main8_k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported) October 31, 2008
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Commission
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Registrant;
State of Incorporation;
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I.R.S.
Employer
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Address; and Telephone
Number
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333-145140-01
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FIRSTENERGY
SOLUTIONS CORP.
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31-1560186
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(An
Ohio Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone
(800)736-3402
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1-446
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METROPOLITAN
EDISON COMPANY
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23-0870160
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(A
Pennsylvania Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone (800)736-3402
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1-3522
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PENNSYLVANIA
ELECTRIC COMPANY
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25-0718085
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(A
Pennsylvania Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone (800)736-3402
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
On October 31, 2008,
FirstEnergy Solutions Corp. (FES) executed a Third Restated Partial Requirements
Agreement (Third PRA) with Metropolitan Edison Company (Met-Ed), Pennsylvania
Electric Company (Penelec) and The Waverly Power and Light Company (Waverly, and
together with Met-Ed and Penelec, the Affiliates) effective November 1,
2008. The Third PRA will remain in effect until December 31,
2009. The Third PRA supersedes the previous Second Restated Partial
Requirements Agreement dated January 1, 2007 (Second PRA). As was the
case with the Second PRA, the initial term of the Third PRA will be
automatically extended for successive periods of one year unless any party gives
sixty days’ notice of termination to the other parties prior to the end of the
calendar year then in effect.
The Third PRA limits
the amount of residual capacity and energy required to be supplied by FES for
the remainder of 2008 and for all of 2009 to roughly two-thirds of the
Affiliates’ power supply requirements as forecasted in FES’ corporate budget for
the remainder of 2008 and 2009. The Affiliates have committed
resources in place for the balance of their expected power supply for the last
two months of 2008 and all of 2009 from a third party non-affiliated
supplier. Under the Third PRA, FES also gives each of Met-Ed and
Penelec (on behalf of itself and Waverly) a call option for 650 megawatts per
hour of off-peak energy exercisable in the event of a default by its
non-affiliated supplier. Prices under the Third PRA remain
unchanged.
In light of current
market conditions and the recent financial difficulties experienced by several
market participants, FES was concerned that if the non-affiliated supplier were
to default on its obligations under the power supply agreements with the
Affiliates, FES would be responsible for providing unexpected amounts of
capacity and energy to the Affiliates at below market prices. The
Affiliates will now assume the market price risk on this portion of their power
supply requirements in the event of a default by their non-affiliated supplier.
In consideration, FES agreed to not terminate the Third PRA before December 31,
2009. In the absence of a non-affiliated supplier default, the Third
PRA results in no change to the Affiliates’ power supply costs during the last
two months of 2008 and calendar year 2009.
The foregoing is a
summary description of certain terms of the Third PRA and is qualified in its
entirety by reference to the Agreement, which FES, Met-Ed and Penelec intend to
file as an exhibit to their quarterly reports on Form 10-Q for the quarter
ending September 30, 2008.
Forward-Looking Statements:
This Form 8-K includes forward-looking statements based on information currently
available to management. Such statements are subject to certain risks and
uncertainties. These statements include declarations regarding management’s
intents, beliefs and current expectations. These statements typically
contain, but are not limited to, the terms “anticipate,” “potential,” “expect,”
“believe,” “estimate” and similar words. Forward-looking statements
involve estimates, assumptions, known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Actual
results may differ materially due to the speed and nature of increased
competition in the electric utility industry and legislative and regulatory
changes affecting how generation rates will be determined following the
expiration of existing rate plans in Ohio and Pennsylvania, the impact of the
PUCO’s rulemaking process on the Ohio Companies’ Electric Security Plan and
Market Rate Offer filings, economic or weather conditions affecting future sales
and margins, changes in markets for energy services, changing energy and
commodity market prices and availability, replacement power costs being higher
than anticipated or inadequately hedged, the continued ability of FirstEnergy’s
regulated utilities to collect transition and other charges or to recover
increased transmission costs, maintenance costs being higher than anticipated,
other legislative and regulatory changes, revised environmental requirements,
including possible greenhouse gas emission regulations, the impact of the U.S.
Court of Appeals’ July 11, 2008 decision to vacate the CAIR rules and the scope
of any laws, rules or regulations that may ultimately take their place, the
uncertainty of the timing and amounts of the capital expenditures needed to,
among other things, implement the Air Quality Compliance Plan (including that
such amounts could be higher than anticipated) or levels of emission reductions
related to the Consent Decree resolving the New Source Review litigation or
other potential regulatory initiatives, adverse regulatory or legal decisions
and outcomes (including, but not limited to, the revocation of necessary
licenses or operating permits and oversight) by the Nuclear Regulatory
Commission (including, but not limited to, the Demand for Information issued to
FENOC on May 14, 2007), the timing and outcome of various proceedings before the
PUCO (including, but not limited to, the Electric Security Plan and Market Rate
Offer proceedings as well as the distribution rate cases and the generation
supply plan filing for the Ohio Companies and the successful resolution of the
issues remanded to the PUCO by the Ohio Supreme Court regarding the Rate
Stabilization Plan and the Rate Certainty Plan, including the recovery of
deferred fuel costs), Met-Ed’s and Penelec’s transmission service charge filings
with the PPUC (as well as the resolution of the Petitions for Review filed with
the Commonwealth Court of Pennsylvania with respect to the transition rate plan
for Met-Ed and Penelec), the continuing availability of generating units and
their ability to operate at or near full capacity, the ability to comply with
applicable state and federal reliability standards, the ability to accomplish or
realize anticipated benefits from strategic goals (including employee workforce
initiatives), the ability to improve electric commodity margins and to
experience growth in the distribution business, the changing market conditions
that could affect the value of assets held in the registrants’ nuclear
decommissioning trusts, pension trusts and other trust funds, and cause
FirstEnergy to make additional contributions sooner, or in an amount that is
larger than currently anticipated, the ability to access the public securities
and other capital and credit markets in accordance with FirstEnergy’s financing
plan and the cost of such capital, changes in general economic conditions
affecting the registrants, the state of the capital and credit markets affecting
the registrants, and the risks and other factors discussed from time to time in
the registrants’ SEC filings, and other similar factors. The
foregoing review of factors should not be construed as
exhaustive. New factors emerge from time to time, and it is not
possible for management to predict all such factors, nor assess the impact of
any such factor on the registrants’ business or the extent to which any factor,
or combination of factors, may cause results to differ materially from those
contained in any forward-looking statements. 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.
SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, each Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
November 6,
2008
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FIRSTENERGY SOLUTIONS
CORP.
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Registrant
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METROPOLITAN EDISON
COMPANY
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Registrant
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PENNSYLVANIA ELECTRIC
COMPANY
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Registrant
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Harvey L.
Wagner
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Vice President
and Controller
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