FirstEnergy - Certificate Pursuant to Rule 24


 



SEC File No. 70-10122





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549






CERTIFICATE PURSUANT TO

RULE 24

OF PARTIAL COMPLETION OF

TRANSACTIONS






FIRSTENERGY CORP.
 
 
 

 



------------------------------------------------------------------------
In the matter of                             :
FirstEnergy Corp.                        :  Certificate Pursuant
:  to Rule 24 of Partial
:  Completion of
:  Transactions
:
SEC File No. 70-10122                  :
(Public Utility Holding Company Act                :
of 1935)                                 :
------------------------------------------------------------------------

TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
 
            The undersigned, FirstEnergy Corp. (FirstEnergy) hereby certifies pursuant to Rule 24 of the Rules and Regulations under the Public Utility Holding Company Act of 1935 (the Act), that certain of the transactions proposed in the Applications, as amended, filed in SEC File No. 70-10122 have been carried out in accordance with the Commission’s Order dated June 30, 2003 as follows:

(1)         During the period April 1, 2005 through June 30, 2005, there were no sales of common stock or preferred securities by FirstEnergy.

(2)         FirstEnergy purchased on the open market 285,212 shares of common stock pursuant to its dividend reinvestment plans and zero shares of restricted stock units were granted under employee benefit plans during the second quarter of 2005. The restrictions on restricted stock units lapse over a defined period of time or based on performance. Dividends are received on the restricted stock units and are reinvested in additional shares.

(3)         During the period April 1, 2005 through June 30, 2005, no FirstEnergy common stock was transferred to a seller of securities of a company being acquired.

(4)          During the period April 1, 2005 through June 30, 2005, there was no long-term Debt and Preferred Securities issued by FirstEnergy. FirstEnergy issued the following short-term Debt during the second quarter of 2005:

   
Transaction
  
Maturity
      
Transaction
  
   
Date   
  
Date   
  
Rate 
  
Amount    
  
CitiBank (FirstEnergy Revolver - $1 Billion 3-Year Facility) 
                  
FirstEnergy
   
6/1/2005
    
6/8/2005
    
4.20
%
$
100,000,000
  
FirstEnergy
   
06/08/205
    
6/14/2005
    
4.20
%
$
20,000,000
  
                           
CitiBank (FirstEnergy Revolver - $2 Billion 5-Year Facility)
                          
FirstEnergy
   
6/20/2005
 
  
6/27/2005
    
3.65
%
$
50,000,000
  
                           
KeyBank (FirstEnergy - $2 Billion Revolver Swingline)
                          
FirstEnergy
   
6/20/2005
    
6/21/2005, 6/23/2005
    
3.64
%
$
55,000,000
  
FirstEnergy
   
6/22/2005
    
6/23/2005, 6/24/2005
    
3.58
%
$
12,000,000
  
FirstEnergy
   
6/27/2005
    
6/28/2005
    
3.73
%
$
5,000,000
  
FirstEnergy
   
6/30/2005
    
7/1/2005
    
3.97
%
$
41,000,000
  


1

(5)          During the period April 1, 2005 through June 30, 2005, the following short-term debt was issued by the Utility Subsidiaries:

   
Transaction
  
Maturity
      
Transaction
  
   
Date   
  
Date   
  
Rate 
  
Amount    
  
FirstMerit (Ohio Edison Company (OE) Bi-Lateral Facility)
                  
OE
    
4/22/2005
    
4/25/2005
    
3.50
%
$
6,000,000
  
OE
    
6/1/2005
    
6/6/2005
    
3.81
%
$
14,000,000
  
OE
    
6/8/2005
    
6/9/2005
    
3.75
%
$
10,000,000
  
                           
KeyBank (OE Bi-Lateral Facility)
                          
OE
    
4/22/2005
    
4/25/2005
    
3.89
%
$
20,000,000
  
OE
    
6/1/2005
    
6/3/2005
    
4.19
%
$
2,000,000
  
OE
    
6/2/2005
    
6/3/2005, 6/6/2005
    
4.15
%
$
8,000,000
  
                           
Union Bank of California (Pennsylvania Electric Company (Penelec) Bi-Lateral Facility)
                          
Penelec
    
3/15/2005
    
4/15/2005
    
3.81
%
$
100,000,000
  
Penelec
    
4/14/2005
    
5/16/2005
    
4.06
%
$
75,000,000
  
Penelec
    
5/16/2005
    
6/15/2005
    
4.13
%
$
75,000,000
  
Penelec
    
6/15/2005
    
7/15/2005
    
3.63
%
$
75,000,000
  

Under the Utility Money Pool, the principal balance of borrowings at the end of the second quarter of 2005 and average interest rate during the second quarter of 2005 are as follows:

Regulated Money Pool
  
Average
  
Principal
  
Loan to/(Borrowing from):    
  
Interest Rate
  
Balance
  
           
OE
    
2.9303
%
$
593,020,721
  
Pennsylvania Power Company (Penn)
    
2.9303
%
  
(25,597,081
)
The Cleveland Electric Illuminating Company (CEI)
    
2.9303
%
  
(388,417,831
)
The Toledo Edison Company (TE)
    
2.9303
%
  
(309,485,404
)
American Transmission Systems, Incorporated (ATSI)
    
2.9303
%
  
35,461,033
  
Jersey Central Power & Light Company (JCP&L)
    
2.9303
%
  
(279,104,720
)
Metropolitan Edison Company (Met-Ed)
    
2.9303
%
  
(34,021,504
)
Penelec
    
2.9303
%
  
(65,887,747
)
York Haven Power Company
    
2.9303
%
  
14,829,646
  

(6)          During the second quarter of 2005, there were no financings consummated by any Non-Utility subsidiary that were not exempt under
               rule 52.

(7)          During the second quarter of 2005, the following guarantees were made by FirstEnergy to support activities of its subsidiaries:

2


           
Purpose of
  
Beneficiary
  
Amount
  
Terms
  
Guarantee
  
               
FirstEnergy Solutions Corp. (FES) (Trading - Electric)
              
Cargill Power Markets LLC
  
$
2,000,000
    
(a)
 
  
(b)
 
Consumers Energy
    
6,500,000
    
(a)
 
  
(b)
 
Duke Energy Marketing America
    
5,000,000
    
(a)
 
  
(b)
 
UBS AG
    
10,000,000
    
(a)
 
  
(b)
 
                   
FES (Trading - Gas)
                    
Dominion Field Services
    
600,000
    
(a)
 
  
(c)
 
Peoples Energy Wholesale Mktg.
    
500,000
    
(a)
 
  
(c)
 
Sprague Energy
    
100,000
    
(a)
 
  
(c)
 
Tenaska Gas Storage LLC
    
2,000,000
    
(a)
 
  
(c)
 
                     
FirstEnergy Generation Corp. (Fuel Marketing / Coal)
                    
Ceredo Synfuel
    
5,000,000
    
(a)
 
  
(d)
 
CIT Group/Equipment Financing
    
31,061,000
    
6 years
    
(e)
 
Pacific Rim Capital Inc
    
7,000,000
    
4 years
    
(e)
 

(a)    Such guarantees are issued for a one-year term, with a ten-day termination right by FirstEnergy.
(b)    Parental guarantees issued by FirstEnergy to provide credit support for electric power purchases by subsidiary.
(c)    Parental guarantees issued by FirstEnergy to provide credit support for natural gas purchases by subsidiary.
(d)    Credit backstop to support coal purchases and emission trading
(e)    Credit backstop to support equipment leases.

The following Letters of Credits (LOC) were issued during the second quarter of 2005:

       
Purpose of
  
Beneficiary
  
Amount   
  
LOC     
  
           
FirstEnergy
          
PJM Interconnection, LLC
  
$
5,000,000
    
(a)
 
               
MYR Group Inc.
              
C. N. A. Insurance
    
29,000
    
(b)
 
Zurich American Insurance
    
14,600,000
    
(c)
 
               
Penn
              
Penns ylvania Dept. of Environmental Protection Bureau of Land Recycling & Waste Management
    
11,454,222
    
(d)
 
 
 
(a)    Renewed collateral for entering into purchased power agreements with PJM. Original LOC was issued in the third quarter of 2003.
(b)    Replaces Surety Bonds on MYR Group insurance and workers compensation policies. Automated renewal of previous issued LOC.
(c)    Renewed Surety Bonds for self-insurance claims. Original LOC was issued in the fourth quarter of 2003.
(d)    Renewed collateral bond for PA Dept. of EPA for waste management facility in Green Township, Beaver County, PA. Original LOC was issued in the third quarter of 2003.
 
 
3
 
(8)          During the second quarter of 2005, FirstEnergy entered into fifteen forward starting swap agreements in order to hedge a portion of the consolidated interest rate risk associated with the planned issuance of fixed-rate, long-term debt securities for one or more of its consolidated entities in the fourth quarter of 2006. These derivatives are treated as cash flow hedges, protecting against the risk of changes in the future interest payments resulting from changes in benchmark U.S. Treasury rates between the date of hedge inception and the date of the debt issuance. The notional amounts, counterparties, and principal terms of the forward starting swap agreements are filed pursuant to request for confidential treatment.

(9)          Investments made during the second quarter of 2005 in any intermediate subsidiary or financing subsidiary are as follows:

Company
  
Investment
  
   
(In Thousands $)
  
       
Centerior Funding Corporation
  
$
12,373
  

(10)        During the second quarter of 2005, FirstEnergy filed the following U-6B-2 Forms:

Company
  
Filing Date
  
OE
    
April 27, 2005
  
TE
    
April 27, 2005
  
CEI
    
April 27, 2005
  
OE
    
June 28, 2005
  


(11)        OE, CEI and TE engaged in jurisdictional financing transactions during the second quarter of 2005. Consolidated balance sheets of OE, CEI and TE for the quarter ended June 30, 2005 are incorporated by reference to OE’s, CEI’s and TE’s Form 10-Q Quarterly Report to SEC for the quarter ended June 30, 2005 (File No. 1-2578, 1-2323 and 1-3583, respectively).

(12)        The following table presented in thousands, provides the capital structure of FirstEnergy on a consolidated basis and each Utility Subsidiary as of the end of the second quarter of 2005.

FirstEnergy
  
  Amount   
  
  Ratio  
  
Common Equity
  
$
8,640,396
    
43.37
%
Preferred Stock
    
213,719
    
1.07
%
Long-Term Debt
    
10,512,694
    
52.77
%
Short-Term Debt
    
554,824
    
2.79
%
Total Capitalization
  
$
19,921,633
    
100.00
%
               
OE
              
Common Equity
  
$
2,409,698
    
58.71
%
Preferred Stock
    
75,070
    
1.83
%
Long-Term Debt
    
1,393,799
    
33.95
%
Short-Term Debt
    
226,301
    
5.51
%
Total Capitalization
  
$
4,104,868
    
100.00
%
               
CEI
              
Common Equity
  
$
1,854,152
    
41.79
%
Preferred Stock
    
-
    
-
%
Long-Term Debt
    
2,023,777
    
45.61
%
Short-Term Debt
    
559,290
    
12.60
%
Total Capitalization
  
$
4,437,219
    
100.00
%
               

4


TE
          
Common Equity
  
$
827,560
    
49.43
%
Preferred Stock
    
126,000
    
7.53
%
Long-Term Debt
    
387,432
    
23.14
%
Short-Term Debt
    
333,136
    
19.90
%
Total Capitalization
  
$
1,674,128
    
100.00
%

Penn
          
Common Equity
  
$
349,059
    
62.81
%
Preferred Stock
    
14,105
    
2.54
%
Long-Term Debt
    
146,941
    
26.44
%
Short-Term Debt
    
45,597
    
8.21
%
Total Capitalization
  
$
555,702
    
100.00
%
               
JCP&L
              
Common Equity
  
$
3,185,687
    
68.27
%
Preferred Stock
    
12,649
    
0.27
%
Long-Term Debt
    
1,189,188
    
25.48
%
Short-Term Debt
    
279,105
    
5.98
%
Total Capitalization
  
$
4,666,629
    
100.00
%
               
Met-Ed
              
Common Equity
  
$
1,284,001
    
61.76
%
Preferred Stock
    
-
    
-
%
Long-Term Debt
    
694,122
    
33.38
%
Short-Term Debt
    
101,021
    
4.86
%
Total Capitalization
  
$
2,079,144
    
100.00
%
               
Penelec
              
Common Equity
  
$
1,302,650
    
65.32
%
Preferred Stock
    
-
    
-
%
Long-Term Debt
    
486,824
    
24.41
%
Short-Term Debt
    
204,888
    
10.27
%
Total Capitalization
  
$
1,994,362
    
100.00
%

(13)         The following table presented in thousands provides retained earnings analysis of FirstEnergy on a consolidated basis and each Utility Subsidiary as of the end of the second quarter 2005.

   
FirstEnergy
  
OE     
  
CEI    
  
TE     
  
Balance, December 31, 2004
  
$
1,856,863
  
$
442,198
  
$
553,740
  
$
191,059
  
Net Income
    
337,718
    
103,853
    
54,141
    
8,041
  
Cash Dividends on Preferred Stock
    
-
    
(1,317
)
  
(1,429
)
  
(4,422
)
Cash Dividends on Common Stock
    
(270,484
)
  
(177,000
)
  
(124,000
)
  
(10,000
)
Other
    
-
    
-
    
(1,495
)
  
-
  
Balance, June 30, 2005
  
$
1,924,097
  
$
367,734
  
$
480,957
  
$
184,678
  
                           
   
Penn
   
JCP&L
   
Met-Ed
   
Penelec
 
Balance, December 31, 2004
  
$
87,695
  
$
43,271
  
$
38,966
  
$
46,068
  
Net Income
    
30,713
    
69,842
    
32,139
    
27,221
  
Cash Dividends on Preferred Stock
    
(1,378
)
  
(250
)
  
-
    
-
  
Cash Dividends on Common Stock
    
(8,000
)
  
(40,000
)
  
(34,000
)
  
(30,000
)
Other
    
-
    
-
    
1
    
-
  
Balance, June 30, 2005
  
$
109,030
  
$
72,863
  
$
37,106
  
$
43,289
  

 
 
5

 
(14)        During the second quarter of 2005, there was no change to any of the credit ratings of FirstEnergy or any of its subsidiaries by any of the nationally recognized credit rating agencies.

(15)        FirstEnergy’s aggregate investment includes all amounts invested, or commitments to be invested, in exempt wholesale generators (EWGs), for which there is recourse, directly or indirectly, to the registered holding company. Accordingly, FirstEnergy’s aggregate investment as of June 30, 2005 is as follows:

   
(In Thousands
  
FirstEnergy Generation Corp.
  
$
1,015,544
  
Termobarranquilla S. A.
    
46,551
  
Aggregate Investment in EWGs
  
$
1,062,095
  *

*  Aggregate investment amounts reflected here include LOCs and guarantees, but do not include any goodwill or other fair value adjustments.


Aggregate Investment as a Percentage of FirstEnergy and Subsidiary Companies:

Total capitalization
  
$
19,921,633
    
5.3
%
Net utility plant
  
$
13,652,235
    
7.8
%
Total consolidated assets
  
$
31,211,243
    
3.4
%
Market value of common equity
  
$
15,868,423
    
6.7
%

(16)        Set forth below is a summary of the direct or indirect investments as defined in SEC Rule 53(a) by FirstEnergy, as of June 30, 2005 in EWGs, as well as the percentage of equity ownership.
 
 
 
 
 
 
  
FirstEnergy’s Investment at
06/30/05
  
 
FirstEnergy’s
% Equity
 
 
Owners not affiliated with FirstEnergy
  
 Associate Company  
 ($000)*
 
Ownership
  
 Name of Entity
 
Type of Entity
  
                           
Termobarranquilla S.A. (a)
  
$
46,551
    
0
%
  
ABB Energy Ventures, Inc.
    
Foreign
  
               
Lancaster Steel 
    
Foreign
  
 
                
Distral Group
    
Foreign
  
 
                
Corp. Electrica
    
Foreign
  
               
Corp. Electrica
        
               
De la Costa
        
               
Atlantica
        
 
                
Darby Mazzanine
        
               
Holdings, LLC
        
                           
FirstEnergy Generation Corp.
    
1,015,544
    
100
%
  
Not Applicable
    
N/A
  
                           
Total Aggregate Investment in EWGs
  
$
1,062,095
                    
 
 
 
 
 
     (* )  Aggregate investment amounts reflected here include LOCs and guarantees, but do not include any goodwill or other fair value adjustments.

(a)  
FirstEnergy sold Termobarranquilla S.A. on January 31, 2004. The remaining investment represents outstanding LOCs issued by FirstEnergy.


6

(17)        FirstEnergy and Subsidiary Companies Consolidated Capitalization Ratios as of June 30, 2005:

   
Amount (000’s)
  
Ratio 
  
Common equity
 
$
8,640,396
    
43.3
%
Preferred stock not subject to mandatory redemption
    
213,719
    
1.1
%
Long-term debt
    
10,512,694
    
52.8
%
Notes payable
    
554,824
    
2.8
%
               
Total capitalization
  
$
19,921,633
    
100.0
%

(18)        Market-to-book ratio of FirstEnergy and Subsidiary Companies common stock as of June 30, 2005:

Closing Market Price per Share
  
$48.11
  
Book Value per Share
 
$
26.34
  
Market-to Book Ratio of Common Stock
    
182.6
%

(19)        No new EWG/FUCO project covered by the Modified Rule 53 Test in which FirstEnergy has invested or committed to invest during the second quarter of 2005.

(20)        Analysis of Growth in Retained Earnings for FirstEnergy and Subsidiary Companies:

   
(In Thousands)
  
Retained Earnings as of 06/30/05
  
$
1,924,097
  
Retained Earnings as of 12/31/04
    
1,856,863
  
Growth in Retained Earnings
  
$
67,234
  
         
Analysis of Growth in Retained Earnings:
        
Income contribution from regulated utility companies
  
$
313,954
  
Income contribution from EWGs
    
28,595
  
Income contribution from all other companies
    
69,347
  
FirstEnergy Holding and Service companies
    
(74,178
)
Cash dividends declared on common stock
    
(270,484
)
Growth in Retained Earnings
  
$
67,234
  

(21)        Statements of Operations for the period ended June 30, 2005 for FirstEnergy Generation Corp. will be filed separately under a request for confidential treatment under Rule 104 (b)


7

SIGNATURE


The undersigned registered holding company has duly caused this quarterly report to be signed on its behalf by the undersigned officer thereunto duly authorized pursuant to the requirements of the Public Utility Holding Company Act of 1935.


     
 
FirstEnergy Corp.
     
     
     
August 18, 2005
    
 
By:
/s/   Harvey L. Wagner
 
       Harvey L. Wagner
Vice President, Controller
And Chief Accounting Officer
(Principal Accounting Officer)


 

8