At this time, I would like to welcome everyone to the FirstEnergy Corp. first quarter earnings conference call. All the lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer period. If you would like to pose a question during that time, please press Star and then the number One on your keypad. If you would like to withdraw your question, you may press the pound key. It is now my pleasure to turn the floor over to your host, Kurt Turosky, Director of Investor Relations. Sir, you may begin. Kurt E. Turosky : Thank you Janelle. During this conference call, we will make very forward looking statements within the meaning of the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned with such forward looking statements with respect to revenues, earnings, performance strategies, process, and other aspects of the business of FirstEnergy Corp. are based on current expectations that are subject to risks and uncertainties. The number of factors could cause actual results or outcomes to differ materially from those indicated from such forward looking statements. Please read the Safe Harbor statement contained in the consolidated report to the financial community which was released earlier today and is also available on our website under the earnings release link. Reconciliation gap from various non-GAAP financial measures that we will be referring to today are also contained in that report as well as on the investor relations section of our website at www.firstenergycorp.com/ir. Participating in today’s call are Tony Alexander, President and Chief Executive Officer, Rick Marsh, Senior Vice President and Chief Financial Officer, Harvey Wagner, Vice President and Controller, and Jim Pearson, Vice President and Treasurer. I’ll now turn the…

Thank you. At this time I would like to remind everyone if you would like to ask a question, please press Star, then the number One on your telephone keypad. (Operator instructions). We’ll pause for just a moment to compile the Q&A roster. Thank you. Our first question is coming from Paul Patterson of Glenrock Associates.

Good afternoon guys. I was wondering if you could, now that we’ve had the RPM auction and it’s a little bit more complicated with the set up that you have in multiple states but I was wondering if just in sort of an aggregate way you could tell us what you think about that auction and what the impact might be for the rest of the year and going to ’08 and maybe further than that. Anthony J. Alexander : Yeah, I’d be glad to take a shot at that, Paul. As you know RPM is being implemented on June 1st of this year and there’s a series of options associated with that. We have three companies, three operating companies in the PGM region, JCP&L, Med-Ed and Penelec. The impact is a little different for those companies. Let’s focus first on JCP&L. That company has about 900 megawatts capacity to bid into RPM but at JCP&L generation revenues both energy and capacity are used to reduce nug deferral balances. OK, so that means there’s not going to be any earnings impact. There will be in essence an acceleration of cash flow from this though Paul. Basically it accelerates receipt of cash under the deferred nug balance. So we recover those costs faster so an acceleration of cash, no earnings impact at JCP&L. For Med-Ed and Penelec, those two companies have a total capacity of about 2,300 megawatts and since the capacities they need to meet their load occupations are greater than their own generation we of course also have third party contracts for energy capacity of just capacity. And over the coming several years we’re well hedged for capacity so there’s really a negligible impact at those companies. So no earnings impact for any of the companies, slight acceleration of cash flow at JCP&L and that’s about the impact of RPM on our PGM companies.

OK, great. And then on the stock buyback that you guys implemented with Morgan Stanley, do we have an idea about where Morgan Stanley is in that buyback yet? Anthony J. Alexander : No.

We don’t? OK. And then…OK that’s it. Thank you very much. Anthony J. Alexander : Thanks Paul.

Thank you. Our next question is coming from Paul Fremont of Jefferies and Company Paul Fremont – Jefferies & Co. : Thank you very much. Really two questions. One, with respect to the deferral benefit that you reported in the fourth quarter, will that be, should we think of that as a nickel drag in the second quarter since you reported two quarters at once last year? Richard H. Marsh : No. It’s not going to be a drag in the second quarter. It’s a flip actually is what it is. So in the first quarter of 2006 there was no deferral. There was two quarters in the second quarter of 2006. Paul Fremont - Jefferies and Company : Right. So in other words the net comparison then would be, wouldn’t that be still a negative comparison for quarter over quarter? Richard H. Marsh : Comparative quarter over quarter, yes. Paul Fremont - Jefferies & Co. : Yeah. That’s what I meant. Richard H. Marsh : OK. Sorry, yes. Paul Fremont - Jefferies & Co. : OK and then the second question is with First Energy Solutions, are you going to switch ultimately your segment? Reporting so that we’re the legal entities as opposed to the break outs that you’re giving us now, which are more accounting break outs. Harvey L. Wagner : Paul this is Harvey Wagner. The segment is going to be very close to what you see in the financial statements for First Energy Solutions as a legal entity. There are a few things that are included in that, that are competitive businesses that aren’t really part of the legal entity itself but are managed that way, and that’s how we’re reporting our segments. Paul Fremont - Jefferies & Co. : And the Ohio transition segment would…

Well, I’ll try to. The impairment resulted from, I guess you could call it, a change in FEC interpretation. Right, and that impacts all utilities that have nuclear decommissioning trusts, and the way we used to do it is that the change in the value of the assets which in the nuclear decommissioning trust was not reflected in earnings. You would only see an earnings impact when gains or losses were realized when he sold the securities. The SEC interpretation said that in their view, the utilities were unable to demonstrate an ability to hold securities in an NDP until any such impairment might be resolved. The reason they said that Paul, is because those funds are managed by external investment managers, not directly under the control of the company. So in their view, the correct way to approach this is that is if at the end of any period, is that is an impairment, those assets are worth less than book value and then you reflect that in earnings. If at the end of the quarter, those assets are greater than book value, you don’t do anything. So it’s sort of an asymmetrical approach. But as the SEC interpretation change, that’s what was driving it impacts all companies within trust. Harvey, do you want to say anything else?

No that’s it. Really 2007 is the last year that you’re going to see this kind of dichotomy, with the changing accounting rules with fair value accounting. Beginning in 2008, those unrealized gains will also be going through P&L. So it will at least be a levelized playing field on that. Paul Patterson - Glenrock Associates: OK, and then the nuclear decommissioning, what happened there?

That’s just a reflection of general capital market conditions. Paul Patterson - Glenrock Associates: So, I guess the capital markets were down at the end of the quarter?

I think the S&P 500 was up 1% for the quarter. Both of these are invested in various types of asset classes. Richard H. Marsh: And remember that that is a comparison to last year. Paul Patterson - Glenrock Associates: OK, then that explains it. Finally, when you guys mentioned the lease, the forced ends that was associated with the increased financing calls as being a one time kind of glitch, and that the lease was going to be replacing a lot of this short term borrowing. What’s the difference between the lease cost and the short term borrowing cost that we’re looking at here, do you follow me? Richard H. Marsh: We haven’t finalized the lease. When we were at the January analysts meeting, I indicated that because of our ability to use that tax loss carry forward, we were able to in essence secure this $1.2 million after tax, and a low single digit sort of equivalent of that rate. Because of the use of that tax loss carry forward that became a very economic way to do it. In terms of our short term borrowing costs, Jim, I don’t know what we are averaging now? James F. Pearson : We’re averaging about 5.8, 5.9% on our short term borrowing costs. Paul Patterson - Glenrock Associates: I remember that it was an advantage for you guys to do it. What I’m wondering is that how much, from a quarter to quarter perspective, as this lease comes into play, should this $0.04 number be lower as result of…do you follow me? James F. Pearson : We have to see when we finalize. There will be, there is, correct. It’ll be a little bit lower.

One thing to remind you Paul, assuming that it is an operating lease, at the end of the day, that there would also be amortization of a rather sizable book gain from the sale. Paul Patterson - Glenrock Associates: But we’ll have to see when you guys actually cut the deal, I guess. OK, great, thanks a lot guys. Operator : Thank you, we have no further questions, I’d like to turn over the floor back over to Richard Marsh. Richard H. Marsh : Well, I’d just like to thank everyone for being with us today. I know this is a very busy earnings release date. So we certainly appreciate your continued interest in first energy and look forward to seeing you at the various conferences that we’ll be appearing in over the next six weeks. Thank you for your time, if you have any follow up questions please contact our investor relations group, have a great day.