Greetings and welcome to the FirstEnergy Corp. fourth quarter 2008 earnings conference call. (Operator instructions) It is now my pleasure to introduce your host, Ms. Irene Prezelj, Manager of Investor Relations for FirstEnergy Corp.

Good afternoon. 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 to GAAP for the non-GAAP earnings measures 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 Anthony 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; Bill Bird, Vice President of Corporate Risk, and Ron Seeholzer, Vice President of Investor Relations. I will now turn the call over to Anthony.

Thanks Irene and good afternoon everyone. Earlier today we reported 2008 normalized non-GAAP earnings of $4.57 per share exceeding our revised earnings guidance of $4.30 to $4.40. This represents an 8% increase over our 2007 non-GAAP earnings. Earnings on a GAAP basis were $4.41 per share compared to GAAP earnings of $4.27 per share in 2007. We also generated $2.2 billion in net cash from operating activities during the year. These results were driven by favorable operational performance as we continued to improve the efficiency and reliability of our generating fleet and further enhance the quality of service to our distribution and transmission customers. Our generation portfolio posted a record output of 82.4 million MWH during 2008, our nuclear units produced 32.2 million MWH with a 93% capacity factor. Our generation record reflected in part our efforts to increase the output of our fleet through incremental low cost upgrades and enhancements. In the last year we added 66 MW in nuclear capacity enhancements and over the past three years we’ve added 450 MW of generation in this similar manner. In 2008 we also expanded our renewable portfolio with several new long-term contracts for more then 160 MW of wind power. We made several important strategic investments during 2008 including our acquisition of the partially completed 707 MW Freemont generating plant. Given our current economic conditions we’ve extended the construction schedule for this facility with completion now expected in 2012. This will reduce our 2009 capital expenditures by $142 million. We also acquired an ownership interest in Signal Peak, a coal mine in Montana during the year. Construction of the long haul mining equipment, wash plant, the development of the mine and the 35-mile rail extension are proceeding well and we expect to begin receiving coal deliveries later this year. We…

Thank you Anthony, as I review our fourth quarter results it might be helpful to refer to our consolidated report to the financial community that we issued this morning. Earnings on a GAAP basis in the fourth quarter were $1.09 per share compared to GAAP earnings of $0.88 per share in the same period last year. Excluding special items, normalized non-GAAP earnings were $1.21 per share compared to $0.90 per share in the fourth quarter of last year. Key drivers for this quarter’s favorable results include higher generation revenues, which increased earnings by $0.04 per share primarily as a result of the mix of sales, lower generation O&M expenses increased earnings by $0.12 per share driven primarily by fewer scheduled nuclear and [fossil] outages, the sale of unneeded emission allowances and lower rental costs following the acquisition of lessor equity interests under our Perry and Beaver Valley two sale leasebacks also contributed to this result. A lower effective income tax rate increased earnings by $0.09 and this principally reflected the ramp up of the manufacturing deduction percentage, continuing phase out of the Ohio State income tax, lower interest on reserve tax issues and utilization of net operating losses to reduce state income taxes. And for 2009 we expect the marginal tax rate to be about 38%. Reduced energy delivery expenses increased earnings $0.08 per share due to lower uncollectibles, general cost control measures, and additional resources being devoted to capital projects. Lower transmission costs incurred by FirstEnergy Solutions increased earnings by $0.07 per share primarily due to congestion expense settlements in the fourth quarter of 2008. The assignment of two existing power river base and coal contracts increased earnings by $0.04 per share. Our acquisition of Signal Peak made us [long western] coal in the 2010 to 2013 period and…

(Operator Instructions) Your first question comes from the line of Greg Gordon – Citigroup Greg Gordon – Citigroup: Looking at the 2009 earnings drivers list one of the things that’s not on there and I know that this is definitionally not all inclusive, when I look at the second quarter and third quarter of 2008 you talked about basically having been caught short in Pennsylvania and New Jersey in both quarters, and that the high power prices at the time were a $0.20 in the second quarter and an $0.11 drag in the third quarter. Power prices are obviously off a lot since then so I’m wondering why that isn’t a positive driver unless of course you’ve hedged that open position for 2009 when prices were higher.

I think your question refers to Pennsylvania not New Jersey, New Jersey is a [PGS] auction, straight pass through for our distribution companies. I’m not sure if I follow your question but I think you’re talking about the supply cost for our [Med Ed], Penn Elec subsidiaries in Pennsylvania. Greg Gordon – Citigroup: That’s correct.

We didn’t attempt to include every driver in this list, we tried to highlight selected items so we didn’t intend to purport this as inclusive or representing earnings guidance so that is a factor. When we do give guidance it will be inclusive but we didn’t try to achieve that with the drivers we laid out here. Greg Gordon – Citigroup: I understand, I’m just asking directionally if I look at your short position in Pennsylvania relative to your short position last year and where power prices are now, if you were in fact opening it to the same magnitude that would be a benefit and I’m wondering whether we should expect purchase power costs in fact to be lower in 2009 versus 2008 or are you substandibly hedged.

Yes, we’ve talked about this a little bit before, you’ll see the negative bullet on the [inaudible] Penn Elec underlying contract, to the extent you’re imputing a higher opportunity cost versus wholesale sales in Ohio, 8 versus 9. Certainly the power price is coming back in 2009 in Pennsylvania will reduce that opportunity cost. I think that’s what you are driving at. Greg Gordon – Citigroup: The second thing is can you give us a specific assumption as to what you’re assuming vis-a-vie load contraction in Pennsylvania and Ohio for 2009.

Not at this point, I don’t think anybody has the visibility into 2009 that they would like to have given the economic conditions but I can say we’ve changed our internal forecast to reflect what we think is a good estimate, as good an estimate as we can of that. So a significant amount of revision downward, I would expect that when we give earnings guidance we would go through that in more detail but we’ll hold until that point in time to give specifics on it.

Your next question comes from the line of Paul Fremont – Jefferies & Company Paul Fremont – Jefferies & Company: Couple of housekeeping questions first, can we assume that the assignment of the coal contract is non recurring in nature as well as the transmission expense congestion expense settlement and does the congestion expense settlement total the full $0.07 or is that only a part of the $0.07.

About the coal assignment we had a long position over several years, this helped close that long position for part of that time period. So there could be further selling off of the long position as time goes on.

I think it was around $0.04 or $0.05 on the congestion settlement. Paul Fremont – Jefferies & Company: On the nuclear decommissioning fund I guess I’m surprised that the earnings for the quarter are up given the performance of the stock market, is there like little or no equity component in the nuclear decommissioning trust.

We have been reducing that over the past year, there is some equity component but not a large equity component also as part of that restructuring there was some income that was generated as well so it’s a combination of those items.

The $0.02 that I think you’re talking about is the normal income that is thrown off from the decommissioning trust. We had the $0.12 charge for the impairment which reflects the reduction in the market value and that’s a separate item. Paul Fremont – Jefferies & Company: Regarding the account for OVEC, is OVEC accounted for as part of your generation, is it purchased power and does it factor into the MWH reduction that you’re forecasting for 2009.

Its reflected as purchased power but it does not factor into the generation MWH numbers that you referenced. Paul Fremont – Jefferies & Company: In terms of resources though so that would be incremental to the generation that you’re losing from your power plants.

That is correct. Paul Fremont – Jefferies & Company: I would assume you’re going to be projecting some sort of gain on the sale of your OVEC interest.

Yes, I would expect we would.

Your next question comes from the line of Hugh Wynne – Stanford Bernstein Hugh Wynne – Stanford Bernstein: One of the things that you all did very well in this quarter was to reduce O&M expenses basically across your operations, the generations, the delivery, the transmissions, and then you say that you’re going to try and push through $100 million of additional O&M reductions in 2009, should we read that as implying a $100 million reduction in the level of O&M expense from 2008 or $100 million reduction off of a trajectory of increase that you’ve not disclosed here.

You should read that as $100 million decrease of the levels of 2008. Hugh Wynne – Stanford Bernstein: The 5% decline in generation sales of 4% decline in distribution deliveries in the fourth quarter despite an increase in heating degree days the implications for 2009 are we at a level of sales now that you think is sustainable for next year or do you see further declines from this point.

I think the answer is a little bit different across the three states that we serve and also within the categories of our industrial customers and clearly in northeast Ohio we continue to have exposure to the auto and steel industries in particular. We would expect those to be weak this year unfortunately so I think we will likely see some continued erosion and have reflected some of that in our plans for 2009. The other side of that from a margin perspective those are our lowest margin customers so the margin and the volume impacts are not proportional but it is something that certainly we’ve witnessed and continue to track closely.

Your next question comes from the line of John Kiani – Deutsche Bank John Kiani – Deutsche Bank: Can you give us an update on the [Nopeck] customers I know there was another energy market that appeared to be soliciting it was like half a million customers or something, can you talk to us about where you think those customers stand especially in light of the recent settlement.

Actually I don’t have any additional information on it. [Nopeck] has not signed the settlement proposal. They are one of the parties that chose not to sign on at least at this point and quite frankly their status with the suppliers that they’ve indicated that they’ve talked to, at this point I just don’t have any information on it. John Kiani – Deutsche Bank: So from the perspective of obviously the drivers that you all provided that at least at this point it seems like assumes that you retain those [Nopeck] customers as far as we know.

Yes, I think that’s—

I just don’t think we identified [who’s] drivers.

Your next question comes from the line of Jeff Coviello – Duquesne Capital Jeff Coviello – Duquesne Capital: I had a question on the auction on the way we should think about the load on your serving with the SCS auction, what’s the approximate right amount of MWH you are going to serve in Ohio among the auction I guess assuming you did 75% in the first quarter, assuming you do 100% let’s just say, how many MWH would that be approximately.

It would be 55. Jeff Coviello – Duquesne Capital: And then if you do less then 100% what would you do with the additional MWH you generate, should we think about those going into the wholesale market or Pennsylvania.

A couple of options, one would be to serve customers at retail as opposed to the auction itself, or into the wholesale market so there’s really three places the generation could end up. Jeff Coviello – Duquesne Capital: Currently when roughly do you think the auction will be if things move according to plan from here on out.

It looks like it will be in May at this point.

Your next question comes from the line of Paul Patterson – Glenrock Associates Paul Patterson – Glenrock Associates: The shopping, the level of shopping decrease in Ohio among all the customer groups in the fourth quarter what was driving that, its on the statistical summary page, electric sales shopped, it looked like across the board it was 25% kind of drop.

I think those were as a result of contracts or other arrangements expiring at the end of the year and they were just being transferred out at probably last billing dates. Paul Patterson – Glenrock Associates: So I guess all that is is just a contractual change, in other words—

Its moving off of the one plan and into the next and the arrangements at FES for retail transactions did not extend into the 2009 period. Paul Patterson – Glenrock Associates: The Pennsylvania power auction does that have any impact on EPS, I know that you didn’t itemize every little thing in the drivers but is that a driver at all or is it just so insignificant from a size perspective, I know that the residential about half of it was done early 2008 from a pricing perspective and commercial was a bit different but any impact from that at all.

No its very similar to New Jersey and its pretty much a pass through. Paul Patterson – Glenrock Associates: When you look at that Pennsylvania power auction how do you think about that in comparison to what you’re looking at in Ohio, is it just such a different market and such a different situation that that just really bears no resemblance and its kind of an outlier or is there any way to look at that as a signal as to what could happen in Ohio.

I don’t know, it’s a much smaller load for one thing. It’s a different time period, different tranche, I don’t know.

This is just one data point, very small or limited transaction. Paul Patterson – Glenrock Associates: Is there any expected change in tax rate for 2009.

Our marginal rate will be in the 38% range, but the effective rate, we’ll be able to give you more information on that when we provide guidance for 2009.

Your next question comes from the line of Steve Fleishman – Catapult Capital Steve Fleishman – Catapult Capital : Just wanted to clarify in your 2009 factors you obviously are not, didn’t go into what generation price you’re assuming but you’re also not including the distribution rider that’s part of the current settlement.

That’s correct. Steve Fleishman – Catapult Capital : And did you also not include the resolution of the RTC on Cleveland too.

Yes, we did not include that also. Steve Fleishman – Catapult Capital : So none of the provisions of that agreement are included in here.

That’s correct. Steve Fleishman – Catapult Capital : Do you have a sense on when the commission at this point is likely to vote on the settlement.

Well if they hold to the recommendation of the parties we would expect an order out before March 4 or on or about March 4 covering the period basically April and May. Pricing in that period is fixed. Then some other ancillary parts of the stipulation but then the main stipulation would be approved prior to or on or about March 25. Its kind of two parts because we have to get April and May solved as part of this overall transition.

Your next question comes from the line of Carrie St.Louis – Fidelity Investments Carrie St.Louis – Fidelity Investments : I was curious have you had any discussions with the agencies since your Ohio settlement has been announced.

We’re always in some degree of contact with the agencies just making sure that they understand what’s going on and so forth. Carrie St.Louis – Fidelity Investments : With specific S&P, have they commented since they’ve been kind of watching the discussions very closely, any views on how they view this settlement versus the ESP.

I can’t speak for S&P but I know they have a good understanding of how the proposed stipulation works. Carrie St.Louis – Fidelity Investments : I just wanted to ask about the short-term debt balance, it seemed high, I know that you’re holding a lot of cash securities, is that why that number looks so high.

Yes, that’s right. Carrie St.Louis – Fidelity Investments : I just wanted to talk about, I know its early but what are your thoughts about the hold to maturity in 2011 how you’re going to approach refinancing that.

We continue to look at that. We don’t have a specific plan that we’ve discussed yet but its something that Jim and Randy and their team continue to look at so as we move through this year we’ll have more clarity around what our plan is to deal with that. Carrie St.Louis – Fidelity Investments : Is it a thought that it would mainly be refinanced there or partly at Solutions.

Not sure yet.

Your next question comes from the line of Unspecified Analyst

I was wondering when do you anticipate the voluntary prepayment plan to be finalized by the Commission in Pennsylvania.

I don’t know when. We had asked for October I am told.

Your next question comes from the line of Dan Jenkins – State of Wisconsin Investment Board Dan Jenkins – State of Wisconsin Investment Board : I was curious I think you said you had $1.1 billion of cash at the end of January is that correct.

That is correct. Dan Jenkins – State of Wisconsin Investment Board : And that’s up from what, about $500 or $600 million at the end of the year.

Yes, that’s about right. Dan Jenkins – State of Wisconsin Investment Board : Is the short-term debt is that also up or what’s the status of that given the cash is up—

Its because well the additional cash is because we had several operating, two operating company issuances and we’re continuing to hold the cash from those. Dan Jenkins – State of Wisconsin Investment Board : So at some point will you then pay down the short-term debt or what’s the, are you saving that for other purposes or what’s the disposition of that cash.

We’ll make that decision as we go through time. Right now we’re comfortable holding the cash but we’ll continue to what we’re earning on that versus what it costs us to, on the revolver and so forth and kind of make that trade off. Dan Jenkins – State of Wisconsin Investment Board : Related to the O&M both the generation and the distribution or delivery, on the delivery you mentioned the lower uncollectible expenses and then more resources devoted to capital projects, given that you’re bringing down your CapEx budget for next year and then given the economic environment what do you expect from those two benefits for this quarter going forward.

For this quarter we haven’t talked about it on a quarterly basis other then what we talked about on the call and in the earnings guidance drivers, we haven’t really gotten more specific then that. Dan Jenkins – State of Wisconsin Investment Board : By itself for 2009 do you expect uncollectible rate to continue at the rate you’ve seen recently or do you expect that to go up or have you got any sense what’s going to happen with that.

Customer uncollectibles? Dan Jenkins – State of Wisconsin Investment Board : Yes.

That whole issue was a focus of what we called our energy delivery excellence plan, we really focused on the whole revenue realization cycle and this was a project that largely took place in 2008 so we spent a lot of time looking at our collection policies and so forth and really fundamentally changed how we identify customer risks and how we collect deposits from customers and so forth and actually we’ve had some very good luck in terms of keeping our uncollectibles arrearages at a very low level. That was true for much of 2008. Probably a little bit of a tick up so far in 2009 but still within what I would say is a very, very small band. So we have been very pleased with our efforts so far. Dan Jenkins – State of Wisconsin Investment Board : And so then the capitalized say operating cost for say payroll and so forth, do you expect that to be a similar rate given your lower CapEx budget then or would you expect maybe more of that to be expensed in 2009.

I think it would be about the same. Dan Jenkins – State of Wisconsin Investment Board : On the revenue side, you’ve seen a pretty rapid deterioration in industrial in the fourth quarter given the economy have you actually seen any customers announce permanent shutdowns of large plants in your service territory that probably won’t come back.

I don’t know of any permanent shutdowns, certainly many of the impacted facilities are steel or auto related but I’m not aware of any permanent shutdown announcements. Dan Jenkins – State of Wisconsin Investment Board : So you haven’t had any of the big auto plants or anything that have been announced in your particular service territories.

Not that I’m aware of.

I want to make one correction to an earlier question, I would refer you back to our recent developments in terms of the consolidated report, the October date we were asking for is for the procurement plan at Med Ed and Penn Elec. We actually have a settlement already in place and was recommended by the ALJ for adoption to the commission without modification. Its already pending for the prepayment plan.

Your next question is a follow-up from the line of Greg Gordon – Citigroup Greg Gordon – Citigroup: The $2.00 per MWH rider, that would go into effect if approved by the Commission April 1 correct.

Yes, that’s correct. Greg Gordon – Citigroup: If you were to also be approved to make your modifications of the Cleveland RTC balance, when would that adjustment take place.

June 1.

Well thanks everybody. We appreciate your time today and your interest in FirstEnergy. If there are any follow-up questions, please feel free to contact Ron Seeholzer or any of the members of our Investor Relations team. Thanks again for your time, everybody have a great day.