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VARIABLE INTEREST ENTITIES | 3 Months Ended
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Mar. 31, 2024
Variable Interest Entities [Abstract] |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES FirstEnergy performs qualitative analyses to determine whether a variable interest qualifies FirstEnergy as the primary beneficiary (a controlling financial interest) of a VIE. An enterprise has a controlling financial interest if it has both: (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. FirstEnergy consolidates a VIE when it is determined that it is the primary beneficiary. In order to evaluate contracts for consolidation treatment and entities for which FirstEnergy has an interest, FirstEnergy aggregates variable interests into categories based on similar risk characteristics and significance. Consolidated VIEs Total assets on the FirstEnergy consolidated balance sheets include approximately $11,156 million and $11,024 million of consolidated VIE assets, as of March 31, 2024 and December 31, 2023, respectively, that can only be used to settle the liabilities of the applicable VIE. Total liabilities include approximately $8,184 million and $7,835 million as of March 31, 2024 and December 31, 2023, respectively, of consolidated VIE liabilities for which the VIE's creditors do not have recourse to FirstEnergy. VIEs in which FirstEnergy is the primary beneficiary consist of the following (included in FirstEnergy’s consolidated financial statements): Securitization Companies •Ohio Securitization Companies - In June 2013, the SPEs formed by the Ohio Companies issued approximately $445 million of pass-through trust certificates supported by phase-in recovery bonds to securitize the recovery of certain all-electric customer heating discounts, fuel and purchased power regulatory assets. The phase-in recovery bonds are payable only from, and secured by, phase in recovery property owned by the SPEs. The bondholder has no recourse to the general credit of FirstEnergy or any of the Ohio Companies. Each of the Ohio Companies, as servicer of its respective SPE, manages and administers the phase in recovery property including the billing, collection and remittance of usage-based charges payable by retail electric customers. The SPEs are considered VIEs and each one is consolidated into its applicable utility. As of March 31, 2024 and December 31, 2023, $183 million and $191 million of the phase-in recovery bonds were outstanding, respectively. •MP and PE Environmental Funding Companies - The consolidated financial statements of FirstEnergy include environmental control bonds issued by two bankruptcy remote, special purpose limited liability companies that are indirect subsidiaries of MP and PE. Proceeds from the bonds were used to construct environmental control facilities. Principal and interest owed on the environmental control bonds is secured by, and payable solely from, the proceeds of the environmental control charges. Creditors of FirstEnergy, other than the limited liability company SPEs, have no recourse to any assets or revenues of the special purpose limited liability companies. As of March 31, 2024 and December 31, 2023, $203 million and $218 million of environmental control bonds were outstanding, respectively. Restricted cash included on the FirstEnergy Consolidated Balance Sheets of $25 million and $40 million as of March 31, 2024 and December 31, 2023, respectively, relates to cash collected from MP, PE and the Ohio Companies' customers that is specifically used to service debt of their respective funding companies. FET FET is a holding company that owns equity interests in ATSI, MAIT, TrAIL and PATH. As further discussed above, on February 2, 2023, FE entered into an agreement with Brookfield to sell an incremental 30% equity interest in FET, which closed on March 25, 2024. As of March 31, 2024, FE’s equity ownership in FET is 50.1% and Brookfield’s is 49.9%. FirstEnergy has concluded that FET is a VIE and that FE is the primary beneficiary because FE has exposure to the economics of FET and the power to direct significant activities of FET through the FESC services agreement, which represents a separate variable interest. Although Brookfield was granted incremental consent rights upon the closing of the FET Equity Interest Sale, Brookfield will not have unilateral control over any activities that most significantly impact FET’s economic performance. However, FE will continue to retain power over the activities that most significantly impact FET’s economic performance through its incremental decision making rights under the existing FESC services agreement, through which executive management and workforce services are provided to FET. As a result, FE is the primary beneficiary of FET and FET will continue to be consolidated in FirstEnergy’s financial statements. The following shows the carrying amounts and classification of the FET assets and liabilities included in the consolidated financial statements as of March 31, 2024 and December 31, 2023. Amounts exclude intercompany balances which were eliminated in consolidation. The assets of FET can only be used to settle its obligations, and creditors of FET do not have recourse to the general credit of FirstEnergy.
Assets |  | March 31, 2024 |  | December 31, 2023
|  | (In millions)
Cash and cash equivalents |  | $ | 77 |  |  | $ | 76 |
Receivables |  | 117 |  | 88
Materials and supplies, at average cost |  | 1 |  |  | 1 |
Prepaid taxes and other |  | 24 |  |  | 23 |
Total current assets |  | 219 |  |  | 188 |
Property, plant and equipment, net |  | 10,426 |  |  | 10,227 |
Goodwill |  | 224 |  |  | 224 |
Investments |  | 19 |  |  | 19 |
Regulatory assets |  | 9 |  |  | 16 |
Other |  | 234 |  |  | 310 |
Total noncurrent assets |  | 10,912 |  |  | 10,796 |
TOTAL ASSETS |  | $ | 11,131 |  |  | $ | 10,984 |
Liabilities |  | March 31, 2024 |  | December 31, 2023
|  | (In millions)
Currently payable long-term debt |  | 600 |  |  | — |
Short-term borrowings |  | 250 |  |  | — |
Accounts payable |  | — |  |  | 2 |
Accrued interest |  | 61 |  |  | 63 |
Accrued taxes |  | 276 |  |  | 262 |
Other |  | 7 |  |  | 14 |
Total current liabilities |  | 1,194 |  |  | 341 |
Long-term debt and other long-term obligations |  | 4,825 |  |  | 5,275 |
Accumulated deferred income taxes |  | 1,289 |  |  | 1,218 |
Regulatory liabilities |  | 342 |  |  | 307 |
Other |  | 148 |  |  | 285 |
Total noncurrent liabilities |  | 6,604 |  |  | 7,085 |
TOTAL LIABILITIES |  | $ | 7,798 |  |  | $ | 7,426 |
Unconsolidated VIEs FirstEnergy is not the primary beneficiary of its equity method investments in Global Holding and PATH WV, as further discussed above, or its PPAs. FirstEnergy evaluated its PPAs and determined that certain Non-Utility Generation entities may be VIEs to the extent that they own a plant that sells substantially all of its output to the applicable utilities and the contract price for power is correlated with the plant’s variable costs of production. As of March 31, 2024, FirstEnergy maintains four long-term PPAs with Non-Utility Generation entities that were entered into pursuant to the Public Utility Regulatory Policies Act of 1978. FirstEnergy was not involved in the creation of, and has no equity or debt invested in, any of these entities. FirstEnergy has determined that, it does not have a variable interest, or the entities do not meet the criteria to be considered a VIE. Because FirstEnergy has no equity or debt interests in the Non-Utility Generation entities, its maximum exposure to loss relates primarily to the above-market costs incurred for power, which are expected to be recovered from customers.

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- Definition Variable Interest Entities Abstract. + References No definition available. + Details
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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//810/tableOfContent + Details
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