Welcome to the FirstEnergy Corp. first quarter 2010 earnings conference call. (Operator Instructions) It is now my pleasure to introduce your host, Irene Prezelj, Director for Investor Relations for FirstEnergy Corp. Thank you Ms. Prezelj, you may begin.

Reconciliations 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; Mark Clark, Executive 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 Mark.

Thanks Irene and good afternoon everyone. I will start today’s call with a review of first quarter results. I’ll then turn the call over to Anthony for an update on regulatory and operational activities. As I review our results it may be helpful for you to refer to the consolidated report to the financial community we issued this morning. Excluding special items, normalized non-GAAP earnings were $0.81 per share compared to $1.02 per share in the first quarter of 2009. Despite the continued impact of the depressed economic activity and generally milder weather across our region these results are in line with our first quarter expectations. On a GAAP basis earnings were $0.51 per share compared to $0.39 per share in the first quarter of 2009. As detailed on page 12 of the consolidated report six special items decreased this year’s GAAP earnings by a total of $0.30 per share. In the first quarter of 2009 a comparable net impact from special items was $0.63 per share. I will address the first quarter 2010 special items from largest to smallest. The first of these is a charge of $0.11 per share related to power contract mark to market adjustments. In December we announced we would market certain Ohio Legacy purchase power contracts for 2010 and 2011. For the first quarter of 2010 the adjustment is a charge of $0.09 per share. The additional $0.02 per share relates to a contract with Northeast Ohio Public Energy Council (NOPEC) which was signed after our December analyst meeting. This contract made FES the generation supplier for customers in 123 northeast Ohio communities. As part of that contract, FES agreed to purchase the existing supply for calendar year 2010 from NOPECs former suppliers. The second special item in the quarter is $0.08 per share…

Thanks Mark. Good afternoon everyone. I will begin with a regulatory update starting with our filing on March 23 at the [PECO] of a stipulated Electric Security Plan (ESP). It was filed as a stipulation of a recommendation and represents a diverse interest of many signatory parties including the staff of the Commission. All public and evidentiary hearings have been completed. The new ESP would again use a competitive bidding process to establish generation supply and pricing for the period between June 1, 2011 through May 31, 2014 for customers who do not choose alternative suppliers. There would be four separate biding sessions; one each in July of 2010, October 2010, July 2011 and July 2012 combining different contract lengths and customer load amounts. While the Commission has indicated it will take additional time to review the filing we are proceeding with preparations for the competitive bidding process as outlined in our filing in anticipation of a decision. The plan also calls for base distribution rates to remain in place through May 31, 2014 and provides for the utilities to recover necessary investments made in the delivery system. This cost recovery mechanism would begin January 1, 2012 when the existing delivery service improvement rider expires. On the whole, we believe the plan will result in more certain rate levels for customers and provide for timely recovery of authorized charges while also promoting energy efficiency and economic development and providing support for low income customers. As I mentioned, if we receive approval for the ESP in the near-term the first auction would be held in July of this year. Respecting Pennsylvania, in January and March the first two auctions were held to procure power supply for Met-Ed and Penelec’s default service requirements beginning January 2, 2011. The auction secured approximately one-half…

(Operator Instructions) The first question comes from the line of Jonathan Arnold – Deutsche Bank. Jonathan Arnold – Deutsche Bank : If I could just ask on the reduction in the generation forecast, to what extent is that just for the first quarter and an assumption that the rest of the year continues to pan out more or less as you had originally planned? What assumptions have you made over the rest of the year and are they different?

I think we are just trying to be a little conservative. It is not we are just subtracting out the first quarter from the total forecast. We are seeing some very positive signs on the industrial side as Tony eluded to. Auto global production is up 50%. 65% in the U.S. We are seeing that at General Motors adding a third shift in Lordstown. Defiance is adding [inaudible]. Toledo Power Train is adding. Steel is starting to add a second shift. So we are seeing it across the board. However, we are just trying to be conservative as we work through the year. One really strong month of March does not make the next 8 or 9. So we are just being a little bit more conservative. Jonathan Arnold – Deutsche Bank : How much of I guess it is about a 4 terawatt hour reduction, how much of that is Davis-Besse versus forecast?

Off the top of my head I don’t know but we can get that and post it. Jonathan Arnold – Deutsche Bank : Can you give us any further color on which of the buckets of sales have been most affected by being more conservative around the forecast? Is it mainly in wholesale or is it in one of the franchise pieces?

Wholesale. Jonathan Arnold – Deutsche Bank : Any possibility of an update on Signal Peak and where you are on targets, etc.?

Signal peak has slowed down a little bit. It had some start up issues. They were very successful in the development of the mine but their startup is a little behind. They are running around 500,000 tons a month. Their full rate we hope will be somewhere around 1 million. They are a little behind where we thought they would be but not terribly disappointed at where they are. Jonathan Arnold – Deutsche Bank : Do you still anticipate getting to that higher number in calendar 2010 or what is the outlook in terms of closing the gap?

Yes, we just met with the CEO of Signal Peak on Saturday or Friday. I don’t remember which anymore. He felt fairly confident they would get back up to where they had forecast by the end of the year. Jonathan Arnold – Deutsche Bank : Could you be a little more specific on what is causing it to be slower than hoped?

One, they had a well problem on the second well. Second, they had some issues with the operators themselves. This is new for them. This is a big system and despite their training it has taken them a little time to ramp up to where they want to be.

The next question comes from the line of Stephen Huang – Carlson Capital. Stephen Huang – Carlson Capital : You said that part of the benefit that in a challenging year you are going to try to benefit from switching from fixed to variable. How much of that is embedded in your numbers now to do financial restructuring?

I think it was embedded originally because at the tail end of the year we had some variable go into fixed. We also had some higher cash position from tax we are going to pay down some short-term debt. So we are going to stay within our guidelines and stay within our policy as we move through the year. Stephen Huang – Carlson Capital : On the retail sales side I know you before had put out 97.9 total sales including retail plus wholesale. How are you thinking about that target number in terms of I know you talked about distributions coming down a little bit and generation output down but how about the overall retail sales as part of your guidance?

Overall retail is pretty much in line with original expectations. The total sales you mentioned of 97 I believe will go down reflecting lower wholesale sales as we go through the year. But the retail portion of our sales is pretty much in line with expectations. Stephen Huang – Carlson Capital : Are you actually doing better on the aggregation in direct sales versus polar? Is there any change to that mix?

Not appreciably different. There is always differences from forecast and if anything I think maybe our non-Ohio sales are running a little bit above our original expectations offsetting the lower consumption that we are seeing in Ohio due to weather and the economy. Stephen Huang – Carlson Capital : How much is the renewable credit sales benefit for you in the quarter? How much do you anticipate it to be for the year? Or is it small?

I think it is relatively around $40 million or $50 million. It is consistent with what we do every year. We have credits. We sell credits. We use them ourselves.

The next question comes from the line of Hugh Wynne – Sanford Bernstein. Hugh Wynne – Sanford Bernstein : I wanted to explore a little bit your breakdown of the commodity margin change on page 3 of your release. I noticed the increase in volume of your competitive retail sales contributed $1.23 to earnings versus $0.79 corrosion in earnings as a result of the loss in volume in polar sales. The implication seems to be as you have mentioned you are generating a significantly higher margin on the competitive retail sales. I wonder if you could expand on that a little bit because I tend to think of your competitive resale sales as being offered at a discount to the auction price but here you are generating a higher margin apparently.

I think the confusion might just come from the year-over-year comparison period. Remember the first quarter of 2009 was a somewhat unique situation. We didn’t have the ESP totally approved. There was no retail shopping in Ohio and the utilities were procuring their power through an RFP process that was in effect for the first 3 months of 2009. I think the anomaly comes from the comparison year and the base period last year. Hugh Wynne – Sanford Bernstein : I also noticed you have an increase in your fuel costs and your purchase power costs and you attribute this to higher nuclear and coal delivery costs yet it appears your nuclear generation must have been down a bit due to the Davis-Besse and Sammis down a bit due to the high end of the air quality controls. That was reflected at the higher purchase power cost. I am a little confused about the increase of purchase power cost and also an increase in the fuel cost.

Our nuclear fuel expense was actually higher as was our nuclear generation output during the first quarter. The Davis-Besse outage for the first quarter was just a scheduled refueling outage. The unexpected outage didn’t occur until April after the quarter. So nuclear generation was actually higher resulting in the higher fuel expense as well as the nuclear rate is higher reflecting the legacy fuel contracts being taken out of or being rolled over to market. On the purchase power expense the increase was really attributable to what I call balancing energy purchases in the PJM market. As dilution assumed 100% of the Met-Ed, Penelec polar requirement for this year they had a higher balancing in energy for that higher load obligation as well as their retail activity in the PJM market resulted in higher balancing purchases for the retail load. Hugh Wynne – Sanford Bernstein : Regarding your outlook for sales, you are still expecting 77.1 million megawatt hour sales for the year despite a first quarter that is flat. It seems to me to get there you need to have 20-25% increases in your volume of sales over the remaining quarters or am I missing something?

I don’t think so. That would be a pretty big jump up. That 25% of what the original 80 would have been somewhere around 20. So no. I think we are being conservative if anything. Hugh Wynne – Sanford Bernstein : You believe you can do that?

Yes. [Jim Pearson]: You also have to remember that it is not even. You have summer loads coming in which are fairly significantly different and higher than the other periods. The weighting is going to be on June, July and August and into September. Hugh Wynne – Sanford Bernstein : But you need another 61 million megawatt hours of sales right to make your target? I am estimating based on your disclosures in the first quarter you had something like 48 million megawatt hours of sales in the last three quarters of last year. It is that difference that strikes me as a very large 25% difference.

Part of the challenge too is getting back to normal weather that we didn’t see in the second half of last year. [Jim Pearson] : You have to remember last year mostly as you went through the year industrial sales were not improving. So we are anticipating when we see improvements in industrial sales now every month. Not as strong as we would like but continuing to improve. You will see improvement year-over-year if that trend continues as well as we are certainly hopeful that the summer is a true summer this year as compared to what we experienced last year.

The next question comes from the line of Reza Hatefi – Decade Capital. Reza Hatefi – Decade Capital : Could you talk a little bit more about the merger? When you announced it commodities were much, much higher than they are now. Obviously back in February or January the accretion was much more attractive and now looking at least in the near or medium term it might be massively dilutive until you get into the 5-6 years from now. Could you talk about your thoughts? Was this unexpected, this drop in commodities? Just give a little more color on your thoughts on the merger at this point.

I am perfectly comfortable with the merger and where it is at. I think it has great opportunity for this company. It repositions us and puts us in a much better position going forward. The fact that we continue to be in a very sluggish recession type economy for a decision that is going to place FirstEnergy in a totally different opportunity position going forward I just don’t think that is a fair or even any sort of valid analysis in terms of what we are looking at. This is a long-term play. This isn’t for next week. Reza Hatefi – Decade Capital : Back at the analyst day you were mentioning later in 2010 you would talk about dividend policy. Do you have any new color on that or should we just wait until the end of the year?

I think we will wait. We also alluded in the context I am sure the board will take it up when we get back to a more normal economy. Reza Hatefi – Decade Capital : Lastly, a couple of the previous questions revolved around the lower generation and sales volumes. Could you run through again some of the offsets to that in terms of some of the positive offsets to lower volumes that are part of your guidance?

You mean lower costs or lower volumes? Reza Hatefi – Decade Capital : In your original 2010 guidance you had the higher generation volumes and higher distribution volumes. Those have come down. I just wanted some more color on what some of the more positive offsets were to that so you were able to maintain guidance.

First, we are taking off at the high end of our cost curve and production curve so that would be the lowest margin generation we would be producing. Second, we have severely restricted hiring. We had assumed some incremental staffing as we worked throughout 2010. Those have all been put on hold. We continue to look for opportunities not to use contractors, restricting travel, watching every expense. We had lists of other O&M kinds of items from last year. We are just working our way down that list. I think we have proven we can continue to cut costs as we have additionally done in the first quarter and that we would expect to do that as we move through the year. I am not suggesting in any way it is easy but we believe it is achievable.

The next question comes from the line of Daniele Seitz - Dudak Research.

Continuing on the expense side when do you visualize expenses leveling off since they were down so much in the first quarter?

I don’t know what normal expenses would be any more because we are in such an abnormal economy. As we continue to move through the year we will continue to look for opportunities to reduce expenses. As we find them we will take advantage of them. I don’t know what normal is anymore.

I understand. I was thinking that the amount of decrease will probably taper off towards the end of the year. Is that what you visualize as well?

I think you are correct that at some point we cannot continue to reduce the level of expenses without having some negative offset in the other part. We had roughly $1.2 billion of direct O&M expenses at our business units for the balance of the year. So that is a pretty good place to start. Any kind of reasonable percentage of that comes up with a big number. You are correct at some point you get diminishing returns. We just don’t think we have hit that point yet.

So not before year-end definitely?

Correct.

The next question comes from the line of Paul Fremont - Jefferies & Co. Paul Fremont - Jefferies & Co.: If I look at the presentation back in December you were projecting I think a $0.06 hurt from benefits and other expense. I guess the OPEB was a positive $0.04 in the quarter. You mentioned in your narrative that in future quarters that benefit would decrease but should we just revise altogether the $0.06 hit you had back on slide 74 of your analyst day meeting?

I don’t have that slide in front of me but we do expect it to continue to decline as we go through the year. It might be slightly higher than the $0.06 you are alluding to. Paul Fremont - Jefferies & Co.: But the $0.06 is a negative and you actually had a $0.04 positive in the first quarter. $0.06 was negative for the year is what you were projecting.

We made pension contributions, increased the earnings of the funds, lowered the discount rate. Factor all that in and it is positive. [Jim Pearson]: I think your question is it was negative $0.06 back when we did it at December 3. It will gradually decline year-over-year comparison but it is going to be closer to a $0.10 positive as we get throughout the year this year based on I think the biggest driving factor was the time modifications we have made.

It is primarily from the OPEBs. I think pension on a year-over-year basis will not be driving the majority of the benefit because when we re-measured the plan back at the end of August last year we did take our discount rate down to 6% and that kind of offset the $500 million. What we did on the OPEB side is we amended that plan where we only provided three years of medical coverage. We didn’t take clear up to Medicare eligibility. Paul Fremont - Jefferies & Co.: So if I understand you correctly if we are redoing that waterfall chart today that should read a $0.10 positive instead of a $0.06 hit, right?

You would just walk it down. You can take any pattern you want. But $0.04, $0.03, $0.02, $0.01 it will fade out as we get throughout the year. Paul Fremont - Jefferies & Co.: The other question I have is has the company yet done a root cause analysis and submitted an action plan to the Nuclear Regulatory Commission on Davis-Besse or is that still something that has to happen?

The root cause analysis is underway. I believe there will be some review with the NRC before restart of the modifications we have made.

The next question comes from the line of Paul Ridzon - Key Bank Capital Markets.

Your level of confidence in that July date given it sounds like the NRC hasn’t really signed off on a whole lot yet?

Again right now we believe the modifications meet all of the industry and are based on industry standard practices. We expect to be able to show to the NRC we are prepared to operate to plan. Right now I feel assuming we can get the work done the July date is when we expect a restart.

There are no further questions in the queue at this time. I would now like to turn the floor back over to Mr. Alexander for closing comments.

Thank you everyone for joining us today on this call. As always we appreciate your continued support and interest in FirstEnergy. Have a nice afternoon.

Ladies and gentlemen this does conclude the teleconference. You may disconnect your lines at this time. Thank you for your participation.