At this time, I would like to welcome everyone to the FirstEnergy Corp's fourth quarter 2007 Earnings Call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Director of Investor Relations, Kurt Turosky. Sir, you may begin your conference.

Thank you. During this conference call, we will make various 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 that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the business of FirstEnergy Corp are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by 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. Reconciliations to GAAP for the non-GAAP earnings measure, we will be referring to today, are also contained in that report as well as on the investor information section of our website at www.firstenergycorp.com\ir. Participating in today's call are Tony Alexander, President and Chief Executive Officer; Rich Marsh, Senior Vice President and Chief Financial Officer; Harvey Wagner, Vice President and Controller; Jim Pearson, Vice President and Treasurer; and Ron Seeholzer, Vice President of Investor Relations. I'll now turn the call over to, Tony.

Thanks, Kurt, and good afternoon, everyone. We had a solid year in 2007 and achieved the highest earnings in FirstEnergy's 10 year history. We reported non-GAAP, normalized earnings, of $4.23 per share, which was near the top end of our earnings guidance, and a 9% increase over our 2006 non-GAAP earnings. We generated approximately $1.7 billion in net cash from operating activities, which included a $300 million pension contribution. And our stock price appreciation plus reinvested dividends produced a total return for shareholders of more than 23%. In December, we announced a 10% increase in the common dividend, our fifth in the last three years for a total increase of 47%, since the beginning of 2005. We further enhanced shareholder value through the repurchase of approximately 14.4 million shares of common stock, combined with the 10.6 million share repurchase in August of 2006, these programs have reduced shares outstanding by nearly 8%. Our strong financial results were driven by solid operational performance, as we continue to improve the efficiency and reliability of our power plants and further enhance the quality of service to our distribution and transmission customers. Our employees achieved the best safety result in our history and one of the best in the industry with an OSHA rate of 0.86 incidents per 100 employees, which represents less than one loss time incident per 200,000 hours worked. Our generation fleet nearly matched its record 2006 production with an output of 81 million megawatt hours. Our nuclear fleet set a new annual generation output record of 30.3 million megawatt hours, with especially strong performance at Beaver Valley Unit Two and Davis Besse, contributing to this achievement. We also continued our efforts to increase the output of our generation fleet through incremental, low cost and low risk investments. In 2007, we…

Thank you, Tony. As I review our fourth quarter results, it might be helpful to refer to our consolidated report to the financial community that we issued earlier this morning. Earnings on a GAAP basis in the fourth quarter were $0.88 per share compared to GAAP earnings of $0.85 per share in the same period last year. Excluding special items, normalized non-GAAP earnings were $0.90 per share compared to $0.84 per share in the fourth quarter of last year. And this year's normalized non-GAAP earnings exclude the loss of $0.02 per share related to the impairment of securities held in our nuclear decommissioning process. Kilowatt hour deliveries to our distribution system were 3% higher than in the prior year, due primarily to colder weather and a mildest growth in load. Heating degree days were 6% above the same period at last year, but 8% below normal. Commercial and residential deliveries increased 5% and 4% respectively, while industrial deliveries increased 0.3%. The key drivers for this quarter's favorable results include a $0.26 per share increase in generation revenues resulting from higher wholesale and retail prices, as well as higher sales volumes. A $0.05 per share increase in distribution delivery revenues, mainly due to the higher residential and commercial sales volumes, I mentioned, but $0.06 per share reduction in post-retirement benefit costs due to retiree health care design changes and lower pension expense, following the $300 million contribution we made to the plan in January of 2007. A $0.05 per share decrease in financing costs is attributable to reduce short-term borrowings, interest capitalized on higher construction spending, and lower refinancing costs, and a $0.4 per share benefit related to the reduction in common shares from accelerated share repurchase of 14.4 million shares in March of 2007. Factors partially offsetting these positive contributions…

(Operator Instructions) Our first question is coming from Paul Fremont. Paul Fremont - Jefferies & Company: Hi thank you. A quick technical question in terms of these formulated maintenance that you talked about in the energy delivery sector, are you able to breakout just the increase in O&M that's attributable to storms.? And second of all, in Ohio is there anything left procedurally before the House of Representatives would draft a new bill or are we completely through hearing and all of the gates that are necessary for them to draft the legislation?

Let me answer the first part of your question Paul. The amount related to storm damage is relatively minor about $5 million.

Okay. Paul, with respect to the other, what's going on in the House, I think the House Committee continues to hold hearings, with several I believe are already scheduled through early March. So, no, I don't believe they've completed their work in terms of understanding the various concepts or in terms of giving parties opportunities to discuss various issues in connection with restructuring. Paul Fremont - Jefferies & Company: Thank you.

Thank you. Our next question is coming from John Kiani.

Good afternoon.

Hi, John.

There were some recent management promotions that created new positions of President of FE's Generation and Utility businesses on a standalone basis. Is this a step that you think helps facilitate a corporate separation, if hypothetically speaking you don't get an acceptable market-based outcome in Ohio?

John, no. Well, obviously, step you take like that has lots of different kinds of implications. But we've already corporately separated the company.

Right.

So, from the standpoint of that, I don't think it facilitates it one way or the other. Well, this was primarily done as to allow senior officers to focus on maximizing the value of each of those individual businesses. Looking at the wires business as a separate business from the generation business, and taking out any issues with respect to that. So, really it's a leadership model that says, we're going to run the wires business to maximize its value, to concentrate primarily on system reliability and the greater emphasis on energy efficiency that we're seeing not only on the State but on the Federal level. From a generation standpoint, with the purchase of Fremont and the continued emphasis on expanding our generation fleet in a cost effective way, we thought it was important to have that organization focus solely on and its senior leadership focused solely on that aspect of the business. So it's really an organizational change that allows the senior officers in each of those groups to focus all of their time on how they can make each of those companies better.

That's helpful. That makes a lot of sense. And then one other quick question. Can you talk a little bit about potential power procurement mechanism for Met-Ed and Penelec after the 2011 exploration of the FES contract?

I think we're planning on filing something probably later this year. My sense is, although I haven't seen anything yet. There are number of ways you can go about it. But my sense is that we would use, at least propose using the same types of methodologies we've used in the past, some sort of descending clock option to assure that the customers of Met-Ed and Penelec have a firm and assured supply for default service.

Okay. Great. Thanks Tony.

Thanks John.

Thank you. Our next question is coming from Hugh Wynne. Hugh, your line is live.

Hi. I just had a couple questions that relate to forecasting results in 2008 and 2009. Because the first you mentioned in your December presentation that 2009 results would be adversely effected by the expiry of Met-Ed and Penelec third-party power contract, I was wondering if you could help me quantify the impact of that contract going away?

4.5 million?

Yeah. It's about 4.5 million megawatt hours, Hugh, basically at that point in time.

Well, basically taking them -- this is Ron Seeholzer. From an underlying contract that's being supplied by a third-party today and moving up to an FES supply contract in the future. Part of it has to do with an opportunity cost, you want to look at between the two of them, but the megawatt-hour is about 4.5 million megawatt hours. The underlying contract is in the mid-30s right now. We're supplying all in with or without gross receipt tax 41.50 or 46.50 in that market right now from FES. And that's kind of the difference of that step up for both 9 and 10, until we get the under market period in Pennsylvania.

Okay. So you have a 4.5 million megawatt-hour contract you are paying in the mid-30s, you would anticipate going from that level to, did you say 41.50?

Correct.

Okay. Thank you. The second question had to do with the results of your procurement efforts at Penelec. Could you tell us more or less the rates that you're seeing for requirements power for your smaller customers?

You mean Met power, Hugh?

I'm sorry, you are right.

Yeah. Not available at this point, Hugh.

Okay. Very good and thank you very much.

Thank you.

Thank you. Our next question is coming from Paul Patterson.

Good afternoon.

Hi, Paul.

You just answer one of my questions, I wanted to ask you about, I guess SB 221 and this is going on and on. How is your handicap a successful passage of this legislation, in terms of being acceptable to you guys, at this point in time if you could?

I typically don't handicap legislation, because there are some very talented people in Ohio and members of our General Assembly that are spending a lot of time on this issue. And we'll see how they come out with respect to it. I think an indication of their thoughtfulness came out just last week, when the speaker and one of members introduced legislation dealing with renewables and energy efficiency, which I believe was handled in a much more comprehensive way, and pretty well thought out with respect to the issues and how it would work over the next several years. And I think this House is spending that same amount of time with the other issues, because, I truly believe, that Substitute Senate Bill 221 will not work in its current form. It has no long-term sustainability, with respect to rates in the State of Ohio. And quite frankly, I appreciate the House spending the time to analyze the issue, have it debated and hopefully resolve it in a timely way.

Okay. So, you guys are expecting some sort of clarity with respect to that in the committee, if I understood from (inaudible) earlier question in early March. And then what's the thought process after that, just that it goes to the House in general and then goes through a Senate. And do you think what will come out of there will probably be something that's acceptable to the Governor, and what have you?

I would certainly hope so. I mean the process basically is the House Committee will complete its hearings, will consider amendments, I assume, at some point in that process, will then, assuming the House Committee can reach a road that passes a bill with amendments will then go to the House floor. The House accepts a legislation or amends it on the floor, then it will go to the senate for either concurrence with the legislation, as modified or as passed by the House, or go into a Conference Committee, in which any differences would have to be resolved. Once that's done in one of those formats then it will go to the Governor. For just consideration.

Okay. But in general it sounds like you are feeling pretty optimistic about the whole process as things stand right now?

I feel good that the process is allowing the issues to be fully debated and aired, such that I believe this House Committee will have a very complete and full understanding with respect to the issues that are involved.

Okay. Thanks a lot. I appreciate it.

Thanks Paul

Thank you. Our next question is coming from Paul Ridzon.

Hi, Paul.

Hi, Rich. How are you?

How are you?

Okay. What does access into PJM through Fremont give you? Can you lever that up for any strategic advantage?

It's just another benefit and what Paul's referring to is that the Fremont generating access can be connected either to PJM or to MISO, because of its location. And just that it gives us more optiontionality around that unit going forward. Just a nice advantage to -- it is sort of frosting on a cake, to an asset that already was a very good fit for us that's one more long-term advantage force? Paul Fremont - Jefferies & Company: Okay. Thank you.

Thanks Paul.

Thank you our next question is coming from Daniele Seitz. Daniele Seitz - Dahlman Rose & Co: Thank you. I was just wondering, if you could remind us of the upside from incremental generation, given the uprates that have been completed in 2007?

Sure. Let me take a shot at that. Over the 2005, 2007 period we've had total megawatt hour additions Daniele of about 447 megawatt. So, about a 130 of those are fossil based load uprates, about 16 peaking unit uprates, nuclear base load uprates about a 152 megawatts and then efficiency and capacity factor improvements about just under 150 bringing us to close to 450 over the 2005, 2007 period. So, that's generation that we can use to either meet customer load or so in the market or whatever, that we were able to put in at a very low cost. Over the next several years 2008 to 2011, we plan to add about 251 megawatts in addition to the 447, which brings us up to almost 700 megawatts over that time span, which is obviously the size of a small generating plant, built within our existing assets at low cost, at low risk and additions that we can take quickly to the market. So, we continue to believe that this approach is the right thing for us to do, to complete these additions that we've identified over the next couple of years. Daniele Seitz - Dahlman Rose & Co: And between '07 and '08 is there a definite step up that will be visible in your numbers or if it will get absorbed, a lot of it has been absorbed. A lot of it has been absorbed already in recent performance?

Well, I mean there will be more megawatts certainly coming on in 2008. Is it a driving factor? Year-over-year there is lots of other items included in that. So, sure, one of the things, maybe looking at this a little more holistically, this year we'll target generation of about 84.7 million megawatt hours. Last year we did right around 81 million megawatt hour. Daniele Seitz - Dahlman Rose & Co: Yeah. So, is that really benefited too?

That's kind of the benefit of what we're doing here, working our plans better, more efficiently, and incrementally adding on a low risk basis to the existing assets. Daniele Seitz - Dahlman Rose & Co: Thank you.

Thanks, Daniele. Daniele Seitz - Dahlman Rose & Co: Thank you.

Let's take one more call operator.

Thank you. Our final question is coming from Hugh Wynne.

Thank you about to sneak one last one in.

Sure.

The Ohio distribution rate case filing, I wonder if you could clarify two things for me. One, when do you anticipate the revenue benefit from the increase that the PUCO staff has recommended? And I guess secondly, when if at all, would you expect the separate proceedings to generate a revenue benefit?

The revenue benefit begins in 2009, Hugh.

Generate first sort of….

Well, two of our companies, yes. For Ohio Edison and Toledo Edison at the beginning of the year. For Centerior, approximately around May.

Okay.

For [CI], approximately around May.

And the separate proceedings, will they have impact on 2009, or was it hard to tell when that's going to come through actually.

Hugh, this is Harvey Wagner. The fuel portion for 2008 already will be reflected. I think Rich mentioned, in the vicinity of about $170 million on an annual price basis. The fuel deferrals for 2006 and 2007, we bought an application in early February and the commission is dealing with that as we speak.

Got it. But I was under the impression that when the PUCO staff had recommended the distribution rate increase of, I guess, was a $114 million to $132 million, they had simultaneously suggested that matters be considered in the separate proceeding that those might increase your revenues by further $115 million. Did I get that wrong?

Yeah. No, that's correct. There were some of those items in our regional filing, which will be considered in the separate hearing.

And, but, were those also coming into affect on the base that you stated earlier, Richard or?

Yeah. Well, I think there are two components to it. Hugh, this is Tony. The few component side of that, that applications is before the commission today, right now I should say and we would expect them to rule on that by own senses that the commission could make that effective in terms of allowing recovery, sometime this year or could wait until maybe '09 to have it coincide with the other distribution increases. With respect to the remaining items, that they talk about other proceedings, that's really a -- those are really deferrals that occur post-date certain in the case, which would essentially mean that you continue to incur carrying charges to those balances and then they would be addressed in a following rate case for distribution services.

Okay. Alright. So little bit difficult to pen down when all those are going to be?

That's right. That would have an additional rate filing for distribution sometime later in '09 probably.

Great. That's very helpful. Thank you.

Good. Thank you, Hugh. Well, we certainly appreciate everybody's time and continued interest in FirstEnergy. If there is any follow-up questions please feel free to give our Investor Relation folks a call, and we hope everybody has a great day. Thanks.

Thanks everyone.

Thank you. This does conclude today's FirstEnergy Corp's fourth quarter 2007 earnings conference call. You may now disconnect.