Good afternoon. My name is Nelson and I will be your conference operator today. At this time, I would like to welcome everyone to the FirstEnergy Corp's First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer period. (Operator Instructions). Thank you. It is now my pleasure to turn the floor over to your host Kurt Turosky, Director of Investor Relations. Sir, you may begin your conference. Kurt Turosky – Director of Investor Relations: Thank you, Nelson. 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. Reconciliation's 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. .: I'll now turn the call over to Rich. Rich Marsh – Senior Vice President and Chief Financial Officer: Thanks Kurt and good afternoon everybody, thanks to being with us today. I will go ahead and start our call this afternoon with an overview of our first quarter financial results and some recent regulatory activities then I…

Thanks Rich and good afternoon everyone. I will start with an overview of Ohio's new energy legislation amended Substitute Senate Bill 221. I truly believe that through this legislation which is expected to be signed by Governor Strickland later today. Ohio was taking a responsible approach to addressing the states energy needs. This legislation which is the product of much hard work and solid leadership offers a real hybrid approach to restructuring that enhances the PUCO supporting to implement late stabilization plans now called electric security plans and provides a define path to the competitive generation market. Under the legislation, each Ohio electric distributing utility must offer retail generation service under either and electric security plan or market rate offer. Each utility must file an electric security plan with the commission which may approve it if it finds that it is more favorable for customers than the market rate offer. If agreement cannot be reached on a electric security plan then the utility can implement a market rate option using a competitive bid process. Now under the market rate option, full utilities that continue to own generation assets market prices will be blended with regulated prices adjusted for certain changes that are defined in the legislation over a period of years. First energies utilities would not be subject to this blended rate progression to market rates since they don’t own generation assets. The legislation also establishes in excess earnings test applicable to the earnings of the electric distribution utility, which for first FirstEnergy would not include generation margin. The bill expressly prohibits the PUCO from directly or indirectly reviewing the earnings of the parent or affiliated companies. Ohio has successfully used rate stabilization plans to avoid rate spikes as the state is moved toward a competitive generation market over the…

Thank you. (Operators Instruction). Our first question is coming from Greg Gordon of Citigroup.

Couple of quick questions. First, the reports that the Governor may in fact sign the legislation today. Do you guys know what that is in fact the case or not?

Greg, this Tony, I refer the same thing we heard its later this afternoon, we presumably presuming can stay on that schedule, if not, I would assume, it would be happened over the next several days.

Second, can you talk about one of the big themes in earnings over the past couple of days has been just the reality of higher call cost just how much Central App or Northern Appalachian coal has moved since the beginning of the every year. Can you just remind us what’s your co hedge position, is, talk about to the extent that what’s you are seeing in the market, how you’re managing the coal position and how that would in fact Dr. Hamshu the filing of heavy SP?

Let me take a shot at that. Greg and then in terms of our coal position, I am talking coal its exclusive of transportation right now. For 2008, essentially our positions both for volume and price are closed, it does not mean the prices wont be higher in 2008 than prior period because we do have contractually openers and other jobs , as far as uncertainty that has been bounded for 2008. For 2009 we have only a slight open position less than 5%. For 2010 we have just a slight exposure less than 5% again in terms of changes under the ceiling price provisions in our contract. So for coal over that three year period I think we are well positioned. We’ve certainly taken an aggressive stand towards longer term contracting then some other folks, I think that’s paying dividends for us, now book in terms of surety or supply and in terms of maintaining -- minimizing cost increases. On the transportations site our positions are largely closed albeit at higher prices then what we have seen in the past obviously. Many of the providers are passing along pure search charges which give the factor and the equation as well. But overall I think our position is advantages relative to many other companies. So we are pretty happy with that. Obviously, you know prices are up meaningfully across the different markets. We have a lot of flexibility with our plans to broaden different blends of fuel at different units, at different tanks which gives us the ability to do something within the portfolio to minimize the overall cost. We typically bunker multiple types of fuel at each of our major units, so that we have some flexibility around that as well. So, no company is unaffected or not impacted, but I think we’ve spend a lot of time thinking about how we can minimize this impact.

And in an ESP, by reading up the legislation is that such types costs including fuel cost would be recoverable? Is that an accurate representation of the way that's went?

I think, Greg, yeah, I mean if you look at the legislation, a legislation gives the commission, the tools and the parties the ability to deal fundamentally with many types of differing costs and to forth on an different ways. So there is no triple way as you can deal with fuel and other costs changes and the legislation allows the commission and the parties to work through those issues in a way that strikes the reasonable balance.

Tony, how quickly do you think you can be in front of that mission with a plan once the governor puts a kind of paper here relatively we today?

Yeah. In the presentation which result of the former second quarter.

Thank you.

Yeah, in the presentation we said we hope to file in the second quarter, I mean, we are trying, this is quickly as we can, but the there is a lot of that’s need to be done in order to prepare an appropriate filing.

Thank you.

Thanks Greg.

Thank you. Now our next question is coming from Jonathan Arnold from Merrill Lynch.

Hi guys and good afternoon.

Hi Jonathan

Couple of things, one just following up on the Greg's slide on call if you be seeing any with your suppliers locked in at prices. So that presumably looking below market and performance issues any concern s about how you’re managing that risk?

Nothing of great significance at this point Jonathan, I mean, one of things we have done is try to make sure that we have multiple modes of transportation, multiple mines that we can source the fuel form and to get one plant, once again really this is idea maintaining as much flexibility. So inventory level are rising towards normal kind of level as we go into December month. So there has been no significant disruption, nothing that has because any operational hiccups here this year.

Okay. And then I just another one on at Slovenia, sorry. Tony, I think you that said you felt comfort in its. If – the relatively – something could happen this session. Can you just clarify what that means because, “if I remember right it is two paying the special session for MET that call recalls is we kind of win that end. So whether it concurrent with the existing session. So just how about your?

I got to reiterate. I look in terms of time frame and I am more up tick this should be done by the under we are.

Okay.

And we start seeing the opportunity, whether its part of the special session and the regular session, I cant tell you that.

At the end of the year without..

Yeah, basically Yeah.

Great, thanks a lot.

Great. Thanks a lot.

Thanks Jonathan.

Thank you. Our next question is coming from Hugh Wynne with Stanford Bernstein.

Hi I had a question regarding the cost of supply to the Ohio utilities seen in 2009, the cost of supply basic generation service in 2009 and how about with the reflected in your electricity security plan. Is it correct to think about that cost to supply as the result of the procurement process in the wholesale market and therefore the cost of supply in essence being the cost or full requirements electricity purchase from wholesale sources and shaped for retail sale.

Thus where I would look at human from the standpoint of the electric distribution utility, the bottom ESP, we’re going to be offering a generation price that’s essentially below files and is shaped against the loads of the service territory. And our market rate auction that would be done roughly the same way.

Exactly. So it -- would it be useful to look at the April 14th request for proposals for residential loaded hour s a basis for estimating that cost of supply. And if so, I wonder if you could show that figure with us?

Well I can’t. share, because I don’t know that, because that sort of completed transaction yet. So, my answer is you know, that’s a different timeframe. So your mail – to certain extent may not, just -- you have to make your own adjustments on that yourselves.

Alright. Thank you very much.

Thanks Hugh.

Thank you. Our next question is coming from John Kiani, of Deutsche Bank.

Good morning Rich.

Hey John.

Going back to the ESP in Ohio and how that’s going to play out. I mean, you touched on this a little bit Tony in some of your comments, but, can we assume that your ESP will include at least some level of deferrals and if that’s true what you think the likelihood is of using some type of securitization vehicle or structure to bring forward the cash?

Well, I am not going to presume anything in terms of what our plan might look like. The legislation gives the commission as well as the companies, the clear opportunity to propose a – in order to manage the price impacts of any plan whether it’s a market plan or whether it’s an ESP plan. If it’s an ESP, my understanding is that you can use securitization as a way to hopefully produce a lower cost to customers overtime as a result of the agent. So we look at all of those options as we put our plan together and utilize the tools, the general assembly and the Governor signs the legislature today then the law provides us in terms of putting together plan that works both for our customers, our share holders and our company overall.

Okay. Thanks that’s helpful.

Thank you, John.

Thank you. Our next question Paul Patterson of Glenrock Associates.

Good afternoon Tony.

Hi Paul.

Hi. In terms of Governor, just a few things in the quarter. What cause the pension fund to decrease the discount rate?

Two things Paul, it’s a change in discount rate from the prior year and asset value at the year-end. You said that item basically based on market conditions of January 1st, so that’s what driving largely those two items.

So I mean the discount rate was lower based on what factor?

The discount rate was higher in 2008 then it was in 2007 which results in lower pension expense.

Sure, I guess, but why was it lowered?

Why did the discount rate change?

Yeah.

That’s based on rates that exist in the market at January 1st, its really an external task you look at yields and bond portfolios in the market at that point, and it’s really a market task when you said that.

Got you. And then with the S&P 500 impact on the investment income from the quarterly, is that just sort of – in another word, does market goes up again that will reverse, is that what we should think about?

The market goes up, yes, and it improve in April so yes, it goes up and down with the market. Now we scale back our equity exposure there to that in the first quarter since the markets were – assuming that a little crazy so that will help mitigate the impact from four equity markets going forward.

Okay. And then the equity commissioning trust you mentioned that I have dismissed in, sorry.

Is it impairment if securities in their Paul.

Okay. And what is the impact of that?

About $0.3.

Okay. I am sorry. And then finally would be the excess earnings test. And, I guess one of distribution case because it seems like that should be resolving for the end of the year, but I am just wondering going forward. Does this provide an opportunity perhaps for getting a higher ROE at the distribution business? It would seem that perhaps the test perhaps a little bit more favorable.

I wouldn't look at that way.

I think it’s a test to establish whether or not what you earn is in excess of comparability. I don't believe it will affect how that the commission determines what an overall rate of return would be inside a rate proceeding.

But if you look, say if you were able to cut cost and you are able to increase your earning substantially that would probably prohibit them from calling you in. Does that make sense?

Less that what, excessive or….

Right exactly.

It is a different test, but I don't know that I wouldn't.

I would apply this as a test not as an opportunity.

Okay, fair enough. Okay and just in terms of the transition in Pennsylvania. I guess you guys expect that there will be a transition legislation to ease the transition. Without the transition right now, without any legislation you’re just simply going to market in terms of doing it right now. Could you give us a flavor for what the rate increase would be with it for residential customers in the metallic area?

8011.

Yeah right.

No. We can't I mean that s a long, its a way far depend on what market prices were at that point in time and how the procurement process was structured and so for so. It's really hypothetical for us even to attempt to do that.

Okay thanks a lot.

Thank you.

Thank you. Our next question is coming from Paul Ridzon of KeyBanc Capital Markets.

Can you give your view of premium over ATC that you think will be appropriate for a full requirements product? Tony Alexander I think that’s anybody's guess Paul, I would prefer not to take a stab at that.

And looking you kind of gave your view in the beginning of the year of how you saw the year shaking up from a quarterly shape. And you certainly did pretty well relative to that despite the $0.06 colliery hit. Do we are thinking about that colliery you hit when you gave that or where might you have outperformed?

Well you know I think we had overall a good quarter. You look at our generation margin is favorable to us. Overall things when as expected as you mentioned we had the $0.06 hit from the colliery. We had about $0.03 on the ED side of incremental expense much of which resulted from two storms that blew through our service territory in the first quarter. So both of those are sort of external events that we can't control. But factoring that out I think was good quarter for us. We are not changing the guidance we have given on a quarterly basis nor at this point are we changing our annual guidance you heard Tony say that we are referring that. So I think overall it was a good quarter for us. Tony said we are very focused on operations making sure that we continue to run the plants well and deliver the reliability that our customer expect, and if we do that we will do well during the remainder of the year.

And can we look at the, I guess the S&P moved 10% and that was a 6% move on colliery. You kind of use that as a rule thumb going forward. You are kind of play with that numbers on your quarterly estimates?

What you are seeing there Paul I mean, the portfolio is about $250 million. And at the beginning of the year was roughly half in equities, half in traditional insurance products. In the first quarter of '07 remember we are comparing quarter over year-over-year of first quarter ago. We had a gain in the first quarter of '07. We have a loss in the first quarter of '08. So that’s where you get to that dollars of about $16 million year-over-year. As I said we scaled back the equity exposure considerably for the time being till we've decided what we want do with that. So that will mitigate that impact going forward. So is a little hard to putting in those pieces together. Pretty hard to hard to project what the impact would be going forward. But those were the driver's first quarter '08 versus first quarter of '07.

In the $60 million swing how much was the benefit last year and how much was paying this year?

I think it was roughly a gain of 4 million in the first quarter of '07 versus a loss of like 12 million this year.

Okay thank you.

Thanks.

Thank you. Our next question is coming from Paul Fremont of Jeffries and Company.

Thank you very much. Really two things, one, can you comment at all about the reliant either or not getting into the PJM auction and what impact that might have on prices in the Midwest ISO. And also with two bills now I guess already been passed one by the Senate one by the house in Pennsylvania, does that can result fairly, quickly at this point or is there still a lot of potential disagreement on how to fund those programs?

First part of your question Paul on reliant, I can’t speak, but I am not sure what their motivational intend is there. So that's not something that I have been tracking closely, so we can’t really comment on that. Tony maybe you want to at the PA issue.

I think there is enough issue between them Paul that give resolved as they get resolved. I mean, legislation has flows and times and it will hopefully they will come to whatever compromises that are necessary to move good legislation for the state of Pennsylvania.

And are you optimistic if that gets resolved fairly, quickly, because I have heard initially people are talking about there may not be a major motivating factor to get anything done this year?

Paul, I said earlier and I am hopeful that its’ done hopefully by the end of the year, if its not, that’s just question about Ohio, but it’s not double than two weeks what happened well. We will take a look at work and I am going from that part. And I think you have to look at Pennsylvania and other legislation like that, and its complex, it involves major industry and it needs to be thoughtfully evaluated and resolved.

Thank you.

It will tack more time to do that.

Thank you.

Our next question is coming from Dan Jenkins of State of Wisconsin.

Good afternoon

Hi Dan.

I was wondering you know, the industrial sales look pretty weak and you know, you gave a lot of comments about the economy weakening and the auto industry and so far, I was wondering if you could give us some color on that and then how that current quarters industrial sales related to what you’re projecting for the rest of the year?

I think the status that (Inaudible) obviously, Ohio is not immune to the conditions that exist out there. If you look at our first quarter our industrial sales year-over-year was down about a 1% from first quarter of 2007 much of that was really concentrated in one sector that which was autos, which is a small number of our customers in terms of however our distribution. Actually some of the industrial sectors did pretty well during the quarter, steel was up in terms of sales about 4%, refineries were up 1% all other were up bout 0.5%. So it’s very, very concentrated in the auto sector and obviously that’s going to be what it is with the economy, but overall the base was not bad, we’re not forecasting much growth from this sector during the year, but hopefully because of the diversity and the base hopefully needed where we see a significant negative impact. And obviously from an economic prospective these are some of our lower meager merging customers they have very attractive rates. So from the economic impact it doesn’t necessarily carry to the bottom line.

And on the Ohio distribution rate case, you know, you mentioned there is 130 million items that are being taking, that are being partially taken to separate cases, if you could give me so what those are and then I missed the amount you said that the rate plus staff proposal was and how much that’s related to ROE recommendations?

Yes some of these were things that took place after the quality test date, this test period date defaults other items, thinks like that dam that would more appropriately could be considered in the future case.

Dan this is Harvey Wagner. You might recall that the Ohio Supreme Court reminded back to the PUCO, the recovery of fuel cost that we have differed 2006 through distribution rates. So that was something that was in our regionally filed case that now is being moved out, and will dealt with separately, and as Rich said the rest of that has to do with the timing of the deferred distribution cost and whether or not they would be included through the end of the test year or beyond through the end of 2008. And now it does not really impact our bottom line its timing of cash recovery.

And those numbers I mentioned Dan, I mean we have filed request for increases totaling $332 million annually. The staff came back with the recommendation of 114 to $132 million annually. I feel about $115 million in items that could be considered in future sipper rate increases.

Okay. And just you know, you mentioned the auction rate market kind of cautious volatility is that behind the increase in the short term debt and what are your plans I guess to finance that short term debt in the next couple of quarters and also what are your plans related to this share buyback?

We haven’t announced any plans regarding share buyback and now the auction rate market and our efforts around that Dan really didn’t have any significant impact on a short term borrowing position.

Okay. You know, the short terms debts up quite a bit from the end of the year, I was wondering maybe you plan to term some of that out and very sooner?

I think unfortunately that was the purchase of the three month asset which was – was that in April, when we close that? March, we had that in March. So that was 234 million there about (Inaudible). So that was the big driver in terms of short term cash.

Okay. Thank you.

Thanks Dan what don’t we do one more call

Thank you. Our final question is from David Frank of Catapult Capital Management.

Hi David.

Hi good afternoon.

How are you?

Great. Just see there is on the tape now an official press release from the Governor's office saying that he is signing this bill at 2 o'clock in the atrium of the safe house. So I assume that’s authentic. The question for you guys do you have an update on the generation output for this year I mean, you continue to improve on your megawatt hours, do you have a aspiration of what you like you think you can achieve?

Yeah, our goal of 84.5 million megawatt hours which is a significant increase for us. So it reflects just better operations of the plan sort averages.

Okay. And do have an update on the MISO capacity market may be what kind of prices you are seeing in the bilateral market and do you have an update on the resource adequacy filing proposal by MISO?

As far as the MISO market I mean, I know there is continued progress towards putting them market place into effect David, I am not really an expert on that and I don’t know if anybody – if there is anything significant, I mean, I know there is activity moving at towards that end point, but I don’t have any specific new news to give you on that, you have probably seen and heard everything we’ve heard about it from that prospective.

Right. And are you seeing anything in the bilateral market as far as prices and update you can give us?

I think in general I mean in PJM and then MISO and that was fit in there it tend to go up and down more and less and parallel in prices for capacity you seem to continue to being up, but it’s not a transparent market in MISO as you know it’s a bilateral market we spent lot of secures from some of those price changes. But in general we believe capacity prices should continue to increase at least over the short term.

Okay last question for Tony, why does anything need to get done in Pennsylvania I mean, what really needs to get resolved, I thought you have a longer books, I thought utilities go to market at the end of their transition and you’ve already got one in Pennsylvania selling that market right now. So there seems to be all this emphasis like something needs to get done in Pennsylvania, but I am confused, I am scratching my head why, why is it that important?

There is legislation pending, and the members want to deal with some of these issues in a more comprehensive or holistic way, So that creates a sense of urgency and the requirement to actively participate in the process, they’re just like where the law in the state of Ohio that basically said 2009 or 2005 what the competitive market place.

True. And I guess all the Ohio or all Pennsylvania companies actually separated there generations, so.

GBU had certainly sold their generation yes.

Yeah. Okay thanks Tony.

Okay. Thanks Dave. And we appreciate everybody's time and interest in FirstEnergy today. Thank you for participating in our call. If there is any follow up questions please feel free to give our IR group a buzz. And look forward to seeing many of you soon. Hope you have a good day. Thank you very much.

Thanks everyone.

Thank you. This does conclude today's FirstEnergy Corps first quarter earnings conference call. You may now disconnect and have a wonderful day.