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Short-Term Borrowings and Bank Lines of Credit | 12 Months Ended
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Dec. 31, 2016
Debt Disclosure [Abstract] |
SHORT-TERM BORROWINGS AND BANK LINES OF CREDIT | SHORT-TERM BORROWINGS AND BANK LINES OF CREDIT On December 6, 2016, FE and certain subsidiaries entered into new five-year syndicated credit facilities available through December 6, 2021, and concurrently terminated existing syndicated credit facilities that were to expire March 31, 2019, as follows:
• | FE and the Utilities entered into a new $4 billion revolving credit facility, which represents an increase of $500 million over the existing $3.5 billion facility it replaced,
• | FET and its subsidiaries entered into a $1 billion revolving credit facility, which replaced their existing $1 billion facility, and
• | FES and AE Supply terminated their unsecured $1.5 billion credit facility (commitments of $900 million and $600 million for FES and AE Supply, respectively) and FES entered into a new, two-year secured credit facility with FE in which FE provided a committed line of credit to FES of up to $500 million and additional credit support of up to $200 million to cover a $169 million surety bond for the benefit of the PA DEP with respect to LBR, and other bonds as designated in writing to FE. In connection with the cancellation of the prior FES/AE Supply facility and entry into the new FES secured facility with FE, certain commitments and amendments associated with shared services and operational matters were made including, without limitation, as follows: (i) FE reaffirmed its obligations under the Intercompany Tax Allocation Agreement, and (ii) amendments to the Service Agreement by and among FESC, FES, FG and NG, to prevent termination until the earlier of December 31, 2018, or a change in control of FES or its subsidiaries.
FE, the Utilities and FET and its subsidiaries may use borrowings under their new facilities for working capital and other general corporate purposes, including intercompany loans and advances by a borrower to any of its subsidiaries. FES expects to use its new facility with FE to conduct its ordinary course of business in lieu of borrowing under the unregulated money pool. The new facility matures on December 31, 2018, and is secured by FMBs issued by FG ($250 million) and NG ($450 million). Under the terms of the new FE and FET credit facilities, each borrower is required to maintain a consolidated debt to total capitalization ratio, as defined, of no more than 0.65 to 1.00, or in the case of FET, 0.75 to 1.00. For purposes of calculating its ratio, FE is permitted certain adjustments to total capitalization including (i) an exclusion for certain previously incurred after-tax, non-cash write-downs and non-cash charges of approximately $2.75 billion and (ii) a new exclusion for additional after-tax, non-cash write-downs and non-cash charges up to $5.5 billion related to asset impairments attributable to the power generation assets owned by FES, AE Supply and each of their subsidiaries. Additionally, under the new credit facility, FE is now also required to maintain a minimum interest coverage ratio of 1.75 to 1.00 until December 31, 2017, 2.00 to 1.00 beginning January 1, 2018 until December 31, 2018, 2.25 to 1.00 beginning January 1, 2019 until December 31, 2019, and 2.50 to 1.00 beginning January 1, 2020 until December 31, 2021. FE and each of the other borrowers under the new FE and FET credit facilities are currently in compliance with these financial covenants. In the case of FE, the impairment charges recognized in the fourth quarter of 2016 described under Note 2, Asset Impairments, are excluded from FE's calculation of total capitalization pursuant to the new $5.5 billion after-tax exclusion referenced in (ii) above consistent with the terms of the facility. Other terms of the new FE credit facility exclude FES and AE Supply from the definition of “significant subsidiaries,” which removes them from FE’s covenants and defaults resulting from adverse judgments in excess of $100 million and eliminates lender approvals previously required for FES and AE Supply asset sales. Outstanding alternate base rate advances under the new FE and FET facilities will bear interest at a fluctuating interest rate per annum equal to the sum of an applicable margin for alternate base rate advances determined by reference to the applicable borrower’s then-current senior unsecured non-credit enhanced debt ratings (reference ratings) plus the highest of (i) the “prime rate” published by the Wall Street Journal from time to time, (ii) the sum of 1/2 of 1% per annum plus the federal funds rate in effect from time to time and (iii) the LIBOR for a one-month interest period plus 1%. Outstanding Eurodollar rate advances will bear interest at LIBOR for interest periods of one week or one, two, three or six months plus an applicable margin determined by reference to the applicable borrower’s reference ratings. Swing line loans under the new FE facility will bear interest at a rate per annum equal to the sum of the alternate base rate plus an applicable margin determined by reference to the applicable borrower’s reference ratings. Changes in reference ratings of a borrower would lower or raise its applicable margin depending on whether ratings improved or were lowered, respectively. FirstEnergy had $2,675 million and $1,708 million of short-term borrowings as of December 31, 2016 and 2015, respectively. FirstEnergy’s available liquidity from external sources as of January 31, 2017 was as follows:
Borrower(s) |  | Type |  | Maturity |  | Commitment |  | Available Liquidity
|  |  |  |  |  | (In millions)
FirstEnergy(1) |  | Revolving |  | December 2021 |  | $ | 4,000 |  |  | $ | 1,341 |
FET(2) |  | Revolving |  | December 2021 |  | 1,000 |  |  | 1,000 |
|  |  |  | Subtotal |  | $ | 5,000 |  |  | $ | 2,341 |
|  |  |  | Cash |  | — |  |  | 308 |
|  |  |  | Total |  | $ | 5,000 |  |  | $ | 2,649 |
(1) | FE and the Utilities.
(2) | Includes FET, ATSI and TrAIL.
FES had $101 million (payable to AE Supply) and $8 million of short-term borrowings as of December 31, 2016 and 2015, respectively. FES' available liquidity as of January 31, 2017 was as follows:
Type |  | Commitment |  | Available Liquidity
|  | (In millions)
Two-year secured credit facility with FE |  | $ | 500 |  |  | $ | 500 |
Cash |  | — |  |  | 2 |
|  | $ | 500 |  |  | $ | 502 |
The following table summarizes the borrowing sub-limits for each borrower under the facilities, the limitations on short-term indebtedness applicable to each borrower under current regulatory approvals and applicable statutory and/or charter limitations, as of December 31, 2016:
Borrower |  | Revolving Credit Facility Sub-Limits |  | Regulatory and Other Short-Term Debt Limitations |
|  | (In millions) |
FE |  |  | $ | 4,000 |  |  |  | $ | — |  | (1)
FET |  |  | 1,000 |  |  |  | — |  | (1)
OE |  |  | 500 |  |  |  | 500 |  | (2)
CEI |  |  | 500 |  |  |  | 500 |  | (2)
TE |  |  | 500 |  |  |  | 500 |  | (2)
JCP&L |  |  | 600 |  |  |  | 500 |  | (2)
ME |  |  | 300 |  |  |  | 500 |  | (2)
PN |  |  | 300 |  |  |  | 300 |  | (2)
WP |  |  | 200 |  |  |  | 200 |  | (2)
MP |  |  | 500 |  |  |  | 500 |  | (2)
PE |  |  | 150 |  |  |  | 150 |  | (2)
ATSI |  |  | 500 |  |  |  | 500 |  | (2)
Penn |  |  | 50 |  |  |  | 100 |  | (2)
TrAIL |  |  | 400 |  |  |  | 400 |  | (2)
MAIT |  |  | 400 |  |  |  | 400 |  | (2)(3)
(1) | No limitations.
(2) | Excluding amounts which may be borrowed under the regulated companies' money pool.
(3) | Pending regulatory approval, as discussed under "FERC Matters" below.
The facilities do not contain provisions that restrict the ability to borrow or accelerate payment of outstanding advances in the event of any change in credit ratings of the borrowers. Pricing is defined in “pricing grids,” whereby the cost of funds borrowed under the facilities is related to the credit ratings of the company borrowing the funds, other than the FET facility, which is based on its subsidiaries' credit ratings. Additionally, borrowings under each of the Facilities are subject to the usual and customary provisions for acceleration upon the occurrence of events of default, including a cross-default for other indebtedness in excess of $100 million. As of December 31, 2016, the borrowers were in compliance with the applicable debt to total capitalization ratio covenants as well as in the case of FE, the minimum interest coverage ratio requirement, in each case as defined under the respective facilities. In the case of FE, the impairment charges recognized in the fourth quarter of 2016 disclosed in "Note 2. Asset Impairments" above are excluded from FE's calculation of total capitalization pursuant to the new exclusion referenced in (ii) above consistent with the terms of the facility. Term Loans On December 6, 2016, FE terminated its existing $1 billion and $200 million term loan credit agreements and entered into a new $1.2 billion five-year syndicated term loan credit agreement. The term loan contains covenants and other terms and conditions substantially similar to those of the FE revolving credit facility described above, including a consolidated debt to total capitalization ratio and minimum interest coverage ratio requirement. The initial borrowing under the new $1.2 billion FE term loan, which took the form of a Eurodollar rate advance, may be converted from time to time, in whole or in part, to alternate base rate advances or other Eurodollar rate advances. Outstanding alternate base rate advances will bear interest at a fluctuating interest rate per annum equal to the sum of an applicable margin for alternate base rate advances determined by reference to FE’s reference ratings plus the highest of (i) the administrative agent’s publicly-announced “prime rate”, (ii) the sum of 1/2 of 1% per annum plus the Federal Funds Rate in effect from time to time and (iii) the rate of interest per annum appearing on a nationally-recognized service such as the Dow Jones Market Service (Telerate) equal to one-month LIBOR on each day plus 1%. Outstanding Eurodollar rate advances will bear interest at LIBOR for interest periods of one week or one, two, three or six months plus an applicable margin determined by reference to FE’s reference ratings. Changes in FE’s reference ratings would lower or raise its applicable margin depending on whether ratings improved or were lowered, respectively. On February 16, 2017, FE entered into two separate $125 million three-year term loan credit agreements with Bank of America, N.A. and The Bank of Nova Scotia, respectively, the proceeds of which were used to reduce short-term debt. The terms and conditions of these new credit agreements are substantially similar to the December 6, 2016, $1.2 billion five-year syndicated term loan credit agreement. As of December 31, 2016, FE was in compliance with the applicable consolidated debt to total capitalization ratio covenants as well as the interest coverage ratio requirement, as defined under its term loan. FirstEnergy Money Pools FirstEnergy’s utility operating subsidiary companies also have the ability to borrow from each other and the holding company to meet their short-term working capital requirements. A similar but separate arrangement exists among FirstEnergy’s unregulated companies. FESC administers these two money pools and tracks surplus funds of FirstEnergy and the respective regulated and unregulated subsidiaries, as well as proceeds available from bank borrowings. Companies receiving a loan under the money pool agreements must repay the principal amount of the loan, together with accrued interest, within 364 days of borrowing the funds. The rate of interest is the same for each company receiving a loan from their respective pool and is based on the average cost of funds available through the pool. The average interest rate for borrowings in 2016 was 0.69% per annum for the regulated companies’ money pool and 2.02% per annum for the unregulated companies’ money pool. As discussed above, FES expects to use its new $500 million secured credit facility with FE in lieu of borrowing under the unregulated companies' money pool. In addition, a separate money pool for use by FES, its subsidiaries and FENOC is expected to be established in the first quarter of 2017 at which time those companies will no longer have access to the unregulated companies' money pool. As of January 31, 2017, FES, its subsidiaries and FENOC had no borrowings in the aggregate under the unregulated companies' money pool. Weighted Average Interest Rates The weighted average interest rates on short-term borrowings outstanding, including borrowings under the FirstEnergy Money Pools, as of December 31, 2016 and 2015, were as follows:
|  | 2016 |  | 2015
FirstEnergy |  | 2.47 | % |  | 2.16 | %

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