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SEGMENT INFORMATION | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity through its reportable segments, Regulated Distribution and Regulated Transmission. FirstEnergy evaluates segment performance based on earnings attributable to FE from continuing operations. The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies, serving approximately six million customers within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its provider of last resort, SOS, standard service offer and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This segment also controls 3,580 MWs of regulated electric generation capacity located primarily in West Virginia and Virginia. The segment’s results reflect the costs of securing and delivering electric generation from transmission facilities to customers, including the deferral and amortization of certain related costs. The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy’s utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment’s revenues are primarily derived from forward-looking formula rates. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual rate base and costs. The segment’s results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy’s transmission facilities. On November 6, 2021, FirstEnergy, along with FET, entered into the FET P&SA I, with Brookfield and the Brookfield Guarantors pursuant to which FET agreed to issue and sell to Brookfield at the closing, and Brookfield agreed to purchase from FET, certain newly issued membership interests of FET, such that Brookfield would own 19.9% of the issued and outstanding membership interests of FET, for a purchase price of $2.375 billion. The transaction closed on May 31, 2022. KATCo, which was a subsidiary of FET, became a wholly owned subsidiary of FE prior to the closing of the FET P&SA I and remains in the Regulated Transmission segment. On February 2, 2023, FE, along with FET, entered into the FET P&SA II with Brookfield and the Brookfield Guarantors, pursuant to which FE agreed to sell to Brookfield at the closing, and Brookfield agreed to purchase from FE, an incremental 30% equity interest in FET for a purchase price of $3.5 billion. The majority of the purchase price is expected to be paid in cash upon closing, and the remainder will be payable by the issuance of a promissory note, which is expected to be repaid by the end of 2024. As a result of the consummation of the transaction, Brookfield’s interest in FET will increase from 19.9% to 49.9%, while FE will retain the remaining 50.1% ownership interests of FET. The transaction is subject to customary closing conditions, including approval from the PPUC, and completion of review by the CFIUS. In addition, pursuant to the FET P&SA II, FirstEnergy made the necessary filings with the applicable regulatory authorities for the PA Consolidation. The FET Minority Equity Interest Sale is expected to close by early 2024. Upon closing, FET will continue to be consolidated in FirstEnergy’s GAAP financial statements. Corporate/Other reflects corporate support and other costs not charged or attributable to the Utilities or Transmission Companies, including FE’s retained pension and OPEB assets and liabilities of former subsidiaries, interest expense on FE’s holding company debt and other investments or businesses that do not constitute an operating segment, including FEV’s investment of 33-1/3% equity ownership in Global Holding. Reconciling adjustments for the elimination of inter-segment transactions are shown separately in the following table of Segment Financial Information. As of September 30, 2023, 67 MWs of electric generating capacity, representing AE Supply’s OVEC capacity entitlement, was also included in Corporate/Other for segment reporting. As of September 30, 2023, Corporate/Other had approximately $6.8 billion of FE holding company debt. Financial information for FirstEnergy’s business segments and reconciliations to consolidated amounts is presented below:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022
External revenues |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 2,978 |  |  | $ | 2,965 |  |  | $ | 8,231 |  |  | $ | 7,867 |
Regulated Transmission |  | 508 |  |  | 503 |  |  | 1,487 |  |  | 1,394 |
Corporate/Other |  | 1 |  |  | 7 |  |  | 6 |  |  | 21 |
Reconciling Adjustments |  | — |  |  | — |  |  | — |  |  | — |
Total external revenues |  | $ | 3,487 |  |  | $ | 3,475 |  |  | $ | 9,724 |  |  | $ | 9,282 |
Internal revenues |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 56 |  |  | $ | 58 |  |  | $ | 171 |  |  | $ | 171 |
Regulated Transmission |  | 1 |  |  | — |  |  | 3 |  |  | 3 |
Corporate/Other |  | — |  |  | — |  |  | — |  |  | — |
Reconciling Adjustments |  | (57) |  |  | (58) |  |  | (174) |  |  | (174) |
Total internal revenues |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Total revenues |  | $ | 3,487 |  |  | $ | 3,475 |  |  | $ | 9,724 |  |  | $ | 9,282 |
Depreciation |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 256 |  |  | $ | 242 |  |  | $ | 762 |  |  | $ | 719 |
Regulated Transmission |  | 93 |  |  | 72 |  |  | 272 |  |  | 245 |
Corporate/Other |  | — |  |  | 3 |  |  | 3 |  |  | 6 |
Reconciling Adjustments |  | 17 |  |  | 15 |  |  | 51 |  |  | 50 |
Total depreciation |  | $ | 366 |  |  | $ | 332 |  |  | $ | 1,088 |  |  | $ | 1,020 |
Deferral of regulatory assets, net |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | (136) |  |  | $ | (85) |  |  | $ | (249) |  |  | $ | (250) |
Regulated Transmission |  | (4) |  |  | (1) |  |  | (4) |  |  | (2) |
Corporate/Other |  | — |  |  | — |  |  | — |  |  | — |
Reconciling Adjustments |  | — |  |  | — |  |  | — |  |  | — |
Total deferral of regulatory assets, net |  | $ | (140) |  |  | $ | (86) |  |  | $ | (253) |  |  | $ | (252) |
Equity method investment earnings |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Regulated Transmission |  | — |  |  | — |  |  | — |  |  | — |
Corporate/Other |  | 43 |  |  | 57 |  |  | 134 |  |  | 134 |
Reconciling Adjustments |  | — |  |  | — |  |  | — |  |  | — |
Total equity method investment earnings |  | $ | 43 |  |  | $ | 57 |  |  | $ | 134 |  |  | $ | 134 |
Interest expense |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 159 |  |  | $ | 132 |  |  | $ | 456 |  |  | $ | 389 |
Regulated Transmission |  | 65 |  |  | 41 |  |  | 185 |  |  | 155 |
Corporate/Other |  | 87 |  |  | 99 |  |  | 244 |  |  | 276 |
Reconciling Adjustments |  | (22) |  |  | (24) |  |  | (57) |  |  | (32) |
Total interest expense |  | $ | 289 |  |  | $ | 248 |  |  | $ | 828 |  |  | $ | 788 |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Income taxes (benefits) |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 70 |  |  | $ | 92 |  |  | $ | 170 |  |  | $ | 213 |
Regulated Transmission |  | 45 |  |  | 5 |  |  | 131 |  |  | 85 |
Corporate/Other |  | (86) |  |  | 8 |  |  | (108) |  |  | (61) |
Reconciling Adjustments |  | — |  |  | — |  |  | — |  |  | — |
Total income taxes (benefits) |  | $ | 29 |  |  | $ | 105 |  |  | $ | 193 |  |  | $ | 237 |
Earnings (losses) attributable to FE from continuing operations |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 275 |  |  | $ | 361 |  |  | $ | 688 |  |  | $ | 828 |
Regulated Transmission |  | 123 |  |  | 27 |  |  | 371 |  |  | 275 |
Corporate/Other |  | 23 |  |  | (54) |  |  | (111) |  |  | (294) |
Reconciling Adjustments |  | — |  |  | — |  |  | — |  |  | — |
Total earnings attributable to FE from continuing operations |  | $ | 421 |  |  | $ | 334 |  |  | $ | 948 |  |  | $ | 809 |
Cash Flows From Investing Activities: |  |  |  |  |  |  |  |
Capital investments |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 409 |  |  | $ | 415 |  |  | $ | 1,136 |  |  | $ | 1,127 |
Regulated Transmission |  | 424 |  |  | 236 |  |  | 1,097 |  |  | 700 |
Corporate/Other |  | 15 |  |  | 15 |  |  | 33 |  |  | 25 |
Reconciling Adjustments |  | — |  |  | — |  |  | — |  |  | — |
Total capital investments |  | $ | 848 |  |  | $ | 666 |  |  | $ | 2,266 |  |  | $ | 1,852 |
(In millions) |  | As of September 30, 2023 |  | As of December 31, 2022
Assets |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 32,434 |  |  | $ | 31,749 |
Regulated Transmission |  | 14,454 |  |  | 13,835 |
Corporate/Other |  | 583 |  |  | 524 |
Reconciling Adjustments |  | — |  |  | — |
Total assets |  | $ | 47,471 |  |  | $ | 46,108 |
Goodwill |  |  |  |  |  |  |  |
Regulated Distribution |  | $ | 5,004 |  |  | $ | 5,004 |
Regulated Transmission |  | 614 |  |  | 614 |
Corporate/Other |  | — |  |  | — |
Reconciling Adjustments |  | — |  |  | — |
Total goodwill |  | $ | 5,618 |  |  | $ | 5,618 |

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