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Goldman SachsAnnual Power & Utility ConferenceNew York, New YorkMay 10, 2007

Goldman Sachs Annual Power & Utility Conference New York, New York • May 10, 2007

Safe Harbor Statement under thePrivate Securities Litigation Reform Act of 1995Forward-looking Statements. This presentation includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These 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 and nature of increased competition and deregulation in the electric utility industry, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of FirstEnergy’s regulated utilities to collect transition and other charges orto recover increased transmission costs, maintenance costs being higher than anticipated, legislative and regulatory changes (including revised environmental requirements), and the legal and regulatory changes resulting from the implementation of the EPACT (including, but not limited to, the repeal of the PUHCA), the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the Air Quality Compliance Plan (including that such amounts could be higher than anticipated) or levels of emission reductions related to the Consent Decree resolving the New Source Review litigation, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the NRC and the various state public utility commissions as disclosed in the registrants’ SEC filings, the timing and outcome of various proceedings before the PUCO (including, but not limited to, the Distribution Rate Cases for the Ohio Companies and the successful resolution of the issues remanded to the PUCO by the Ohio Supreme Court regarding the Rate Stabilization Plan) and the PPUC (including the transition rate plan filings for Met-Ed and Penelec and Penn’s Default Service Plan filing), the continuing availability and operation of generating units, the ability of generating units to continue to operate at, or near full capacity, the inability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the anticipated benefits from voluntary pension plan contributions, the ability to improve electric commodity margins and to experience growth in the distribution business, the ability to access the public securities and other capital markets and the cost of such capital, the outcome, cost and other effects of present and potential legal and administrative proceedings and claims related to the August 14, 2003 regional power outage, the successful structuring and completion of a potential sale and leaseback transaction for Bruce Mansfield Unit 1 currently under consideration by management, any purchase price adjustment under the accelerated share repurchase program announced March 2, 2007, the risks and other factors discussed from time to time in the registrants’ SEC filings, and other similar factors. Dividends declared from time to time on FirstEnergy's common stock during any annual period may in aggregate vary from the indicated amounts due to circumstances considered by FirstEnergy's Board of Directors at the time of the actual declarations. Also, a security rating is not a recommendation to buy, sell or hold securities, and it may be subject to revision or withdrawal at any time and each such rating should be evaluated independently of any other rating. The registrants expressly disclaim any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.

Strategic Vision


Strategic Vision: 2007 and BeyondOur strategic focus continues to be on the fundamentals…

Realizing the full potential of our asset baseEfficiently achieving environmental improvementControlling commodity costs and risksPursuing continuous improvement in all aspects of the businessManaging transition to competitive marketsEnhancing financial strength and flexibility

DRIVING PERFORMANCE & DELIVERING RESULTS

2Strategic Vision


Financial ObjectivesMaintain Financial Strength and Flexibility

Strong and stable cash flowsBalanced capital structure Investment grade credit metrics

Deliver Consistent and Predictable Financial ResultsImproved generation marginsEfficiency enhancements and cost reductionsEffectively manage transition to competitive markets

Deploy Cash Effectively to Increase Shareholder ValueSustainable dividend growth Share repurchasesReinvestment in business

3Strategic Vision

Generation Portfolio


Akron

Toledo

Reading

Beaver Valley1,722 MW

Davis-Besse898 MW

Perry1,258 MW

R. E. Burger413 MW

W. H. Sammis2,233 MW

Bruce Mansfield2,460 MW

Eastlake1,262 MW

Ashtabula244 MW

Seneca443 MW

Edgewater48 MW

Richland432 MW

Stryker18 MW

Yards Creek200 MW

York Haven19 MW

Mad River60 MW

West Lorain545 MW

Lake Shore249 MW

Sumpter340 MW

Erie

Ohio

Pennsylvania

NewJersey

Harrisburg

MorristownNewark

Allenhurst

Trenton

Bay Shore648 MW

Columbus

New Castle

Cleveland

Johnstown

Forked River86 MW

Michigan

Baseload Load Following Peaking Units

Plant Load Strategy

Towanda

MW MWMW

FirstEnergy Generation Sources

West Lorain 545Seneca 443Richland 432Sumpter 340Yards Creek 200Burger 3 & EMDs 101Forked River 86Mad River 60Other 129

Total Peaking Units 2,336

Mansfield 1-3 2,460Beaver Valley 1,2 1,722Perry 1,258Sammis 6,7 1,200Davis-Besse 898Eastlake 5 597Bay Shore 1 136York Haven 19

Total Baseload 8,290

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

Total Load Following 2,952

OVEC 463Wind 30

Total 493

Other MW

FirstEnergy Power Plants

C Coal 7,439 MWN Nuclear 3,878 H Hydro 662 G Gas & O Oil 1,599

Other 493Total 14,071MW


2


Pursue continuous improvement– Fleet reliability– Outage execution– Excellence standards

WELL-POSITIONED TO SUCCEEDIN A COMPETITIVE GENERATION MARKET

Explore opportunities to mine existing assets forcost-effective capacity additions

Effectively implement environmental compliance strategy

– Benchmark analysis– Controlling costs

Generation StrategyRealizing our full potential


3


45.7 46.5 51.1 52.4

32.0

51.152.6

28.729.9

21.1

29.0 31.2

0

20

40

60

80

100

2003 2004 2005 2006 2007E 2008E

NuclearFossil & Hydro

Note: Excludes JCP&L and OVEC

(million MWh)

66.876.4

79.8 81.6 82.3 84.4

Generation StrategyContinued improvement of asset utilization

2003 to 2006 = 22% INCREASE IN GENERATION OUTPUT3 CONSECUTIVE RECORD YEARS


4


2006 generation reflects sustaining generation increase of close to 5M MWH over 2004Maximize operational flexibility for regulation, minimum loads and system rampingDispatch strategies focused on maximizing utilization in profitable markets

*Excludes the peaking units.

0

5

10

15

20M NMWh

0%

25%

50%

75%

100%Capacity Factor

Load Following 15.2 18.2 16.6 14.4 19.5 19.1 19.8Capacity Factor 54% 64% 59% 51% 69% 69% 70%

2001 2002 2003 2004 2005 2006 2007E

Focus on total fleet output has positive impact on fossil load following utilization.


5


Nuclear Generation Future Outages Focus on Reliability

Refueling *25$30Beaver Valley2R14

Replace Low Pressure Turbines (2) *Reactor Coolant System Loop Stop Valves (2)Reactor Vessel Head Inspection

30$30Beaver Valley1R19

Refueling *10-year IVVI / Bioshield In-service InspectionRecirc Pump Motor Replacement

25$30Perry1R12

2009

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


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

2008

Split Pins *Containment Sump Modifications*Reactor Vessel ISI *100% Eddy Current TestReactor Vessel Head InspectionPressurizer Overlay


Refueling *IVVI30$30Perry

1R11

2007

Scope Driving DurationItems with asterisk* denote duration drivers

Outage Duration

(days)

OutageCosts

($ millions)PlantYear


6


Nuclear Generation Fuel Cost ManagementFENOC Fuel Cost Projections

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2006 2007E 2008E 2009E

($/MWh)

4.28 4.48 4.575.12

Current Fuel Contract Coverage (includes Letters of Intent)Uranium: 100% coverage through 2009; 69% coverage in 2010Enrichment: 100% coverage through 2010; 76% coverage in 2011Fabrication PY – life of unit contract

DB – 1 additional reload under contractBV1 – 5 additional reloads under contractBV2 – 5 additional reloads under contract

Negotiations for extension of DB fabrication contract are ongoing.

Disposal & OtherFabrication

EnrichmentUranium


7


Nuclear Generation Managing Our Used Fuel

Through 2006, 46 of 102 plants reached capacity in used fuel pools49 operating plants built on-site dry cask fuel storage, 46 are under constructionPlans for federal repository for long-term storage — Yucca Mountain Congressional proposals for interim storage and reprocessing

FENOC PlanBV Unit 1BV Unit 1

BV Unit 2BV Unit 2

Davis-BesseDavis-Besse

PerryPerry

Implement dry storage by end of 2014

Criticality analysis frees up storage spaceRerack before 2011 to provide capacity through 2025Dry storage could then be implemented

Continue with wet storage until 2021Return to dry storage in 2022

Spent fuel pool campaign in 2007 ($7M)Implement dry storage before 2011 ($26M)


8


CurrentExpiration

Submit Request

(NRC Docket)

ApprovalExpected

NewExpiration

Beaver Valley Unit 1 2016 2007 2009 2036Beaver Valley Unit 2 2027 2007 2009 2047Davis-Besse 2017 2010 2012 2037Perry 2026 2013 2015 2046

Nuclear Generation Continued Safe Operations through License Renewal

License Renewal Schedule


9


Generation StrategyAsset Mining Initiatives

Mining existing asset base for low risk, cost-effective growthWind power contracts helping to meet renewable portfolio standardsAdditional longer-term initiatives under review

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

Fossil baseload uprates 100 30 130Nuclear baseload uprates 49 100 149

Peaking capacity enhancements* 0 197 197Wind power contracts 30 184 214Total MW additions 179 511 690

MW AdditionsMW Additions 2007E–2008E2007E–2008E2005–20062005–2006 CumulativeCumulative


10


Realizing Full Potential of Asset BaseBaseload Capacity Uprates


11

TotalTotal(MW)(MW) 20052005 20062006 20072007 20082008NuclearDavis-Besse 14 12 26Beaver Valley 1 25 43 68Beaver Valley 2 10 45 55

Total 49 43 57 149FossilMansfield 1 50 50Mansfield 2 50 50Mansfield 3 30 30

Total 50 50 30 130Total Uprates 50 99 73 57 279

Environmental Strategy


Non-Emitting 4,530 33%Coal Controlled(SO2/NOx – full control)Natural Gas Peaking 1,269 10%

8,368 62%

Capacity (MW) Fleet %

Fleet Emission Control StatusFleet Emission Control Status

2,569 19%

Environmental StrategyOur generation fleet is well positioned for the future

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

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

Longer-term environmental considerations

2Environmental Strategy


54136

380

563496

178

0

200

400

600

2005 2006 2007E 2008E 2009E 2010E

Construction Overview– Sammis Plant (2,220 MW) – SO2 and NOx controls– Mansfield Plant (2,460 MW) – SO2 control upgrades– Eastlake Unit 5 (600 MW) & Burger Units 4 & 5 (300 MW) – NOx controls– Bay Shore Unit 4 (215 MW) – SO2 and NOx controls

($ millions) Capital Expenditures

Environmental StrategyAQCS expenditures estimated at $1.8B


3


Environmental StrategyAQCS Construction Overview

Sammis Plant (2,220 MW)– SO2 control (scrubbers) all units– NOx control (SCRs) Units 6 & 7 (1,200 MW)– NOx control (SNCR) Units 1–5 (1,020 MW)

completed

Mansfield Plant (2,460 MW)– SO2 control (scrubber) upgrades

– 1,660 MW completed, 800 MW to be completed in 2007

Bay Shore Plant– NOx and SO2 control Unit 4 (215 MW)

NOx Controls (SNCR)– Eastlake Unit 5 (600 MW) completed– Burger Units 4 & 5 (300 MW)


4


FirstEnergy’s Position on Global Climate Change

Climate change is a global issue requiringa global approach

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

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


5


FirstEnergy’s diverse generation provides strong competitive position.

35% of generation from non-emitting nuclear unitsin 2006

Uprates will further increase nuclear generating capacity

Long-term contracts for more than 300 MW of wind capacity

Environmental Strategy 6


Current Greenhouse Gas Reduction Actions

$100M in investments planned 2006 – 2010– $50M on products, programs and activities to help reduce greenhouse

gas emissions– $50M to support relicensing and capacity uprates at non-emitting

generating plants; renewable energy development

Fleet modernization a key strategy:– Increased ownership of nuclear generation and decreased ownership

of coal– 1,383 MW of older coal-based boilers out of service since 1990

(estimated annual CO2 avoidance of 1.5 million tons)– 1,155 MW of new natural gas-fired peaking capacity since 1999– 300 MW of wind generation secured through long-term agreements

Overall efforts resulted in average annual reductions of 8.9 million tons of CO2 equivalent; 143 million tons since 1991

Environmental Strategy 7



8

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

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

Generation Initiatives• Fossil plant efficiencies • Nuclear plant uprates

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

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

Renewables• 650 MWs Hydro• >300 MWs Wind Purchase Agreements

Renewal of Nuclear and Hydro Plant Operating Licenses

• Continued operation of non-emitting generation

Environmental StrategyFirstEnergy’s Climate Activities

Commodity Operations


Deploy generation to capture market opportunities– Leverage presence in two RTOs– Leverage FES retail market competencies

Enhance fuel supply optionality and flexibility

Effectively hedge commodity positions

Employ strict risk management controls and oversight– Volume and price risks– Generation availability risks– Transmission congestion risks

Commodity Operations StrategyEffectively managing commodity margins and risks


2


* Represents the percentage hedged of total forecasted generation.

Coal only* 100% 98%

Coal transportation* 100% 46%

SO2* 100% 100%

NOx* 100% 100%

Nuclear fuel* 100% 100%

% Hedged % Hedged 2008200820072007

Commodity Operations StrategyEffectively hedging commodity positions

Coal delivery optionality and fuel flexibility– 3 coal delivery options for largest baseload plants– 8 units can burn any of 3 coal types and can switch quickly– 9 additional units can operate within a wide blending range


3


Commodity Operations’ objective is to provide FEwith a predictable and profitable commodity margin.

GenerationMargin

GenerationMargin

MWH

COST

FENOC

31M MWh

FENOC

31M MWh

MWH

COST

Fossil

51M MWh

Fossil

51M MWh

MWH

COST

Purchased Power34M MWh

Purchased Power34M MWh

MWH

REV

RegulatedSales

80M MWh

RegulatedSales

80M MWh

MWH

REV

CompetitiveSales

12M MWh

CompetitiveSales

12M MWh

MWH

REV

WholesaleSales

20M MWh

WholesaleSales

20M MWh

MWHLosses &Pumping4M MWh

Losses &Pumping4M MWh

+ Generation Revenue– Fuel– Purchased Power

Generation Margin

CommodityMargin

CommodityMargin

Excludes JCP&L and OVEC.

+ Generation Margin– Transmission Expense– RTO expense

Commodity Margin

PJM / MISO Expenses

PJM / MISO Expenses


4


Balanced emission allowance position minimizes risks.

Based on projected generation:

Emission allowance positions are coveredNOx positions are completely covered2007 and 2008 net SO2positions are covered

SO2 Position (tons)

-30,000

60,000

150,000

240,000

330,000

2007 2008

Needed Covered

NOx Position (tons)

0

10,000

20,000

30,000

2007 2008

Needed Covered


5


Procurement of coal supply will be vital to asset utilization and a “predictable” margin.

Aggressively working tosecure longer-term fuelsupply requirements

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

Engaged in fuel flexibility initiative to create more options

05,0

0010

,000

15,00

020

,000

25,00

0

2008

2007

Total Covered TonsTotal Needed Tons

98%

100%

Securing Open Coal Commodity Positions


6


Secured fuel transportation position will be vital to asset utilization and a “predictable” margin.

2007 transportation positions100% covered based on forecasted generation

2008 transportation positions will be closed shortly —agreements reached

Evaluating additional delivery options to increase both capabilities and flexibility

54%

Securing Open Fuel Transportation Positions

05,0

0010

,000

15,00

020

,000

25,00

0

2008

2007

Total Open TonsTotal Covered TonsTotal Needed Tons


7


Fuel and Transportationoptions create leverage.

EastlakeBurgerAshtabulaSammisMansfieldBay ShoreLake Shore

TruckVesselBargeRailCoal Delivery Options

0

5

10

15

PRB 3 3 0 3 4 3 5NAAP 0 0 10 3 3 5 3CAAP 3 4 0 6 6 6 6

Lake Shore Bay Shore Mansfield Sammis Ashtabula Burger Eastlake

67

10

1213

14 14Planned & PotentialMine Sources

# of

Min

es


8


Fuel CostsGeneration and Fuel Expense

0

300

600

900

1,200

1,500

$12.00

$16.00

$20.00

Total Fuel 1209.0 1231.7 1356.0

Nuclear Fuel 120.4 140.2 146.8

Fossil Fuel (excl JCPL) 1088.6 1091.5 1209.2

$'s per MWh $14.83 $15.23 $16.15

2006 2007E 2008E

($ millions) ($/MWh)

FOSSIL FUEL (excludes JCP&L)

0

300

600

900

1,200

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

Total Fossil Fuel 1,088.6 1,091.5 1,209.2

Other 1.4 1.5 1.5

Fuel Handling 20.8 22.9 24.6

Ash Disposal 14.9 13.1 13.8

Oil 11.2 11.8 12.0

Natural Gas 20.0 25.6 22.5

EmissionAllowances

57.3 34.8 45.9

Re-agents 52.8 58.6 62.5

Coal Transportation 254.6 358.8 402.2

Coal Commodity 655.6 564.4 624.2

Fuel per MWh $21.20 $21.02 $23.26

2006 2007E 2008E

($ millions) ($/MWh)


9


Fuel Costs

Total Coal Expense

0

200,000

400,000

600,000

800,000

1,000,000

($000)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

($/MWh)

Total $910,187 $923,235 $1,026,382

Coal Only $655,581 $564,406 $624,160

Transportation $254,606 $358,828 $402,222

$/MWh Total $18.00 $18.38 $19.79

$/MWh Coal Only $12.97 $11.23 $12.04

$/MWh Transportation $5.04 $7.14 $7.76

2006 2007E 2008E


10


Annual requirementof 22–25 million tonsIncreasing usage ofPRB coal

2003 – 23%2004 – 25%2005 – 35%2006 – 37%2007E – 46%

Coal SupplyCoal Supply 2007E Coal Mix by Origin (tons)2007E Coal Mix by Origin (tons)

Coal SupplyBalanced & Economic

CAPP15%

PRB46%

NAPP39%


11

Energy Delivery


Continued focus on enhancing reliability and customer service

– Targeted reinvestment in T&D infrastructure – Leveraging technology

Implement “Energy Delivery Excellence Program”– Comprehensive review identified operational, technological,

scheduling, and financial control opportunities for improvement

Significant improvement in 2006 reliability metrics– Distribution SAIDI improved 20% – Transmission Outage Frequency per circuit is at top-decile

Energy Delivery StrategyTargeting improved operational & financial performance

Energy Delivery

2


Ohio

Ohio Edison 1,042,000 7,000

Illuminating Company 762,000 1,600

Toledo Edison 314,000 2,300

Met-Ed 542,000 3,300

Penelec 589,000 17,600

Pennsylvania Power 159,000 1,100

Jersey Central Power & Light 1,082,000 3,200Total 4,490,000 36,100

Customers Square Miles

FirstEnergy Service Territories

Pennsylvania

NewJersey

Energy Delivery

3


FirstEnergy’s Strengths

Electric Customers – 5th Largest Electric Customers – 5th Largest

Residential35%

Commercial32%

Ohio2.1 million

Pennsylvania1.3 million

New Jersey1.1 million

Attractive Customer BaseLarge and Balanced

Balanced Sales MixBalanced Sales Mix

Industrial33%

4Energy Delivery


2006YTD=152

2005YE = 191

0

50

100

150

200

Jan Feb M ar Apr M ay Jun Jul Aug Sep Oct Nov Dec

SAIDI (minutes)

Threshold2006 2005

175

The Transmission Outage Frequency (TOF) is a measure of the average number of transmission circuit outages per circuit in the 230–500kV voltage classes. Threshold, target, and maximum have been established as industry average, top quartile, and top decile as defined by the SGS benchmarking study.

Transmission Outage Frequency (TOF) Per Circuit

SAIDI represents the averagetotal duration of outage minutesper customer in a year adjustedfor major storms. The 2006 goal is 175 minutes.Note: Based on Commission criteria.

Distribution SAIDI (System Average Interruption Duration Index)

Energy Delivery Reliability Improvements

Energy Delivery

(20% Improvement)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Jan Feb Mar April May June July Aug Sept Oct Nov Dec

Out

ages

per

Circ

uit

Threshold = 0.78Target = 0.42

Max = 0.36

YTD = 0.35

5


Our Accelerated Reliability Improvement Plan (ARIP) is producing outstanding results.

Energy Delivery

Penn Power SAIDI

0

50

100

150

200

250

300

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

SAID

I (m

inut

es)

Threshold 2006 2005

6

Penelec SAIDI

0

50

100

150

200

250

300

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

SAID

I (m

inut

es)

Threshold 2006 2005

Regulatory Matters


Retail Regulatory Structure

1 CEI fixed through April 2009.2 NUG recovery thru 2020.

Ohio Edison Stable ratesthru 2008“g + RSC”

RTC thru2008 – OE, TE2010 – CEI

Fixed ratesthru 20081

Pass thruMISO costs

Penn Power Market in2007

POLR ratesthru 2010

GenerationGeneration TransmissionTransmission DistributionDistribution Transition CostTransition Cost

Norestriction

JCP&L BGS Supply MTC thru 2018No restriction

Met-Ed

Penelec

Toledo Edison

CEI

CTC endedJan. 2006

CTC thru 20102

CTC thru 20092

Pass thruPJM costs

Norestriction

InGeneration

Regulatory Matters

2


Regulatory StrategyManaging the Transition to Competitive Markets

Successful transition to market-based generation ratesRFP process for 900 MW from Jan. 2007 – May 2008Average auction price of $85/MWh replaced $55/MWh for non-shoppersDefault Service Proposal (Phase II) filed May 2, 2007– Proposed full requirements product by class– Multiple RFPs with staggered delivery

– For default service period June 2008 - May 2011– Filing conforms with PPUC’s proposed default service rules– Three year phase-out of promotional generation rates

Penn PowerPennsylvania

Regulatory Matters

3


Regulatory StrategyManaging the Transition to Competitive Markets

Transition Plan Rate Case– Overall: $109M increase effective Jan. 12, 2007– Transmission recovery granted in full ($193M increase)– Generation increase of $219M denied– Distribution decrease of $84M; ROE set at 10.1%– Appeals to Commonwealth Court currently pending

– Met-Ed and Penelec have appealed PPUC’s decision on the denial of generation rate relief and on a consolidated tax adjustment

– Industrials and OCA have appealed Transmission recovery

NUG Accounting Case– ALJ Initial Decision was to deny the Companies’ request– Awaiting PPUC Final Order

Met-Ed and PenelecPennsylvania

Regulatory Matters

4


Regulatory Strategy Managing the Transition to Competitive Markets

Ohio Senate Bill 3 – Ohio Restructuring Legislation(July 1999)

Generation Asset Transfer completed (4Q 2005)Rate Certainty Plan approved (Jan. 2006)– Stable transition for customers/companies through 2008– Provides for synchronization of the following in 2009:

– Distribution rate increase, including recovery ofRCP deferrals

– Market-based generation rates– Elimination/reduction of transition cost recovery

Regulatory Matters

5


Regulatory Strategy Managing the Transition to Competitive Markets

OhioRate shock experienced in other states not likelyfor FirstEnergy

Termination/reduction of transition cost recovery(average of $15/MWh in 2008) will substantially mitigate any price increases to customers

Well positioned to participate in development of the post-2008 market structure in Ohio

Regulatory Matters

6

Financial Matters


Execute Mansfield Unit 1 sale and leaseback transaction

Continue to use cash to benefit shareholders– Sustainable common stock dividend growth

– 11.1% increase (March 1, 2007)

– Share repurchase – 14.4 million ASR (March 2, 2007)

– Reinvest in business to generate future earnings

Continue focus on capital structure management– Additional transfers of tax-exempt debt from operating companies– Appropriately capitalize operating companies– Obtain investment grade credit rating at FE Solutions

Deliver consistent and predictable financial results

Financial Strategy2007 Focal Points

Financial Matters

2


Financial StrategySale and Leaseback – Mansfield Unit 1

Retain operating control of assetCapture benefit of $785M of expiring tax capital loss carryforwardsProjected after-tax cash proceeds of $1.2B – Current use of proceeds assumptions

– $900M Share repurchase– $193M Pension contribution (after-tax)– $107M Short-term debt paydown

NPV expected to exceed $500MLow-cost source of financing Potential capital structure impact– Maximum debt leverage impact of 200 bp

Target closing in 2nd Qtr 2007

Financial Matters

3


Financial StrategyShare Repurchase

On March 2, FE repurchased 14.4 million shares– Represents approx. 4.5% of outstanding shares– $900M ASR at initial price of $62.63 per share– Final purchase price to be adjusted to reflect volume-weighted

average price of stock during acquisition period (up to approximately one year)

Coupled with Aug. 2006 ASR program of 10.6 million shares, total buy-backs equal approx. 7.6% of shares outstanding

Projected net earnings impact from both buy-backs is approx. $0.18 per share in 2007 vs. 2006

Financial Matters

4


Financial StrategyPension Contribution

Previously contributed $1B to plan during 2004–2005Pension Protection Act of 2006 changed plan funding rules$300M contribution ($193M after-tax) made in JanuaryIncreases plan funding– Improves PBO funded ratio to 105%

Financial impact of contribution equates to 15% pre-taxcash return, 9% after-tax returnAccretive to annual earnings by approx. $0.05 per shareFAS 87/106 Cost: 2006 $ 94 M

2007E (89) M$ (183) M

5Financial Matters


Long-Term Dividend Policy

Annual growth target of 4–5%Sustainable annual growth and a payout ratio appropriate for our level of earnings

Dividend Changes:Change fromPrior Period

Change fromPrior Period

Payment Date

Payment Date

Quarterly Rate

Quarterly Rate

AnnualizedRate

AnnualizedRate

1Q 2007 50.00¢ 11.1% $2.001Q 2006 45.00¢ 4.65% $1.804Q 2005 43.00¢ 4.24% $1.721Q 2005 41.25¢ 10.00% $1.654Q 2004 37.50¢ – $1.50

Financial Matters

6


($ millions)

20062006 20072007 20082008

Energy Delivery $ 650 $ 729 $ 868FENOC 229 145 131Fossil 116 90 68Environmental 136 389 579Other 39 90 68Total $ 1,170 $ 1,443 $ 1,714

Estimate *Estimate *

Capital Expenditures

Financial Matters

7

* Total capital expenditures forecast for 2009-2011 estimated to be approximately $4.7 billion


FE Solutions (FES)Wholly-owned competitive subsidiary– Holding company for FE Genco and FE Nuclear Genco– Provides energy-related products & services to wholesale

and retail customers in MISO and PJM

Targeting a debt ratio in the upper 50% range by 2008– Genco-level tax-exempt debt with 4% average current cost

comprises approx. 44% of debt portfolio– $1.4B of tax-exempt pollution control debt transferred from

operating companies to Gencos ($700M still to be transferred)

Investment grade credit ratings– Received rating of BBB from S&P on March 26, 2007– Received rating of Baa2 from Moody’s on March 27, 2007

SEC registrant providing full financials during 2007

Financial Matters

8


$3.00

$3.50

$4.00

$4.50

$5.00

$3.88(1)

($0.05)

$0.07

($0.05)$4.15(1)

$0.18

Midpoint 2006 Non-GAAP EPS

GenerationOutput &

MixWiresGrowth

T&D Infra-structure

Midpoint 2007 Non-GAAP

EPS Guidance

$0.06

$0.17

($0.19)

NetBenefitCosts

ME/PERate Case (“D”)

OH Trans-ition Cost

Amort.

2007 Non-GAAP Earnings Per Share Guidance(2)

Issued January 31, 2007

(1) See GAAP to non-GAAP reconciliations in subsequent slides. (2) 2007 EPS guidance, excluding unusual items, is $4.05 – $4.25. On a GAAP basis, EPS is expected to be $4.09 – $4.29.

Net Share Repurchases Depr.

($0.10)

Penn Power

to Market

$0.12All

OtherNuclear Outage O&M

$0.08($0.02)

Financial Matters

9


Net Pension Contribution: $373M ($90M tax benefit realized in 2006)

Securitization/Asset Sales in 2006: $310M

Higher Dividends / Capital Expenditures: $215M

Wires Growth: $20M

Gen Output/Mix: $15M

Penn Power to Market: $40M

Nuclear Outage O&M: $25M

PA Rate Increase: $60M

JCP&L NUG Recovery: $100M

Net Collateral: $80M

2007 Cash Flow Drivers

Financial Matters

10


Higher Ohio transition cost amortization

T&D infrastructure investment

Increased fuel and purchased power costs

Growth in delivery sales

Increased generation margin

Lower generation-related outage maintenance costs

2008 Earnings Drivers

Financial Matters

11


Adjusted Total Debt / Total Capital Funds from Operations /Interest Coverage

Funds from Operations / Total Debt

Maintaining Financial Strength and FlexibilityMaintaining Financial Strength and Flexibility

3.53.53.73.0

2.5

0

1

2

3

4

5

2002 2003 2004 2005 2006

17%18%18%

14%

11%

0%

5%

10%

15%

20%

2002 2003 2004 2005 2006

58%56%58%60%67%

0%

10%

20%

30%

40%

50%

60%

70%

2002 2003 2004 2005 2006*

FirstEnergy Credit Metrics

*Includes the equity reduction of approximately $409m from the implementation of FAS 158

Financial Matters

12


FirstEnergy Credit Ratings

On March 27, 2007, Moody’s assigned FES an Issuer Rating of “Baa2”. The Rating Outlook from Moody’s is Stable for FES and Positive for all other rated companies.

On March 26, 2007, S&P assigned FES a corporate credit rating of “BBB”. The Ratings Outlook from S&P is Stable for all rated companies.

On February 2, 2007, Fitch upgraded the ratings of FE Corp, JCP&L, CEI, and TE. The Rating Outlook is Positive for CEI and TE and Stable for all other rated subsidiaries.

Corporate Credit Rating (S&P) / Issuer Rating

(Moody's) / Issuer Default Rating (Fitch)

Senior Secured Senior Unsecured

S&P Moodys Fitch S&P Moodys Fitch S&P Moodys FitchFirstEnergy Corp. BBB Baa3 BBB - - - BBB- Baa3 BBB

FirstEnergy Solutions BBB Baa2 - - - - - - -

Ohio Edison BBB Baa2 BBB- BBB+ Baa1 BBB+ BBB- Baa2 BBB

Cleveland Electric Illuminating Co. BBB Baa3 BB+ BBB Baa2 BBB BBB- Baa3 BBB-

Toledo Edison BBB Baa3 BB+ BBB Baa2 BBB BBB- Baa3 BBB-

Pennsylvania Power BBB Baa2 BBB- BBB+ Baa1 BBB+ BBB- Baa2 BBB

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

Metropolitan Edison BBB Baa2 BBB- BBB+ Baa1 BBB+ BBB Baa2 BBB

Pennsylvania Electric Co. BBB Baa2 BBB- BBB+ Baa1 BBB+ BBB Baa2 BBB

As of April 27, 2007

Financial Matters

13


Strong Liquidity Position

Substantial liquidity available– $1.8B available borrowing capacity as of April 27, 2007

Company Type Term Maturity Amount ($M)FE Corp. RCA* 5-year Aug. 2011 $ 2,750FE Corp. Bank Lines Various Various 370OH & PA Utilities A/R Fin. 1-year Various 550FE Solutions Bank Line 90 days 2007 250

Company Type Term Maturity Amount ($M)

Total $ 3,920* Revolving Credit Agreement.

Financial Matters

14


Issued on February 20, 2007

2006 Earnings Per Share Reconciliation of GAAP to Non-GAAP

2006 EPSBasic EPS (GAAP basis) $ 3.84Excluding Unusual Items:

Trust Securities Impairment 0.02PPUC NUG Cost Reserve for Prior Years 0.02

Basic EPS (non-GAAP basis) $ 3.88

Financial Matters

15


As of May 3, 2007

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

2007 EPSBasic EPS (GAAP basis) $4.09 – $4.29Excluding Unusual Items:

Benefit from New Regulatory AssetAuthorized by PPUC (0.05)Trust Securities Impairment 0.01

Basic EPS (non-GAAP basis) $4.05 – $4.25

Financial Matters

16

Investment Highlights


FirstEnergy’s Financial Accomplishments since 2004:Achieved 3-year annualized total shareholder return of 24%Increased market capitalization by $7.6B (66%)Voluntarily contributed $1.3B to pension planInvested over $3B in capital expendituresReduced outstanding debt and preferred stock by over $1.2BRestored investment grade credit ratingsReturned over $3B to shareholders in the form of share repurchases and common stock dividends– Increased common stock dividend 33%– Repurchased 25 million shares of common stock (7.6%)

Financial AccomplishmentsImproved operations & strategic execution


2


Corporate GovernanceExcellent ISS Corporate Governance Scores


3

FirstEnergy’s ISS Corporate Governance Quotient*– Outperformed 88.9% of the companies in the S&P 500– Outperformed 92.7% of the companies in the Utilities Group

Key ISS Corporate Governance Features Met by FirstEnergy– Board independence > 90%– Full Board elected annually– Independent Chairman / Separate CEO– Limit on outside Board membership– No poison pill in place– Director stock ownership guidelines– ISS Director Education Program

* As of May 1, 2007


Stock Ownership*– CEO = approx. 477,000 shares– Executive Officers = approx. 1,754,000 shares

CEO Compensation– 80% of 2006 target total compensation was variable and delivered

through annual incentives and equity-based opportunities

Management Incentive Plan– Includes both short-term and long-term incentives– Tied to EPS, cash generation, safety, operational performance,

and long-term stock performance

Financial Strategy Aligning management and shareholder interests

* Includes shares beneficially owned and common stock equivalents

4Investment Highlights


Managing the transition to competitive markets– Penn Power (2007)– Ohio Edison, Illuminating Company & Toledo Edison (2009)– Met-Ed & Penelec (2011)

Phase-out of transition cost amortizationPower uprates and capacity additionsWires growth and distribution rate cases

Aggressive operating efficiencies / cost savings

Well-positioned to succeed in a carbon-constrained world

20072007 20082008 20092009 2010 &Beyond2010 &Beyond

5Investment Highlights

Financial Strategy Compelling long-term growth potential


Effectively managing transitionto competitive markets

Mining full potential of efficient, low-cost generation fleet

Reinvesting for future growth

Pursuing continuous improvement

Disciplined risk-management approach

Maintaining financial strength and flexibility

Significant Earnings Growth

Potential

Significant Earnings Growth

Potential

WELL-PREPARED FOR THE FUTURE

FirstEnergy – Driving Performance & Delivering ResultsFirstEnergy – Driving Performance & Delivering Results


6

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