FirstEnergy Generation
Corp.                                                      EXHIBIT 10.5
FERC Electric Tariff, Original Volume No. 1
Service Agreement No. 2
 
[Execution Copy]

GENCO POWER SUPPLY AGREEMENT

Between FirstEnergy Generation Corp., Seller
and
FirstEnergy Solutions Corp., Buyer

This GENCO Power Supply Agreement ("Agreement") dated October 14, 2005 is made
by and between FirstEnergy Generation Corp., ("Genco" or "Seller"), and
FirstEnergy Solutions Corp. ("Solutions" or "Buyer"). Genco and Solutions may be
identified collectively as "Parties" or individually as a "Party." This
Agreement is entered into in connection with the transfer of ownership of The
Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power
Company, and The Toledo Edison Company’s fossil and pumped storage generation
assets to Genco.

WHEREAS, Seller is a generation only company that owns, operates and leases
fossil and pumped storage generation assets; and

WHEREAS, Seller is engaged exclusively in the business of owning and operating
this generation and selling Power at wholesale, and

WHEREAS, Seller is a wholly owned subsidiary of Solutions; and

WHEREAS, Buyer desires to obtain the entire electric output of the generating
plants owned by Genco as described in Exhibit C (collectively, the “Genco
Facilities”), pursuant to the rates, terms and conditions set forth herein.

It is agreed as follows:

I.  TERM
 
The sale and purchase of Power pursuant to this Agreement shall begin on
December 1, 2005, or such later effective date authorized by the FERC, for an
initial term ending December 31, 2010. This Agreement shall remain in effect
from year to year thereafter unless terminated by either Party upon at least
sixty days written notice prior to the end of the calendar year.

Issued by: Donald R. Schneider,
President                                                  Effective Date:
Issued on: October 14,
2005                                                           December 1, 2005
 
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II. SALE AND PURCHASE OF CAPACITY AND ENERGY

A.
Seller shall make available to Buyer all of the Capacity, Energy, Ancillary
Services, Emission Allowances, and Renewable Energy Attributes, if any, which
are available from the Genco Facilities and Buyer shall purchase and pay for
such Capacity, Energy, Ancillary Services, Emission Allowances and Renewable
Energy Attributes in accordance with the terms of this Agreement. Seller shall
make firm Capacity, Energy, and Ancillary Services available at the Delivery
Points. Buyer shall arrange and will be responsible for all transmission,
congestion costs, losses, and related services at and from the Delivery Points.
The Capacity, Energy, Ancillary Services, Emission Allowances and Renewable
Energy Attributes supplied by Seller are collectively referred to as Buyer's
"Power Supply Requirements." Electric Capacity and Energy supplied shall be
sixty-hertz, three phase alternating current. The Power Supply Requirements will
be provided in accordance with Good Utility Practice, and where applicable, the
provisions of the applicable Transmission Provider OATT, and the requirements of
the FERC.

B.
Genco will operate and maintain the Genco Facilities in accordance with Good
Utility Practice, the applicable requirements of the FERC, NERC, Electric
Reliability Organization, as well as the requirements of the regional
reliability councils or Regional Entity and Regional Transmission Organizations
where the Genco Facilities are located.

III. SCHEDULING AND SYSTEM PLANNING
 

A.  
In order for Solutions to be able to plan adequately to market and sell all of
the Capacity, Energy, Ancillary Services, Emission Allowances and Renewable
Energy Attributes available from the Genco Facilities, Genco shall notify
Solutions on or before November 1 of each year during the term of this Agreement
of the amount of Capacity, Energy, Ancillary Services, Emission Allowances and
Renewable Energy Attributes it expects to have available for each day in each
month of the next calendar year. The information provided in this notification
shall include, but not be limited to, the time and expected duration of any
planned outage of the Genco Facilities.

B.
Genco shall update its annual forecast of available Capacity, Energy, Ancillary
Services, Emission Allowances, and Renewable Energy Attributes for any change or
expected changed in the operation of Genco Facilities that would materially
affect the annual forecast provided to Solutions. Genco shall provide the
updated forecast to Solutions for any full month(s) remaining in the calendar
year within thirty days of becoming aware of the change or expected change in
the operation of the Genco Facilities.

 
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C.  
Genco will supply Solutions, upon request, any such information as is necessary
to meet the requirements of the applicable Transmission Provider OATT, the FERC,
NERC, Electric Reliability Organization, regional reliability council, Regional
Entity or Government Authority.

 
IV. PRICE

Seller shall charge, and Buyer shall pay, for Buyer's Power Supply Requirements,
as follows on a monthly basis.

A. Charges

Buyer will pay Seller the Monthly Charge under the formula set forth in Exhibit
A for the Power Supply Requirements available from the Genco Facilities
identified in Exhibit C.

B. Billing and Payment

Unless otherwise specifically agreed upon by the Parties, the calendar month
shall be the standard period for all billings and payments under this Agreement.
As soon as practicable after the end of each month, the Seller will render an
invoice to Buyer for the amounts due for Power Supply Requirements for the
preceding month. Payment shall be due and payable within ten days of receipt of
the invoice or, if such day is not a Business Day, then on the next Business
Day. Buyer will make payments by electronic funds transfer or by other mutually
agreeable method(s) to the account designated by Seller. Any amounts not paid by
the due date will be deemed delinquent and will accrue interest at the Interest
Rate until the date of payment in full.
 
C. Records

Each Party shall keep complete and accurate records of its operations under this
Agreement and shall maintain such data as may be necessary to determine the
reasonableness and accuracy of all relevant data, estimates, payments or
invoices submitted by or to it hereunder. All records regarding this Agreement
shall be maintained for a period of three years from the date of the invoice or
payment, or for such longer period as may be required by law.

D. Audit and Adjustment Rights

Buyer shall have the right, at its own expense and during normal business hours,
to audit the accounts and records of Seller that reasonably relate to the
provision of service under this Agreement. If the audit reveals an inaccuracy in
an invoice, the necessary adjustment in such invoice and the payments therefor
will be promptly made. No adjustment will be made for any invoice or payment
made more than one year from rendition thereof. This provision shall survive the
termination of this Agreement for a period of one year from the date of
termination for the purpose of such invoice and payment objections. To the
extent that audited information includes Confidential Information, the Buyer
shall keep all such information confidential under Section VII.C.
 
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E. Section 205 Rights

Nothing contained herein shall be construed as affecting in any way the right of
the Party furnishing service under this Agreement to unilaterally make
application to the FERC for a change in rates under Section 205 of the Federal
Power Act and pursuant to the FERC's Rules and Regulations thereunder. Provided,
however, that nonrate terms and conditions may be amended only by a written
agreement signed by the Parties.

V. METERING

Generation metering shall be installed, operated and maintained in accordance
with the applicable generator interconnection agreements between the Genco,
Transmission Provider, and Transmission Owner. Metering between control areas
shall be handled in accordance with the applicable Transmission Provider OATT.
Retail metering shall be provided in accordance with applicable state law.
Nothing in this Agreement requires Seller or Buyer to install new metering
facilities.

VI. NOTICES

All notices, requests, statements or payments shall be made as specified below.
Notices required to be in writing shall be delivered by letter, facsimile or
other documentary form. Notice by facsimile or hand delivery shall be deemed to
have been received by the close of the Business Day on which it was transmitted
or hand delivered (unless transmitted or hand delivered after close in which
case it shall be deemed to have been received at the close of the next Business
Day). Notice by overnight mail or courier shall be deemed to have been received
two Business Days after it was sent. A Party may change its addresses by giving
notice as provided above.

NOTICES & CORRESPONDENCE: 
 

 To Seller: FirstEnergy Generation Corp., President   76 South Main St.   Akron,
Ohio 44308

 
 

 To Buyer: FirstEnergy Solutions Corp., Director, Wholesale Energy Transactions
  395 Ghent Road   Akron, Ohio 44333

 
 
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INVOICES & PAYMENTS: 
 

 To Seller:  FirstEnergy Generation Corp., President   76 South Main St.  
Akron, Ohio 44308

 
 

 To Buyer:  FirstEnergy Solutions Corp., Director, Wholesale Energy Transactions
  395 Ghent Road   Akron, Ohio 44333

 
SCHEDULING:
 
 

 To Seller: FirstEnergy Generation Corp., President   76 South Main St.   Akron,
Ohio 44308

 
 

 To Buyer:  FirstEnergy Solutions Corp., Director, Wholesale Energy
Transactions     395 Ghent Road   Akron, Ohio 44333

 
VII. MISCELLANEOUS

A. Performance Excused
 
If either Party is rendered unable by an event of Force Majeure to carry out, in
whole or part, its obligations hereunder, then, during the pendency of such
Force Majeure but for no longer period, the Party affected by the event shall be
relieved of its obligations insofar as they are affected by Force Majeure. The
Party affected by an event of Force Majeure shall provide the other Party with
written notice setting forth the full details thereof as soon as practicable
after the occurrence of such event and shall take all reasonable measures to
mitigate or minimize the effects of such event of Force Majeure. Nothing in this
Section requires Seller to deliver, or Buyer to receive, Power at Delivery
Points other than those Delivery Points designated under this Agreement, or
relieves Buyer of its obligation to make payment under Section IV of this
Agreement.
 

Force Majeure shall be defined as any cause beyond the reasonable control of,
and not the result of negligence or the lack of diligence of, the Party claiming
Force Majeure or its contractors or suppliers. It includes, without limitation,
earthquake, storm, lightning, flood, backwater caused by flood, fire, explosion,
act of the public enemy, epidemic, accident, failure of facilities, equipment or
fuel supply, acts of God, war, riot, civil disturbances, strike, labor
disturbances, labor or material shortage, national emergency, restraint by court
order or other Government Authority, interruption of synchronous operation, or
other similar or dissimilar causes beyond the control of the Party affected,
which causes such Party could not have avoided by exercising Good Utility
Practice. Nothing contained herein shall be construed to require a Party to
settle any strike, lockout, work stoppage, or other industrial disturbance or
dispute in which it may be involved or to take an appeal from any judicial,
regulatory or administrative action.

 
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B. Transfer of Title and Indemnification

Title and risk of loss related to the Power Supply Requirements shall transfer
to the Buyer at the Delivery Points. Seller warrants that it will deliver the
Power Supply Requirements to Buyer free and clear of all liens, security
interests, claims and encumbrances or any interest therein or thereto by any
person arising prior to the Delivery Points. Each Party shall indemnify, defend
and hold harmless the other Party from and against any claims arising from or
out of any event, circumstance, act or incident first occurring or existing
during the period when control and title to the Power Supply Requirements is
vested in the other Party.
 
C. Confidentiality

Neither Party shall disclose to third parties Confidential Information obtained
from the other Party pursuant to this Agreement except in order to comply with
the requirements of FERC, NERC, Electric Reliability Organization, applicable
regional reliability councils or Regional Entity, Regional Transmission
Organization, or Government Authority. Each Party shall use reasonable efforts
to prevent or limit the disclosure required to third parties under this section.

D. Further Assurances

Subject to the terms and conditions of this Agreement, each of the Parties will
use reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and effectuate the transactions contemplated
hereby.

E. Assignment

No assignment, pledge, or transfer of this Agreement shall be made by any Party
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld. No prior written consent shall be required for (i) the
assignment, pledge or other transfer to another company or affiliate in the same
holding company system as the assignor, pledgor or transferor, or (ii) the
transfer incident to a merger or consolidation with, or transfer of all (or
substantially all) of the assets of the transferor, to another person or
business entity; provided, however, that such assignee, pledgee, transferee or
acquirer of such assets or the person with which it merges or into which it
consolidates assumes in writing all of the obligations of such Party hereunder
and provided, further, that either Party may, without the consent of the other
Party (and without relieving itself from liability hereunder), transfer, sell,
pledge, encumber or assign such Party's rights to the accounts, revenues or
proceeds hereof in connection with any financing or other financial
arrangements.
 

 

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F. Governing Law

The interpretation and performance of this Agreement shall be according to and
controlled by the laws of the State of Ohio regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws.
 
G. Counterparts

This Agreement may be executed in two or more counterparts and each such
counterpart shall constitute one and the same instrument.

H. Waiver

No waiver by a Party of any default by the other Party shall be construed as a
waiver of any other default. Any waiver shall be effective only for the
particular event for which it is issued and shall not be deemed a waiver with
respect to any subsequent performance, default or matter.

I. No Third Party Beneficiaries

This Agreement shall not impart any rights enforceable by any third party other
than a permitted successor or assignee bound to this Agreement.

J. Severability

Any provision of this Agreement declared or rendered unlawful by any applicable
court of law or regulatory agency or deemed unlawful because of a statutory
change will not otherwise affect the remaining lawful obligations that arise
under this Agreement.

K. Construction

The term "including" when used in this Agreement shall be by way of example only
and shall not be considered in any way to be a limitation. The headings used
herein are for convenience and reference purposes only.
 
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IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this Agreement on their behalf as of October 14,
2005.
 

     FirstEnergy Solutions Corp.    
   
   
     

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President, FirstEnergy Solutions Corp.  

     FirstEnergy Generation Corp.      
   
   
     

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 President, FirstEnergy Generation Corp.  

 

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EXHIBIT A

FirstEnergy Generation Corp.
Monthly Charge Formula
 
 
 
 
 

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EXHIBIT B

DEFINITIONS

In addition to terms defined elsewhere in this Agreement, the terms listed below
are defined as follows:

Affiliate means, with respect to any person, any other person (other than an
individual) that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such person. For
purposes of the foregoing definition, control means the direct or indirect
ownership of more than fifty percent (50%) of the outstanding capital stock or
other equity interests having ordinary voting power or ability to direct the
affairs of the affiliate.

Ancillary Services means Reactive Supply and Voltage Control from Generation
Resources, Regulation and Frequency Response Service, Operating Reserve -
Spinning Reserve Service, and Operating Reserve - Supplemental Service and such
additional Ancillary Services as defined in the Open Access Transmission Tariff
of the Transmission Provider and to the extent available from the Genco
Facilities.

Business Day means any day on which Federal Reserve member banks in New York
City are open for business.

Capacity means the resource that produces electric Energy, measured in
megawatts.

Confidential Information means any confidential, proprietary, trade secret,
critical energy infrastructure information, or commercially sensitive
information relating to the present or planned business of a Party that is
supplied under this Agreement, and is identified as confidential by the Party
supplying the information.

Delivery Point means where Capacity, Energy, and Ancillary Services are supplied
by the Seller at the point of interconnection between the Genco Facilities and
the transmission facilities of Transmission Owner.

Electric Reliability Organization has the meaning given in Section 215(a)(2) of
the Federal Power Act.

Emission Allowances means all present and future authorizations to emit
specified units of pollutants or hazardous substances, which units are
established by the Government Authority with jurisdiction over the Genco
Facilities under (i) an air pollution and emissions reduction program designed
to mitigate global warming, interstate or intra-state transport of air
pollutants; (ii) a program designed to mitigate impairment of surface waters,
watersheds, or groundwater; or (iii) any pollution reduction program with a
similar purpose. Emission Allowances include allowances, as described above,
regardless as to whether the Governmental Authority establishing such Emission
Allowances designates such allowances by a name other than “allowances.”

 

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Energy means electric energy delivered under this Agreement at three-phase,
60-hertz alternating current measured in megawatt hours.

FERC means The Federal Energy Regulatory Commission or its regulatory successor.

Force Majeure has the meaning given in Section VII.A.

Good Utility Practice means any of the practices, methods and acts engaged in or
approved by a significant portion of the electric utility industry during the
relevant time period or any of the practices, methods and acts which, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety,
and expedition. Good Utility Practice includes compliance with the standards
adopted by NERC, its applicable regional councils, an Electric Reliability
Organization or Regional Entity as approved by the FERC. Good Utility Practice
is not intended to be limited to the optimum practice, method or act to the
exclusion of all others, but rather to be acceptable practices, methods or acts,
generally accepted in the region and consistently adhered to by utilities in the
region.

Government Authority means any federal, state, local, municipal or other
governmental entity, authority or agency, department, board, court, tribunal,
regulatory commission, or other body, whether legislative, judicial or
executive, together or individually, exercising or entitled to exercise any
administrative, executive, judicial, policy, regulatory or taxing authority or
power over Buyer or Seller.

Interest Rate means the lesser of Prime Rate plus two percent and the maximum
rate permitted by applicable law.

NERC means The North American Electric Reliability Council or any superseding
organization with responsibility for establishing reliability standards for the
interstate grid.

Power means Capacity and/or Energy.

Prime Rate means for any date, the per annum rate of interest announced from
time to time by Citibank, NA as its prime rate for commercial loans, effective
for such date as established from time to time by such bank.

Regional Entity has the meaning given in Section 215(a)(7) of the Federal Power
Act.

Regional Transmission Organization has the meaning given in Section 3(27) of the
Federal Power Act.

Renewable Energy Attributes means any credits, offsets, benefits, or tradable
instrument created by law and related to generation of Power from the Genco
Facilities.

Taxes means all ad valorem, property, occupation, utility, gross receipts,
sales, use, excise and other taxes, governmental charges, licenses, permits and
assessments, other than taxes based on net income or net worth.
 

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Transmission Owner means the entity that owns facilities used for the
transmission of Power from the Genco Facilities.

Transmission Provider means the utility or utilities, including Regional
Transmission Organizations, transmitting Power on behalf of Buyer from the
Delivery Point(s) under this Agreement.

Transmission Provider OATT means the Open Access Transmission Tariff, Open
Access Transmission and Energy Markets Tariff, or any other tariff of general
applicability on file at the FERC under which the Transmission Provider offers
transmission service.

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EXHIBIT C
NDC in kW
Genco Facilities
 

FirstEnergy
GENERATION CAPABILITIES
 
PLANT NAME
UNIT #
YEAR IN-
SERVICE
NAMEPLATE
RATINGS (KW)
NET DEMONSTRATED
CAPABILITY (KW)
           
ASHTABULA
5
1958
256,000
244,000
ASHTABULA
Total
   
 
256,000
 
244,000
         
BAY SHORE
1
1955
140,625
136,000
BAY SHORE
2
1959
140,625
138,000
BAY SHORE
3
1963
140,625
142,000
BAY SHORE
4
1968
217,600
215,000
BAY SHORE
CT
1967
16,000
  17,000
BAY SHORE
Total
   
 
655,475
 
648,000
         
R.E. BURGER
3
1950
103,500
  94,000
R.E. BURGER
4
1955
156,250
156,000
R.E. BURGER
5
1955
156,250
156,000
R.E. BURGER
EMD (3)
1972
7,500
7,000
R.E. BURGER
Total
   
 
423,500
 
413,000
         
EASTLAKE
1
1953
123,000
132,000
EASTLAKE
2
1953
123,000
132,000
EASTLAKE
3
1954
123,000
132,000
EASTLAKE
4
1956
208,000
240,000
EASTLAKE
5
1972
680,000
597,000
EASTLAKE
CT
1973
32,000
  29,000
EASTLAKE
Total
   
 
1,289,000
 
1,262,000
         
EDGEWATER
CT (2)
1973
57,600
48,000
EDGEWATER Total
   
57,600
48,000
         
LAKESHORE
18
1962
256,000
245,000
LAKESHORE
EMD (2)
1966
4,000
4,000
LAKESHORE
Total
   
 
260,000
 
249,000
                   

 
 

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MAD RIVER
CT(2)
1972
54,000
60,000
MAD RIVER
Total
   
54,000
60,000
       
 
MANSFIELD
1
1976
913,750
780,000
MANSFIELD
2
1977
913,750
780,000
MANSFIELD
3
1980
913,750
800,000
MANSFIELD Total
2,741,250
2,360,000

         
RICHLAND
CT1-3 
1967 
45,000
42,000
RICHLAND 
 CT 4-6
2001 
390,000 
390,000 
RICHLAND
Total
 

435,000
432,000

         
SAMMIS
1
1959
190,400
180,000
SAMMIS
2
1960
190,400
180,000
SAMMIS
3 
1961 
190,400
180,000
SAMMIS 
4 
1962 
190,400 
180,000 
SAMMIS
5
1967
334,050
300,000
SAMMIS
6
1969
680,000
600,000
SAMMIS
7
1971
680,000
600,000
SAMMIS
EMD (5)
1972
12,500
13,000
SAMMIS
Total
2,468,150
2,233,000
         
SENECA
1
1970
220,000
210,000
SENECA
2 
1970 
220,000
195,000
 SENECA
3 
1970 
29,000 
30,000
SENECA Total
469,000
435,000
   

STRYKER 
CT 
 1968
19,000 
18,000 
STRYKER
Total
19,000
18,000
 
 
 
 
 
SUMPTER
CT 1-4 
2002 
340,000
340,000
SUMPTER
Total 
 
 
 340,000
340,000 
     
 
 
WEST LORAIN 
CT 1A
& 1B 
1973 
130,600 
120,000 
WEST LORAIN 
 CT 2-6
2001 
425,000 
425,000 
WEST LORAIN
Total 
   
555,600 
545,000 
     
 
 
Total 
   
10,023,575 
9,287,000