, 1983, Form 10-Q, File No. 1-3583).

4b(24) - December 1, 1983 (Exhibit 4(x), 1983 Form 10-K, File No. 1-3583).

4b(25) - April 1, 1984 (Exhibit 4(c), File No. 2-90059).

4b(26) - October 15, 1984 (Exhibit 4(z), 1984 Form 10-K, File No. 1-3583).

4b(27) - October 15, 1984 (Exhibit 4(aa), 1984 Form 10-K, File No. 1-3583).

4b(28) - August 1, 1985 (Exhibit 4(dd), File No. 33-1689).

4b(29) - August 1, 1985 (Exhibit 4(ee), File No. 33-1689).

4b(30) - December 1, 1985 (Exhibit 4(c), File No. 33-1689).

4b(31) - March 1, 1986 (Exhibit 4b(31), 1986 Form 10-K, File No. 1-3583).

4b(32) - October 15, 1987 (Exhibit 4, September 30, 1987 Form 10-Q, File No. 1-3583).

4b(33) - September 15, 1988 (Exhibit 4b(33), 1988 Form 10-K, File No. 1-3583).

4b(34) - June 15, 1989 (Exhibit 4b(34), 1989 Form 10-K, File No. 1-3583).

4b(35) - October 15, 1989 (Exhibit 4b(35), 1989 Form 10-K, File No. 1-3583).

4b(36) - May 15, 1990 (Exhibit 4, June 30, 1990 Form 10-Q, File No. 1-3583).

4b(37) - March 1, 1991 (Exhibit 4(b), June 30, 1991 Form 10-Q, File No. 1-3583).

4b(38) - May 1, 1992 (Exhibit 4(a)(3), File No. 33-48844).

4b(39) - August 1, 1992 (Exhibit 4b(39), 1992 Form 10-K, File No. 1-3583).

4b(40) - October 1, 1992 (Exhibit 4b(40), 1992 Form 10-K, File No. 1-3583).

4b(41) - January 1, 1993 (Exhibit 4b(41), 1992 Form 10-K, File No. 1-3583).

4b(42) - September 15, 1994 (Exhibit 4(b), September 30, 1994 Form 10-Q, File No. 1-3583).

4b(43) - May 1, 1995 (Exhibit 4(d), September 30, 1995 Form 10-Q, File No. 1-3583).

4b(44) - June 1, 1995 (Exhibit 4(e), September 30, 1995 Form 10-Q, File No. 1-3583).

4b(45) - July 14, 1995 (Exhibit 4(f), September 30, 1995 Form 10-Q, File No. 1-3583).

4b(46) - July 15, 1995 (Exhibit 4(g), September 30, 1995 Form 10-Q, File No. 1-3583).

4b(47) - August 1, 1997 (Exhibit 4b(47), 1998 Form 10-K, File No. 1-3583).

4b(48) - June 1, 1998 (Exhibit 4b (48), 1998 Form 10-K, File No. 1-3583).

(A)4b(49) - January 15, 2000.

4c - Open-End Subordinate Indenture of Mortgage between The Toledo Edison Company and Bank One, Columbus, N.A., as Trustee, dated as of June 1, 1994 (Exhibit 4(b), August 26, 1994 Form 8-K, File No. 1-3583).

(A) 12.4 - Consolidated fixed charge ratios.

(A) 13.3 - 1999 Annual Report to Stockholders. (Only those portions expressly incorporated by reference in this Form 10-K are to be deemed "filed" with the SEC.)

45

Exhibit Number (A) 21.3 - List of Subsidiaries of the Registrant at December 31, 1999.

(A) 27.3 - Financial Data Schedule.

(A) - Provided herein in electronic format as an exhibit.

TE has not filed as an (B) - Pursuant to paragraph (b) (4) (iii) (A) of Item 601 of Regulation S-K, exhibit to this Form 10-K any instrument with respect to long-term debt if the total amount of securities authorized thereunder does not exceed 10% of the total assets of TE, but hereby agrees to furnish to the Commission on request any such instruments.

(b) Reports on Form 8-K FirstEnergy, OE, CEI. TE, Penn None.

46

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of FirstEnergy Corp.:

We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in FirstEnergy Corp.'s Annual Report to Stockholders incorporated by reference in this Form 10 K and have issued our report thereon dated February 11, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule of consolidated valuation and qualifying accounts listed in Item 14 is the responsibility of the Company's management and is presented for the purpose of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP Cleveland, Ohio February 11,2000 47

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of Ohio Edison Company:

We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in Ohio Edison Company's Annual Report to Stockholders incorporated by reference in this Form 10-K and have issued our report thereon dated February 11, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule of consolidated valuation and qualifying accounts listed in Item 14 is the responsibility of the Company's management and is presented for the purpose of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP Cleveland, Ohio February 11,2000 48

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of The Cleveland Electric Illuminating Company:

We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in The Cleveland Electric Illuminating Company's Annual Report to Stockholders incorporated by reference in this Form 10-K and have issued our report thereon dated February 11, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule of consolidated valuation and qualifying accounts listed in Item 14 is the responsibility of the Company's management and is presented for the purpose of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairiy states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP Cleveland, Ohio February 11,2000 49

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of The Toledo Edison Company:

We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in The Toledo Edison Company's Annual Report to Stockholders incorporated by reference in this Form 10-K and have issued our report thereon dated February 11, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule of consolidated valuation and qualifying accounts listed in Item 14 is the responsibility of the Company's management and is presented for the purpose of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP Cleveland, Ohio February 11, 2000 50

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of Pennsylvania Power Company:

We have audited, in accordance with generally accepted auditing standards, the financial statements included in Pennsylvania Power Company's Annual Report to Stockholders incorporated by reference in this Form 10-K and have issued our report thereon dated February 11, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule of valuation and qualifying accounts listed in Item 14 is the responsibility of the Company's management and is presented for the purpose of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP Cleveland, Ohio February 11, 2000 51

SCHEDULE II FIRSTENERGY CORP.

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31,1999, 1998 AND 1997 Additions Charged Beginning Charged to Other Ending Balance to Income Accounts Deductions Balance Description (In Thousands)

Year Ended December 31, 1999:

Accumulated provision for uncollectible accounts - customers ...................... $ 6,397 $8.668 $2.313 (a) $1659 (b) $ 6.719

- other .............................. T46-2-51 J _4039 $-1 (a) 49 (b) 5359 Year Ended December 31, 1998:

Accumulated provision for uncollectible accounts - customers ...................... $ 5,618 $28.984 $2,290 (a) $30495 (b) $ 6,397

- other .............................. 4-026 45.836 $__42 (a) 3 (b) 46251 Year Ended December 31, 1997:

Accumulated provision for uncollectible accounts - customers ...................... $ 2.306 $13,565 $2,277 (a) $12530 (b) $ 5.618 4808 (c) 1723 14026

- other .............................. $7777941 (a) Represents recoveries and reinstatements of accounts previously written off.

(b) Represents the write-off of accounts considered to be uncollectible.

(c) Includes the $4,026,000 effect of the FirstEriergy merger on November 8, 1997.

52

SCHEDULE II OHIO EDISON COMPANY CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31,1999, 1998 AND 1997 Additions Charged Beginning Charged to Other Ending Accounts Deductions Balance Description Balance to Income (In Thousands)

Year Ended December 31, 1999:

Accumulated provision for uncollectible accounts - customers .................. $6,397 $ 8.401 $2,313 (a) $10,659 (b) $6,452

- other .......................... ~zIz 1000 I -_- EI -_-- 11_000 Year Ended December 31, 1998:

Accumulated provision for uncollectible accounts ..................................... $5.618 $ 7933 $2,290 (a) $ 9,444 (b) $6,397 Year Ended December 31, 1997:

Accumulated provision for uncollectible accounts ..................................... $2.306 $10,979 $2,277 (a) $ 9,944 (b) $5618 (a) Represents recoveries and reinstatements of accounts previously written off.

(b) Represents the write-off of accounts considered to be uncollectible.

53

SCHEDULEII THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 Additions Charged Beginning Charged to Other Ending Description Balance to Income Accounts Deductions Balance (In Thousands)

Year Ended December 31, 1999:

Accumulated provision for uncollectible accounts ..................................... $ 491 1.180 $ 18 (a) $ 689 (b) $1i 000 Year Ended December 31, 1998:

Accumulated provision for uncollectible accounts ..................................... $1,226 $ (16) $ 42 (a) $ 761 (b) $ 491 Year Ended December 31, 1997:

Accumulated provision for uncollectible accounts:

Nov. 8 - Dec. 31, 1997 ........................................ $1.226 $ 2.331 $ 216 (a) $ 2,547 (b) $1,226 Jan. 1 - Nov. 7, 1997 .......................................... $ 58 $12.853 $1,366 (a) $13,051 (b) $1,226 (a) Represents recoveries and reinstatements of accounts previously written off.

(b) Represents the write-off of accounts considered to be uncollectible.

54

SCHEDULE II THE TOLEDO EDISON COMPANY CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31,1999, 1998 AND 1997 Additions Charged Beginning Charged to Other Ending to Income Accounts Deductions Balance Description Balance (In Thousands)

Year Ended December 31, 1999:

Accumulated provision for uncollectible accounts ..................................... $_ 100 $ 10 (b) $___

Year Ended December 31, 1998:

Accumulated provision for uncollectible accounts ..................................... $2R800 $192 _ -- $2.892 (b) $ 100 Year Ended December 31, 1997:

Accumulated provision for uncollectible accounts:

Nov. 8 -Dec. 31. 1997.............................. $2,800 $1.196 $ 56 (a) $1,762 (b) $2_800 Nov 8 - Dec 31 1997 ........................................

$ 100 $9.367 $1.797 (a) $8464 (b) $2,800 Jan. 1 - Nov. 7, 1997 ..........................................

(a) Represents recoveries and reinstatements of accounts previously written off.

(b) Represents the write-off of accounts considered to be uncollectible.

55

SCHEDULE II PENNSYLVANIA POWER COMPANY VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 Additions Charged Beginning Charged to Other Ending Description Balance to Income Accounts Deductions Balance (In Thousands)

Year Ended December 31, 1999:

Accumulated provision for uncollectible accounts ..................................... $3,599 $1.289 $oQo(a) $1,651 (b) $3,537 Year Ended December 31, 1998:

Accumulated provision for uncollectible accounts ..................................... $3.609 $1242 $409 (a) $1,661 (b) $3,599 Year Ended December 31, 1997:

Accumulated provision for uncollectible accounts ..................................... $ 569 $4409 $397 (a) $1,766 (b) $3,609 (a) Represents recoveries and reinstatements of accounts previously written off.

(b) Represents the write-off of accounts considered to be uncollectible.

56

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FIRSTENERGY CORP.

BY bQT{k~

H. Peter Burg Chairman of the BoarJ and Chief Executive Officer Date: March 21, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

H. Peter Burg AtoyJ egie Chairman of the Boa President and Director and Chief Executive Okfcer and Director (Principal Executive Officer)

Richard H. Marsh Harvey L. Wagne/

Vice President and Chief Financial Officer Controller (Pri7 Financial Officer) S ipal Accounting Officer)

Glen .ea'lows Carol A. Cartwright Director Dir( or

,or William F. Conway PaulJ. we Director Director.t 1""t B -44ýý Robert B. Heisler, Jr. Rdrert C. Savaige Director Director art, Robert L. Loughhead(

Director 6

/G)5'org

,,Je se T. Williams, Sr.

Director Drctor Date: March 21, 2000 57

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

OHIO EDISON COMPANY BY H. Peter Burg President Date: March 21, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

IL2&tA1 H. Peter Burg Richard H. Marsh President and Director \J Vice President and Director (Principal Executive Office'r) (Principal Financial Officer)

Harvey L. Wagnir Anthony J. A1a Director Controller (Principal Accounting Officer)

Date: March 21, 2000 58

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY BY ________

H. Peter Burg President <1 Date: March 21, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

H. Peter Burg , IRichard H. Marsh President and Direct r Vice President and Director (Principal Executive 0ficer) (Principal Financial Officer)

AnonyJ.Alano Controller U Director (Principal Accounting Officer)

Date: March 21, 2000 59

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE TOLEDO EDISON COMPANY BY -lJbA H. Peter Burg President ýj Date: March 21, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

H. Peter Burg Richard H. Marsh President and Director Vice President and Director (Principal Executive Officý (Principal Financial Officer)

Harvey L. Wagr/r AnonyoJ.Ax Controller Director (Principal Accounting Officer)

Date: March 21, 2000 60

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PENNSYLVANIA POWER COMPANY BY H. Peter Burg Chairman of the B ard nd Chief Executive 0 Date: March 21, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

Chaira oftheBoara R1'cfird H. M~arsh Vice President and Director (Principal Financial Officer)

(Principal Executive Officer)

Anthor ga y.Wagr Controller (Principal Accounting Officer) a5-cýý Director Date: March 21, 2000 61

EXHIBIT 12.1 Page 1 FIRSTENERGY CORP.

CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES Year Ended December 31, 1995 1996 1997 1998 1999 1999 (Dollars in Thousands)

EARNINGS AS DEFINED IN REGULATION S-K: $318,166 $ 441,396 $ 568,299

$317,241 $315,170 Income before extraordinary items ......................................................................

Interest and other charges, before reduction for 273,719 255,572 608,618 585,648 299,606 amounts capitalized ........................................................................................ 199,307 201,295 207,985 321,699 394,827 Provision for income taxes .................................................................................. 111,534 114,093 142,363 279.519 283,869 Interest element of rentals charged to income ..................................................... $901,801 $886.130 1968 1-20 $1,6j55,582 $1,828.293 Earnings as defined ........................................................................................

FIXED CHARGES AS DEFINED IN REGULATION S-K: $ 509,169

$266,514 $240,146 $284,180 $ 542,819 Interest expense ................................................................................................. 7,205 15,426 15,426 65,299 76,479 Subsidiaries' preferred stock dividend requirements ................................. *..........

Adjustments to subsidiaries' preferred stock dividends 2,956 2,910 2,918 43,370 44,829 to state on a pre-income tax basis ................................................................... 114,093 111,534 142,363 283,869 279,519 Interest element of rentals charged to income ..................................................... $388.209 $372,575 $ 935,357 $ 909,996 Fixed charges as defined ................................................................................

CONSOLIDATED RATIO OF EARNINGS TO FIXED 2.18 1.77 2.01 CHARGES .......................................................................................................... 2.32 2.38 62

EXHIBIT 12.2 Page 1 OHIO EDISON COMPANY CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

Income before extraordinary items ...................................................................... $317,241 $315,170 $293,194 $301,320 $297,689 Interest and other charges, before reduction for amounts capitalized ........................................................................................ 273,719 255,572 250,920 235,317 225,358 Provision for income taxes .................................................................................. 199,307 201,295 187,805 191,261 191,835 Interest element of rentals charged to income (a)................................................ 111534 114,093 117.409 115310 113804 Earnings as defined ........................................................................................ 9 8 $886.130 $849,328 $843.208 $828.686 FIXED CHARGES AS DEFINED IN REGULATION S-K:

Interest on long-term debt ................................................................................... $243,570 $211,935 $204,285 $184,915 $178,217 Other interest expense ........................................................................................ 22,944 28,211 31,209 34,976 31,971 Subsidiaries' preferred stock dividend requirements ............................................ 7,205 15,426 15,426 15,426 15,170 Adjustments to subsidiaries' preferred stock dividends to state on a pre-income tax basis ................................................................... 2,956 2,910 2,918 2,892 2,770 Interest element of rentals charged to income (a) ................................................ 111534 114,093 117,409 115,310 113,804 Fixed charges as defined ............................................................................... $388.209 $372575 $371_247 $353 _519 $341932 CONSOLIDATED RATIO OF EARNINGS TO FIXED C HA RG ES (b) .................................................................................................... 2.32 2.38 2.29 2.39 2.42 (a) Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.

(b) These ratios exclude fixed charges applicable to the guarantee of the debt of a coal supplier aggregating $6,315,000, $5,093,000, $3,828,000 and $2,209,000 for each of the four years ended December 31, 1998, respectively. The guarantee and related coal supply contract debt expired December 31, 1999.

63

EXHIBIT 12.2 Page 2 OHIO EDISON COMPANY CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS)

Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K: $297,689 Income before extraordinary items ...................................................................... $317,241 $315,170 $293,194 $301,320 273,719 255,572 250,920 235,317 225,358 Interest and other charges, before reduction for amounts capitalized .................. 191,261 191,835 Provision for incom e taxes .................................................................................. 199,307 201,295 187,805 111,534 114,093 117,409 115,310 113,804 Interest element of rentals charged to income (a) ................................................ $843.208 $828.686 Earnings as defined ........................................................................................ $901, 801 $886.130 $849.328 FIXED CHARGES AS DEFINED IN REGULATION S-K PLUS PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS): $184,915 $178,217

$243,570 $211,935 $204,285 Interest on long-term debt ................................................................................... 28,211 31,209 34,976 31,971 22,944 Other interest expense ........................................................................................ 27,395 26,717 29,699 27,923 27,817 Preferred and preference stock dividend requirements .......................................

Adjustments to preferred and preference stock dividends 10,140 9,859 16,745 10,542 10,503 to state on a pre-income tax basis ................................................................... 111,534 114,093 117,409 115,310 113,804 Interest element of rentals charged to income (a) ................................................

Fixed charges as defined plus preferred and preference stock $360,568

$424.492 $392.704 $391.223 $372.736 dividend requirements (pre-income tax basis) .............................................

CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS 2.30 2.12 2.26 2.17 2.26 (PRE-INCOME TAX BASIS) (b) .........................................................................

(a) Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.

(b) These ratios exclude fixed charges applicable to the guarantee of the debt of a coal supplier aggregating $6,315,000, $5,093,000, $3,828,000 and $2,209,000 for each of the four years ended December 31, 1998, respectively. The guarantee and related coal supply contract debt expired December 31, 1999.

64

EXHIBIT 12.3 Page 1 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

Income before extraordinary items ...................................................................... $183,719 $116,553 $114,481 $164,891 $194,089 Interest and other charges, before reduction for amounts capitalized ........................................................................................ 251,793 244,789 248,429 232,727 211,960 Provision for incom e taxes .................................................................................. 95,561 69,120 92,969 110,611 123,869 Interest element of rentals charged to income (a) ............................................. 79. 642 79503 69086 68,314 66680 Earnings as defined ...................................................................................... $610.715 $509,965 $524,965 $576543 $ 965968 FIXED CHARGES AS DEFINED IN REGULATION S-K:

Interest expense ..... .............................................. $251,793 $244,789 $248,429 $232,727 $211,960 Interest element of rentals charged to income (a) ................................ 79642 79,503 69.08 68,314 66.68 Fixed charges as defined ............................................................................... $331 .435 $324.292 $317.515 $301.041 $278.640 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES ................................................................................................. ....... 1.84 1.57 1.65 1.92 2.14 (a) Includes the interest component of Bruce Mansfield sale and leaseback rentals, leased nuclear fuel in the reactor, and other miscellaneous rentals.

65

EXHIBIT 12.3 Page 2 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS)

Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

Income before extraordinary items ...................................................................... $183,719 $116,553 $114,481 $164,891 $194,089 Interest and other charges, before reduction for amounts capitalized .................. 95,561 69,120 92,969 110,611 123,869 Provision for income taxes .................................................................................. 251,793 244,789 248,429 232,727 211,960 Interest element of rentals charged to income (a) ................................................ 79,642 79,503 69,086 68,314 66,680 Earnings as defined ........................................................................................ $610.715 $509.965 $524965 $576,543 $596,598 FIXED CHARGES AS DEFINED IN REGULATION S-K PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS):

Interest expense ................................................................................................. $251,793 $244,789 $248,429 $232,727 $211,960 Preferred stock dividend requirements ................................................................ 42,444 38,743 45,029 24,794 33,524 Adjustments to preferred stock dividends to state on a pre-income tax basis ................................................................... 22,077 22,976 36,568 16,632 21,395 Interest element of rentals charged to income (a)...................................... ..... 79,642 79503 69 086 68314 66680 Fixed charges as defined plus preferred stock dividend requirements (pre-income tax basis) ............................................. $395,956 $386,011 $399,112 $342,467 $333,559 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOM E TAX BASIS) ............................................................................... 1.54 1.32 1.32 1.68 1.79 (a) Includes the interest component of Bruce Mansfield sale and leaseback rentals, leased nuclear fuel in the reactor, and other miscellaneous rentals.

66

EXHIBIT 12.4 Page 1 THE TOLEDO EDISON COMPANY CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

Income before extraordinary items ...................................................................... $96,762 $57,289 $49,385 $106,582 $99,945 Interest and other charges, before reduction for am ounts capitalized ........................................................................................ 112,344 97,329 98,423 88,263 78,496 Provision for incom e taxes .................................................................................. 43,828 31,501 39,703 72,696 56,821 Interest element of rentals charged to income (a) ................................................ 110,977 109,935 102,795 100, 245 98,445 Earnings as defined ..................................................................................... .. $363.91 1 $296054 $290,306 $36 7786 $333.707 FIXED CHARGES AS DEFINED IN REGULATION S-K:

Interest expense ................................................................................................. $112,344 $97,329 $98,423 $88,263 $78,496 Interest element of rentals charged to income (a) ................................................ 110,977 109.935 7100245 98.445 Fixed charges as defined ................................................................................ $223 321 $207.264 I201.218 $188,508 $176.941 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES .......................................................................................................... 1.63 1.43 1.44 1.95 1.89 (a) Includes the interest component of Beaver Valley and Bruce Mansfield sale and leaseback rentals, leased nuclear fuel in the reactor, and other miscellaneous rentals.

67

EXHIBIT 12.4 Page 2 THE TOLEDO EDISON COMPANY CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS)

Year Ended December 31.

1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

Income before extraordinary items ...................................................................... $ 96,762 $ 57,289 $ 49,385 $106,582 $ 99,945 Interest and other charges, before reduction for amounts capitalized .................. 43,828 31,501 39,703 72,696 56,821 Provision for income taxes .................................................................................. 112,344 97,329 98,423 88,263 78,496 Interest element of rentals charged to income (a)................................................ 110977 109,935 102.795 100,245 98,445 Earnings as defined ........................................................................................ $363.91 1 $296.054 $290,306 $367,786 $333,707 FIXED CHARGES AS DEFINED IN REGULATION S-K PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS):

Interest expense ................................................................................................. $112,344 $ 97,329 $ 98,423 $ 88,263 $ 78,496 Preferred stock dividend requirements ................................................................ 18,252 16,926 19,435 13,609 16,238 Adjustments to preferred stock dividends to state on a pre-income tax basis ................................................................... 8,266 9,307 15,783 8,335 10,363 Interest element of rentals charged to income (a) ................................................ 110,977 109935 102795 100.245 98445 Fixed charges as defined plus preferred stock dividend requirements (pre-income tax basis) ............................................. $249,839 $233n 497 $236,436 $210,452 $203,542 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOM E TAX BASIS) ............................................................................... 1.46 1.27 1.23 1.75 1.64 (a) Includes the interest component of Beaver Valley and Bruce Mansfield sale and leaseback rentals, leased nuclear fuel in the reactor, and other miscellaneous rentals.

68

EXHIBIT 12.5 Page 1 PENNSYLVANIA POWER COMPANY RATIO OF EARNINGS TO FIXED CHARGES Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

Income before extraordinary items ...................................................................... $ 38,930 $ 40,587 $31,472 $39,748 $12,648 Interest before reduction for amounts capitalized ................................................ 31,350 27,889 22,438 21,073 21,317 Provision for income taxes .................................................................................. 32,591 33,421 26,658 32,504 18,834 Interest element of rentals charged to income (a) ........................................... 1,865 186 1,750 1,920 1,887 Earnings as defined ........................................................................................ J $103.765 $82318 $95,245 $54 686 FIXED CHARGES AS DEFINED IN REGULATION S-K:

Interest on long-term debt ................................................................................... $ 28,937 $ 25,715 $20,458 $19,255 $19,268 Interest on nuclear fuel obligations ...................................................................... 407 219 276 28 90 O ther interest expense ........................................................................................ 2,006 1,955 1,704 1,789 1,959 Interest element of rentals charged to income (a) .............................................. 1.865 186 1750 1,920 1,887 Fixed charges as defined ................................................................................ $33.215 $ 29.757 $24188 $22.992 $23,204 RATIO OF EARNINGS TO FIXED CHARGES (b) .................................................. 3.15 3.49 3.40 4.14 2.36 (a) Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.

(b) These ratios exclude fixed charges applicable to the guarantee of the debt of a coal supplier aggregating $795,000, $642,000, $483,000 and $273,000 for each of the four years ended December 31, 1998, respectively. The guarantee and related coal supply contract debt expired December 31, 1999.

69

EXHIBIT 12.5 Page 2 PENNSYLVANIA POWER COMPANY RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS)

Year Ended December 31, 1995 1996 1997 1998 1999 (Dollarsin Thousands)

EARNINGS AS DEFINED IN REGULATION S-K:

$ 38,930 $ 40,587 $31,472 $39,748 $12,648 Income before extraordinary items ......................................................................

31,350 27,889 22,438 21,073 21,317 Interest before reduction for amounts capitalized ................................................

32,591 33,421 26,658 32,504 18,834 Provision for income taxes ..................................................................................

1865 1 868 1750 1,920 1887 Interest element of rentals charged to income (a) ...................................

4 $103,765 $ 4 $54.686 Earnings as defined ........................................................................................

FIXED CHARGES AS DEFINED IN REGULATION S-K PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS):

$ 28,937 $ 25,715 $20,458 $19,255 $19,268 Interest on long-term debt ...................................................................................

407 219 276 28 90 Interest on nuclear fuel obligations ......................................................................

2,006 1,955 1,704 1,789 1,959 Other interest expense ........................................................................................

4,775 4,626 4,626 4,626 4,370 Preferred stock dividend requirements ................................................................

3,939 3,751 3,859 3,726 6,403 Adjustment to preferred stock dividends to state on a pre-income tax basis ........

1,865 1868 1750 1,920 1,887 Interest element of rentals charged to income (a) ................................................

Fixed charges as defined plus preferred stock dividend requirements

$ 41.929 $ 38.134 $32.673 i 31 44 $33,977 (pre-income tax basis) .....................................................................................

RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED 2.50 2.72 2.52 3.04 1.61 STOCK DIVIDEND REQUIREMENTS (PRE-INCOME TAX BASIS) (b) .............

can be determined.

(a) Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element and $273,000 for each of the four years (b) These ratios exclude fixed charges applicable to the guarantee of the debt of a coal supplier aggregating $795,000, $642,000, $483,000 ended December 31, 1998, respectively. The guarantee and related coal supply contract debt expired December 31, 1999.

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EXHIBIT 23 FIRSTENERGY CORP.

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included or incorporated by reference in this Form 10-K, into FirstEnergy Corp.'s previously filed Registration Statements, File No. 333-40065, No. 333-48587, No. 333-48651, No. 333-58279, No. 333-65409 and No. 333-75985.

ARTHUR ANDERSEN LLP Cleveland, Ohio March 29, 2000 71

EXHIBIT 23.1 OHIO EDISON COMPANY CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included or incorporated by reference in this Form 10-K, into Ohio Edison Company's previously filed Registration Statements, File No. 33-49135, No. 33-49259, No. 33-49413, No. 33-51139, No. 333-01489 and No. 333-05277.

ARTHUR ANDERSEN LLP Cleveland, Ohio March 29, 2000 72

EXHIBIT 23.2 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included or incorporated by reference in this Form 10-K, into The Cleveland Electric Illuminating Company's previously filed Registration Statements, File No. 33-55513, No. 333-47651 and No. 333-72891.

ARTHUR ANDERSEN LLP Cleveland, Ohio March 29, 2000 73

EXHIBIT 23.3 PENNSYLVANIA POWER COMPANY CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included or incorporated by reference in this Form 10-K, into Pennsylvania Power Company's previously filed Registration Statements, File No. 33-62450 and No. 33-65156.

ARTHUR ANDERSEN LLP Cleveland, Ohio March 29, 2000 74

76 South Main Street Akron, Ohio 44308-1890 (330) 384-5100 p