FirstEnergy Corp. · NYSE:FE
FirstEnergy — Merger or Acquisition (August 2010)
20 slides from FirstEnergy's merger presentation, August 2010
Slide 1: FirstEnergy/Allegheny Energy Merger Update
FirstEnergy/Allegheny Energy Merger Update August 2010
Slide 2: Information Concerning Forward-Looking Statements
Information Concerning Forward-Looking Statements In addition to historical information, this presentation may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as anticipate, expect, project, intend, plan, believe, and wo
Slide 3: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed merger, FirstEnergy filed a Registration Statement on Form S-4 (Registration No. 333- 165640) with the SEC that includes a joint proxy statement of FirstEnergy and Allegheny Energy and that also constitutes a prospectus of F
Slide 4: Natural Geographic Fit
Assets Natural Geographic Fit… PA OH NJ MD VA WV FirstEnergy (FE) Service Area FirstEnergy Power Plants Allegheny Power Plants Allegheny Energy (AYE) Service Area Potomac Edison/TrAILCo * Reflects the sale of Allegheny Energy’s Virginia distribution assets, which was completed on VA Transmission Zon
Slide 5: Three Separate Growth Platforms
Assets Three Separate Growth Platforms… Utilities Transmission Generation / Retail Greater scale Nearly 20K miles of Diversified portfolio Increased geographic transmission Margin capture through reach Separate transmission retail sales growth 7 states entities 24 GW capacity5 10 u
Slide 6: Transition Planning Underway
Benefits Transition Planning Underway… Estimated Transaction Benefits Q Integration / planning teams $MM 650 530 500 480 – Teams comprising FirstEnergy and 450 350 Allegheny Energy employees 350 180 200 – Began review in mid-April 50 – Identifying value-drivers (100) (35) (28) (28) (95) – Teamwork h
Slide 7: Generation and Fuel: Benefits
Benefits Generation and Fuel: Benefits Fuel Generation Economies of scale and best practices Generation asset reliability improvement Barge optimization Dispatch optimization Rail optimization Expand use of fuel blending techniques Off-site storage and blending Mining assets (incre
Slide 8: Proven Performance
Benefits Proven Performance… Equivalent Forced Outage Rate (EFOR) Capacity Factor (3 Yr Average) FE and AYE (Supercritical and Subcritical) FE and AYE (Supercritical and Subcritical) 30% 85% 84% 82% 20% 77% 17% 74% 75% 69% 71% 68% 11% 11% 6% 10% 8% 4% 45% 42% 6% 4% 7% 5% 6% 5% 5% 4% 3% 4% Supercriti
Slide 9: Margin captured across entire value chain, not just one component
Margin Margin captured across entire value chain, not just one component… Generation assets provide unique benefits Retail Allegheny FirstEnergy Value Chain Suppliers Energy Supply Solutions Retail Margin Wholesale Margin Nuclear $$$ Generation Margin Baseload $$ Intermediate $ Counterpa
Slide 10: Corporate and Information Services: Benefits
Benefits Corporate and Information Services: Benefits Corporate / HR Information Services Organizational alignment Review of outsourced services Consolidate facility leases, Integrate SAP and other systems external auditors, credit Information systems facilities and benefit programs cons
Slide 11: Utility Operations: Benefits
Benefits Utility Operations: Benefits Supply Chain Optimization Services Materials Processes Vegetation management Meters Consolidate design Substation construction Substation transformers processes Pole inspections Distribution transformers Decentralize distribution operations Ene
Slide 12: On Plan and On Schedule
Approval On Plan and On Schedule… Q Shareholder Approvals – S-4 Registration Statement declared effective July 16, 2010 – Separate shareholder meetings scheduled for September 14, 2010 Q State Regulatory Filings – Maryland Public Service Commission – Filed May 27, 2010 – Pennsylvania Public Utility
Slide 13: Jobs / Economic Development / Service
Approval Proposals: Jobs / Economic Development / Service Q No net utility job reductions for two years due to involuntary attrition as a result of the merger integration process (MD, PA, WV) Q Establish FE regional management approach (MD, PA, WV) Q Establish new Power Systems Institute program (PA
Slide 14: Compelling Transaction
Compelling Transaction… Q Benefits – real and achievable Q Margin – across entire value chain Q Assets – three growth platforms Q Approvals – on plan and on schedule Experienced management with proven ability to integrate companies Building a Better, Stronger Company FirstEnergy/Allegheny Energy Mer
Slide 15: Appendix
Appendix Building a Better, Stronger Company FirstEnergy/Allegheny Energy Merger Update August 17, 2010 1
Slide 16: Diverse Competitive Generation Portfolio
Diverse Competitive Generation Portfolio Combined Competitive Capacity 1 Combined Competitive Production 2 Gas / Oil Hydro/Wind Hydro/Wind <1% ~2% Subcritical Subcritical Gas / Oil Coal Coal 7% Nuclear 12% 20% 18% 28% Nuclear 19% 42% Supercritical 52% Coal Supercritical Coal Total Combined Capacity:
Slide 17: Utility Operations at a Glance
Utility Operations at a Glance* Service Distribution Total Customers Area Square Overhead Number of Ownership Company Line (millions) Miles Wire Miles Substations Staffing (thousands) (thousands) Ohio Edison/Penn FE 1.2 8.1 41.2 447 625 Power Cleveland Electric FE 0.8 1.6 21.2 207 364 Illuminating F
Slide 18: Rate Base
Rate Base Rate Base Allowed Ownership Company Rates Effective ($ millions) ROE FE Ohio Edison January 2009 $1,251 10.5% FE Penn Power May 1998 $654 12.9% FE Cleveland Electric Illuminating May 2009 $984 10.5% FE Toledo Edison January 2009 $414 10.5% FE Jersey Central Power & Light June 2005 $2,080 9
Slide 19: State Procedural Schedules
State Procedural Schedules Pennsylvania Maryland June 22, 2010 – Prehearing Conference June 22, 2010 – Prehearing Conference July 15, 2010 – Supplemental Testimony September 27, 2010 – Direct Testimony Due Filed October 18, 2010 – Rebuttal Testimony Due July 30, 2010 – Deadline to Identi
Slide 20: State Procedural Schedules
State Procedural Schedules West Virginia Virginia August 2, 2010 – Intervention Deadline July 30, 2010 – Notice of Participation/Hearing Request Deadline October 14, 2010 – Non-Company Direct and Rebuttal Testimony Due August 13, 2010 – Staff Report Due November 1, 2010 – Company Rebuttal