----

----

**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D. C. 20549**

**FORM      10-Q**

**(Mark      One)**

**[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**For      the      quarterly period ended March 31, 2007**

**OR**

**[      ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

| **For                the transition period from** |   | **to** |   |
|---------------------------------------------------|--------|--------|--------|

| **Commission**                 | **Registrant;                State of Incorporation;**         | **I.R.S.                Employer**    |
|--------------------------------|----------------------------------------------------------------|---------------------------------------|
| **File                Number** | **Address;                and Telephone Number**               | **Identification                No.** |
|                           |                                                           |                                  |
| **333-21011**                  | **FIRSTENERGY                CORP.**                           | **34-1843785**                        |
|                           | **(An                Ohio Corporation)**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |
|                           |                                                           |                                  |
| **1-2578**                     | **OHIO                EDISON COMPANY**                         | **34-0437786**                        |
|                           | **(An                Ohio Corporation)**                       |                                  |
|                           | **c/o                FirstEnergy Corp.**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |
|                           |                                                           |                                  |
| **1-2323**                     | **THE                CLEVELAND ELECTRIC ILLUMINATING COMPANY** | **34-0150020**                        |
|                           | **(An                Ohio Corporation)**                       |                                  |
|                           | **c/o                FirstEnergy Corp.**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |
|                           |                                                           |                                  |
| **1-3583**                     | **THE                TOLEDO EDISON COMPANY**                   | **34-4375005**                        |
|                           | **(An                Ohio Corporation)**                       |                                  |
|                           | **c/o                FirstEnergy Corp.**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |
|                           |                                                           |                                  |
| **1-3141**                     | **JERSEY                CENTRAL POWER & LIGHT COMPANY**    | **21-0485010**                        |
|                           | **(A                New                Jersey Corporation)**   |                                  |
|                           | **c/o                FirstEnergy Corp.**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |
|                           |                                                           |                                  |
| **1-446**                      | **METROPOLITAN                EDISON COMPANY**                 | **23-0870160**                        |
|                           | **(A                Pennsylvania Corporation)**                |                                  |
|                           | **c/o                FirstEnergy Corp.**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |
|                           |                                                           |                                  |
| **1-3522**                     | **PENNSYLVANIA                ELECTRIC COMPANY**               | **25-0718085**                        |
|                           | **(A                Pennsylvania Corporation)**                |                                  |
|                           | **c/o                FirstEnergy Corp.**                       |                                  |
|                           | **76                South Main Street**                        |                                  |
|                           | **Akron,                OH 44308**                             |                                  |
|                           | **Telephone                (800)736**-**3402**                 |                                  |

----

| Large                Accelerated Filer (X)     | FirstEnergy                Corp.                                                                                                                                                                                                                                                                |
|------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Accelerated                Filer ( )      | N/A                                                                                                                                                                                                                                                                                             |
| Non-accelerated                Filer (X)  | Ohio                Edison                Company, The Cleveland Electric Illuminating Company, The Toledo                Edison                Company, Jersey Central Power & Light Company, Metropolitan Edison                Company, and Pennsylvania Electric                Company |

|                                                                                    | **OUTSTANDING**                      |
|-----------------------------------------------------------------------------------------|--------------------------------------|
| **CLASS**                                                                               | **AS                OF MAY 9, 2007** |
| FirstEnergy                Corp., $.10 par value                                        | 304,835,407                          |
| Ohio                Edison                Company, no par value                         | 60                                   |
| The                Cleveland                Electric Illuminating Company, no par value | 67,930,743                           |
| The                Toledo                Edison Company, $5 par value                   | 29,402,054                           |
| Jersey                Central                Power & Light Company, $10 par value   | 15,009,335                           |
| Metropolitan                Edison Company, no par value                                | 859,500                              |
| Pennsylvania                Electric Company, $20 par value                             | 5,290,596                            |

----

*This      Form 10-Q      includes forward-looking statements based on information currently available      to      management. Such statements are subject to certain risks and uncertainties.      These statements typically contain, but are not limited to, the terms“anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words.      Actual results may differ materially due to the speed and nature of increased      competition and deregulation in the electric utility industry, economic or      weather conditions affecting future sales and margins, changes in markets for      energy services, changing energy and commodity market prices, replacement power      costs being higher than anticipated or inadequately hedged, the continued      ability of FirstEnergy’s regulated utilities to collect transition and other      charges or to recover increased transmission costs, maintenance costs being      higher than anticipated, legislative and regulatory changes (including revised      environmental requirements), and the legal and regulatory changes resulting      from      the implementation of the EPACT (including, but not limited to, the repeal      of      the PUHCA), the uncertainty of the timing and amounts of the capital      expenditures needed to, among other things, implement the Air Quality Compliance      Plan (including that such amounts could be higher than anticipated) or levels      of      emission reductions related to the Consent Decree resolving the New Source      Review litigation, adverse regulatory or legal decisions and outcomes      (including, but not limited to, the revocation of necessary licenses or      operating permits and oversight) by the NRC and the various state public utility      commissions as disclosed in the registrants’ SEC filings, the timing and outcome      of various proceedings before the PUCO (including, but not limited to, the      distribution rate cases for the Ohio Companies and the successful resolution      of      the issues remanded to the PUCO by the Ohio Supreme Court regarding the Rate      Stabilization Plan) and the PPUC( including the transition rate plan filings      for      Met-Ed and Penelec and Penn’s default service plan filing), the continuing      availability and operation of generating units, the ability of generating units      to continue to operate at, or near full capacity, the inability to accomplish      or      realize anticipated benefits from strategic goals (including employee workforce      initiatives), the anticipated benefits from voluntary pension plan      contributions, the ability to improve electric commodity margins and to      experience growth in the distribution business, the ability to access the public      securities and other capital markets and the cost of such capital, the outcome,      cost and other effects of present and potential legal and administrative      proceedings and claims related to the August 14, 2003 regional power      outage, the successful structuring and completion of a potential sale and      leaseback transaction for Bruce Mansfield Unit 1 currently under consideration      by management, any purchase price adjustment under the accelerated share      repurchase program announced March 2, 2007, the risks and other factors      discussed from time to time in the registrants’ SEC filings, and other similar      factors. Also, a security rating is not a recommendation to buy, sell or hold      securities, and it may be subject to revision or withdrawal at any time and      each      such rating should be evaluated independently of any other rating. The      registrants expressly disclaim any current intention to update any      forward-looking statements contained herein as a result of new information,      future events, or otherwise. *

----

**TABLE      OF      CONTENTS**

|                                                                                                                                                                                             |                                                                                                                               | **Pages** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|-----------|
| **Glossary                of Terms**                                                                                                                                                             | iii-v                                                                                                                              |
|                                                                                                                                                                                             |                                                                                                                               |      |
| **Part                I.** **Financial                Information**                                                                                                                         |                                                                                                                               |
|                                                                                                                                                                                             |                                                                                                                               |      |
| **Items                1. and 2. - Financial Statements and Management’s Discussion and Analysis                of** **Financial                Condition and Results of Operations** |                                                                                                                               |
|                                                                                                                                                                                             |                                                                                                                               |      |
|                                                                                                                                                                                             | Notes                to                Consolidated Financial Statements                                                           | 1-21      |
|                                                                                                                                                                                             |                                                                                                                               |      |
| **FirstEnergy                Corp.**                                                                                                                                                             |                                                                                                                               |
|                                                                                                                                                                                             |                                                                                                                               |      |
|                                                                                                                                                                                             | Consolidated                Statements of Income                                                                                   | 22        |
|                                                                                                                                                                                             | Consolidated                Statements of Comprehensive Income                                                                     | 23        |
|                                                                                                                                                                                             | Consolidated                Balance Sheets                                                                                         | 24        |
|                                                                                                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 25        |
|                                                                                                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 26        |
|                                                                                                                                                                                             | Management's                Discussion and Analysis of Financial                Condition and Results of Operations                | 27-59     |
|                                                                                                                                                                                             |                                                                                                                               |      |
| **Ohio                Edison Company**                                                                                                                                                           |                                                                                                                               |
|                                                                                                                                                                                             |                                                                                                                               |      |
|                                                                                                                                                                                             | Consolidated                Statements of Income and Comprehensive Income                                                          | 60        |
|                                                                                                                                                                                             | Consolidated                Balance Sheets                                                                                         | 61        |
|                                                                                                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 62        |
|                                                                                                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 63        |
|                                                                                                                                                                                             | Management's                Discussion and Analysis of Financial                Condition and Results of Operations                | 64-67     |
|                                                                                                                                                                                             |                                                                                                                               |      |
| **The                Cleveland Electric Illuminating Company**                                                                                                                                   |                                                                                                                               |
|                                                                                                                                                                                             |                                                                                                                               |      |
|                                                                                                                                                                                             | Consolidated                Statements of Income and Comprehensive Income                                                          | 68        |
|                                                                                                                                                                                             | Consolidated                Balance Sheets                                                                                         | 69        |
|                                                                                                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 70        |
|                                                                                                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 71        |
|                                                                                                                                                                                             | Management's                Discussion and Analysis of Financial                Condition and Results of Operations                | 72-75     |
|                                                                                                                                                                                             |                                                                                                                               |      |
| **The                Toledo Edison Company**                                                                                                                                                     |                                                                                                                               |
|                                                                                                                                                                                             |                                                                                                                               |      |
|                                                                                                                                                                                             | Consolidated                Statements of Income and Comprehensive Income                                                          | 76        |
|                                                                                                                                                                                             | Consolidated                Balance Sheets                                                                                         | 77        |
|                                                                                                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 78        |
|                                                                                                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 79        |
|                                                                                                                                                                                             | Management's                Discussion and Analysis of                Financial                Condition and Results of Operations | 80-82     |
|                                                                                                                                                                                             |                                                                                                                               |      |

----

**TABLE      OF      CONTENTS (Cont'd)**

|                                                                                                             |                                                                                                                               | **Pages** |
|------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                             |                                                                                                                               |      |
|                                                                                                             |                                                                                                                               |      |
| **Jersey                Central Power & Light Company**                                                      |                                                                                                                               |
|                                                                                                             |                                                                                                                               |      |
|                                                                                                             | Consolidated                Statements of Income and Comprehensive Income                                                          | 83        |
|                                                                                                             | Consolidated                Balance Sheets                                                                                         | 84        |
|                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 85        |
|                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 86        |
|                                                                                                             | Management's                Discussion and Analysis of Financial                Condition and Results of Operations                | 87-89     |
|                                                                                                             |                                                                                                                               |      |
| **Metropolitan                Edison Company**                                                                   |                                                                                                                               |
|                                                                                                             |                                                                                                                               |      |
|                                                                                                             | Consolidated                Statements of Income and Comprehensive Income                                                          | 90        |
|                                                                                                             | Consolidated                Balance Sheets                                                                                         | 91        |
|                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 92        |
|                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 93        |
|                                                                                                             | Management's                Discussion and Analysis of Financial                Condition and Results of Operations                | 94-96     |
|                                                                                                             |                                                                                                                               |      |
| **Pennsylvania                Electric Company**                                                                 |                                                                                                                               |
|                                                                                                             |                                                                                                                               |      |
|                                                                                                             | Consolidated                Statements of Income and Comprehensive Income                                                          | 97        |
|                                                                                                             | Consolidated                Balance Sheets                                                                                         | 98        |
|                                                                                                             | Consolidated                Statements of Cash Flows                                                                               | 99        |
|                                                                                                             | Report                of                Independent Registered Public Accounting Firm                                              | 100       |
|                                                                                                             | Management's                Discussion and Analysis of                Financial                Condition and Results of Operations | 101-103   |
|                                                                                                             |                                                                                                                               |      |
| **Combined                Management’s Discussion and Analysis of Registrant                Subsidiaries** | 104-115                                                                                                                            |
|                                                                                                             |                                                                                                                               |
| **Item                3.** **Quantitative                and Qualitative Disclosures About Market Risk**    | 116                                                                                                                                |
|                                                                                                             |                                                                                                                               |      |
| **Item                4.** **Controls                and Procedures**                                       | 116                                                                                                                                |
|                                                                                                             |                                                                                                                               |      |
| **Part                II.** **Other                Information**                                            |                                                                                                                               |
|                                                                                                             |                                                                                                                               |      |
| **Item                1.** **Legal                Proceedings**                                             | 117                                                                                                                                |
|                                                                                                             |                                                                                                                               |      |
| **Item                1A.** **Risk                Factors**                                                 | 117                                                                                                                                |
|                                                                                                             |                                                                                                                               |
| **Item                2.** **Unregistered                Sales of Equity Securities and Use of Proceeds**   | 117                                                                                                                                |
|                                                                                                             |                                                                                                                               |      |
| **Item                6.** **Exhibits**                                                                     | 117-118                                                                                                                            |

----

**GLOSSARY      OF      TERMS**

| ATSI                                                                                                                                                            | American                Transmission Systems, Inc., owns and operates transmission                facilities                                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| CEI                                                                                                                                                             | The                Cleveland                Electric Illuminating Company, an Ohio electric utility operating                subsidiary                                                                                                      |
| Centerior                                                                                                                                                       | Centerior                Energy Corporation, former parent of CEI and TE, which merged with                OE to                formFirstEnergy                on                November 8, 1997                                            |
| Companies                                                                                                                                                       | OE,                CEI, TE,                JCP&L, Met-Ed and Penelec                                                                                                                                                                     |
| FENOC                                                                                                                                                           | FirstEnergy                Nuclear Operating Company, operates nuclear generating                facilities                                                                                                                                  |
| FES                                                                                                                                                             | FirstEnergy                Solutions Corp., provides energy-related products and                services                                                                                                                                     |
| FESC                                                                                                                                                            | FirstEnergy                Service Company, provides legal, financial, and other corporate support                services                                                                                                                   |
| FGCO                                                                                                                                                            | FirstEnergy                Generation Corp., owns and operates non-nuclear generating                facilities                                                                                                                              |
| FirstEnergy                                                                                                                                                     | FirstEnergy                Corp., a public utility holding company                                                                                                                                                                           |
| FSG                                                                                                                                                             | FirstEnergy                Facilities Services Group, LLC, former parent company of several                heating,                ventilation,air                conditioning and energy management companies                               |
| GPU                                                                                                                                                             | GPU,                Inc.,                former parent of JCP&L, Met-Ed and Penelec, which merged with                FirstEnergy onNovember 7,                2001                                                                 |
| JCP&L                                                                                                                                                       | Jersey                Central                Power & Light Company, a New Jersey electric utility operating                subsidiary                                                                                                    |
| JCP&L                Transition Funding                                                                                                                     | JCP&L                Transition Funding LLC, a Delaware limited liability company and                issuer of                transition bonds                                                                                           |
| JCP&L                TransitionFunding                II                                                                                                    | JCP&L                Transition Funding II LLC, a Delaware limited liability company and                issuer                of transition bonds                                                                                        |
| Met-Ed                                                                                                                                                          | Metropolitan                Edison Company, a Pennsylvania electric utility operating                subsidiary                                                                                                                              |
| MYR                                                                                                                                                             | MYR                Group,                Inc., a utility infrastructure construction service                company                                                                                                                          |
| NGC                                                                                                                                                             | FirstEnergy                Nuclear Generation Corp., owns nuclear generating                facilities                                                                                                                                       |
| OE                                                                                                                                                              | Ohio                Edison                Company, an Ohio electric utility operating subsidiary                                                                                                                                             |
| Ohio                Companies                                                                                                                                   | CEI,                OE and                TE                                                                                                                                                                                                 |
| Penelec                                                                                                                                                         | Pennsylvania                Electric Company, a Pennsylvania electric utility operating                subsidiary                                                                                                                            |
| Penn                                                                                                                                                            | Pennsylvania                Power Company, a Pennsylvania electric utility operating subsidiary                of                OE                                                                                                          |
| PNBV                                                                                                                                                            | PNBV                Capital                Trust, a special purpose entity created by OE in 1996                                                                                                                                             |
| Shippingport                                                                                                                                                    | Shippingport                Capital Trust, a special purpose entity created by CEI and TE in                1997                                                                                                                             |
| TE                                                                                                                                                              | The                Toledo                Edison Company, an Ohio electric utility operating                subsidiary                                                                                                                        |
| TEBSA                                                                                                                                                           | Termobarranquilla                S.A., Empresa de Servicios Publicos                                                                                                                                                                         |
|                                                                                                                                                            |                                                                                                                                                                                                                                         |
| The                following                abbreviations and acronyms are used to identify frequently used terms                in                this report: |
|                                                                                                                                                            |                                                                                                                                                                                                                                         |
| ALJ                                                                                                                                                             | Administrative                Law Judge                                                                                                                                                                                                      |
| AOCL                                                                                                                                                            | Accumulated                Other Comprehensive Loss                                                                                                                                                                                          |
| APB                                                                                                                                                             | Accounting                Principles Board                                                                                                                                                                                                   |
| APB                12                                                                                                                                           | APB                Opinion                No. 12, “Omnibus Opinion - 1967”                                                                                                                                                       |
| ARO                                                                                                                                                             | Asset                Retirement Obligation                                                                                                                                                                                                   |
| B&W                                                                                                                                                         | Babcock&                Wilcox Company                                                                                                                                                                                                   |
| Bechtel                                                                                                                                                         | Bechtel                Power                Corporation                                                                                                                                                                                      |
| BGS                                                                                                                                                             | Basic                Generation Service                                                                                                                                                                                                      |
| CAIR                                                                                                                                                            | Clean                Air                Interstate Rule                                                                                                                                                                                      |
| CAL                                                                                                                                                             | Confirmatory                Action Letter                                                                                                                                                                                                    |
| CAMR                                                                                                                                                            | Clean                Air                Mercury Rule                                                                                                                                                                                         |
| CBP                                                                                                                                                             | Competitive                Bid Process                                                                                                                                                                                                       |
| CO2                                                                                                                                                             | Carbon                Dioxide                                                                                                                                                                                                                |
| DOJ                                                                                                                                                             | United                States                Department of Justice                                                                                                                                                                            |
| DRA                                                                                                                                                             | Division                of                Ratepayer Advocate                                                                                                                                                                                 |
| ECAR                                                                                                                                                            | East                Central                Area Reliability Coordination Agreement                                                                                                                                                           |
| EITF                                                                                                                                                            | Emerging                Issues Task Force                                                                                                                                                                                                    |
| EITF                06-10                                                                                                                                       | EITF                Issue No.                06-10, “Accounting for Deferred Compensation and Postretirement                BenefitAspects                of                Collateral Split-Dollar Life Insurance Arrangements” |
| EPA                                                                                                                                                             | Environmental                Protection Agency                                                                                                                                                                                               |
| EPACT                                                                                                                                                           | Energy                Policy                Act of 2005                                                                                                                                                                                      |
| ERO                                                                                                                                                             | Electric                Reliability Organization                                                                                                                                                                                             |
| FASB                                                                                                                                                            | Financial                Accounting Standards Board                                                                                                                                                                                          |
| FERC                                                                                                                                                            | Federal                Energy                Regulatory Commission                                                                                                                                                                           |
| FIN                                                                                                                                                             | FASB                Interpretation                                                                                                                                                                                                           |

----

| FIN                46R     | FIN                46                (revised December 2003), "Consolidation of Variable Interest                Entities"                                                                                                                   |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| FIN                47      | FIN                47,                "Accounting for Conditional Asset Retirement Obligations - an                interpretation of FASB Statement                No.                143"                                                   |
| FIN                48      | FIN                48,                “Accounting for Uncertainty in Income Taxes - an interpretation of                FASB                StatementNo.                109”                                                     |
| Fitch                      | Fitch                Ratings,                Ltd.                                                                                                                                                                                            |
| FMB                        | First                Mortgage                Bonds                                                                                                                                                                                           |
| GAAP                       | Accounting                Principles Generally Accepted in the United States                                                                                                                                                                 |
| GHG                        | Greenhouse                Gases                                                                                                                                                                                                              |
| IRS                        | Internal                Revenue Service                                                                                                                                                                                                      |
| kV                         | Kilovolt                                                                                                                                                                                                                                     |
| KWH                        | Kilowatt-hours                                                                                                                                                                                                                               |
| LOC                        | Letter                of                Credit                                                                                                                                                                                               |
| MEIUG                      | Met-Ed                Industrial Users Group                                                                                                                                                                                                 |
| MISO                       | Midwest                Independent Transmission System Operator, Inc.                                                                                                                                                                        |
| Moody’s              | Moody’s                Investors Service                                                                                                                                                                                               |
| MOU                        | Memorandum                of                Understanding                                                                                                                                                                                    |
| MW                         | Megawatts                                                                                                                                                                                                                                    |
| NAAQS                      | National                Ambient Air Quality Standards                                                                                                                                                                                        |
| NERC                       | North                American                Electric Reliability Corporation                                                                                                                                                                |
| NJBPU                      | New                Jersey                Board of Public Utilities                                                                                                                                                                           |
| NOAC                       | Northwest                Ohio                Aggregation Coalition                                                                                                                                                                           |
| NOPR                       | Notice                of                Proposed Rulemaking                                                                                                                                                                                  |
| NOV                        | Notice                of                Violation                                                                                                                                                                                            |
| NOX                        | Nitrogen                Oxide                                                                                                                                                                                                                |
| NRC                        | Nuclear                Regulatory Commission                                                                                                                                                                                                 |
| NUG                        | Non-Utility                Generation                                                                                                                                                                                                        |
| NUGC                       | Non-Utility                Generation Charge                                                                                                                                                                                                 |
| OCA                        | Office                of                Consumer Advocate                                                                                                                                                                                    |
| OCC                        | Office                of the                Ohio Consumer’s Counsel                                                                                                                                                                    |
| OVEC                       | Ohio                Valley                Electric Corporation                                                                                                                                                                               |
| PCAOB                      | Public                Company                Accounting Oversight Board                                                                                                                                                                      |
| PICA                       | Penelec                Industrial Customer Alliance                                                                                                                                                                                          |
| PJM                        | PJM                Interconnection L. L. C.                                                                                                                                                                                                  |
| PLR                        | Provider                of                Last Resort                                                                                                                                                                                        |
| PPUC                       | Pennsylvania                Public Utility Commission                                                                                                                                                                                        |
| PRP                        | Potentially                Responsible Party                                                                                                                                                                                                 |
| PSA                        | Power                Supply                Agreements                                                                                                                                                                                        |
| PUCO                       | Public                Utilities Commission of Ohio                                                                                                                                                                                           |
| PUHCA                      | Public                Utility                Holding Company Act of 1935                                                                                                                                                                     |
| RCP                        | Rate                Certainty                Plan                                                                                                                                                                                            |
| RFP                        | Request                for                Proposal                                                                                                                                                                                           |
| RSP                        | Rate                Stabilization Plan                                                                                                                                                                                                       |
| RTC                        | Regulatory                Transition Charge                                                                                                                                                                                                  |
| RTO                        | Regional                Transmission Organization                                                                                                                                                                                            |
| RTOR                       | Regional                Through and Out Rates                                                                                                                                                                                                |
| S&P                    | Standard&                Poor’s Ratings Service                                                                                                                                                                                    |
| SBC                        | Societal                Benefits Charge                                                                                                                                                                                                      |
| SEC                        | U.S.                Securities and Exchange Commission                                                                                                                                                                                       |
| SECA                       | Seams                Elimination Cost Adjustment                                                                                                                                                                                             |
| SFAS                       | Statement                of                Financial Accounting Standards                                                                                                                                                                    |
| SFAS                106    | SFAS                No. 106,                “Employers’ Accounting for Postretirement Benefits Other Than                Pensions”                                                                                         |
| SFAS                107    | SFAS                No. 107,                “Disclosure about Fair Value of Financial Instruments”                                                                                                                               |
| SFAS                109    | SFAS                No. 109,                “Accounting for Income Taxes”                                                                                                                                                        |
| SFAS                123(R) | SFAS                No.                123(R), "Share-Based Payment"                                                                                                                                                                         |
| SFAS                133    | SFAS                No. 133,                “Accounting for Derivative Instruments and Hedging                Activities”                                                                                                        |
| SFAS                143    | SFAS                No. 143,                "Accounting for Asset Retirement Obligations"                                                                                                                                                    |
| SFAS                157    | SFAS                No. 157,                “Fair Value Measurements”                                                                                                                                                            |
| SFAS                159    | SFAS                No. 159,                “The Fair Value Option for Financial Assets and Financial Liabilities                -                Including anAmendment                of                FASB Statement No. 115” |

----

| SIP   | State                Implementation Plan(s) Under the Clean Air Act |
|-------|---------------------------------------------------------------------|
| SNCR  | Selective                Non-Catalytic Reduction                    |
| SO2   | Sulfur                Dioxide                                       |
| SRM   | Special                Reliability Master                           |
| TBC   | Transition                Bond Charge                               |
| TMI-2 | Three                Mile                Island Unit 2              |
| VIE   | Variable                Interest Entity                             |

----

**PART      I.      FINANCIAL INFORMATION**

**ITEMS      1. AND      2. FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL      CONDITION AND RESULTS OF OPERATIONS**

**FIRSTENERGY      CORP. AND SUBSIDIARIES **

**OHIO      EDISON      COMPANY AND SUBSIDIARIES **

**THE      CLEVELAND ELECTRIC ILLUMINATING COMPANY AND SUBSIDIARIES **

**THE      TOLEDO      EDISON COMPANY AND SUBSIDIARY **

**JERSEY      CENTRAL POWER & LIGHT COMPANY AND SUBSIDIARIES **

**METROPOLITAN      EDISON COMPANY AND SUBSIDIARIES **

**PENNSYLVANIA      ELECTRIC COMPANY AND SUBSIDIARIES **

**NOTES      TO      CONSOLIDATED FINANCIAL STATEMENTS **

**(UNAUDITED)      **

**1.**
**      ORGANIZATION AND BASIS OF PRESENTATION**

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**2.      EARNINGS      PER SHARE**

| **Reconciliation                of Basic and Diluted**                              |                                                                                              |   **Three                Months Ended****March                31,** |   |
|-------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------|--------|
| **Earnings                per Share of Common Stock**                               |                                                                                              | **2007**                                                                      |   | **2006** |   |
|                                                                                | ***                      (In millions, except per share amounts)*** |
| Income                from                continuing operations                     |                                                                                              | $                                                                             | 290    |   | $ | 219 |   |
| Discontinued                operations                                              |                                                                                              |                                                                          | -      |   |   | 2 |   |
| Net                income                available for common shareholders          |                                                                                              | $                                                                             | 290    |   | $ | 221 |   |
|                                                                                |                                                                                              |                                                                          |   |   |   |   |   |
| Average                shares                of common stock outstanding - Basic    |                                                                                              |                                                                          | 314    |   |   | 329 |   |
| Assumed                exercise of dilutive stock options and awards                |                                                                                              |                                                                          | 2      |   |   | 1 |   |
| Average                shares                of common stock outstanding - Dilutive |                                                                                              |                                                                          | 316    |   |   | 330 |   |
|                                                                                |                                                                                              |                                                                          |   |   |   |   |   |
| Earnings                per                share:                                   |                                                                                              |                                                                          |   |   |   |   |   |
|                                                                                | Basic                earnings                per share:                                           |                                                                          |   |   |   |   |   |   |
|                                                                                |                                                                                              | Earnings                from                continuing operations             |   | $ | 0.92 |   | $ | 0.67 |   |
|                                                                                |                                                                                              | Discontinued                operations                                        |   |   | - |   |   | - |   |
|                                                                                |                                                                                              | Net                earnings                per basic share                    |   | $ | 0.92 |   | $ | 0.67 |   |
|                                                                                |                                                                                              |                                                                          |   |   |   |   |   |
|                                                                                | Diluted                earnings per share:                                                        |                                                                          |   |   |   |   |   |   |
|                                                                                |                                                                                              | Earnings                from                continuing operations             |   | $ | 0.92 |   | $ | 0.67 |   |
|                                                                                |                                                                                              | Discontinued                operations                                        |   |   | - |   |   | - |   |
|                                                                                |                                                                                              | Net                earnings                per diluted share                  |   | $ | 0.92 |   | $ | 0.67 |   |
|                                                                                |                                                                                              |                                                                          |   |   |   |   |   |

**3.      DIVESTITURES AND DISCONTINUED OPERATIONS**

| FSG                subsidiaries                                   |   | $      | (1 | )      |
|-------------------------------------------------------------------|--------|--------|----|--------|
| MYR                                                               |   |   | 3  |   |
| Income                from                discontinued operations |   | $      | 2  |   |

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**4.      DERIVATIVE INSTRUMENTS**

**5.      ASSET      RETIREMENT OBLIGATIONS**

----

| **ARO                Reconciliation**                           |   | **FirstEnergy**                    |   | **OE** |   | **CEI** |   | **TE** |   | **JCP&L** |   | **Met-Ed** |   | **Penelec** |   |
|-----------------------------------------------------------------|--------|------------------------------------|--------|--------|--------|---------|--------|--------|--------|---------------|--------|------------|--------|-------------|--------|
|                                                            |   | ***(In                millions)*** |   |
| Balance,                January 1, 2007                         |   | $                                  | 1,190  |   | $      | 88      |   | $      | 2      |          | $      | 27         |   | $           | 84     |   | $ | 151 |   | $ | 77 |   |
| Liabilities                incurred                             |   |                               | -      |   |   | -       |   |   | -      |          |   | -          |   |        | -      |   |   | - |   |   | - |   |
| Liabilities                settled                              |   |                               | -      |   |   | -       |   |   | -      |          |   | -          |   |        | -      |   |   | - |   |   | - |   |
| Accretion                                                       |   |                               | 18     |   |   | 1       |   |   | -      |          |   | -          |   |        | 2      |   |   | 2 |   |   | 1 |   |
| Revisions                in                estimated cash flows |   |                               | -      |   |   | -       |   |   | -      |          |   | -          |   |        | -      |   |   | - |   |   | - |   |
| Balance,                March                31, 2007           |   | $                                  | 1,208  |   | $      | 89      |   | $      | 2      |          | $      | 27         |   | $           | 86     |   | $ | 153 |   | $ | 78 |   |
|                                                            |   |                               |   |   |   |    |   |   |   |          |   |       |   |        |   |   |   |   |   |   |   |   |
| Balance,                January 1, 2006                         |   | $                                  | 1,126  |   | $      | 83      |   | $      | 8      |          | $      | 25         |   | $           | 80     |   | $ | 142 |   | $ | 72 |   |
| Liabilities                incurred                             |   |                               | -      |   |   | -       |   |   | -      |          |   | -          |   |        | -      |   |   | - |   |   | - |   |
| Liabilities                settled                              |   |                               | -      |   |   | -       |   |   | -      |          |   | -          |   |        | -      |   |   | - |   |   | - |   |
| Accretion                                                       |   |                               | 18     |   |   | 1       |   |   | -      |          |   | -          |   |        | 1      |   |   | 2 |   |   | 1 |   |
| Revisions                in                estimated cash flows |   |                               | 4      |   |   | -       |   |   | -      |          |   | -          |   |        | -      |   |   | - |   |   | - |   |
| Balance,                March                31, 2006           |   | $                                  | 1,148  |   | $      | 84      |   | $      | 8      |          | $      | 25         |   | $           | 81     |   | $ | 144 |   | $ | 73 |   |

**6.      PENSION      AND OTHER POSTRETIREMENT BENEFITS**

|                                                        |   | **Pension                Benefits** |   | **Other                Postretirement Benefits** |   |
|-------------------------------------------------------------|--------|-------------------------------------|--------|--------------------------------------------------|--------|
|                                                        |   | **2007**                            |   | **2006**                                         |   | **2007** |   | **2006** |   |
|                                                        |   |                                |   | ***(In                millions)***               |   |   |   |
| Service                cost                                 |   | $                                   | 21     |                                             | $      | 21 |   | $ | 5 |   | $ | 9 |   |
| Interest                cost                                |   |                                | 71     |                                             |   | 66 |   |   | 17 |   |   | 26 |   |
| Expected                return on plan assets               |   |                                | (112   | )                                                |   | (99 | ) |   | (13 | ) |   | (12 | ) |
| Amortization                of prior service cost           |   |                                | 2      |                                             |   | 2 |   |   | (37 | ) |   | (19 | ) |
| Recognized                net                actuarial loss |   |                                | 10     |                                             |   | 15 |   |   | 12 |   |   | 14 |   |
| Net                periodic                cost (credit)    |   | $                                   | (8)    |                                             | $      | 5 |   | $ | (16 | ) | $ | 18 |   |

|                                                |   | **Pension                Benefit Cost (Credit)** |   | **Other                Postretirement****Benefit                Cost (Credit)** |   |
|-----------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|
|                                                |   | **2007**                                         |   | **2006**                                                                        |   | **2007** |   | **2006** |   |
|                                                |   |                                             |   | ***(In                millions)***                                              |   |   |   |
| OE                                                  |   | $                                                | (4.0   | )                                                                               | $      | (1.5 | ) | $ | (2.7 | ) | $ | 4.2 |   |
| CEI                                                 |   |                                             | 0.3    |                                                                            |   | 1.0 |   |   | 1.0 |   |   | 2.8 |   |
| TE                                                  |   |                                             | -      |                                                                            |   | 0.2 |   |   | 1.2 |   |   | 2.0 |   |
| JCP&L                                           |   |                                             | (2.1   | )                                                                               |   | (1.4 | ) |   | (4.0 | ) |   | 0.6 |   |
| Met-Ed                                              |   |                                             | (1.7   | )                                                                               |   | (1.7 | ) |   | (2.5 | ) |   | 0.7 |   |
| Penelec                                             |   |                                             | (2.6   | )                                                                               |   | (1.3 | ) |   | (3.2 | ) |   | 1.8 |   |
| Other                FirstEnergy  subsidiaries |   |                                             | 2.5    |                                                                            |   | 9.9 |   |   |  (5.7 |  ) |   | 6.1 |   |
|                                                |   | $                                                | (7.6   | )                                                                               | $      | 5.2 |   | $ | (15.9 | ) | $ | 18.2 |   |

----

**7.      VARIABLE      INTEREST ENTITIES**

**Leases**

**Power      Purchase Agreements**

|      |   | **Three                Months Ended** |   |
|-----------|--------|---------------------------------------|--------|
|      |   | **March                31,**          |   |
|      |   | **2007**                              |   | **2006** |   |
|      |   | ***(In                millions)***    |   |
| JCP&L |   | $                                     | 20     |   | $ | 15 |   |
| Met-Ed    |   |                                  | 15     |   |   | 16 |   |
| Penelec   |   |                                  | 8      |   |   | 8 |   |
|      |   | $                                     | 43     |   | $ | 39 |   |

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**Transition      Bonds **

**8.      INCOME      TAXES **

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**9.      COMMITMENTS, GUARANTEES AND CONTINGENCIES **

**(A)      **
**GUARANTEES      AND OTHER ASSURANCES **

|                                                    |   |                              |    | **Borrowing**                      |   |
|---------------------------------------------------------|--------|-----------------------------------|---------|------------------------------------|--------|
| **Subsidiary                Company**                   |   | **Parent                Company** |    | **Capacity**                       |   |
|                                                    |   |                              |    | ***(In                millions)*** |   |
| OES                Capital,                Incorporated |   |                              | OE      |                               | $      | 170 |   |
| Centerior                Funding Corp.                  |   |                              | CEI     |                               |   | 200 |   |
| Penn                Power                Funding LLC    |   |                              | Penn    |                               |   | 25 |   |
| Met-Ed                Funding                LLC        |   |                              | Met-Ed  |                               |   | 80 |   |
| Penelec                Funding LLC                      |   |                              | Penelec |                               |   | 75 |   |
|                                                    |   |                              |    |                               | $      | 550 |   |

**(B)**
**ENVIRONMENTAL      MATTERS **

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*Clean      Air Act      Compliance*

*National      Ambient      Air Quality Standards*

*Mercury      Emissions*

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*W.      H. Sammis      Plant*

*Climate      Change*

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*Clean      Water      Act*

*Regulation      of      Hazardous Waste*

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**(C)**
**OTHER      LEGAL      PROCEEDINGS **

*Power      Outages      and Related Litigation*

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*Nuclear      Plant      Matters*

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*Other      Legal      Matters*

**10.      REGULATORY MATTERS **

**(A)**
**RELIABILITY      INITIATIVES**

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*First*
*First*
*First*

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**(B)**
**OHIO**

**(C)**
**PENNSYLVANIA**

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----

**(D)**
**NEW      JERSEY**

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|                ·   |  Reduce              the total              projected electricity demand by 20% by              2020; |
|----------------------------------------|------------------------------------------------------------------------------------------------------------|

|                  ·   |   Meet 22.5% of New                Jersey’s electricity needs with renewable energy resources by that                date; |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   |   Reduce air pollution                related to energy use; |
|--------------------|-------------------------------------------------------------------|

|                ·   |                Encourage and maintain economic growth and development; |
|----------------------------------------|-----------------------------------------------------------------------------|

|                ·   |  Achieve                a 20% reduction in both Customer Average Interruption Duration Index                and                System Average Interruption Frequency Index by                2020; |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |  Unit                prices for electricity should remain no more than +5% of the regional                average price (region includes New York, New Jersey, Pennsylvania,                Delaware,                  Maryland and the District of Columbia);                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                ·   |                  Eliminate transmission congestion by                2020. |
|----------------------------------------|---------------------------------------------------------------------------------|

**(E)**
**FERC      MATTERS**

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*** ***

**11.      NEW      ACCOUNTING STANDARDS AND INTERPRETATIONS **

*SFAS      159 - “The      Fair Value Option for Financial Assets and Financial Liabilities - Including      an      amendment of FASB *

*Statement      No.      115”*

* *
*.      *

----

*SFAS      157 - “Fair      Value Measurements”*

*EITF      06-10 -“Accounting for Deferred Compensation and Postretirement Benefit Aspects of      Collateral *

*Split-Dollar      Life Insurance Arrangements”*

* *

**12.      SEGMENT      INFORMATION **

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| **Segment                  Financial Information**     |   |                               |   |            |   |             |   |      |   |            |   |             |   |
|--------------------------------------------------------|--------|------------------------------------|--------|-----------------|--------|------------------|--------|-----------|--------|-----------------|--------|------------------|--------|
|                                                   |   |                               |   |            |   | **Ohio**         |   |      |   |            |   |             |   |
|                                                   |   | **Energy**                         |   | **Competitive** |   | **Transitional** |   |      |   |            |   |             |   |
|                                                   |   | **Delivery**                       |   | **Energy**      |   | **Generation**   |   |      |   | **Reconciling** |   |             |   |
| **Three                  Months Ended**                |   | **Services**                       |   | **Services**    |   | **Services**     |   | **Other** |   | **Adjustments** |   | **Consolidated** |   |
|                                                   |   | **(In                  millions)** |   |
| **March                  31, 2007**                    |   |                               |   |            |   |             |   |      |   |            |   |             |   |
| External                  revenues                     |   | $                                  | 2,040  |            | $      | 328              |   | $         | 619    |            | $      | 12               |   | $ | (26 | ) | $ | 2,973 |   |
| Internal                  revenues                     |   |                               | -      |            |   | 714              |   |      | -      |            |   | -                |   |   | (714 | ) |   | - |   |
| Total                  revenues                        |   |                               | 2,040  |            |   | 1,042            |   |      | 619    |            |   | 12               |   |   | (740 | ) |   | 2,973 |   |
| Depreciation                  and amortization         |   |                               | 220    |            |   | 51               |   |      | (15    | )               |   | 1                |   |   | 6 |   |   | 263 |   |
| Investment                  income                     |   |                               | 70     |            |   | 3                |   |      | 1      |            |   | -                |   |   | (41 | ) |   | 33 |   |
| Net                  interest                  charges |   |                               | 107    |            |   | 49               |   |      | 1      |            |   | 2                |   |   | 21 |   |   | 180 |   |
| Income                  taxes                          |   |                               | 148    |            |   | 65               |   |      | 15     |            |   | 5                |   |   | (33 | ) |   | 200 |   |
| Net                  income                            |   |                               | 218    |            |   | 98               |   |      | 24     |            |   | 1                |   |   | (51 | ) |   | 290 |   |
| Total                  assets                          |   |                               | 23,526 |            |   | 7,089            |   |      | 246    |            |   | 254              |   |   | 675 |   |   | 31,790 |   |
| Total                  goodwill                        |   |                               | 5,874  |            |   | 24               |   |      | -      |            |   | -                |   |   | - |   |   | 5,898 |   |
| Property                  additions                    |   |                               | 155    |            |   | 124              |   |      | -      |            |   | 1                |   |   | 16 |   |   | 296 |   |
|                                                   |   |                               |   |            |   |             |   |      |   |            |   |             |   |   |   |   |   |   |   |
| **March                  31, 2006**                    |   |                               |   |            |   |             |   |      |   |            |   |             |   |   |   |   |   |   |   |
| External                  revenues                     |   | $                                  | 1,796  |            | $      | 355              |   | $         | 543    |            | $      | 28               |   | $ | (17 | ) | $ | 2,705 |   |
| Internal                  revenues                     |   |                               | 9      |            |   | 611              |   |      | -      |            |   | -                |   |   | (620 | ) |   | - |   |
| Total                  revenues                        |   |                               | 1,805  |            |   | 966              |   |      | 543    |            |   | 28               |   |   | (637 | ) |   | 2,705 |   |
| Depreciation                  and amortization         |   |                               | 258    |            |   | 46               |   |      | (21    | )               |   | 1                |   |   | 5 |   |   | 289 |   |
| Investment                  income                     |   |                               | 84     |            |   | 15               |   |      | -      |            |   | -                |   |   | (56 | ) |   | 43 |   |
| Net                  interest                  charges |   |                               | 99     |            |   | 44               |   |      | -      |            |   | 1                |   |   | 16 |   |   | 160 |   |
| Income                  taxes                          |   |                               | 126    |            |   | 21               |   |      | 20     |            |   | (6               | )      |   | (26 | ) |   | 135 |   |
| Income                  from                           |   |                               |   |            |   |             |   |      |   |            |   |             |   |   |   |   |   |   |   |
| continuing                  operations                 |   |                               | 189    |            |   | 32               |   |      | 30     |            |   | 12               |   |   | (44 | ) |   | 219 |   |
| Discontinued                  operations               |   |                               | -      |            |   | -                |   |      | -      |            |   | 2                |   |   | - |   |   | 2 |   |
| Net                  income                            |   |                               | 189    |            |   | 32               |   |      | 30     |            |   | 14               |   |   | (44 | ) |   | 221 |   |
| Total                  assets                          |   |                               | 23,633 |            |   | 6,759            |   |      | 215    |            |   | 367              |   |   | 823 |   |   | 31,797 |   |
| Total                  goodwill                        |   |                               | 5,916  |            |   | 24               |   |      | -      |            |   | -                |   |   | - |   |   | 5,940 |   |
| Property                  additions                    |   |                               | 193    |            |   | 244              |   |      | -      |            |   | -                |   |   | 10 |   |   | 447 |   |

----

| **FIRSTENERGY                      CORP.**                                                                                                                                                                                                                           |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |
| **CONSOLIDATED                      STATEMENTS OF INCOME**                                                                                                                                                                                                           |   |
| **(Unaudited)**                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                 |   | **Three                      Months Ended** |   |
|                                                                                                                                                                                                                                                                 |   | **March                      31,**  |   |
|                                                                                                                                                                                                                                                                 |   | **2007**  |   | **2006**  |   |
|                                                                                                                                                                                                                                                                 |   | ***(In                      millions, except per share amounts)***  |   |
| **REVENUES:**                                                                                                                                                                                                                                                        |   |   |   |   |   |
| Electric                      utilities                                                                                                                                                                                                                         |   | $ | 2,681 |   | $ | 2,340 |   |
| Unregulated                      businesses                                                                                                                                                                                                                     |   |   | 292 |   |   | 365 |   |
|  Total                      revenues*                                                                                                                                                                                                                           |   |   | 2,973 |   |   | 2,705 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Fuel                      and                      purchased power                                                                                                                                                                                              |   |   | 1,121 |   |   | 998 |   |
| Other                      operating expenses                                                                                                                                                                                                                   |   |   | 749 |   |   | 754 |   |
| Provision                      for                      depreciation                                                                                                                                                                                            |   |   | 156 |   |   | 148 |   |
| Amortization                      of regulatory assets                                                                                                                                                                                                          |   |   | 251 |   |   | 221 |   |
| Deferral                      of                      new regulatory assets                                                                                                                                                                                     |   |   | (144 | ) |   | (80 | ) |
| General                      taxes                                                                                                                                                                                                                              |   |   | 203 |   |   | 193 |   |
|  Total                      expenses                                                                                                                                                                                                                            |   |   | 2,336 |   |   | 2,234 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **OPERATING                      INCOME**                                                                                                                                                                                                                            |   |   | 637 |   |   | 471 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **OTHER                      INCOME (EXPENSE):**                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Investment                      income                                                                                                                                                                                                                          |   |   | 33 |   |   | 43 |   |
| Interest                      expense                                                                                                                                                                                                                           |   |   | (185 | ) |   | (165 | ) |
| Capitalized                      interest                                                                                                                                                                                                                       |   |   | 5 |   |   | 7 |   |
| Subsidiaries’                      preferred stock dividends                                                                                                                                                                                              |   |   | - |   |   | (2 | ) |
|  Total                      other                      expense                                                                                                                                                                                                  |   |   | (147 | ) |   | (117 | ) |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **INCOME                      FROM CONTINUING OPERATIONS BEFORE INCOME TAXES**                                                                                                                                                                                       |   |   | 490 |   |   | 354 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **INCOME                      TAXES**                                                                                                                                                                                                                                |   |   | 200 |   |   | 135 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **INCOME                      FROM CONTINUING OPERATIONS**                                                                                                                                                                                                           |   |   | 290 |   |   | 219 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Discontinued                      operations (net of income tax benefit of $1 million)                                                                                                                                                                               |   |   |   |   |   |   |   |
| (Note                      3)                                                                                                                                                                                                                                   |   |   | - |   |   | 2 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **NET                      INCOME**                                                                                                                                                                                                                                  |   | $ | 290 |   | $ | 221 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **BASIC                      EARNINGS PER SHARE OF COMMON STOCK:**                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Income                      from                      continuing operations                                                                                                                                                                                     |   | $ | 0.92 |   | $ | 0.67 |   |
| Discontinued                      operations (Note 3)                                                                                                                                                                                                           |   |   | - |   |   | - |   |
| Net                      income                                                                                                                                                                                                                                 |   | $ | 0.92 |   | $ | 0.67 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **WEIGHTED                      AVERAGE NUMBER OF BASIC SHARES OUTSTANDING**                                                                                                                                                                                         |   |   | 314 |   |   | 329 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **DILUTED                      EARNINGS PER SHARE OF COMMON STOCK:**                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Income                      from                      continuing operations                                                                                                                                                                                     |   | $ | 0.92 |   | $ | 0.67 |   |
| Discontinued                      operations (Note 3)                                                                                                                                                                                                           |   |   | - |   |   | - |   |
| Net                      income                                                                                                                                                                                                                                 |   | $ | 0.92 |   | $ | 0.67 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **WEIGHTED                      AVERAGE NUMBER OF DILUTED SHARES OUTSTANDING**                                                                                                                                                                                       |   |   | 316 |   |   | 330 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **DIVIDENDS                      DECLARED PER SHARE OF COMMON STOCK**                                                                                                                                                                                                |   | $ | 0.50 |   | $ | 0.45 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| *                      Includes                      $104 million and $99 million of excise tax collections in the                      first                      quarter of 2007 and 2006, respectively.                                                           |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| The                      preceding                      Notes to Consolidated Financial Statements as they relate to                      FirstEnergy                      Corp. are an integral part of                      these                      statements. |   |

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| **FIRSTENERGY                    CORP.**                                                                                                                                                                                                                 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                     |   |   |   |   |   |
| **CONSOLIDATED                    STATEMENTS OF COMPREHENSIVE INCOME**                                                                                                                                                                                   |   |
| **(Unaudited)**                                                                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                                                     |   |   |   |   |   |
|                                                                                                                                                                                                                                                     |   | **Three                    Months Ended**  |   |
|                                                                                                                                                                                                                                                     |   | **March                    31,**  |   |
|                                                                                                                                                                                                                                                     |   | **2007**  |   | **2006**  |   |
|                                                                                                                                                                                                                                                     |   | ***(In                    millions)***  |   |
|                                                                                                                                                                                                                                                     |   |   |   |   |   |
| **NET                    INCOME**                                                                                                                                                                                                                        |   | $ | 290 |   | $ | 221 |   |
|                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| **OTHER                    COMPREHENSIVE INCOME (LOSS):**                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Pension                    and                    other postretirement benefits                                                                                                                                                                     |   |   | (11 | ) |   | - |   |
| Unrealized                    gain on derivative hedges                                                                                                                                                                                             |   |   | 21 |   |   | 37 |   |
| Unrealized                    gain on available for sale securities                                                                                                                                                                                 |   |   | 17 |   |   | 37 |   |
|  Other                    comprehensive income                                                                                                                                                                                                      |   |   | 27 |   |   | 74 |   |
| Income                    tax                    expense related to other comprehensive income                                                                                                                                                      |   |   | 9 |   |   | 27 |   |
|  Other                    comprehensive income, net of tax                                                                                                                                                                                          |   |   | 18 |   |   | 47 |   |
|                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| **COMPREHENSIVE                    INCOME**                                                                                                                                                                                                              |   | $ | 308 |   | $ | 268 |   |
|                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    FirstEnergy                    Corp. are an integral part                    of these                    statements. |   |

----

| **FIRSTENERGY                  CORP.**                                                                                                                                                               |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                           |   |    |   |   |   |
| **CONSOLIDATED                  BALANCE SHEETS**                                                                                                                                                     |   |
| **(Unaudited)**                                                                                                                                                                                      |   |
|                                                                                                                                                                                                           |   | **March                  31, ** | ** ** | **December                  31,**  |   |
|                                                                                                                                                                                                           |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                           |   | ***(In                  millions)*** |   |
| **ASSETS**                                                                                                                                                                                                     |   |    |   |   |   |
|                                                                                                                                                                                                           |   |    |   |   |   |
| **CURRENT                  ASSETS:**                                                                                                                                                                           |   |    |   |   |   |
| Cash                  and cash                  equivalents                                                                                                                                                    |   | $ | 89 |   | $ | 90 |   |
| Receivables-                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Customers                  (less accumulated provisions of $40 million and                                                                                                                                     |   |   |   |   |   |   |   |
| $43                  million,                  respectively, for uncollectible accounts)                                                                                                                       |   |   | 1,250 |   |   | 1,135 |   |
| Other                  (less                  accumulated provisions of $23 million and                                                                                                                        |   |   |   |   |   |   |   |
| $24                  million,                  respectively, for uncollectible accounts)                                                                                                                       |   |   | 184 |   |   | 132 |   |
| Materials                  and                  supplies, at average cost                                                                                                                                      |   |   | 591 |   |   | 577 |   |
| Prepayments                  and other                                                                                                                                                                         |   |   | 233 |   |   | 149 |   |
|                                                                                                                                                                                                           |   |   | 2,347 |   |   | 2,083 |   |
| **PROPERTY,                  PLANT AND EQUIPMENT:**                                                                                                                                                            |   |   |   |   |   |   |   |
| In                  service                                                                                                                                                                                    |   |   | 24,223 |   |   | 24,105 |   |
| Less                  -                  Accumulated provision for depreciation                                                                                                                                |   |   | 10,191 |   |   | 10,055 |   |
|                                                                                                                                                                                                           |   |   | 14,032 |   |   | 14,050 |   |
| Construction                  work in progress                                                                                                                                                                 |   |   | 754 |   |   | 617 |   |
|                                                                                                                                                                                                           |   |   | 14,786 |   |   | 14,667 |   |
| **INVESTMENTS:**                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Nuclear                  plant                  decommissioning trusts                                                                                                                                         |   |   | 2,008 |   |   | 1,977 |   |
| Investments                  in                  lease obligation bonds                                                                                                                                        |   |   | 775 |   |   | 811 |   |
| Other                                                                                                                                                                                                          |   |   | 742 |   |   | 746 |   |
|                                                                                                                                                                                                           |   |   | 3,525 |   |   | 3,534 |   |
| **DEFERRED                  CHARGES AND OTHER ASSETS:**                                                                                                                                                        |   |   |   |   |   |   |   |
| Goodwill                                                                                                                                                                                                       |   |   | 5,898 |   |   | 5,898 |   |
| Regulatory                  assets                                                                                                                                                                             |   |   | 4,371 |   |   | 4,441 |   |
| Pension                  assets                                                                                                                                                                                |   |   | 277 |   |   | - |   |
| Other                                                                                                                                                                                                          |   |   | 586 |   |   | 573 |   |
|                                                                                                                                                                                                           |   |   | 11,132 |   |   | 10,912 |   |
|                                                                                                                                                                                                           |   | $ | 31,790 |   | $ | 31,196 |   |
| **LIABILITIES                  AND CAPITALIZATION**                                                                                                                                                            |   |   |   |   |   |   |   |
|                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| **CURRENT                  LIABILITIES:**                                                                                                                                                                      |   |   |   |   |   |   |   |
| Currently                  payable long-term debt                                                                                                                                                              |   | $ | 2,093 |   | $ | 1,867 |   |
| Short-term                  borrowings                                                                                                                                                                         |   |   | 2,247 |   |   | 1,108 |   |
| Accounts                  payable                                                                                                                                                                              |   |   | 625 |   |   | 726 |   |
| Accrued                  taxes                                                                                                                                                                                 |   |   | 413 |   |   | 598 |   |
| Other                                                                                                                                                                                                          |   |   | 1,020 |   |   | 956 |   |
|                                                                                                                                                                                                           |   |   | 6,398 |   |   | 5,255 |   |
| **CAPITALIZATION:**                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Common                  stockholders’ equity-                                                                                                                                                            |   |   |   |   |   |   |   |
| Common                  stock,                  $.10 par value, authorized 375,000,000 shares-                                                                                                                 |   |   |   |   |   |   |   |
| 304,835,407                  and 319,205,517 shares outstanding, respectively                                                                                                                                  |   |   | 30 |   |   | 32 |   |
| Other                  paid-in                  capital                                                                                                                                                        |   |   | 5,574 |   |   | 6,466 |   |
| Accumulated                  other comprehensive loss                                                                                                                                                          |   |   | (241 | ) |   | (259 | ) |
| Retained                  earnings                                                                                                                                                                             |   |   | 2,941 |   |   | 2,806 |   |
| Unallocated                  employee stock ownership plan common stock-                                                                                                                                       |   |   |   |   |   |   |   |
| 324,738                  and                  521,818 shares, respectively                                                                                                                                     |   |   | (5 | ) |   | (10 | ) |
| Total                  common                  stockholders' equity                                                                                                                                            |   |   | 8,299 |   |   | 9,035 |   |
| Long-term                  debt                  and other long-term obligations                                                                                                                               |   |   | 8,546 |   |   | 8,535 |   |
|                                                                                                                                                                                                           |   |   | 16,845 |   |   | 17,570 |   |
| **NONCURRENT                  LIABILITIES:**                                                                                                                                                                   |   |   |   |   |   |   |   |
| Accumulated                  deferred income taxes                                                                                                                                                             |   |   | 2,826 |   |   | 2,740 |   |
| Asset                  retirement obligations                                                                                                                                                                  |   |   | 1,208 |   |   | 1,190 |   |
| Power                  purchase                  contract loss liability                                                                                                                                       |   |   | 1,063 |   |   | 1,182 |   |
| Retirement                  benefits                                                                                                                                                                           |   |   | 920 |   |   | 944 |   |
| Lease                  market                  valuation liability                                                                                                                                             |   |   | 745 |   |   | 767 |   |
| Other                                                                                                                                                                                                          |   |   | 1,785 |   |   | 1,548 |   |
|                                                                                                                                                                                                           |   |   | 8,547 |   |   | 8,371 |   |
| **COMMITMENTS,                  GUARANTEES AND CONTINGENCIES (Note 9)**                                                                                                                                        |   |   |   |   |   |   |   |
|                                                                                                                                                                                                           |   | $ | 31,790 |   | $ | 31,196 |   |
|                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to FirstEnergy                  Corp. are an integral part of these balance                  sheets. |   |

----

| **FIRSTENERGY                  CORP.**                                                                                                                                                                     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                       |   |    |   |    |   |
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS**                                                                                                                                                 |   |
| **(Unaudited)**                                                                                                                                                                                            |   |
|                                                                                                                                                                                                       |   |    |   |    |   |
|                                                                                                                                                                                                       |   | **Three                  Months Ended** |   |
|                                                                                                                                                                                                       |   | **March                  31,**   |   |
|                                                                                                                                                                                                       |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                       |   | ***(In                  millions)*** |   |
|                                                                                                                                                                                                       |   |    |   |    |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                 |   |    |   |    |   |
| Net                  income                                                                                                                                                                                |   | $ | 290 |   | $ | 221 |   |
| Adjustments                  to                  reconcile net income to net cash from operating                  activities-                                                                              |   |   |   |   |   |   |   |
| Provision                  for                  depreciation                                                                                                                                               |   |   | 156 |   |   | 148 |   |
| Amortization                  of regulatory assets                                                                                                                                                         |   |   | 251 |   |   | 222 |   |
| Deferral                  of                  new regulatory assets                                                                                                                                        |   |   | (144 | ) |   | (80 | ) |
| Nuclear                  fuel                  and lease amortization                                                                                                                                      |   |   | 26 |   |   | 20 |   |
| Deferred                  purchased power and other costs                                                                                                                                                  |   |   | (116 | ) |   | (104 | ) |
| Deferred                  income taxes and investment tax credits, net                                                                                                                                     |   |   | 53 |   |   | 6 |   |
| Investment                  impairment                                                                                                                                                                     |   |   | 5 |   |   | - |   |
| Deferred                  rents                  and lease market valuation liability                                                                                                                      |   |   | (25 | ) |   | (38 | ) |
| Accrued                  compensation and retirement benefits                                                                                                                                              |   |   | (65 | ) |   | (19 | ) |
| Commodity                  derivative transactions, net                                                                                                                                                    |   |   | 1 |   |   | 26 |   |
| Income                  from                  discontinued operations                                                                                                                                      |   |   | - |   |   | (2 | ) |
| Cash                  collateral                                                                                                                                                                           |   |   | 6 |   |   | (106 | ) |
| Pension                  trust                  contribution                                                                                                                                               |   |   | (300 | ) |   | - |   |
| Decrease                  (Increase) in operating assets-                                                                                                                                                  |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                |   |   | (155 | ) |   | 226 |   |
| Materials                  and                  supplies                                                                                                                                                   |   |   | 15 |   |   | (52 | ) |
| Prepayments                  and other current assets                                                                                                                                                      |   |   | (74 | ) |   | (93 | ) |
| Increase                  (Decrease) in operating liabilities-                                                                                                                                             |   |   |   |   |   |   |   |
| Accounts                  payable                                                                                                                                                                          |   |   | (108 | ) |   | (114 | ) |
| Accrued                  taxes                                                                                                                                                                             |   |   | 73 |   |   | 9 |   |
| Accrued                  interest                                                                                                                                                                          |   |   | 86 |   |   | 100 |   |
| Electric                  service prepayment programs                                                                                                                                                      |   |   | (17 | ) |   | (14 | ) |
| Other                                                                                                                                                                                                      |   |   | (33 | ) |   | (32 | ) |
| Net                  cash                  provided from (used for) operating activities                                                                                                                   |   |   | (75 | ) |   | 324 |   |
|                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                 |   |   |   |   |   |   |   |
| New                  Financing-                                                                                                                                                                            |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                                            |   |   | 250 |   |   | - |   |
| Short-term                  borrowings, net                                                                                                                                                                |   |   | 1,139 |   |   | 200 |   |
| Redemptions                  and Repayments-                                                                                                                                                               |   |   |   |   |   |   |   |
| Common                  stock                                                                                                                                                                              |   |   | (891 | ) |   | - |   |
| Preferred                  stock                                                                                                                                                                           |   |   | - |   |   | (30 | ) |
| Long-term                  debt                                                                                                                                                                            |   |   | (13 | ) |   | (64 | ) |
| Net                  controlled                  disbursement activity                                                                                                                                     |   |   | 12 |   |   | (8 | ) |
| Stock-based                  compensation tax benefit                                                                                                                                                      |   |   | 8 |   |   | - |   |
| Common                  stock                  dividend payments                                                                                                                                           |   |   | (159 | ) |   | (148 | ) |
| Net                  cash                  provided from (used for) financing activities                                                                                                                   |   |   | 346 |   |   | (50 | ) |
|                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                 |   |   |   |   |   |   |   |
| Property                  additions                                                                                                                                                                        |   |   | (296 | ) |   | (447 | ) |
| Proceeds                  from                  asset sales                                                                                                                                                |   |   | - |   |   | 57 |   |
| Proceeds                  from                  nuclear decommissioning trust fund sales                                                                                                                   |   |   | 266 |   |   | 481 |   |
| Investments                  in                  nuclear decommissioning trust funds                                                                                                                       |   |   | (269 | ) |   | (484 | ) |
| Cash                  investments                                                                                                                                                                          |   |   | 25 |   |   | 103 |   |
| Other                                                                                                                                                                                                      |   |   | 2 |   |   | (20 | ) |
| Net                  cash used                  for investing activities                                                                                                                                   |   |   | (272 | ) |   | (310 | ) |
|                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Net                  decrease                  in cash and cash equivalents                                                                                                                                |   |   | (1 | ) |   | (36 | ) |
| Cash                  and cash                  equivalents at beginning of period                                                                                                                         |   |   | 90 |   |   | 64 |   |
| Cash                  and cash                  equivalents at end of period                                                                                                                               |   | $ | 89 |   | $ | 28 |   |
|                                                                                                                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to FirstEnergy                  Corp. are an integral part of these                  statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**FIRSTENERGY      CORP.**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION AND RESULTS OF OPERATIONS **

**EXECUTIVE      SUMMARY**

| **Change                in Basic Earnings Per Share From****Prior                Year First Quarter** |   |                  |   |
|-------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|
|                                                                                                  |   |                  |   |
| Basic                Earnings                Per Share - First Quarter 2006                           |   | $                0.67 |   |
| Revenues                                                                                              |   | 0.51                  |   |
| Fuel                and                purchased power                                                |   | (0.24)                |   |
| Depreciation                and amortization                                                          |   | (0.08)                |   |
| Deferral                of                new regulatory assets                                       |   | 0.07                  |   |
| Other                expenses                                                                         |   | (0.05)                |   |
| Saxton                decommissioning regulatory asset                                                |   | 0.05                  |   |
| Trust                securities impairment                                                            |   | (0.01)                |   |
| Basic                Earnings                Per Share - First Quarter 2007                           |   | $                0.92 |   |
|                                                                                                  |   |                  |   |

**Financial      Matters**

----

**Regulatory      Matters**

**Generation**

----

**FIRSTENERGY’S      BUSINESS**

| ·   | **Energy                Delivery Services**                transmits and                distributes electricity through FirstEnergy's eight utility operating                companies, serving 4.5 million customers within 36,100 square miles                of Ohio, Pennsylvania and New Jersey and purchases power for its                PLR                requirements in Pennsylvania and New Jersey. This business segment                derives                its revenues principally from the delivery of electricity within                FirstEnergy’s service areas, cost recovery of regulatory assets and the                sale of electric generation to non-shopping retail customers under                the PLR                obligations in its Pennsylvania and New Jersey franchise areas.                Its                results                reflect the commodity costs of securing electric generation from                the                Competitive Energy Services Segment under partial requirements purchased                power agreements with FES and non-affiliated power suppliers as well                as                the net PJM transmission expenses related to the delivery of that                generation load. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | **Competitive                Energy Services**                supplies the                electric power needs of end-use customers through retail and wholesale                arrangements, including associated company power sales to meet all                or a                portion of the PLR requirements of FirstEnergy's Ohio and Pennsylvania                utility subsidiaries and competitive retail sales to customers primarily                in Ohio, Pennsylvania, Maryland and Michigan. This business segment                owns                and operates FirstEnergy's generating facilities and also purchases                electricity to meet sales obligations. The segment's net income is                primarily derived from the affiliated company power sales and the                non-affiliated electric generation sales revenues less the related                costs                of electricity generation, including purchased power and net transmission                (including congestion) and ancillary costs charged by PJM and MISO                to                deliver energy to the segment’s                customers. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | **Ohio                Transitional Generation Services**                supplies the                electric power needs of non-shopping customers under the PLR requirements                of FirstEnergy's Ohio Companies. The segment's net income is primarily                derived from electric generation sales revenues less the cost of                power                purchased from the competitive energy services segment through a                full-requirements PSA arrangement with FES and net transmission                (including congestion) and ancillary costs charged by MISO to deliver                energy to its retail customers. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**RESULTS      OF      OPERATIONS**

|                                                             |   | **Three                Months Ended**                     |   |         |   |
|------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|--------------|--------|
|                                                             |   | **March                31,**                              |   | **Increase** |   |
|                                                             |   | **2007**                                                  |   | **2006**     |   | **(Decrease)** |   |
| **Net                Income**                                    |   | ***(In                millions, except per share data)*** |   |
| **By                Business Segment**                           |   |                                                      |   |         |   |   |   |
| Energy                delivery services                          |   | $                                                         | 218    |         | $      | 189 |   | $ | 29 |   |
| Competitive                energy services                       |   |                                                      | 98     |         |   | 32 |   |   | 66 |   |
| Ohio                transitional generation services             |   |                                                      | 24     |         |   | 30 |   |   | (6 | ) |
| Other                and                reconciling adjustments* |   |                                                      | (50    | )            |   | (30 | ) |   | (20 | ) |
| Total                                                            |   | $                                                         | 290    |         | $      | 221 |   | $ | 69 |   |
|                                                             |   |                                                      |   |         |   |   |   |   |   |   |
| **Basic                and Diluted Earnings Per Share**          |   | $                                                         | 0.92   |         | $      | 0.67 |   | $ | 0.25 |   |

----

|                                                                       |   |                          |        |            |   | **Ohio**         |   |                           |   |             |   |
|----------------------------------------------------------------------------|--------|------------------------------------|-------------|-----------------|--------|------------------|--------|--------------------------------|--------|------------------|--------|
|                                                                       |   |  **Energy**                   |        | **Competitive** |   | **Transitional** |   | **Other                  and** |   |             |   |
|                                                                       |   |  **Delivery**                 |        | **Energy**      |   | **Generation**   |   | **Reconciling**                |   | **FirstEnergy**  |   |
| **First                  Quarter 2007 Financial Results**                  |   |  **Services**                 |        | **Services**    |   | **Services**     |   | **Adjustments**                |   | **Consolidated** |   |
|                                                                       |   | **(In                  millions)** |        |
| Revenues:                                                                  |   |                          |        |            |   |             |   |                           |   |             |   |
|     External                                           |   |                               |        |            |   |             |   |                           |   |             |   |
| Electric                                                                   |   |  $                            | 1,875  |            | $      | 276              |   | $                              | 613    |             | $      | - |   | $ | 2,764 |   |
| Other                                                                      |   |                               | 165    |            |   | 52               |   |                           | 6      |             |   | (14 | ) |   | 209 |   |
| Internal                                                                   |   |                               | -           |            |   | 714              |   |                           | -      |             |   | (714 | ) |   | - |   |
| Total                  Revenues                                            |   |                               | 2,040       |            |   | 1,042            |   |                           | 619    |             |   | (728 | ) |   | 2,973 |   |
|                                                                       |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |
| Expenses:                                                                  |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |
| Fuel                  and                  purchased power                 |   |                               | 844         |            |   | 447              |   |                           | 544    |             |   | (714 | ) |   | 1,121 |   |
| Other                  operating expenses                                  |   |                               | 408         |            |   | 307              |   |                           | 49     |             |   | (15 | ) |   | 749 |   |
| Provision                  for                  depreciation               |   |                               | 98          |            |   | 51               |   |                           | -      |             |   | 7 |   |   | 156 |   |
| Amortization                  of regulatory assets                         |   |                               | 246         |            |   | -                |   |                           | 5      |             |   | - |   |   | 251 |   |
| Deferral                  of                  new regulatory assets        |   |                               |  (124  | )               |   | -                |   |                           | (20    | )                |   | - |   |   | (144 | ) |
| General                  taxes                                             |   |                               | 165         |            |   | 28               |   |                           | 2      |             |   | 8 |   |   | 203 |   |
| Total                  Expenses                                            |   |                               | 1,637       |            |   | 833              |   |                           | 580    |             |   | (714 | ) |   | 2,336 |   |
|                                                                       |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |
| Operating                  Income                                          |   |                               | 403         |            |   | 209              |   |                           | 39     |             |   | (14 | ) |   | 637 |   |
| Other                  Income                  (Expense):                  |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |
| Investment                  income                                         |   |                               | 70          |            |   | 3                |   |                           | 1      |             |   | (41 | ) |   | 33 |   |
| Interest                  expense                                          |   |                               | (109        | )               |   | (52              | )      |                           | (1     | )                |   | (23 | ) |   | (185 | ) |
| Capitalized                  interest                                      |   |                               | 2           |            |   | 3                |   |                           | -      |             |   | - |   |   | 5 |   |
| Total                  Other                  Expense                      |   |                               | (37         | )               |   | (46              | )      |                           | -      |             |   | (64 | ) |   | (147 | ) |
|                                                                       |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |
| Income                  From                  Continuing Operations Before |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |
| Income                  Taxes                                              |   |                               | 366         |            |   | 163              |   |                           | 39     |             |   | (78 | ) |   | 490 |   |
| Income                  taxes                                              |   |                               | 148         |            |   | 65               |   |                           | 15     |             |   | (28 | ) |   | 200 |   |
| Net                  Income                                                |   | $                                  | 218         |            | $      | 98               |   | $                              | 24     |             | $      | (50 | ) | $ | 290 |   |
|                                                                       |   |                               |        |            |   |             |   |                           |   |             |   |   |   |   |   |   |

----

|                                                                           |   |                            |   |            |   | **Ohio**         |   |                             |   |             |   |
|--------------------------------------------------------------------------------|--------|--------------------------------------|--------|-----------------|--------|------------------|--------|----------------------------------|--------|------------------|--------|
|                                                                           |   |  **Energy**                     |   | **Competitive** |   | **Transitional** |   | **Other                    and** |   |             |   |
|                                                                           |   |  **Delivery**                   |   | **Energy**      |   | **Generation**   |   | **Reconciling**                  |   | **FirstEnergy**  |   |
| **First                    Quarter 2006 Financial Results**                    |   |  **Services**                   |   | **Services**    |   | **Services**     |   | **Adjustments**                  |   | **Consolidated** |   |
|                                                                           |   | **(In                    millions)** |   |
| Revenues:                                                                      |   |                            |   |            |   |             |   |                             |   |             |   |
| External                                                                       |   |                                 |   |            |   |             |   |                             |   |             |   |
| Electric                                                                       |   | $                                    | 1,668  |            | $      | 304              |   | $                                | 539    |             | $      | - |   | $ | 2,511 |   |
| Other                                                                     |   |                                 | 128    |            |   | 51               |   |                             | 4      |             |   | 11 |   |   | 194 |   |
| Internal                                                                       |   |                                 | 9      |            |   | 611              |   |                             | -      |             |   | (620 | ) |   | - |   |
| Total                    Revenues                                              |   |                                 | 1,805  |            |   | 966              |   |                             | 543    |             |   | (609 | ) |   | 2,705 |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Expenses:                                                                      |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Fuel                    and                    purchased power                 |   |                                 | 693    |            |   | 468              |   |                             | 457    |             |   | (620 | ) |   | 998 |   |
| Other                    operating expenses                                    |   |                                 | 366    |            |   | 344              |   |                             | 56     |             |   | (12 | ) |   | 754 |   |
| Provision                    for                    depreciation               |   |                                 | 96     |            |   | 46               |   |                             | -      |             |   | 6 |   |   | 148 |   |
| Amortization                    of regulatory assets                           |   |                                 | 217    |            |   | -                |   |                             | 4      |             |   | - |   |   | 221 |   |
| Deferral                    of                    new regulatory assets        |   |                                 | (55    | )               |   | -                |   |                             | (25    | )                |   | - |   |   | (80 | ) |
| General                    taxes                                               |   |                                 | 158    |            |   | 26               |   |                             | 1      |             |   | 8 |   |   | 193 |   |
| Total                    Expenses                                              |   |                                 | 1,475  |            |   | 884              |   |                             | 493    |             |   | (618 | ) |   | 2,234 |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Operating                    Income                                            |   |                                 | 330    |            |   | 82               |   |                             | 50     |             |   | 9 |   |   | 471 |   |
| Other                    Income                    (Expense):                  |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Investment                    income                                           |   |                                 | 84     |            |   | 15               |   |                             | -      |             |   | (56 | ) |   | 43 |   |
| Interest                    expense                                            |   |                                 | (100   | )               |   | (47              | )      |                             | -      |             |   | (18 | ) |   | (165 | ) |
| Capitalized                    interest                                        |   |                                 | 3      |            |   | 3                |   |                             | -      |             |   | 1 |   |   | 7 |   |
| Subsidiaries'                    preferred stock dividends                     |   |                                 | (2     | )               |   | -                |   |                             | -      |             |   | - |   |   | (2 | ) |
| Total                    Other                    Expense                      |   |                                 | (15    | )               |   | (29              | )      |                             | -      |             |   | (73 | ) |   | (117 | ) |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Income                    From                    Continuing Operations Before |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Income                    Taxes                                                |   |                                 | 315    |            |   | 53               |   |                             | 50     |             |   | (64 | ) |   | 354 |   |
| Income                    taxes                                                |   |                                 | 126    |            |   | 21               |   |                             | 20     |             |   | (32 | ) |   | 135 |   |
| Income                    from                    continuing operations        |   |                                 | 189    |            |   | 32               |   |                             | 30     |             |   | (32 | ) |   | 219 |   |
| Discontinued                    operations                                     |   |                                 | -      |            |   | -                |   |                             | -      |             |   | 2 |   |   | 2 |   |
| Net                    Income                                                  |   | $                                    | 189    |            | $      | 32               |   | $                                | 30     |             | $      | (30 | ) | $ | 221 |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| **Changes                    Between First Quarter 2007 and**                  |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| **First                    Quarter 2006 Financial Results**                    |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| **Increase                    (Decrease)**                                     |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Revenues:                                                                      |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| External                                                                  |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Electric                                                                       |   | $                                    | 207    |            | $      | (28              | )      | $                                | 74     |             | $      | - |   | $ | 253 |   |
| Other                                                                          |   |                                 | 37     |            |   | 1                |   |                             | 2      |             |   | (25 | ) |   | 15 |   |
| Internal                                                                       |   |                                 | (9     | )               |   | 103              |   |                             | -      |             |   | (94 | ) |   | - |   |
| Total                    Revenues                                              |   |                                 | 235    |            |   | 76               |   |                             | 76     |             |   | (119 | ) |   | 268 |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Expenses:                                                                      |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Fuel                    and                    purchased power                 |   |                                 | 151    |            |   | (21              | )      |                             | 87     |             |   | (94 | ) |   | 123 |   |
| Other                    operating expenses                                    |   |                                 | 42     |            |   | (37              | )      |                             | (7     | )                |   | (3 | ) |   | (5 | ) |
| Provision                    for                    depreciation               |   |                                 | 2      |            |   | 5                |   |                             | -      |             |   | 1 |   |   | 8 |   |
| Amortization                    of regulatory asset                            |   |                                 | 29     |            |   | -                |   |                             | 1      |             |   | - |   |   | 30 |   |
| Deferral                    of                    new regulatory assets        |   |                                 | (69    | )               |   | -                |   |                             | 5      |             |   | - |   |   | (64 | ) |
| General                    taxes                                               |   |                                 | 7      |            |   | 2                |   |                             | 1      |             |   | - |   |   | 10 |   |
| Total                    Expenses                                              |   |                                 | 162    |            |   | (51              | )      |                             | 87     |             |   | (96 | ) |   | 102 |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Operating                    Income                                            |   |                                 | 73     |            |   | 127              |   |                             | (11    | )                |   | (23 | ) |   | 166 |   |
| Other                    Income                    (Expense):                  |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Investment                    income                                           |   |                                 | (14    | )               |   | (12              | )      |                             | 1      |             |   | 15 |   |   | (10 | ) |
| Interest                    expense                                            |   |                                 | (9     | )               |   | (5               | )      |                             | (1     | )                |   | (5 | ) |   | (20 | ) |
| Capitalized                    interest                                        |   |                                 | (1     | )               |   | -                |   |                             | -      |             |   | (1 | ) |   | (2 | ) |
| Subsidiaries'                    preferred stock dividends                     |   |                                 | 2      |            |   | -                |   |                             | -      |             |   | - |   |   | 2 |   |
| Total                    Other                    Income (Expense)             |   |                                 | (22    | )               |   | (17              | )      |                             | -      |             |   | 9 |   |   | (30 | ) |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Income                    From                    Continuing Operations Before |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |
| Income                    Taxes                                                |   |                                 | 51     |            |   | 110              |   |                             | (11    | )                |   | (14 | ) |   | 136 |   |
| Income                    taxes                                                |   |                                 | 22     |            |   | 44               |   |                             | (5     | )                |   | 4 |   |   | 65 |   |
| Income                    from                    continuing operations        |   |                                 | 29     |            |   | 66               |   |                             | (6     | )                |   | (18 | ) |   | 71 |   |
| Discontinued                    operations                                     |   |                                 | -      |            |   | -                |   |                             | -      |             |   | (2 | ) |   | (2 | ) |
| Net                    Income                                                  |   | $                                    | 29     |            | $      | 66               |   | $                                | (6     | )                | $      | (20 | ) | $ | 69 |   |
|                                                                           |   |                                 |   |            |   |             |   |                             |   |             |   |   |   |   |   |   |

----

***Energy      Delivery Services - First Quarter 2007 Compared to First Quarter      2006***

*Revenues      -*

|                                           |   | **Three                Months Ended** |   |         |   |
|------------------------------------------------|--------|---------------------------------------|--------|--------------|--------|
|                                           |   | **March                31,**          |   | **Increase** |   |
| **Revenues                By Type of Service** |   | **2007**                              |   | **2006**     |   | **(Decrease)** |   |
|                                           |   | ***(In                millions)***    |   |
| Distribution                services           |   | $                                     | 944    |         | $      | 935 |   | $ | 9 |   |
| Generation                sales:               |   |                                  |   |         |   |   |   |   |   |   |
| Retail                                         |   |                                  | 720    |         |   | 637 |   |   | 83 |   |
| Wholesale                                      |   |                                  | 132    |         |   | 55 |   |   | 77 |   |
| Total                generation sales          |   |                                  | 852    |         |   | 692 |   |   | 160 |   |
| Transmission                                   |   |                                  | 183    |         |   | 124 |   |   | 59 |   |
| Other                                          |   |                                  | 61     |         |   | 54 |   |   | 7 |   |
| Total                Revenues                  |   | $                                     | 2,040  |         | $      | 1,805 |   | $ | 235 |   |

| **Electric                Distribution Deliveries** |   |   |   |
|-----------------------------------------------------|--------|--------|--------|
| Residential                                         |   |   | 7.1    | % |
| Commercial                                          |   |   | 4.3    | % |
| Industrial                                          |   |   | 0.1    | % |
| Total                Distribution Deliveries        |   |   | 3.9    | % |

| **Sources                of Change in Generation Sales**        |   | **Increase**                       |   |   |
|-----------------------------------------------------------------|--------|------------------------------------|--------|--------|
|                                                            |   | ***(In                millions)*** |   |   |
| Retail:                                                         |   |                               |   |   |   |
| Effect                of 0.3%                increase in volume |   | $                                  | 2      |   |   |
| Change                in                prices                  |   |                               | 81     |   |   |
|                                                            |   |                               | 83     |   |   |
| Wholesale:                                                      |   |                               |   |   |   |
| Effect                of 139%                increase in volume |   |                               | 77     |   |   |
| Change                in                prices                  |   |                               | -      |   |   |
|                                                            |   |                               | 77     |   |   |
| Net                Increase                in Generation Sales  |   | $                                  | 160    |   |   |
|                                                            |   |                               |   |   |   |

----

*Expenses      -*

|   | · | Purchased                power costs were $151 million higher in the first quarter of 2007                due to                higher unit prices and volumes purchased. The increased unit prices                reflected the effect of higher JCP&L purchased power unit prices                resulting from the BGS auction. The increased KWH purchases in 2007                were                due in part to higher customer usage and sales to the wholesale market.                The following table summarizes the sources of changes in purchased                power                costs: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Sources                of Change in Purchased Power**             |   | **Increase****(Decrease)**         |   |   |
|---------------------------------------------------------------------|--------|------------------------------------|--------|--------|
|                                                                |   | ***(In                millions)*** |   |   |
|                                                                |   |                               |   |   |   |
| Purchased                Power:                                     |   |                               |   |   |   |
| Change                due to                increased unit costs    |   | $                                  | 74     |   |   |
| Change                due to                increased volume        |   |                               | 79     |   |   |
| Decrease                in                NUG costs deferred        |   |                               | (2     | )      |   |
| Net                Increase                in Purchased Power Costs |   | $                                  | 151    |   |   |

|   | · | Other                operating expenses increased $42 million due to the net effects of: |
|--------|--------|-----------------------------------------------------------------------------------------------|

| -   | An                increase of                $52 million in MISO and PJM transmission expenses, resulting                primarily from higher congestion                costs; |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Miscellaneous                operating expenses decreased $8 million primarily due to reduced                support services billings from FESC; and |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Operation                and                maintenance expenses decreased $2 million primarily due to lower                employee                benefit and storm-related costs. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Amortization                of regulatory assets increased $29 million compared to 2006 due primarily                to recovery of deferred BGS costs through higher NUGC revenues for                JCP&L as discussed above; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                deferral                of new regulatory assets during the first quarter of 2007 was                $69 million higher in 2007 primarily due to the deferral of                previously expensed decommissioning expenses of $27 million related                to the                Saxton nuclear research facility (see Outlook - State Regulatory                Matters -                Pennsylvania) and the absence in the first quarter of 2006 of PJM                transmission costs and interest deferrals of $33 million that began                during                the second quarter of 2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Other      Income and      Expense -*

***Ohio      Transitional Generation Services - First Quarter 2007 Compared to First Quarter      2006***

----

*Revenues      -*

|                                           |   | **Three                Months Ended** |   |         |   |
|------------------------------------------------|--------|---------------------------------------|--------|--------------|--------|
|                                           |   | **March                31,**          |   | **Increase** |   |
| **Revenues                By Type of Service** |   | **2007**                              |   | **2006**     |   | **(Decrease)** |   |
|                                           |   | ***(In                millions)***    |   |
| Generation                sales:               |   |                                  |   |         |   |   |   |
| Retail                                         |   | $                                     | 545    |         | $      | 472 |   | $ | 73 |   |
| Wholesale                                      |   |                                  | 2      |         |   | 7 |   |   | (5 | ) |
| Total                generation sales          |   |                                  | 547    |         |   | 479 |   |   | 68 |   |
| Transmission                                   |   |                                  | 71     |         |   | 63 |   |   | 8 |   |
| Other                                          |   |                                  | 1      |         |   | 1 |   |   | - |   |
| Total                Revenues                  |   | $                                     | 619    |         | $      | 543 |   | $ | 76 |   |

| **Source                of Change in Electric Generation Sales**        |   | **Increase**                       |   |
|-------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                    |   | ***(In                millions)*** |   |
| Retail:                                                                 |   |                               |   |   |
| Effect                of 6.6%                increase in customer usage |   | $                                  | 31     |   |
| Change                in                prices                          |   |                               | 42     |   |
|  Total Increase                in Retail Generation Sales     |   | $                                  | 73     |   |
|                                                                    |   |                               |   |   |

*Expenses      -*

| **Source                of Change in Purchased Power**                |   | **Increase**                       |   |
|-----------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                  |   | ***(In                millions)*** |   |
| Purchases                from                non-affiliates:          |   |                               |   |   |
| Change                due to                increased unit costs      |   | $                                  | 10     |   |
| Change                due to                volume purchased          |   |                               | -      |   |
|                                                                  |   |                               | 10     |   |
| Purchases                from                FES:                     |   |                               |   |   |
| Change                due to                increased unit costs      |   |                               | 55     |   |
| Change                due to                volume purchased          |   |                               | 22     |   |
|                                                                  |   |                               | 77     |   |
| Total                Increase                in Purchased Power Costs |   | $                                  | 87     |   |

***Competitive      Energy Services - First Quarter 2007 Compared to First Quarter      2006***

----

*Revenues      -*

|                                                 |   | **Three                Months Ended** |   |         |   |
|------------------------------------------------------|--------|---------------------------------------|--------|--------------|--------|
|                                                 |   | **March                31,**          |   | **Increase** |   |
| **Revenues                By Type of Service**       |   | **2007**                              |   | **2006**     |   | **(Decrease)** |   |
|                                                 |   | ***(In                millions)***    |   |
| Non-Affiliated                Generation Sales:      |   |                                  |   |         |   |   |   |
| Retail                                               |   | $                                     | 173    |         | $      | 131 |   | $ | 42 |   |
| Wholesale                                            |   |                                  | 103    |         |   | 173 |   |   | (70 | ) |
| Total                Non-Affiliated Generation Sales |   |                                  | 276    |         |   | 304 |   |   | (28 | ) |
| Affiliated                Power Sales                |   |                                  | 714    |         |   | 611 |   |   | 103 |   |
| Transmission                                         |   |                                  | 23     |         |   | 20 |   |   | 3 |   |
| Other                                                |   |                                  | 29     |         |   | 31 |   |   | (2 | ) |
| Total                Revenues                        |   | $                                     | 1,042  |         | $      | 966 |   | $ | 76 |   |

|                                                                          |   | **Increase**                       |   |
|-------------------------------------------------------------------------------|--------|------------------------------------|--------|
| **Source                of Change in Non-Affiliated Generation Sales**        |   | **(Decrease)**                     |   |
|                                                                          |   | ***(In                millions)*** |   |
| Retail:                                                                       |   |                               |   |   |
| Effect                of                17.9% increase in customer usage      |   | $                                  | 23     |   |
| Change                in                prices                                |   |                               | 19     |   |
|                                                                          |   |                               | 42     |   |
| Wholesale:                                                                    |   |                               |   |   |
| Effect                of                35.9% decrease in KWH sales           |   |                               | (62    | ) |
| Change                in                prices                                |   |                               | (8     | ) |
|                                                                          |   |                               | (70    | ) |
| Net                Decrease                in Non-Affiliated Generation Sales |   | $                                  | (28    | ) |
|                                                                          |   |                               |   |
|                                                                          |   |                               |   |
| **Source                of Change in Affiliated Generation Sales**            |   | **Increase**                       |   |
|                                                                          |   | ***(In                millions)*** |   |
| Ohio                Companies:                                                |   |                               |   |   |
| Effect                of 4.9%                increase in KWH sales            |   | $                                  | 22     |   |
| Change                in                prices                                |   |                               | 55     |   |
|                                                                          |   |                               | 77     |   |
| Pennsylvania                Companies:                                        |   |                               |   |   |
| Effect                of                10.0% increase in KWH sales           |   |                               | 16     |   |
| Change                in                prices                                |   |                               | 10     |   |
|                                                                          |   |                               | 26     |   |
| Net                Increase                in Affiliated Generation Sales     |   | $                                  | 103    |   |

----

*Expenses      -*

|                                                                         |   | **Increase**                       |   |
|------------------------------------------------------------------------------|--------|------------------------------------|--------|
| **Source                of Change in Fuel and Purchased Power**              |   | **(Decrease)**                     |   |
|                                                                         |   | ***(In                millions)*** |   |
| Fuel:                                                                        |   |                               |   |   |
| Change                due to                decreased composite unit costs   |   |  $                            | (11    | ) |
| Change                due to                volume consumed                  |   |                               | (9     | ) |
|                                                                         |   |                               | (20    | ) |
| Purchased                Power:                                              |   |                               |   |   |
| Change                due to                decreased unit costs             |   |                               | (30    | ) |
| Change                due to                volume purchased                 |   |                               | 29     |   |
|                                                                         |   |                               | (1     | ) |
| Net                Decrease                in Fuel and Purchased Power Costs |   | $                                  | (21    | ) |

|   | · | Fuel                costs                were $20 million lower primarily due to reduced coal costs ($19 million)                and lower emission allowance costs ($6 million) reflecting decreased                fossil KWH production, partially offset by a $7 million increase                in                nuclear fuel costs resulting from higher nuclear KWH                production; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Purchased                power costs decreased by $1 million due primarily to lower unit costs                for                power in MISO and lower KWH purchases in PJM, partially offset by                higher                unit prices in PJM; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other                operating expenses were $37 million lower in 2007 primarily due to                the                absence of contractor service costs related to the 2006 refueling                outages                at Beaver Valley Unit 1 and Davis-Besse with no refueling outages                in the                first quarter of 2007. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Higher                fossil                plant operating costs principally due to planned maintenance outages                at                Sammis Units 6 and 7 and Eastlake Unit 5;                and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increased                depreciation expense of $5 million resulting principally from fossil                and nuclear property additions since the first quarter of                2006. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Other      Income -*

***Other      -      First Quarter 2007 Compared to First Quarter 2006***

**CAPITAL      RESOURCES AND LIQUIDITY**

----

**Changes      in      Cash Position**

**Cash      Flows      From Operating Activities**

|                                                                                 |   | **Three                Months Ended** |   |
|--------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                 |   | **March                31,**          |   |
| **Operating                Cash Flows**                                              |   | **2007**                              |   | **2006** |   |
|                                                                                 |   | ***(In                millions)***    |   |
| Net                income                                                            |   | $                                     | 290    |   | $ | 221 |   |
| Non-cash                charges                                                      |   |                                  | 125    |   |   | 165 |   |
| Pension                trust                contribution                             |   |                                  | (300   | ) |   | - |   |
| Working                capital and other                                             |   |                                  | (190   | ) |   | (62 | ) |
| Net                cash                provided from (used for) operating activities |   | $                                     | (75    | ) | $ | 324 |   |

**Cash      Flows      From Financing Activities**

|                                               |   | **Three                Months Ended** |   |
|----------------------------------------------------|--------|---------------------------------------|--------|
|                                               |   | **March                31,**          |   |
| **Securities                Issued or Redeemed**   |   | **2007**                              |   | **2006** |   |
|                                               |   | ***(In                millions)***    |   |
| *New                Issues*:                       |   |                                  |   |   |   |   |   |
| Unsecured                notes                     |   | $                                     | 250    |   | $ | - |   |
|                                               |   |                                  |   |   |   |   |   |
| *Redemptions*:                                     |   |                                  |   |   |   |   |   |
| Pollution                control notes             |   | $                                     | -      |   | $ | 54 |   |
| Senior                secured                notes |   |                                  | 13     |   |   | 10 |   |
| Common                stock                        |   |                                  | 891    |   |   | - |   |
| Preferred                stock                     |   |                                  | -      |   |   | 30 |   |
|                                               |   | $                                     | 904    |   | $ | 94 |   |
|                                               |   |                                  |   |   |   |   |   |
| *Short-term                borrowings, net*        |   | $                                     | 1,139  |   | $ | 200 |   |

----

| **Borrowing                Capability (In millions)**                                                                                                                                                                                                                                                                                  |   |    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|
| Short-term                credit facilities(1)                                                                                                                                                                                                                                                                                         |   | $       | 3,370  |   |
| Accounts                receivable financing facilities                                                                                                                                                                                                                                                                                |   |    | 550    |   |
| Utilized                                                                                                                                                                                                                                                                                                                               |   |    | (2,244 | ) |
| LOCs                                                                                                                                                                                                                                                                                                                                   |   |    | (473   | ) |
| Net                                                                                                                                                                                                                                                                                                                                    |   |  $ | 1,203  |   |
|                                                                                                                                                                                                                                                                                                                                   |   |    |   |   |
| (1)                Includes the $2.75 billion revolving credit facility described below,                a                $100 million revolving credit facility that expires in December 2009,                a $20 million uncommitted line of credit and two $250 million bridge                loan                facilities. |

----

|            |   | **Revolving**                      |   | **Regulatory                and**          |   |
|-----------------|--------|------------------------------------|--------|--------------------------------------------|--------|
|            |   | **Credit                Facility** |   | **Other                Short-Term**        |   |
| **Borrower**    |   | **Sub-Limit**                      |   | **Debt                Limitations****(1)** |   |
|            |   | ***(In                millions)*** |   |
| **FirstEnergy** |   |                               | $      | 2,750                                      |   |   | $ | 1,500 |   |
| **OE**          |   |                               | 500    |                                       |   | 500 |   |
| **Penn**        |   |                               | 50     |                                       |   | 39 |   |
| **CEI**         |   |                               | 250    | (2)                                        |   | 500 |   |
| **TE**          |   |                               | 250    | (2)                                        |   | 500 |   |
| **JCP&L**   |   |                               | 425    |                                       |   | 412 |   |
| **Met-Ed**      |   |                               | 250    |                                       |   | 250 | (3) |
| **Penelec**     |   |                               | 250    |                                       |   | 250 | (3) |
| **FES**         |   |                               | 250    |                                       |   | n/a |   |
| **ATSI**        |   |                               | -      | (4)                                        |   | 50 |   |

|   | (1) | As                of                March 31, 2007. |
|--------|-----|----------------------------------------------------------|

|   | (2) | Borrowing                sub-limits for CEI and TE may be increased to up to $500 million by                delivering notice to the                administrative agent that such borrower has senior unsecured debt                ratings                of at least BBB by S&P                and                Baa2 by Moody’s. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Excluding                amounts which may be borrowed under the regulated money                pool. |
|--------|-----|-------------------------------------------------------------------------------------------------------|

|   | (4) | The                borrowing                sub-limit for ATSI may be increased up to $100 million by delivering                notice to the administrative                agent that either (i) such borrower has senior unsecured debt ratings                of                at least BBB- by                S&P and                Baa3 by Moody’s or (ii) FirstEnergy has guaranteed the obligations of such                borrower under                the                facility. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Borrower**    |   |   |
|-----------------|--------|--------|
| **FirstEnergy** |   | 61     | % |
| **OE**          |   | 49     | % |
| **Penn**        |   | 28     | % |
| **CEI**         |   | 57     | % |
| **TE**          |   | 49     | % |
| **JCP&L**   |   | 25     | % |
| **Met-Ed**      |   | 46     | % |
| **Penelec**     |   | 36     | % |
| **FES**         |   | 57     | % |

----

| **Issuer**  |   | **Securities**                  |   | **S&P** |   | **Moody’s** |   | **Fitch** |
|-------------|--------|---------------------------------|--------|-------------|--------|-------------------|--------|-----------|
|        |   |                            |   |        |   |              |   |      |
| FirstEnergy |   | Senior                unsecured |   | BBB-        |   | Baa3              |   | BBB       |
|        |   |                            |   |        |   |              |   |      |
| OE          |   | Senior                unsecured |   | BBB-        |   | Baa2              |   | BBB       |
|        |   |                            |   |        |   |              |   |      |
| CEI         |   | Senior                secured   |   | BBB         |   | Baa2              |   | BBB       |
|        |   | Senior                unsecured |   | BBB-        |   | Baa3              |   | BBB-      |
|        |   |                            |   |        |   |              |   |      |
| TE          |   | Senior                secured   |   | BBB         |   | Baa2              |   | BBB       |
|        |   | Senior                unsecured |   | BBB-        |   | Baa3              |   | BBB-      |
|        |   |                            |   |        |   |              |   |      |
| Penn        |   | Senior                secured   |   | BBB+        |   | Baa1              |   | BBB+      |
|        |   |                            |   |        |   |              |   |      |
| JCP&L   |   | Senior                secured   |   | BBB+        |   | Baa1              |   | A-        |
|        |   |                            |   |        |   |              |   |      |
| Met-Ed      |   | Senior                unsecured |   | BBB         |   | Baa2              |   | BBB       |
|        |   |                            |   |        |   |              |   |      |
| Penelec     |   | Senior                unsecured |   | BBB         |   | Baa2              |   | BBB       |

**Cash      Flows      From Investing Activities**

----

| **Summary                of Cash Flows**             |   | **Property**                       |   |            |   |      |   |      |   |
|------------------------------------------------------|--------|------------------------------------|--------|-----------------|--------|-----------|--------|-----------|--------|
| **Used                for Investing Activities**     |   | **Additions**                      |   | **Investments** |   | **Other** |   | **Total** |   |
| **Sources                (Uses)**                    |   | ***(In                millions)*** |   |
| **Three                Months Ended March 31, 2007** |   |                               |   |            |   |      |   |      |   |
| Energy                delivery services              |   | $                                  | (155   | )               | $      | 53        |   | $         | 9      |   | $ | (93 | ) |
| Competitive                energy services           |   |                               | (124   | )               |   | (4        | )      |      | 1      |   |   | (127 | ) |
| Other                                                |   |                               | (17    | )               |   | (16       | )      |      | (4     | ) |   | (37 | ) |
| Inter-Segment                reconciling items       |   |                               | -      |            |   | (15       | )      |      | -      |   |   | (15 | ) |
| Total                                                |   | $                                  | (296   | )               | $      | 18        |   | $         | 6      |   | $ | (272 | ) |
|                                                 |   |                               |   |            |   |      |   |      |   |   |   |   |   |
| **Three                Months Ended March 31, 2006** |   |                               |   |            |   |      |   |      |   |   |   |   |   |
| Energy                delivery services              |   | $                                  | (193   | )               | $      | 136       |   | $         | (7     | ) | $ | (64 | ) |
| Competitive                energy services           |   |                               | (244   | )               |   | (20       | )      |      | (1     | ) |   | (265 | ) |
| Other                                                |   |                               | (10    | )               |   | 41        |   |      | (3     | ) |   | 28 |   |
| Inter-Segment                reconciling items       |   |                               | -      |            |   | (9        | )      |      | -      |   |   | (9 | ) |
| Total                                                |   | $                                  | (447   | )               | $      | 148       |   | $         | (11    | ) | $ | (310 | ) |

**GUARANTEES      AND OTHER ASSURANCES**

----

|                                                                  |   | **Maximum**                        |   |
|-----------------------------------------------------------------------|--------|------------------------------------|--------|
| **Guarantees                and Other Assurances**                    |   | **Exposure**                       |   |
|                                                                  |   | ***(In                millions)*** |   |
| FirstEnergy                Guarantees of Subsidiaries                 |   |                               |   |
| Energy                and                Energy-Related Contracts (1) |   | $                                  | 910    |   |
| LOC                (2)                                                |   |                               | 994    |   |
| Other                (3)                                              |   |                               | 592    |   |
|                                                                  |   |                               | 2,496  |   |
| Surety                Bonds                                           |   |                               | 106    |   |
| LOC                (4)(5)                                             |   |                               | 1,737  |   |
|                                                                  |   |                               |   |   |
| Total                Guarantees and Other Assurances                  |   | $                                  | 4,339  |   |

|   | (1) | Issued                for                open-ended terms, with a 10-day termination right by FirstEnergy. |
|--------|-----|------------------------------------------------------------------------------------------------------------|

|   | (2) | LOC’s                issued                by FGCO and NGC in support of pollution control revenue                bonds                with various maturities. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Includes                guarantees of $300 million for OVEC obligations and $80 million                for nuclear decommissioning funding                assurances. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Includes                $470 million issued for various terms under LOC capacityavailable                in                FirstEnergy’s revolving credit agreement and an additional $648 million                outstanding in support of pollution control revenue bonds issued                with                various maturities. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Includes                approximately $194  million pledged in connection with the                sale                and                leaseback of Beaver Valley Unit 2 by CEI and TE, $291 million                pledged in connection with the sale and leaseback of Beaver                Valley                Unit 2 by OE and $134 million pledged in connection with                the sale                and leaseback of Perry Unit 1 by                OE. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**OFF-BALANCE      SHEET ARRANGEMENTS**

----

**MARKET      RISK      INFORMATION**

**Commodity      Price Risk **

| **Increase                (Decrease) in the Fair Value of Commodity Derivative                Contracts**   |   | **Non-Hedge**                      |   | **Hedge** |   | **Total** |   |
|-------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|-----------|--------|-----------|--------|
|                                                                                                        |   | ***(In                millions)*** |   |
| **Change                in the Fair Value of Commodity Derivative                Contracts:**               |   |                               |   |      |   |      |   |
| Outstanding                net liability as of January 1, 2007                                              |   | $                                  | (1,140 | )         | $      | (17       | )      | $ | (1,157 | ) |
| Additions/change                in value of existing contracts                                              |   |                               | 16     |      |   | 6         |   |   | 22 |   |
| Settled                contracts                                                                            |   |                               | 96     |      |   | 12        |   |   | 108 |   |
|                                                                                                        |   |                               |   |      |   |      |   |   |   |   |
| Outstanding                net liability as of March 31, 2007(1)                                            |   | $                                  | (1,028 | )         | $      | 1         |   | $ | (1,027 | ) |
|                                                                                                        |   |                               |   |      |   |      |   |   |   |   |
| **Non-commodity                Net Assets as of March 31, 2007**:                                           |   |                               |   |      |   |      |   |   |   |   |
| Interest                Rate                Swaps(2)                                                        |   |                               | -      |      |   | (26       | )      |   | (26 | ) |
| **Net                Liabilities - Derivatives Contracts as of March 31,                2007**              |   | $                                  | (1,028 | )         | $      | (25       | )      | $ | (1,053 | ) |
|                                                                                                        |   |                               |   |      |   |      |   |   |   |   |
| **Impact                of First Quarter Changes in Commodity Derivative                Contracts:****(3)** |   |                               |   |      |   |      |   |   |   |   |
| Income                Statement Effects (Pre-Tax)                                                           |   | $                                  | 2      |      | $      | -         |   | $ | 2 |   |
| Balance                Sheet                Effects:                                                        |   |                               |   |      |   |      |   |   |   |   |
| Other                Comprehensive Income (Pre-Tax)                                                         |   | $                                  | -      |      | $      | 18        |   | $ | 18 |   |
| Regulatory                Asset (net)                                                                       |   | $                                  | (110   | )         | $      | -         |   | $ | (110 | ) |

| **Balance                Sheet Classification**      |   | **Non-Hedge**                      |   | **Hedge** |   | **Total** |   |
|------------------------------------------------------|--------|------------------------------------|--------|-----------|--------|-----------|--------|
|                                                 |   | ***(In                millions)*** |   |
| **Current-**                                         |   |                               |   |      |   |      |   |
| Other                assets                          |   | $                                  | -      |      | $      | 35        |   | $ | 35 |   |
| Other                liabilities                     |   |                               | (2     | )         |   | (34       | )      |   | (36 | ) |
|                                                 |   |                               |   |      |   |      |   |   |   |   |
| **Non-Current-**                                     |   |                               |   |      |   |      |   |   |   |   |
| Other                deferred                charges |   |                               | 37     |      |   | 20        |   |   | 57 |   |
| Other                non-current liabilities         |   |                               | (1,063 | )         |   | (46       | )      |   | (1,109 | ) |
|                                                 |   |                               |   |      |   |      |   |   |   |   |
| Net                liabilities                       |   | $                                  | (1,028 | )         | $      | (25       | )      | $ | (1,053 | ) |

----

| **Source                of Information**                        |   |                               |   |     |   |     |   |     |   |     |   |           |   |      |   |
|-----------------------------------------------------------------|--------|------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------------|--------|-----------|--------|
| **-                Fair                Value by Contract Year** |   | **2007**(1)                        |   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **Thereafter** |   | **Total** |   |
|                                                            |   | ***(In                millions)*** |   |
| Prices                actively quoted(2)                        |   | $                                  | -      |     | $      | -        |   | $        | -      |     | $      | -              |   |  $   | -      |   | $ | - |   | $ | - |   |
| Other                external                sources(3)         |   |                               | (198   | )        |   | (257     | )      |     | (202   | )        |   | (168           | )      |      | -      |   |   | - |   |   | (825 | ) |
| Prices                based                on models            |   |                               | -      |     |   | -        |   |     | -      |     |   | -              |   |      | (101   | ) |   | (101 | ) |   | (202 | ) |
| **Total****(4)**                                                |   | $                                  | (198   | )        | $      | (257     | )      | $        | (202   | )        | $      | (168           | )      | $         | (101   | ) | $ | (101 | ) | $ | (1,027 | ) |

|   | (4) | Includes                $1.026 billion in non-hedge commodity derivative contracts (primarily                with NUGs), which are offset by a regulatory asset. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Interest      Rate Swap Agreements- Fair Value Hedges**

|                                            |   | **March                31, 2007**  |   | **December                31, 2006** |   |
|-------------------------------------------------|--------|------------------------------------|--------|--------------------------------------|--------|
|                                            |   | **Notional**                       |   | **Maturity**                         |   | **Fair** |   | **Notional** |   | **Maturity** |   | **Fair** |   |
| **Interest                Rate Swaps**          |   | **Amount**                         |   | **Date**                             |   | **Value** |   | **Amount** |   | **Date** |   | **Value** |   |
|                                            |   | ***(In                millions)*** |   |
| Fair                value                hedges |   | $                                  | 100    |                                 |   | 2008 |   | $ | (2 | ) | $ | 100 |   |   | 2008 |   | $ | (2) |   |
|                                            |   |                               | 50     |                                 |   | 2010 |   |   | - |   |   | 50 |   |   | 2010 |   |   | (1) |   |
|                                            |   |                               | 300    |                                 |   | 2013 |   |   | (5 | ) |   | 300 |   |   | 2013 |   |   | (6) |   |
|                                            |   |                               | 150    |                                 |   | 2015 |   |   | (10 | ) |   | 150 |   |   | 2015 |   |   | (10) |   |
|                                            |   |                               | 50     |                                 |   | 2025 |   |   | (1 | ) |   | 50 |   |   | 2025 |   |   | (2) |   |
|                                            |   |                               | 100    |                                 |   | 2031 |   |   | (6 | ) |   | 100 |   |   | 2031 |   |   | (6) |   |
|                                            |   | $                                  | 750    |                                 |   |   |   | $ | (24 | ) | $ | 750 |   |   |   |   | $ | (27) |   |

**Forward      Starting Swap Agreements - Cash Flow Hedges**

----

|                                           |   | **March                31, 2007**  |   | **December                31, 2006** |   |
|------------------------------------------------|--------|------------------------------------|--------|--------------------------------------|--------|
|                                           |   | **Notional**                       |   | **Maturity**                         |   | **Fair** |   | **Notional** |   | **Maturity** |   | **Fair** |   |
| **Forward                Starting Swaps**      |   | **Amount**                         |   | **Date**                             |   | **Value** |   | **Amount** |   | **Date** |   | **Value** |   |
|                                           |   | ***(In                millions)*** |   |
| Cash                flow                hedges |   | $                                  | 25     |                                 |   | 2015 |   | $ | - |   | $ | 25 |   |   | 2015 |   | $ | - |   |
|                                           |   |                               | 375    |                                 |   | 2017 |   |   | (2 | ) |   | 200 |   |   | 2017 |   |   | (4 | ) |
|                                           |   |                               | 25     |                                 |   | 2018 |   |   | (1 | ) |   | 25 |   |   | 2018 |   |   | (1 | ) |
|                                           |   |                               | 50     |                                 |   | 2020 |   |   | 1 |   |   | 50 |   |   | 2020 |   |   | 1 |   |
|                                           |   | $                                  | 475    |                                 |   |   |   | $ | (2 | ) | $ | 300 |   |   |   |   | $ | (4 | ) |

**Equity      Price      Risk**

**CREDIT      RISK**

**Outlook**

*State      Regulatory      Matters*

| · | restructuring                the electric generation business and allowing the Companies' customers                to                select a competitive electric generation supplier other than the                Companies;         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                    |
| · | establishing                or defining the PLR obligations to customers in the Companies' service                areas;                                                                                                                |
|   |                                                                                                                                                                                                                                    |
| · | providing                the                Companies with the opportunity to recover potentially stranded investment                (or transition costs) not otherwise recoverable in a competitive                generation market; |
|   |                                                                                                                                                                                                                                    |
| · | itemizing                (unbundling) the price of electricity into its component elements                -                including generation, transmission, distribution and stranded costs                recovery charges;         |
|   |                                                                                                                                                                                                                                    |
| · | continuing                regulation of the Companies' transmission and distribution systems;                and                                                                                                                        |
|   |                                                                                                                                                                                                                                    |
| · | requiring                corporate separation of regulated and unregulated business                activities.                                                                                                                          |

----

|                                  |   | **March                31,**       |   | **December                31,** |   | **Increase**   |   |
|---------------------------------------|--------|------------------------------------|--------|---------------------------------|--------|----------------|--------|
| **Regulatory                Assets*** |   | **2007**                           |   | **2006**                        |   | **(Decrease)** |   |
|                                  |   | ***(In                millions)*** |   |
| OE                                    |   | $                                  | 729    |                            | $      | 741            |   | $ | (12 | ) |
| CEI                                   |   |                               | 854    |                            |   | 855            |   |   | (1 | ) |
| TE                                    |   |                               | 237    |                            |   | 248            |   |   | (11 | ) |
| JCP&L                             |   |                               | 2,059  |                            |   | 2,152          |   |   | (93 | ) |
| Met-Ed                                |   |                               | 455    |                            |   | 409            |   |   | 46 |   |
| ATSI                                  |   |                               | 37     |                            |   | 36             |   |   | 1 |   |
| Total                                 |   | $                                  | 4,371  |                            | $      | 4,441          |   | $ | (70 | ) |

| * | Penelec                had                net regulatory liabilities of approximately $70 million and                $96 million as of March 31, 2007 and December 31, 2006,                respectively.                These net regulatory liabilities are included in Other Non-current                Liabilities on the Consolidated Balance                Sheets. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                        |   | **March                31,**       |   | **December                31,** |   | **Increase**   |   |
|-------------------------------------------------------------|--------|------------------------------------|--------|---------------------------------|--------|----------------|--------|
| **Regulatory                Assets By Source**              |   | **2007**                           |   | **2006**                        |   | **(Decrease)** |   |
|                                                        |   | ***(In                millions)*** |   |
| Regulatory                transition costs                  |   |  $                            | 3,040  |                            | $      | 3,266          |   | $ | (226 | ) |
| Customer                shopping incentives                 |   |                               | 583    |                            |   | 603            |   |   | (20 | ) |
| Customer                receivables for future income taxes |   |                               | 270    |                            |   | 217            |   |   | 53 |   |
| Societal                benefits charge                     |   |                               | 4      |                            |   | 11             |   |   | (7 | ) |
| Loss                on                reacquired debt       |   |                               | 42     |                            |   | 43             |   |   | (1 | ) |
| Employee                postretirement benefits             |   |                               | 45     |                            |   | 47             |   |   | (2 | ) |
| Nuclear                decommissioning, decontamination     |   |                               |   |                            |   |           |   |   |   |   |
| and                spent fuel                disposal costs |   |                               | (108   | )                               |   | (145           | )      |   | 37 |   |
| Asset                removal                costs           |   |                               | (169   | )                               |   | (168           | )      |   | (1 | ) |
| Property                losses and unrecovered plant costs  |   |                               | 16     |                            |   | 19             |   |   | (3 | ) |
| MISO/PJM                transmission costs                  |   |                               | 238    |                            |   | 213            |   |   | 25 |   |
| Fuel                costs -                RCP              |   |                               | 127    |                            |   | 113            |   |   | 14 |   |
| Distribution                costs - RCP                     |   |                               | 202    |                            |   | 155            |   |   | 47 |   |
| Other                                                       |   |                               | 81     |                            |   | 67             |   |   | 14 |   |
| Total                                                       |   | $                                  | 4,371  |                            | $      | 4,441          |   | $ | (70 | ) |

***Reliability      Initiatives***

----

*First*
*First*
*First*

----

***Ohio***

|  **Amortization**                |   |         |   |          |   |         |   |           |   |   |  **Total** |   |
|---------------------------------------|--------|--------------|--------|---------------|--------|--------------|--------|----------------|--------|--------|-----------------|--------|
|  **Period**                      |   |  **OE** |   |  **CEI** |   |  **TE** |   |  **Ohio** |   |
|                                  |   |         |   |          |   |         |   |           |   |   |            |   |   |
| 2007                                  |   | **$**        | 179    |          | **$**  | 108          |   | **$**          | 93     |   | **$**           | 380    |   |
| 2008                                  |   |         | 208    |          |   | 124          |   |           | 119    |   |            | 451    |   |
| 2009                                  |   |         | -      |          |   | 216          |   |           | -      |   |            | 216    |   |
| 2010                                  |   |         | -      |          |   | 273          |   |           | -      |   |            | 273    |   |
| **Total                Amortization** |   | **$**        | 387    |          | **$**  | 721          |   | **$**          | 212    |   | **$**           | 1,320  |   |

----

***Pennsylvania***

----

----

***New      Jersey***

| ·   |  Reduce                the total projected electricity demand by 20% by                2020; |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   |  Meet                22.5% of                New Jersey’s electricity needs with renewable energy resources by that                date; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |   Reduce air pollution              related to energy use; |
|--------------------|-----------------------------------------------------------------|

| ·   |   Encourage and maintain              economic growth and development; |
|--------------------|-----------------------------------------------------------------------------|

| ·   |  Achieve                a 20% reduction in both Customer Average Interruption Duration Index                and                System Average                  Interruption Frequency Index by                2020; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |  Unit                prices for electricity should remain no more than +5% of the regional                average price (region includes  New                York, New Jersey, Pennsylvania, Delaware,  Maryland                and                the District of Columbia); and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |   Eliminate transmission              congestion by 2020. |
|--------------------|----------------------------------------------------------------|

----

***FERC      Matters***

*** ***

----

***Environmental      Matters***

*Clean      Air Act      Compliance*

*National      Ambient      Air Quality Standards*

----

*Mercury      Emissions*

*W.      H. Sammis      Plant*

----

*Climate      Change*

*Clean      Water      Act*

*Regulation      of      Hazardous Waste*

----

***Other      Legal Proceedings***

*Power      Outages      and Related Litigation*

----

----

*Nuclear      Plant      Matters*

*Other      Legal      Matters*

----

**NEW      ACCOUNTING STANDARDS AND INTERPRETATIONS **

*SFAS      159 - “The      Fair Value Option for Financial Assets and Financial Liabilities - Including      an      amendment of FASB *

*Statement      No.      115”*

* *
*.      *

*SFAS      157 - “Fair      Value Measurements”*

*EITF      06-10 -“Accounting for Deferred Compensation and Postretirement Benefit Aspects of      Collateral *

*Split-Dollar      Life Insurance Arrangements”*

* *

----

| **OHIO                    EDISON COMPANY**                                                                                                                                                                                                       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                       |   |    |   |   |   |   |
| **CONSOLIDATED                    STATEMENTS OF INCOME AND COMPREHENSIVE                    INCOME**                                                                                                                                             |   |
| **(Unaudited)**                                                                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                                       |   |    |   |   |   |   |
|                                                                                                                                                                                                                                                       |   | **Three                    Months Ended** |   |
|                                                                                                                                                                                                                                                       |   | **March                    31,** |   |
|                                                                                                                                                                                                                                                       |   | **2007** |   |   |  |  **2006** |   |
| **STATEMENTS                    OF INCOME**                                                                                                                                                                                                                |   | ***(In                    thousands)*** |   |
|                                                                                                                                                                                                                                                       |   |    |   |   |   |   |
| **REVENUES:**                                                                                                                                                                                                                                              |   |    |   |   |   |   |
| Electric                    sales                                                                                                                                                                                                                          |   | $ | 594,344 |   |   | $ | 557,229 |   |
| Excise                    tax                    collections                                                                                                                                                                                               |   |   | 31,254 |   |   |   | 28,974 |   |
| Total                    revenues                                                                                                                                                                                                                          |   |   | 625,598 |   |   |   | 586,203 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| Fuel                                                                                                                                                                                                                                                       |   |   | 3,015 |   |   |   | 2,951 |   |
| Purchased                    power                                                                                                                                                                                                                         |   |   | 349,852 |   |   |   | 283,020 |   |
| Nuclear                    operating costs                                                                                                                                                                                                                 |   |   | 41,514 |   |   |   | 41,084 |   |
| Other                    operating costs                                                                                                                                                                                                                   |   |   | 88,486 |   |   |   | 90,810 |   |
| Provision                    for                    depreciation                                                                                                                                                                                           |   |   | 18,848 |   |   |   | 18,016 |   |
| Amortization                    of regulatory assets                                                                                                                                                                                                       |   |   | 45,417 |   |   |   | 53,861 |   |
| Deferral                    of                    new regulatory assets                                                                                                                                                                                    |   |   | (36,649 | ) |   |   | (36,240 | ) |
| General                    taxes                                                                                                                                                                                                                           |   |   | 49,745 |   |   |   | 45,895 |   |
| Total                    expenses                                                                                                                                                                                                                          |   |   | 560,228 |   |   |   | 499,397 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **OPERATING                    INCOME**                                                                                                                                                                                                                    |   |   | 65,370 |   |   |   | 86,806 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **OTHER                    INCOME (EXPENSE):**                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Investment                    income                                                                                                                                                                                                                       |   |   | 26,630 |   |   |   | 33,042 |   |
| Miscellaneous                    income                                                                                                                                                                                                                    |   |   | 373 |   |   |   | 197 |   |
| Interest                    expense                                                                                                                                                                                                                        |   |   | (21,022 | ) |   |   | (18,232 | ) |
| Capitalized                    interest                                                                                                                                                                                                                    |   |   | 110 |   |   |   | 491 |   |
| Subsidiary's                    preferred stock dividend requirements                                                                                                                                                                                      |   |   | - |   |   |   | (156 | ) |
| Total                    other                    income                                                                                                                                                                                                   |   |   | 6,091 |   |   |   | 15,342 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **INCOME                    BEFORE INCOME TAXES**                                                                                                                                                                                                          |   |   | 71,461 |   |   |   | 102,148 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **INCOME                    TAXES**                                                                                                                                                                                                                        |   |   | 17,426 |   |   |   | 38,318 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **NET                    INCOME**                                                                                                                                                                                                                          |   |   | 54,035 |   |   |   | 63,830 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **PREFERRED                    STOCK DIVIDEND REQUIREMENTS**                                                                                                                                                                                               |   |   | - |   |   |   | 659 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **EARNINGS                    ON COMMON STOCK**                                                                                                                                                                                                            |   | $ | 54,035 |   |   | $ | 63,171 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **STATEMENTS                    OF COMPREHENSIVE INCOME**                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **NET                    INCOME**                                                                                                                                                                                                                          |   | $ | 54,035 |   |   | $ | 63,830 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **OTHER                    COMPREHENSIVE INCOME (LOSS):**                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Pension                    and                    other postretirement benefits                                                                                                                                                                            |   |   | (3,423 | ) |   |   | - |   |
| Unrealized                    gain (loss) on available for sale securities                                                                                                                                                                                 |   |   | (126 | ) |   |   | 5,735 |   |
| Other                    comprehensive income (loss)                                                                                                                                                                                                       |   |   | (3,549 | ) |   |   | 5,735 |   |
| Income                    tax                    expense (benefit) related to other comprehensive income                                                                                                                                                   |   |   | (1,503 | ) |   |   | 2,069 |   |
| Other                    comprehensive income (loss), net of tax                                                                                                                                                                                           |   |   | (2,046 | ) |   |   | 3,666 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| **TOTAL                    COMPREHENSIVE INCOME**                                                                                                                                                                                                          |   | $ | 51,989 |   |   | $ | 67,496 |   |
|                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Ohio Edison                    Company are an integral part of                    these                    statements. |   |

----

| **OHIO                      EDISON COMPANY**                                                                                                                                                                                                                               |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                       |   |    |   |    |   |
| **CONSOLIDATED                      BALANCE SHEETS**                                                                                                                                                                                                                       |   |
| **(Unaudited)**                                                                                                                                                                                                                                                            |   |
|                                                                                                                                                                                                                                                                       |   | **March                      31,**  |   | **December                      31,**  |   |
|                                                                                                                                                                                                                                                                       |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                       |   | ***(In                      thousands)*** |   |
| **ASSETS**                                                                                                                                                                                                                                                                 |   |    |   |    |   |
| **CURRENT                      ASSETS:**                                                                                                                                                                                                                                   |   |    |   |    |   |
| Cash                      and cash                      equivalents                                                                                                                                                                                                        |   | $ | 694 |   | $ | 712 |   |
| Receivables-                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Customers                      (less accumulated provisions of $15,242,000 and $15,033,000,                                                                                                                                                                                |   |   |   |   |   |   |   |
| respectively,                      for uncollectible accounts)                                                                                                                                                                                                             |   |   | 266,347 |   |   | 234,781 |   |
| Associated                      companies                                                                                                                                                                                                                                  |   |   | 207,377 |   |   | 141,084 |   |
| Other                      (less                      accumulated provisions of $5,409,000 and $1,985,000,                                                                                                                                                                 |   |   |   |   |   |   |   |
| respectively,                      for uncollectible accounts)                                                                                                                                                                                                             |   |   | 18,106 |   |   | 13,496 |   |
| Notes                      receivable from associated companies                                                                                                                                                                                                            |   |   | 527,232 |   |   | 458,647 |   |
| Prepayments                      and other                                                                                                                                                                                                                                 |   |   | 23,657 |   |   | 13,606 |   |
|                                                                                                                                                                                                                                                                       |   |   | 1,043,413 |   |   | 862,326 |   |
| **UTILITY                      PLANT:**                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| In                      service                                                                                                                                                                                                                                            |   |   | 2,649,190 |   |   | 2,632,207 |   |
| Less                      -                      Accumulated provision for depreciation                                                                                                                                                                                    |   |   | 1,029,438 |   |   | 1,021,918 |   |
|                                                                                                                                                                                                                                                                       |   |   | 1,619,752 |   |   | 1,610,289 |   |
| Construction                      work in progress                                                                                                                                                                                                                         |   |   | 44,405 |   |   | 42,016 |   |
|                                                                                                                                                                                                                                                                       |   |   | 1,664,157 |   |   | 1,652,305 |   |
| **OTHER                      PROPERTY AND INVESTMENTS:**                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Long-term                      notes receivable from associated companies                                                                                                                                                                                                  |   |   | 639,658 |   |   | 1,219,325 |   |
| Investment                      in                      lease obligation bonds                                                                                                                                                                                             |   |   | 291,225 |   |   | 291,393 |   |
| Nuclear                      plant                      decommissioning trusts                                                                                                                                                                                             |   |   | 118,636 |   |   | 118,209 |   |
| Other                                                                                                                                                                                                                                                                      |   |   | 37,418 |   |   | 38,160 |   |
|                                                                                                                                                                                                                                                                       |   |   | 1,086,937 |   |   | 1,667,087 |   |
| **DEFERRED                      CHARGES AND OTHER ASSETS:**                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Regulatory                      assets                                                                                                                                                                                                                                     |   |   | 729,500 |   |   | 741,564 |   |
| Pension                      assets                                                                                                                                                                                                                                        |   |   | 94,682 |   |   | 68,420 |   |
| Property                      taxes                                                                                                                                                                                                                                        |   |   | 60,080 |   |   | 60,080 |   |
| Unamortized                      sale and leaseback costs                                                                                                                                                                                                                  |   |   | 48,885 |   |   | 50,136 |   |
| Other                                                                                                                                                                                                                                                                      |   |   | 55,011 |   |   | 18,696 |   |
|                                                                                                                                                                                                                                                                       |   |   | 988,158 |   |   | 938,896 |   |
|                                                                                                                                                                                                                                                                       |   | $ | 4,782,665 |   | $ | 5,120,614 |   |
| **LIABILITIES                      AND CAPITALIZATION**                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **CURRENT                      LIABILITIES:**                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Currently                      payable long-term debt                                                                                                                                                                                                                      |   | $ | 161,424 |   | $ | 159,852 |   |
| Short-term                      borrowings-                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Associated                      companies                                                                                                                                                                                                                                  |   |   | 16,460 |   |   | 113,987 |   |
| Other                                                                                                                                                                                                                                                                      |   |   | 178,097 |   |   | 3,097 |   |
| Accounts                      payable-                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Associated                      companies                                                                                                                                                                                                                                  |   |   | 150,368 |   |   | 115,252 |   |
| Other                                                                                                                                                                                                                                                                      |   |   | 20,047 |   |   | 13,068 |   |
| Accrued                      taxes                                                                                                                                                                                                                                         |   |   | 135,793 |   |   | 187,306 |   |
| Accrued                      interest                                                                                                                                                                                                                                      |   |   | 17,900 |   |   | 24,712 |   |
| Other                                                                                                                                                                                                                                                                      |   |   | 93,484 |   |   | 64,519 |   |
|                                                                                                                                                                                                                                                                       |   |   | 773,573 |   |   | 681,793 |   |
| **CAPITALIZATION:**                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Common                      stockholder's equity-                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Common                      stock,                      without par value, authorized 175,000,000 shares -                                                                                                                                                                 |   |   |   |   |   |   |   |
| 60                      and 80                      shares outstanding, respectively                                                                                                                                                                                       |   |   | 1,208,467 |   |   | 1,708,441 |   |
| Accumulated                      other comprehensive income                                                                                                                                                                                                                |   |   | 1,162 |   |   | 3,208 |   |
| Retained                      earnings                                                                                                                                                                                                                                     |   |   | 314,043 |   |   | 260,736 |   |
| Total                      common                      stockholder's equity                                                                                                                                                                                                |   |   | 1,523,672 |   |   | 1,972,385 |   |
| Long-term                      debt                      and other long-term obligations                                                                                                                                                                                   |   |   | 1,117,635 |   |   | 1,118,576 |   |
|                                                                                                                                                                                                                                                                       |   |   | 2,641,307 |   |   | 3,090,961 |   |
| **NONCURRENT                      LIABILITIES:**                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Accumulated                      deferred income taxes                                                                                                                                                                                                                     |   |   | 712,023 |   |   | 674,288 |   |
| Accumulated                      deferred investment tax credits                                                                                                                                                                                                           |   |   | 19,640 |   |   | 20,532 |   |
| Asset                      retirement obligations                                                                                                                                                                                                                          |   |   | 89,428 |   |   | 88,223 |   |
| Retirement                      benefits                                                                                                                                                                                                                                   |   |   | 165,031 |   |   | 167,379 |   |
| Deferred                      revenues - electric service programs                                                                                                                                                                                                         |   |   | 77,657 |   |   | 86,710 |   |
| Other                                                                                                                                                                                                                                                                      |   |   | 304,006 |   |   | 310,728 |   |
|                                                                                                                                                                                                                                                                       |   |   | 1,367,785 |   |   | 1,347,860 |   |
| **COMMITMENTS                      AND CONTINGENCIES (Note 9)**                                                                                                                                                                                                            |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                       |   | $ | 4,782,665 |   | $ | 5,120,614 |   |
|                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| The                      preceding                      Notes to Consolidated Financial Statements as they relate to                      Ohio Edison                      Company are an integral part of these                      balance                      sheets. |   |

----

| **OHIO                      EDISON COMPANY**                                                                                                                                                                                                                           |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                   |   |    |   |   |   |
| **CONSOLIDATED                      STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                         |   |
| **(Unaudited)**                                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                                                   |   |    |   |   |   |
|                                                                                                                                                                                                                                                                   |   | **Three                      Months Ended** |   |
|                                                                                                                                                                                                                                                                   |   | **March                      31,** |   |
|                                                                                                                                                                                                                                                                   |   |  **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                   |   | ***(In                      thousands)*** |   |
| **CASH                      FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                                                                         |   |    |   |   |   |
| Net                      income                                                                                                                                                                                                                                        |   | $ | 54,035 |   | $ | 63,830 |   |
| Adjustments                      to                      reconcile net income to net cash from operating                      activities-                                                                                                                              |   |   |   |   |   |   |   |
| Provision                      for                      depreciation                                                                                                                                                                                                   |   |   | 18,848 |   |   | 18,016 |   |
| Amortization                      of regulatory assets                                                                                                                                                                                                                 |   |   | 45,417 |   |   | 53,861 |   |
| Deferral                      of                      new regulatory assets                                                                                                                                                                                            |   |   | (36,649 | ) |   | (36,240 | ) |
| Amortization                      of lease costs                                                                                                                                                                                                                       |   |   | 32,934 |   |   | 32,934 |   |
| Deferred                      income taxes and investment tax credits, net                                                                                                                                                                                             |   |   | (3,992 | ) |   | (3,945 | ) |
| Accrued                      compensation and retirement benefits                                                                                                                                                                                                      |   |   | (16,794 | ) |   | (1,494 | ) |
| Pension                      trust                      contribution                                                                                                                                                                                                   |   |   | (20,261 | ) |   | - |   |
| Decrease                      (increase) in operating assets-                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                                                                            |   |   | (102,469 | ) |   | 116,271 |   |
| Prepayments                      and other current assets                                                                                                                                                                                                              |   |   | (6,339 | ) |   | (12,136 | ) |
| Increase                      (decrease) in operating liabilities-                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Accounts                      payable                                                                                                                                                                                                                                  |   |   | 42,095 |   |   | 9,668 |   |
| Accrued                      taxes                                                                                                                                                                                                                                     |   |   | (46,791 | ) |   | 27,505 |   |
| Accrued                      interest                                                                                                                                                                                                                                  |   |   | (6,812 | ) |   | 3,721 |   |
| Electric                      service prepayment programs                                                                                                                                                                                                              |   |   | (9,053 | ) |   | (7,763 | ) |
| Other                                                                                                                                                                                                                                                                  |   |   | (4,137 | ) |   | 4,454 |   |
| Net                      cash                      provided from (used for) operating activities                                                                                                                                                                       |   |   | (59,968 | ) |   | 268,682 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **CASH                      FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| New                      Financing-                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Short-term                      borrowings, net                                                                                                                                                                                                                        |   |   | 77,473 |   |   | - |   |
| Redemptions                      and Repayments-                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Common                      stock                                                                                                                                                                                                                                      |   |   | (500,000 | ) |   | - |   |
| Long-term                      debt                                                                                                                                                                                                                                    |   |   | (72 | ) |   | (59,506 | ) |
| Short-term                      borrowings, net                                                                                                                                                                                                                        |   |   | - |   |   | (178,716 | ) |
| Dividend                      Payments-                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Common                      stock                                                                                                                                                                                                                                      |   |   | - |   |   | (35,000 | ) |
| Preferred                      stock                                                                                                                                                                                                                                   |   |   | - |   |   | (659 | ) |
| Net                      cash used                      for financing activities                                                                                                                                                                                       |   |   | (422,599 | ) |   | (273,881 | ) |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **CASH                      FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Property                      additions                                                                                                                                                                                                                                |   |   | (29,888 | ) |   | (28,793 | ) |
| Proceeds                      from                      nuclear decommissioning trust fund sales                                                                                                                                                                       |   |   | 12,951 |   |   | 19,054 |   |
| Investments                      in                      nuclear decommissioning trust funds                                                                                                                                                                           |   |   | (12,951 | ) |   | (19,054 | ) |
| Loan                      repayments from (loans to) associated companies, net                                                                                                                                                                                         |   |   | 511,082 |   |   | (45,224 | ) |
| Cash                      investments                                                                                                                                                                                                                                  |   |   | 168 |   |   | 78,458 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 1,187 |   |   | 877 |   |
| Net                      cash                      provided from investing activities                                                                                                                                                                                  |   |   | 482,549 |   |   | 5,318 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Net                      increase                      (decrease) in cash and cash equivalents                                                                                                                                                                         |   |   | (18 | ) |   | 119 |   |
| Cash                      and cash                      equivalents at beginning of period                                                                                                                                                                             |   |   | 712 |   |   | 929 |   |
| Cash                      and cash                      equivalents at end of period                                                                                                                                                                                   |   | $ | 694 |   | $ | 1,048 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| The                      preceding                      Notes to Consolidated Financial Statements as they relate to                      Ohio Edison                      Company are an integral part of                      these                      statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**OHIO      EDISON      COMPANY**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION**
** **
**AND      RESULTS      OF OPERATIONS **

**Results      of Operations**

*Revenues*

| **Retail              Generation KWH Sales**        |   |  **Increase                (Decrease)** |    |
|-----------------------------------------------------|--------|----------------------------------------------|---------|
|                                                |   |                                         |    |   |
| Residential                                         |   |                                         | 12.1    |  % |
| Commercial                                          |   |                                         | 2.7     |  % |
| Industrial                                          |   |                                         | (12.9   | )% |
| **Net                Increase in Generation Sales** |   |                                         | **0.8** | ** %** |

| **Retail                Generation Revenues**                            |   | **Increase                (Decrease)** |   |
|--------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                     |   | ***(In                millions)***     |
| Residential                                                              |   | $                                      | 37     |   |
| Commercial                                                               |   |                                   | 16     |   |
| Industrial                                                               |   |                                   | (5     | ) |
| **Net                Increase in****Generation                Revenues** |   | **$**                                  | **48** |   |

----

| **Changes                in Distribution KWH Deliveries**  |   | **Increase                (Decrease)** |    |
|------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                       |   |                                   |    |   |
| Residential                                                |   |                                   | 9.7     |  % |
| Commercial                                                 |   |                                   | 4.5     |  % |
| Industrial                                                 |   |                                   | (1.5    | )% |
| **Net                Increase in Distribution Deliveries** |   |                                   | **4.3** | ** %** |

|  **Decreases                in Distribution Revenues** |   | ***(In                millions)*** |    |
|-------------------------------------------------------------|--------|------------------------------------|---------|
|                                                        |   |                               |    |   |
| Residential                                                 |   | $                                  | (1      | ) |
| Commercial                                                  |   |                               | (4      | ) |
| Industrial                                                  |   |                               | (8      | ) |
| **Decrease                in Distribution Revenues**        |   | **$**                              | **(13** | **)** |

*Expenses*

| **Expenses                - Changes**                           |   | **Increase                (Decrease)** |                               |
|-----------------------------------------------------------------|--------|----------------------------------------|------------------------------------|
|                                                            |   |                                   | ***(In                millions)*** |   |
| Purchased                power costs                            |   | $                                      | 67                                 |   |
| Other                operating costs                            |   |                                   | (2                                 | ) |
| Provision                for                depreciation        |   |                                   | 1                                  |   |
| Amortization                of regulatory assets                |   |                                   | (8                                 | ) |
| Deferral                of                new regulatory assets |   |                                   | (1                                 | ) |
| General                taxes                                    |   |                                   | 4                                  |   |
| **Net                Increase in Expenses**                     |   | **$**                                  | **61**                             |   |
|                                                            |   |                                   |                               |   |

*Other      Income*

*Income      Taxes*

**Capital      Resources and Liquidity **

----

*Changes      in Cash      Position*

*Cash      Flows From      Operating Activities*

|                                                                                 |   | **Three                Months Ended****March                31,** |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
| **Operating                Cash Flows**                                              |   | **2007**                                                          |   | **2006** |   |
|                                                                                 |   | ***(In                millions)***                                |   |
| Net                income                                                            |   | $                                                                 | 54     |   | $ | 64 |   |
| Non-cash                charges                                                      |   |                                                              | 31     |   |   | 56 |   |
| Pension                trust                contribution                             |   |                                                              | (20    | ) |   | - |   |
| Working                capital and other                                             |   |                                                              | (125   | ) |   | 149 |   |
| Net                cash                provided from (used for) operating activities |   | $                                                                 | (60    | ) | $ | 269 |   |

*Cash      Flows From      Financing Activities*

*Cash      Flows From      Investing Activities*

----

**Off-Balance      Sheet Arrangements**

**Equity      Price Risk**

**Regulatory      Matters**

**Environmental      Matters**

**Other      Legal Proceedings**

**New      Accounting Standards and Interpretations**

----

| **THE                  CLEVELAND ELECTRIC ILLUMINATING COMPANY**                                                                                                                                                                                                       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                   |   |    |   |    |   |
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**                                                                                                                                                                                        |   |
| **(Unaudited)**                                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                                                   |   |    |   |    |   |
|                                                                                                                                                                                                                                                                   |   | **Three                  Months Ended** |   |
|                                                                                                                                                                                                                                                                   |   | **March                  31,** |   |
|                                                                                                                                                                                                                                                                   |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                   |   | ***(In                  thousands)*** |   |
|                                                                                                                                                                                                                                                                   |   |    |   |    |   |
| **REVENUES:**                                                                                                                                                                                                                                                          |   |    |   |    |   |
| Electric                  sales                                                                                                                                                                                                                                        |   | $ | 422,805 |   | $ | 390,499 |   |
| Excise                  tax                  collections                                                                                                                                                                                                               |   |   | 18,027 |   |   | 17,311 |   |
| Total                  revenues                                                                                                                                                                                                                                        |   |   | 440,832 |   |   | 407,810 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Fuel                                                                                                                                                                                                                                                                   |   |   | 13,191 |   |   | 13,563 |   |
| Purchased                  power                                                                                                                                                                                                                                       |   |   | 180,657 |   |   | 143,770 |   |
| Other                  operating costs                                                                                                                                                                                                                                 |   |   | 74,951 |   |   | 72,895 |   |
| Provision                  for                  depreciation                                                                                                                                                                                                           |   |   | 18,468 |   |   | 17,201 |   |
| Amortization                  of regulatory assets                                                                                                                                                                                                                     |   |   | 33,129 |   |   | 31,530 |   |
| Deferral                  of                  new regulatory assets                                                                                                                                                                                                    |   |   | (33,957 | ) |   | (30,526 | ) |
| General                  taxes                                                                                                                                                                                                                                         |   |   | 38,894 |   |   | 35,070 |   |
| Total                  expenses                                                                                                                                                                                                                                        |   |   | 325,333 |   |   | 283,503 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **OPERATING                  INCOME**                                                                                                                                                                                                                                  |   |   | 115,499 |   |   | 124,307 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE):**                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Investment                  income                                                                                                                                                                                                                                     |   |   | 17,687 |   |   | 26,936 |   |
| Miscellaneous                  income (expense)                                                                                                                                                                                                                        |   |   | 731 |   |   | (246 | ) |
| Interest                  expense                                                                                                                                                                                                                                      |   |   | (35,740 | ) |   | (34,732 | ) |
| Capitalized                  interest                                                                                                                                                                                                                                  |   |   | 205 |   |   | 673 |   |
| Total                  other                  expense                                                                                                                                                                                                                  |   |   | (17,117 | ) |   | (7,369 | ) |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **INCOME                  BEFORE INCOME TAXES**                                                                                                                                                                                                                        |   |   | 98,382 |   |   | 116,938 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **INCOME                  TAXES**                                                                                                                                                                                                                                      |   |   | 34,833 |   |   | 44,525 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                                                        |   |   | 63,549 |   |   | 72,413 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **OTHER                  COMPREHENSIVE INCOME:**                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Pension                  and                  other postretirement benefits                                                                                                                                                                                            |   |   | 1,202 |   |   | - |   |
| Income                  tax                  expense related to other comprehensive income                                                                                                                                                                             |   |   | 355 |   |   | - |   |
| Other                  comprehensive income, net of tax                                                                                                                                                                                                                |   |   | 847 |   |   | - |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **TOTAL                  COMPREHENSIVE INCOME**                                                                                                                                                                                                                        |   | $ | 64,396 |   | $ | 72,413 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to The                  Cleveland                  Electric Illuminating Company                  are an                  integral part of these statements. |   |

----

| **THE                      CLEVELAND ELECTRIC ILLUMINATING COMPANY**                                                                                                                                                                                                                               |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                      BALANCE SHEETS**                                                                                                                                                                                                                                               |   |
| **(Unaudited)**                                                                                                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                                                                                                               |   | **March                      31,** |   | **December                      31,** |   |
|                                                                                                                                                                                                                                                                                               |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                                               |   | ***(In                      thousands)*** |   |
| **ASSETS**                                                                                                                                                                                                                                                                                         |   |    |   |    |   |
| **CURRENT                      ASSETS:**                                                                                                                                                                                                                                                           |   |    |   |    |   |
| Cash                      and cash                      equivalents                                                                                                                                                                                                                                |   | $ | 775 |   | $ | 221 |   |
| Receivables-                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Customers                      (less accumulated provisions of $6,578,000 and $6,783,000,                                                                                                                                                                                                          |   |   | 264,634 |   |   | 245,193 |   |
| respectively,                      for uncollectible accounts)                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Associated                      companies                                                                                                                                                                                                                                                          |   |   | 16,705 |   |   | 249,735 |   |
| Other                                                                                                                                                                                                                                                                                              |   |   | 3,818 |   |   | 14,240 |   |
| Notes                      receivable from associated companies                                                                                                                                                                                                                                    |   |   | 259,098 |   |   | 27,191 |   |
| Prepayments                      and other                                                                                                                                                                                                                                                         |   |   | 1,675 |   |   | 2,314 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 546,705 |   |   | 538,894 |   |
| **UTILITY                      PLANT:**                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| In                      service                                                                                                                                                                                                                                                                    |   |   | 2,140,603 |   |   | 2,136,766 |   |
| Less                      -                      Accumulated provision for depreciation                                                                                                                                                                                                            |   |   | 830,385 |   |   | 819,633 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 1,310,218 |   |   | 1,317,133 |   |
| Construction                      work in progress                                                                                                                                                                                                                                                 |   |   | 63,588 |   |   | 46,385 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 1,373,806 |   |   | 1,363,518 |   |
| **OTHER                      PROPERTY AND INVESTMENTS:**                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Long-term                      notes receivable from associated companies                                                                                                                                                                                                                          |   |   | 353,293 |   |   | 486,634 |   |
| Investment                      in                      lessor notes                                                                                                                                                                                                                               |   |   | 483,996 |   |   | 519,611 |   |
| Other                                                                                                                                                                                                                                                                                              |   |   | 13,418 |   |   | 13,426 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 850,707 |   |   | 1,019,671 |   |
| **DEFERRED                      CHARGES AND OTHER ASSETS:**                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Goodwill                                                                                                                                                                                                                                                                                           |   |   | 1,688,521 |   |   | 1,688,521 |   |
| Regulatory                      assets                                                                                                                                                                                                                                                             |   |   | 853,733 |   |   | 854,588 |   |
| Pension                      assets                                                                                                                                                                                                                                                                |   |   | 13,456 |   |   | - |   |
| Property                      taxes                                                                                                                                                                                                                                                                |   |   | 65,000 |   |   | 65,000 |   |
| Other                                                                                                                                                                                                                                                                                              |   |   | 65,134 |   |   | 33,306 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 2,685,844 |   |   | 2,641,415 |   |
|                                                                                                                                                                                                                                                                                               |   | $ | 5,457,062 |   | $ | 5,563,498 |   |
| **LIABILITIES                      AND CAPITALIZATION**                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| **CURRENT                      LIABILITIES:**                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Currently                      payable long-term debt                                                                                                                                                                                                                                              |   | $ | 223,676 |   | $ | 120,569 |   |
| Short-term                      borrowings-                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Associated                      companies                                                                                                                                                                                                                                                          |   |   | 102,201 |   |   | 218,134 |   |
| Accounts                      payable-                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| Associated                      companies                                                                                                                                                                                                                                                          |   |   | 109,744 |   |   | 365,678 |   |
| Other                                                                                                                                                                                                                                                                                              |   |   | 6,320 |   |   | 7,194 |   |
| Accrued                      taxes                                                                                                                                                                                                                                                                 |   |   | 142,355 |   |   | 128,829 |   |
| Accrued                      interest                                                                                                                                                                                                                                                              |   |   | 37,155 |   |   | 19,033 |   |
| Lease                      market                      valuation liability                                                                                                                                                                                                                         |   |   | 60,200 |   |   | 60,200 |   |
| Other                                                                                                                                                                                                                                                                                              |   |   | 29,883 |   |   | 52,101 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 711,534 |   |   | 971,738 |   |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **CAPITALIZATION:**                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Common                      stockholder's equity                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Common                      stock,                      without par value, authorized 105,000,000 shares -                                                                                                                                                                                         |   |   | 860,165 |   |   | 860,133 |   |
| 67,930,743                      shares outstanding                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Accumulated                      other comprehensive loss                                                                                                                                                                                                                                          |   |   | (103,584 | ) |   | (104,431 | ) |
| Retained                      earnings                                                                                                                                                                                                                                                             |   |   | 752,491 |   |   | 713,201 |   |
| Total                      common                      stockholder's equity                                                                                                                                                                                                                        |   |   | 1,509,072 |   |   | 1,468,903 |   |
| Long-term                      debt                      and other long-term obligations                                                                                                                                                                                                           |   |   | 1,937,294 |   |   | 1,805,871 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 3,446,366 |   |   | 3,274,774 |   |
| **NONCURRENT                      LIABILITIES:**                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Accumulated                      deferred income taxes                                                                                                                                                                                                                                             |   |   | 488,325 |   |   | 470,707 |   |
| Accumulated                      deferred investment tax credits                                                                                                                                                                                                                                   |   |   | 19,850 |   |   | 20,277 |   |
| Lease                      market                      valuation liability                                                                                                                                                                                                                         |   |   | 532,800 |   |   | 547,800 |   |
| Retirement                      benefits                                                                                                                                                                                                                                                           |   |   | 110,039 |   |   | 122,862 |   |
| Deferred                      revenues - electric service programs                                                                                                                                                                                                                                 |   |   | 46,275 |   |   | 51,588 |   |
| Other                                                                                                                                                                                                                                                                                              |   |   | 101,873 |   |   | 103,752 |   |
|                                                                                                                                                                                                                                                                                               |   |   | 1,299,162 |   |   | 1,316,986 |   |
| **COMMITMENTS                      AND CONTINGENCIES (Note 9)**                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                               |   | $ | 5,457,062 |   | $ | 5,563,498 |   |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| The                      preceding                      Notes to Consolidated Financial Statements as they relate to                      The Cleveland                      Electric Illuminating Company are                      an                      integral part of these balance sheets. |   |

----

| **THE                    CLEVELAND ELECTRIC ILLUMINATING COMPANY**                                                                                                                                                                                                                 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                               |   |    |   |    |   |
| **CONSOLIDATED                    STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                                       |   |
| **(Unaudited)**                                                                                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                                                                                               |   |    |   |    |   |
|                                                                                                                                                                                                                                                                               |   | **Three                    Months Ended** |   |
|                                                                                                                                                                                                                                                                               |   | **March                    31,** |   |
|                                                                                                                                                                                                                                                                               |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                               |   | ***(In                    thousands)*** |   |
| **CASH                    FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                                                                                       |   |    |   |    |   |
| Net                    income                                                                                                                                                                                                                                                      |   | $ | 63,549 |   | $ | 72,413 |   |
| Adjustments                    to                    reconcile net income to net cash from operating                    activities-                                                                                                                                                |   |   |   |   |   |   |   |
| Provision                    for                    depreciation                                                                                                                                                                                                                   |   |   | 18,468 |   |   | 17,201 |   |
| Amortization                    of regulatory assets                                                                                                                                                                                                                               |   |   | 33,129 |   |   | 31,530 |   |
| Deferral                    of                    new regulatory assets                                                                                                                                                                                                            |   |   | (33,957 | ) |   | (30,526 | ) |
| Nuclear                    fuel                    and capital lease amortization                                                                                                                                                                                                  |   |   | 56 |   |   | 60 |   |
| Deferred                    rents                    and lease market valuation liability                                                                                                                                                                                          |   |   | (46,528 | ) |   | (54,821 | ) |
| Deferred                    income taxes and investment tax credits, net                                                                                                                                                                                                           |   |   | (5,453 | ) |   | (402 | ) |
| Accrued                    compensation and retirement benefits                                                                                                                                                                                                                    |   |   | (890 | ) |   | (172 | ) |
| Pension                    trust                    contribution                                                                                                                                                                                                                   |   |   | (24,800 | ) |   | - |   |
| Decrease                    (increase) in operating assets-                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                                                                                        |   |   | 224,011 |   |   | 74,518 |   |
| Prepayments                    and other current assets                                                                                                                                                                                                                            |   |   | 592 |   |   | 515 |   |
| Increase                    (decrease) in operating liabilities-                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Accounts                    payable                                                                                                                                                                                                                                                |   |   | (256,808 | ) |   | (9,424 | ) |
| Accrued                    taxes                                                                                                                                                                                                                                                   |   |   | 13,959 |   |   | 15,691 |   |
| Accrued                    interest                                                                                                                                                                                                                                                |   |   | 18,122 |   |   | 12,802 |   |
| Electric                    service prepayment programs                                                                                                                                                                                                                            |   |   | (5,313 | ) |   | (4,056 | ) |
| Other                                                                                                                                                                                                                                                                              |   |   | (223 | ) |   | 81 |   |
| Net                    cash                    provided from (used for) operating activities                                                                                                                                                                                       |   |   | (2,086 | ) |   | 125,410 |   |
|                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| New                    Financing-                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Long-term                    debt                                                                                                                                                                                                                                                  |   |   | 247,715 |   |   | - |   |
| Redemptions                    and Repayments-                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Long-term                    debt                                                                                                                                                                                                                                                  |   |   | (150 | ) |   | (172 | ) |
| Short-term                    borrowings, net                                                                                                                                                                                                                                      |   |   | (130,585 | ) |   | (57,760 | ) |
| Dividend                    Payments-                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Common                    stock                                                                                                                                                                                                                                                    |   |   | (24,000 | ) |   | (63,000 | ) |
| Net                    cash                    provided from (used for) financing activities                                                                                                                                                                                       |   |   | 92,980 |   |   | (120,932 | ) |
|                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Property                    additions                                                                                                                                                                                                                                              |   |   | (36,682 | ) |   | (34,410 | ) |
| Loans                    to                    associated companies, net                                                                                                                                                                                                           |   |   | (231,907 | ) |   | (9,158 | ) |
| Collection                    of                    principal on long-term notes receivable                                                                                                                                                                                        |   |   | 133,341 |   |   | - |   |
| Investments                    in                    lessor notes                                                                                                                                                                                                                  |   |   | 35,614 |   |   | 44,548 |   |
| Other                                                                                                                                                                                                                                                                              |   |   | 9,294 |   |   | (5,448 | ) |
| Net                    cash used                    for investing activities                                                                                                                                                                                                       |   |   | (90,340 | ) |   | (4,468 | ) |
|                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Net                    increase                    in cash and cash equivalents                                                                                                                                                                                                    |   |   | 554 |   |   | 10 |   |
| Cash                    and cash                    equivalents at beginning of period                                                                                                                                                                                             |   |   | 221 |   |   | 207 |   |
| Cash                    and cash                    equivalents at end of period                                                                                                                                                                                                   |   | $ | 775 |   | $ | 217 |   |
|                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    The Cleveland                    Electric Illuminating Company are                    an                    integral part of these statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**THE      CLEVELAND ELECTRIC ILLUMINATING COMPANY**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION AND RESULTS OF OPERATIONS**

**Results      of Operations**

*Revenues*

| **Retail                Generation KWH Sales**            |   | **Increase** |    |
|-----------------------------------------------------------|--------|--------------|---------|
| Residential                                               |   |         | 8.0     | % |
| Commercial                                                |   |         | 7.1     | % |
| Industrial                                                |   |         | 3.3     | % |
| **Total                Retail Electric Generation Sales** |   |         | **5.6** | **%** |

| **Retail                Generation Revenues**       |   | **Increase**                       |   |
|-----------------------------------------------------|--------|------------------------------------|--------|
|                                                |   | ***(In                millions***) |   |
| Residential                                         |   | $                                  | 7      |   |
| Commercial                                          |   |                               | 7      |   |
| Industrial                                          |   |                               | 8      |   |
| **Total                Retail Generation Revenues** |   | **$**                              | **22** |   |

----

| **Distribution                KWH Deliveries**               |   | **Increase** |    |
|--------------------------------------------------------------|--------|--------------|---------|
| Residential                                                  |   |         | 8.0     | % |
| Commercial                                                   |   |         | 4.9     | % |
| Industrial                                                   |   |         | 2.1     | % |
| **Total                Increase in Distribution Deliveries** |   |         | **4.6** | **%** |

| **Distribution                  Revenues**                 |   | **Increase                  (Decrease****)** |   |
|------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                       |   | ***(In                  millions)***         |   |
| Residential                                                |   | $                                            | 2      |   |
| Commercial                                                 |   |                                         | 1      |   |
| Industrial                                                 |   |                                         | (5     | ) |
| **Net                  Decrease in Distribution Revenues** |   | **$**                                        | **(2** | **)** |

*Expenses*

| **Expenses                - Changes**                           |   | **Increase                (Decrease)** |   |
|-----------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                            |   | ***(In                millions)***     |   |
| Purchased                power costs                            |   | $                                      | 37     |   |
| Other                operating costs                            |   |                                   | 2      |   |
| Provision                for                depreciation        |   |                                   | 1      |   |
| Amortization                of regulatory assets                |   |                                   | 2      |   |
| Deferral                of                new regulatory assets |   |                                   | (4     | ) |
| General                taxes                                    |   |                                   | 4      |   |
| **Net                increase in expenses**                     |   | **$**                                  | 42     |   |

*Other      Expense*

**Capital      Resources and Liquidity**

*Changes      in Cash      Position*

----

*Cash      Flows from      Operating Activities*

|                                                                                 |   | **Three                Months Ended****March                31,** |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
| **Operating                Cash Flows**                                              |   | **2007**                                                          |   | **2006** |   |
|                                                                                 |   | ***(In                millions)***                                |   |
| Net                Income                                                            |   | **$**                                                             | 64     |   | **$** | 72 |   |
| Non-cash                credits                                                      |   |                                                              | (40    | ) |   | (41 | ) |
| Pension                trust                contribution                             |   |                                                              | (25    | ) |   | - |   |
| Working                capital and other                                             |   |                                                              | (1     | ) |   | 94 |   |
| Net                cash                provided from (used for) operating activities |   | **$**                                                             | (2     | ) | **$** | 125 |   |

*Cash      Flows from      Financing Activities*

*Cash      Flows from      Investing Activities*

**Off-Balance      Sheet Arrangements**

**Regulatory      Matters**

----

**Environmental      Matters**

**Other      Legal Proceedings**

**New      Accounting Standards and Interpretations**

----

| **THE                  TOLEDO EDISON COMPANY**                                                                                                                                                                                   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                 |   |    |   |    |   |
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE                  INCOME**                                                                                                                                 |   |
| **(Unaudited)**                                                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                                 |   |    |   |    |   |
|                                                                                                                                                                                                                                                 |   | **Three                  Months Ended** |   |
|                                                                                                                                                                                                                                                 |   | **March                  31,** |   |
|                                                                                                                                                                                                                                                 |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                 |   |      |   |
| **STATEMENTS                  OF INCOME**                                                                                                                                                                                                            |   | ***(In                  thousands)*** |   |
|                                                                                                                                                                                                                                                 |   |    |   |    |   |
| **REVENUES:**                                                                                                                                                                                                                                        |   |    |   |    |   |
| Electric                  sales                                                                                                                                                                                                                      |   | $ | 233,056 |   | $ | 210,874 |   |
| Excise                  tax                  collections                                                                                                                                                                                             |   |   | 7,400 |   |   | 7,103 |   |
| Total                  revenues                                                                                                                                                                                                                      |   |   | 240,456 |   |   | 217,977 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Fuel                                                                                                                                                                                                                                                 |   |   | 10,147 |   |   | 9,762 |   |
| Purchased                  power                                                                                                                                                                                                                     |   |   | 96,169 |   |   | 75,420 |   |
| Nuclear                  operating costs                                                                                                                                                                                                             |   |   | 17,721 |   |   | 17,332 |   |
| Other                  operating costs                                                                                                                                                                                                               |   |   | 42,921 |   |   | 40,425 |   |
| Provision                  for                  depreciation                                                                                                                                                                                         |   |   | 9,117 |   |   | 8,097 |   |
| Amortization                  of regulatory assets                                                                                                                                                                                                   |   |   | 23,876 |   |   | 24,456 |   |
| Deferral                  of                  new regulatory assets                                                                                                                                                                                  |   |   | (13,481 | ) |   | (13,656 | ) |
| General                  taxes                                                                                                                                                                                                                       |   |   | 13,734 |   |   | 12,931 |   |
| Total                  expenses                                                                                                                                                                                                                      |   |   | 200,204 |   |   | 174,767 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **OPERATING                  INCOME**                                                                                                                                                                                                                |   |   | 40,252 |   |   | 43,210 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE):**                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Investment                  income                                                                                                                                                                                                                   |   |   | 7,225 |   |   | 9,780 |   |
| Miscellaneous                  expense                                                                                                                                                                                                               |   |   | (3,100 | ) |   | (2,684 | ) |
| Interest                  expense                                                                                                                                                                                                                    |   |   | (7,503 | ) |   | (4,310 | ) |
| Capitalized                  interest                                                                                                                                                                                                                |   |   | 83 |   |   | 214 |   |
| Total                  other                  income (expense)                                                                                                                                                                                       |   |   | (3,295 | ) |   | 3,000 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **INCOME                  BEFORE INCOME TAXES**                                                                                                                                                                                                      |   |   | 36,957 |   |   | 46,210 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **INCOME                  TAXES**                                                                                                                                                                                                                    |   |   | 11,097 |   |   | 17,204 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                                      |   |   | 25,860 |   |   | 29,006 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **PREFERRED                  STOCK DIVIDEND REQUIREMENTS**                                                                                                                                                                                           |   |   | - |   |   | 1,275 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **EARNINGS                  ON COMMON STOCK**                                                                                                                                                                                                        |   | $ | 25,860 |   | $ | 27,731 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **STATEMENTS                  OF COMPREHENSIVE INCOME**                                                                                                                                                                                              |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                                      |   | $ | 25,860 |   | $ | 29,006 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **OTHER                  COMPREHENSIVE INCOME (LOSS):**                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Pension                  and                  other postretirement benefits                                                                                                                                                                          |   |   | 573 |   |   | - |   |
| Unrealized                  gain (loss) on available for sale securities                                                                                                                                                                             |   |   | 379 |   |   | (1,138 | ) |
| Other                  comprehensive income (loss)                                                                                                                                                                                                   |   |   | 952 |   |   | (1,138 | ) |
| Income                  tax                  expense (benefit) related to other                                                                                                                                                                      |   |   |   |   |   |   |   |
| comprehensive                  income                                                                                                                                                                                                                |   |   | 334 |   |   | (411 | ) |
| Other                  comprehensive income (loss), net of tax                                                                                                                                                                                       |   |   | 618 |   |   | (727 | ) |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **TOTAL                  COMPREHENSIVE INCOME**                                                                                                                                                                                                      |   | $ | 26,478 |   | $ | 28,279 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to The                  Toledo                  Edison Company are                  an                  integral part of these statements. |   |

----

| **THE                    TOLEDO EDISON COMPANY**                                                                                                                                                                                                                     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                 |   |    |   |    |   |
| **CONSOLIDATED                    BALANCE SHEETS**                                                                                                                                                                                                                   |   |
| **(Unaudited)**                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                 |   | **March                    31,** |   | **December                    31,** |   |
|                                                                                                                                                                                                                                                                 |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                 |   | ***(In                    thousands)*** |   |
| **ASSETS**                                                                                                                                                                                                                                                           |   |    |   |    |   |
| **CURRENT                    ASSETS:**                                                                                                                                                                                                                               |   |    |   |    |   |
| Cash                    and cash                    equivalents                                                                                                                                                                                                      |   | $ | 201 |   | $ | 22 |   |
| Receivables-                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Customers                                                                                                                                                                                                                                                            |   |   | 557 |   |   | 772 |   |
| Associated                    companies                                                                                                                                                                                                                              |   |   | 14,059 |   |   | 13,940 |   |
| Other                    (less                    accumulated provisions of $433,000 and $430,000,                                                                                                                                                                   |   |   |   |   |   |   |   |
| respectively,                    for uncollectible accounts)                                                                                                                                                                                                         |   |   | 3,769 |   |   | 3,831 |   |
| Notes                    receivable from associated companies                                                                                                                                                                                                        |   |   | 109,195 |   |   | 100,545 |   |
| Prepayments                    and other                                                                                                                                                                                                                             |   |   | 539 |   |   | 851 |   |
|                                                                                                                                                                                                                                                                 |   |   | 128,320 |   |   | 119,961 |   |
| **UTILITY                    PLANT:**                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| In                    service                                                                                                                                                                                                                                        |   |   | 897,270 |   |   | 894,888 |   |
| Less                    -                    Accumulated provision for depreciation                                                                                                                                                                                  |   |   | 398,461 |   |   | 394,225 |   |
|                                                                                                                                                                                                                                                                 |   |   | 498,809 |   |   | 500,663 |   |
| Construction                    work in progress                                                                                                                                                                                                                     |   |   | 16,787 |   |   | 16,479 |   |
|                                                                                                                                                                                                                                                                 |   |   | 515,596 |   |   | 517,142 |   |
| **OTHER                    PROPERTY AND INVESTMENTS:**                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Investment                    in                    lessor notes                                                                                                                                                                                                     |   |   | 154,689 |   |   | 169,493 |   |
| Long-term                    notes receivable from associated companies                                                                                                                                                                                              |   |   | 96,589 |   |   | 128,858 |   |
| Nuclear                    plant                    decommissioning trusts                                                                                                                                                                                           |   |   | 62,075 |   |   | 61,094 |   |
| Other                                                                                                                                                                                                                                                                |   |   | 1,840 |   |   | 1,871 |   |
|                                                                                                                                                                                                                                                                 |   |   | 315,193 |   |   | 361,316 |   |
| **DEFERRED                    CHARGES AND OTHER ASSETS:**                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Goodwill                                                                                                                                                                                                                                                             |   |   | 500,576 |   |   | 500,576 |   |
| Regulatory                    assets                                                                                                                                                                                                                                 |   |   | 237,220 |   |   | 247,595 |   |
| Pension                    assets                                                                                                                                                                                                                                    |   |   | 4,796 |   |   | - |   |
| Property                    taxes                                                                                                                                                                                                                                    |   |   | 22,010 |   |   | 22,010 |   |
| Other                                                                                                                                                                                                                                                                |   |   | 50,514 |   |   | 30,042 |   |
|                                                                                                                                                                                                                                                                 |   |   | 815,116 |   |   | 800,223 |   |
|                                                                                                                                                                                                                                                                 |   | $ | 1,774,225 |   | $ | 1,798,642 |   |
| **LIABILITIES                    AND CAPITALIZATION**                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| **CURRENT                    LIABILITIES:**                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Currently                    payable long-term debt                                                                                                                                                                                                                  |   | $ | 30,000 |   | $ | 30,000 |   |
| Accounts                    payable-                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                              |   |   | 67,253 |   |   | 84,884 |   |
| Other                                                                                                                                                                                                                                                                |   |   | 4,119 |   |   | 4,021 |   |
| Notes                    payable                    to associated companies                                                                                                                                                                                          |   |   | 107,049 |   |   | 153,567 |   |
| Accrued                    taxes                                                                                                                                                                                                                                     |   |   | 54,781 |   |   | 47,318 |   |
| Lease                    market                    valuation liability                                                                                                                                                                                               |   |   | 24,600 |   |   | 24,600 |   |
| Other                                                                                                                                                                                                                                                                |   |   | 49,916 |   |   | 37,551 |   |
|                                                                                                                                                                                                                                                                 |   |   | 337,718 |   |   | 381,941 |   |
| **CAPITALIZATION:**                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Common                    stockholder's equity-                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Common                    stock,                    $5 par value, authorized 60,000,000 shares -                                                                                                                                                                     |   |   |   |   |   |   |   |
| 29,402,054                    shares outstanding                                                                                                                                                                                                                     |   |   | 147,010 |   |   | 147,010 |   |
| Other                    paid-in                    capital                                                                                                                                                                                                          |   |   | 166,799 |   |   | 166,786 |   |
| Accumulated                    other comprehensive loss                                                                                                                                                                                                              |   |   | (36,186 | ) |   | (36,804 | ) |
| Retained                    earnings                                                                                                                                                                                                                                 |   |   | 230,200 |   |   | 204,423 |   |
| Total                    common                    stockholder's equity                                                                                                                                                                                              |   |   | 507,823 |   |   | 481,415 |   |
| Long-term                    debt                                                                                                                                                                                                                                    |   |   | 358,254 |   |   | 358,281 |   |
|                                                                                                                                                                                                                                                                 |   |   | 866,077 |   |   | 839,696 |   |
| **NONCURRENT                    LIABILITIES:**                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                 |   |   | 165,004 |   |   | 161,024 |   |
| Accumulated                    deferred investment tax credits                                                                                                                                                                                                       |   |   | 10,806 |   |   | 11,014 |   |
| Lease                    market                    valuation liability                                                                                                                                                                                               |   |   | 212,650 |   |   | 218,800 |   |
| Retirement                    benefits                                                                                                                                                                                                                               |   |   | 75,265 |   |   | 77,843 |   |
| Asset                    retirement obligations                                                                                                                                                                                                                      |   |   | 26,987 |   |   | 26,543 |   |
| Deferred                    revenues - electric service programs                                                                                                                                                                                                     |   |   | 20,930 |   |   | 23,546 |   |
| Other                                                                                                                                                                                                                                                                |   |   | 58,788 |   |   | 58,235 |   |
|                                                                                                                                                                                                                                                                 |   |   | 570,430 |   |   | 577,005 |   |
| **COMMITMENTS                    AND CONTINGENCIES (Note 9)**                                                                                                                                                                                                        |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                 |   | $ | 1,774,225 |   | $ | 1,798,642 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    The Toledo                    Edison Company are an                    integral                    part of these balance sheets. |   |

----

| **THE                    TOLEDO EDISON COMPANY**                                                                                                                                                                                                                 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                             |   |    |   |    |   |
| **CONSOLIDATED                    STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                     |   |
| **(Unaudited)**                                                                                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                                             |   |    |   |    |   |
|                                                                                                                                                                                                                                                             |   | **Three                    Months Ended** |   |
|                                                                                                                                                                                                                                                             |   | **March                    31,** |   |
|                                                                                                                                                                                                                                                             |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                             |   | ***(In                    thousands)*** |   |
| **CASH                    FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                                                                     |   |    |   |    |   |
| Net                    income                                                                                                                                                                                                                                    |   | $ | 25,860 |   | $ | 29,006 |   |
| Adjustments                    to                    reconcile net income to net cash from operating                    activities-                                                                                                                              |   |   |   |   |   |   |   |
| Provision                    for                    depreciation                                                                                                                                                                                                 |   |   | 9,117 |   |   | 8,097 |   |
| Amortization                    of regulatory assets                                                                                                                                                                                                             |   |   | 23,876 |   |   | 24,456 |   |
| Deferral                    of                    new regulatory assets                                                                                                                                                                                          |   |   | (13,481 | ) |   | (13,656 | ) |
| Deferred                    rents                    and lease market valuation liability                                                                                                                                                                        |   |   | (10,891 | ) |   | (16,084 | ) |
| Deferred                    income taxes and investment tax credits, net                                                                                                                                                                                         |   |   | (3,639 | ) |   | (8,453 | ) |
| Accrued                    compensation and retirement benefits                                                                                                                                                                                                  |   |   | (756 | ) |   | (293 | ) |
| Pension                    trust                    contribution                                                                                                                                                                                                 |   |   | (7,659 | ) |   | - |   |
| Decrease                    (increase) in operating assets-                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                                                                      |   |   | 158 |   |   | (8,793 | ) |
| Prepayments                    and other current assets                                                                                                                                                                                                          |   |   | 312 |   |   | 366 |   |
| Increase                    (decrease) in operating liabilities-                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Accounts                    payable                                                                                                                                                                                                                              |   |   | (17,533 | ) |   | (15,969 | ) |
| Accrued                    taxes                                                                                                                                                                                                                                 |   |   | 9,379 |   |   | 20,401 |   |
| Accrued                    interest                                                                                                                                                                                                                              |   |   | 3,951 |   |   | (668 | ) |
| Electric                    service prepayment programs                                                                                                                                                                                                          |   |   | (2,616 | ) |   | (2,231 | ) |
| Other                                                                                                                                                                                                                                                            |   |   | (1,320 | ) |   | 1,282 |   |
| Net                    cash                    provided from operating activities                                                                                                                                                                                |   |   | 14,758 |   |   | 17,461 |   |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| New                    Financing-                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Short-term                    borrowings, net                                                                                                                                                                                                                    |   |   | - |   |   | 55,539 |   |
| Redemptions                    and Repayments-                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Preferred                    stock                                                                                                                                                                                                                               |   |   | - |   |   | (30,000 | ) |
| Short-term                    borrowings, net                                                                                                                                                                                                                    |   |   | (46,518 | ) |   | - |   |
| Dividend                    Payments-                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Common                    stock                                                                                                                                                                                                                                  |   |   | - |   |   | (25,000 | ) |
| Preferred                    stock                                                                                                                                                                                                                               |   |   | - |   |   | (1,275 | ) |
| Net                    cash used                    for financing activities                                                                                                                                                                                     |   |   | (46,518 | ) |   | (736 | ) |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Property                    additions                                                                                                                                                                                                                            |   |   | (6,064 | ) |   | (15,044 | ) |
| Loans                    to                    associated companies                                                                                                                                                                                              |   |   | (8,583 | ) |   | (11,270 | ) |
| Collection                    of                    principal on long-term notes receivable                                                                                                                                                                      |   |   | 32,202 |   |   | - |   |
| Investments                    in                    lessor notes                                                                                                                                                                                                |   |   | 14,804 |   |   | 9,335 |   |
| Proceeds                    from                    nuclear decommissioning trust fund sales                                                                                                                                                                     |   |   | 16,863 |   |   | 13,793 |   |
| Investments                    in                    nuclear decommissioning trust funds                                                                                                                                                                         |   |   | (16,863 | ) |   | (13,793 | ) |
| Other                                                                                                                                                                                                                                                            |   |   | (420 | ) |   | 254 |   |
| Net                    cash                    provided from (used for) investing activities                                                                                                                                                                     |   |   | 31,939 |   |   | (16,725 | ) |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| Net                    change in                    cash and cash equivalents                                                                                                                                                                                    |   |   | 179 |   |   | - |   |
| Cash                    and cash                    equivalents at beginning of period                                                                                                                                                                           |   |   | 22 |   |   | 15 |   |
| Cash                    and cash                    equivalents at end of period                                                                                                                                                                                 |   | $ | 201 |   | $ | 15 |   |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    The Toledo                    Edison Company are an integral part                    of these                    statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**THE      TOLEDO      EDISON COMPANY**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION**
**      AND RESULTS      OF OPERATIONS**

**Results      of Operations**

*Revenues*

| **Retail                Generation KWH Sales**            |   | **Increase** |    |
|-----------------------------------------------------------|--------|--------------|---------|
| Residential                                               |   |         | 13.7    | % |
| Commercial                                                |   |         | 5.3     | % |
| Industrial                                                |   |         | 0.8     | % |
| **Total                Retail Electric Generation Sales** |   |         | **5.0** | **%** |

| **Retail                Generation Revenues**       |   | **Increase**                       |   |
|-----------------------------------------------------|--------|------------------------------------|--------|
|                                                |   | ***(In                millions***) |   |
| Residential                                         |   | $                                  | 4      |   |
| Commercial                                          |   |                               | 3      |   |
| Industrial                                          |   |                               | 5      |   |
| **Total                Retail Generation Revenues** |   | **$**                              | **12** |   |

----

| **Distribution                KWH Deliveries**               |   | **Increase** |    |
|--------------------------------------------------------------|--------|--------------|---------|
| Residential                                                  |   |         | 8.0     | % |
| Commercial                                                   |   |         | 2.8     | % |
| Industrial                                                   |   |         | 0.4     | % |
| **Total                Increase in Distribution Deliveries** |   |         | **3.0** | **%** |

| **Distribution                Revenues**                 |   | **Increase                (Decrease****)** |   |
|----------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                     |   | ***(In                millions)***         |   |
| Residential                                              |   | $                                          | 2      |   |
| Commercial                                               |   |                                       | -      |   |
| Industrial                                               |   |                                       | (4     | ) |
| **Net                Decrease in Distribution Revenues** |   | **$**                                      | **(2** | **)** |

*Expenses*

| **Expenses**                                             |   | ***(In                millions)*** |   |
|----------------------------------------------------------|--------|------------------------------------|--------|
| Purchased                power costs                     |   | $                                  | 21     |   |
| Other                operating costs                     |   |                               | 2      |   |
| Provision                for                depreciation |   |                               | 1      |   |
| General                taxes                             |   |                               | 1      |   |
| **Increase                in expenses**                  |   | **$**                              | 25     |   |

*Other      Expense*

**Capital      Resources and Liquidity**

*Changes      in Cash      Position *

*Cash      Flows From      Operating Activities *

|                                                                      |   | **Three                Months Ended****March                31,** |   |
|---------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
| **Operating                Cash Flows**                                   |   | **2007**                                                          |   | **2006** |   |
|                                                                      |   | ***(In                millions)***                                |   |
| Net                income                                                 |   | $                                                                 | 26     |   | $ | 29 |   |
| Non-cash                charges (credits)                                 |   |                                                              | 2      |   |   | (8 | ) |
| Pension                trust                contribution                  |   |                                                              | (8     | ) |   | - |   |
| Working                capital and other                                  |   |                                                              | (5     | ) |   | (3 | ) |
| Net                cash                provided from operating activities |   | $                                                                 | 15     |   | $ | 18 |   |

----

*Cash      Flows From      Financing Activities*

*Cash      Flows From      Investing Activities*

**Off-Balance      Sheet Arrangements**

**Regulatory      Matters**

**Environmental      Matters**

**Other      Legal Proceedings**

**New      Accounting Standards and Interpretations**

----

| **JERSEY                  CENTRAL POWER & LIGHT COMPANY**                                                                                                                                                                                      |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                               |   |    |   |    |   |
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**                                                                                                                                                                    |   |
| **(Unaudited)**                                                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                                                               |   |    |   |    |   |
|                                                                                                                                                                                                                                               |   | **Three                  Months Ended** |   |
|                                                                                                                                                                                                                                               |   | **March                  31,** |   |
|                                                                                                                                                                                                                                               |   | **2007** |   | **2006** |   |
| **STATEMENTS                  OF INCOME**                                                                                                                                                                                                          |   | ***(In                  thousands)*** |   |
|                                                                                                                                                                                                                                               |   |    |   |    |   |
| **REVENUES:**                                                                                                                                                                                                                                      |   |    |   |    |   |
| Electric                  sales                                                                                                                                                                                                                    |   | $ | 670,907 |   | $ | 563,550 |   |
| Excise                  tax                  collections                                                                                                                                                                                           |   |   | 12,836 |   |   | 12,242 |   |
|  Total                  revenues                                                                                                                                                                                                              |   |   | 683,743 |   |   | 575,792 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Purchased                  power                                                                                                                                                                                                                   |   |   | 386,497 |   |   | 315,710 |   |
| Other                  operating costs                                                                                                                                                                                                             |   |   | 74,651 |   |   | 83,028 |   |
| Provision                  for                  depreciation                                                                                                                                                                                       |   |   | 20,516 |   |   | 20,628 |   |
| Amortization                  of regulatory assets                                                                                                                                                                                                 |   |   | 95,228 |   |   | 66,745 |   |
| General                  taxes                                                                                                                                                                                                                     |   |   | 16,999 |   |   | 16,232 |   |
|  Total                  expenses                                                                                                                                                                                                              |   |   | 593,891 |   |   | 502,343 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **OPERATING                  INCOME**                                                                                                                                                                                                              |   |   | 89,852 |   |   | 73,449 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE):**                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Miscellaneous                  income                                                                                                                                                                                                              |   |   | 3,061 |   |   | 3,543 |   |
| Interest                  expense                                                                                                                                                                                                                  |   |   | (22,416 | ) |   | (20,616 | ) |
| Capitalized                  interest                                                                                                                                                                                                              |   |   | 513 |   |   | 892 |   |
|  Total                  other expense                                                                                                                                                                                                         |   |   | (18,842 | ) |   | (16,181 | ) |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **INCOME                  BEFORE INCOME TAXES**                                                                                                                                                                                                    |   |   | 71,010 |   |   | 57,268 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **INCOME                  TAXES**                                                                                                                                                                                                                  |   |   | 32,664 |   |   | 23,558 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                                    |   |   | 38,346 |   |   | 33,710 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **PREFERRED                  STOCK DIVIDEND REQUIREMENTS**                                                                                                                                                                                         |   |   | - |   |   | 125 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **EARNINGS                  ON COMMON STOCK**                                                                                                                                                                                                      |   | $ | 38,346 |   | $ | 33,585 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **STATEMENTS                  OF COMPREHENSIVE INCOME**                                                                                                                                                                                            |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                                    |   | $ | 38,346 |   | $ | 33,710 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **OTHER                  COMPREHENSIVE INCOME (LOSS):**                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Pension                  and                  other postretirement benefits                                                                                                                                                                        |   |   | (2,115 | ) |   | - |   |
| Unrealized                  gain on derivative hedges                                                                                                                                                                                              |   |   | 97 |   |   | 69 |   |
|  Other                  comprehensive income (loss)                                                                                                                                                                                           |   |   | (2,018 | ) |   | 69 |   |
| Income                  tax                  expense (benefit) related to other                                                                                                                                                                    |   |   |   |   |   |   |   |
|                     comprehensive income                                                                                                                                                                                                 |   |   | (984 | ) |   | 28 |   |
| Other                  comprehensive income (loss), net of tax                                                                                                                                                                                     |   |   | (1,034 | ) |   | 41 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **TOTAL                  COMPREHENSIVE INCOME**                                                                                                                                                                                                    |   | $ | 37,312 |   | $ | 33,751 |   |
|                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to Jersey                  Central Power & Light Company                  are an                  integral part of these statements. |   |

----

| **JERSEY                    CENTRAL POWER & LIGHT COMPANY**                                                                                                                                                                                                                     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                |   |    |   |    |   |
| **CONSOLIDATED                    BALANCE SHEETS**                                                                                                                                                                                                                                  |   |
| **(Unaudited)**                                                                                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                                                |   | **March                    31,** |   | **December                    31,** |   |
|                                                                                                                                                                                                                                                                                |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                                |   | ***(In                    thousands)*** |   |
| **ASSETS**                                                                                                                                                                                                                                                                          |   |    |   |    |   |
| **CURRENT                    ASSETS:**                                                                                                                                                                                                                                              |   |    |   |    |   |
| Cash                    and cash                    equivalents                                                                                                                                                                                                                     |   | $ | 46 |   | $ | 41 |   |
| Receivables-                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Customers                    (less accumulated provisions of $3,005,000 and $3,524,000,                                                                                                                                                                                             |   |   |   |   |   |   |   |
| respectively,                    for uncollectible accounts)                                                                                                                                                                                                                        |   |   | 270,534 |   |   | 254,046 |   |
| Associated                    companies                                                                                                                                                                                                                                             |   |   | 863 |   |   | 11,574 |   |
| Other                    (less                    accumulated provisions of $716,000                                                                                                                                                                                                |   |   |   |   |   |   |   |
| in                    2007 for                    uncollectible accounts)                                                                                                                                                                                                           |   |   | 57,628 |   |   | 40,023 |   |
| Notes                    receivable - associated companies                                                                                                                                                                                                                          |   |   | 23,924 |   |   | 24,456 |   |
| Materials                    and                    supplies, at average cost                                                                                                                                                                                                       |   |   | 2,044 |   |   | 2,043 |   |
| Prepaid                    taxes                                                                                                                                                                                                                                                    |   |   | 1,127 |   |   | 13,333 |   |
| Other                                                                                                                                                                                                                                                                               |   |   | 12,834 |   |   | 18,076 |   |
|                                                                                                                                                                                                                                                                                |   |   | 369,000 |   |   | 363,592 |   |
| **UTILITY                    PLANT:**                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| In                    service                                                                                                                                                                                                                                                       |   |   | 4,030,132 |   |   | 4,029,070 |   |
| Less                    -                    Accumulated provision for depreciation                                                                                                                                                                                                 |   |   | 1,468,470 |   |   | 1,473,159 |   |
|                                                                                                                                                                                                                                                                                |   |   | 2,561,662 |   |   | 2,555,911 |   |
| Construction                    work in progress                                                                                                                                                                                                                                    |   |   | 92,008 |   |   | 78,728 |   |
|                                                                                                                                                                                                                                                                                |   |   | 2,653,670 |   |   | 2,634,639 |   |
| **OTHER                    PROPERTY AND INVESTMENTS:**                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Nuclear                    fuel                    disposal trust                                                                                                                                                                                                                   |   |   | 171,007 |   |   | 171,045 |   |
| Nuclear                    plant                    decommissioning trusts                                                                                                                                                                                                          |   |   | 166,342 |   |   | 164,108 |   |
| Other                                                                                                                                                                                                                                                                               |   |   | 2,056 |   |   | 2,047 |   |
|                                                                                                                                                                                                                                                                                |   |   | 339,405 |   |   | 337,200 |   |
| **DEFERRED                    CHARGES AND OTHER ASSETS:**                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Regulatory                    assets                                                                                                                                                                                                                                                |   |   | 2,058,636 |   |   | 2,152,332 |   |
| Goodwill                                                                                                                                                                                                                                                                            |   |   | 1,962,361 |   |   | 1,962,361 |   |
| Pension                    assets                                                                                                                                                                                                                                                   |   |   | 36,034 |   |   | 14,660 |   |
| Other                                                                                                                                                                                                                                                                               |   |   | 15,499 |   |   | 17,781 |   |
|                                                                                                                                                                                                                                                                                |   |   | 4,072,530 |   |   | 4,147,134 |   |
|                                                                                                                                                                                                                                                                                |   | $ | 7,434,605 |   | $ | 7,482,565 |   |
| **LIABILITIES                    AND CAPITALIZATION**                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **CURRENT                    LIABILITIES:**                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Currently                    payable long-term debt                                                                                                                                                                                                                                 |   | $ | 153,986 |   | $ | 32,683 |   |
| Short-term                    borrowings-                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                                             |   |   | 223,611 |   |   | 186,540 |   |
| Accounts                    payable-                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                                             |   |   | 26,970 |   |   | 80,426 |   |
| Other                                                                                                                                                                                                                                                                               |   |   | 151,777 |   |   | 160,359 |   |
| Accrued                    taxes                                                                                                                                                                                                                                                    |   |   | 23,573 |   |   | 1,451 |   |
| Accrued                    interest                                                                                                                                                                                                                                                 |   |   | 24,252 |   |   | 14,458 |   |
| Cash                    collateral from suppliers                                                                                                                                                                                                                                   |   |   | 32,446 |   |   | 32,300 |   |
| Other                                                                                                                                                                                                                                                                               |   |   | 94,036 |   |   | 96,150 |   |
|                                                                                                                                                                                                                                                                                |   |   | 730,651 |   |   | 604,367 |   |
| **CAPITALIZATION:**                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Common                    stockholder's equity-                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Common                    stock,                    $10 par value, authorized 16,000,000 shares-                                                                                                                                                                                    |   |   |   |   |   |   |   |
| 15,371,270                    shares outstanding                                                                                                                                                                                                                                    |   |   | 150,093 |   |   | 150,093 |   |
| Other                    paid-in                    capital                                                                                                                                                                                                                         |   |   | 2,908,315 |   |   | 2,908,279 |   |
| Accumulated                    other comprehensive loss                                                                                                                                                                                                                             |   |   | (45,288 | ) |   | (44,254 | ) |
| Retained                    earnings                                                                                                                                                                                                                                                |   |   | 168,732 |   |   | 145,480 |   |
| Total                    common                    stockholder's equity                                                                                                                                                                                                             |   |   | 3,181,852 |   |   | 3,159,598 |   |
| Long-term                    debt                    and other long-term obligations                                                                                                                                                                                                |   |   | 1,189,664 |   |   | 1,320,341 |   |
|                                                                                                                                                                                                                                                                                |   |   | 4,371,516 |   |   | 4,479,939 |   |
| **NONCURRENT                    LIABILITIES:**                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Power                    purchase                    contract loss liability                                                                                                                                                                                                        |   |   | 1,062,658 |   |   | 1,182,108 |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                                |   |   | 796,940 |   |   | 803,944 |   |
| Nuclear                    fuel                    disposal costs                                                                                                                                                                                                                   |   |   | 185,856 |   |   | 183,533 |   |
| Asset                    retirement obligations                                                                                                                                                                                                                                     |   |   | 85,722 |   |   | 84,446 |   |
| Other                                                                                                                                                                                                                                                                               |   |   | 201,262 |   |   | 144,228 |   |
|                                                                                                                                                                                                                                                                                |   |   | 2,332,438 |   |   | 2,398,259 |   |
| **COMMITMENTS                    AND CONTINGENCIES (Note 9)**                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                |   | $ | 7,434,605 |   | $ | 7,482,565 |   |
|                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Jersey                    Central Power & Light Company are                    an                    integral part of these balance sheets. |   |

----

| **JERSEY                    CENTRAL POWER & LIGHT COMPANY**                                                                                                                                                                                                                 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                            |   |    |   |    |   |
| **CONSOLIDATED                    STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                                    |   |
| **(Unaudited)**                                                                                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                                                                                            |   |    |   |    |   |
|                                                                                                                                                                                                                                                                            |   | **Three                    Months Ended** |   |
|                                                                                                                                                                                                                                                                            |   | **March                    31,** |   |
|                                                                                                                                                                                                                                                                            |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                            |   | ***(In                    thousands)*** |   |
| **CASH                    FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                                                                                    |   |    |   |    |   |
| Net                    income                                                                                                                                                                                                                                                   |   | $ | 38,346 |   | $ | 33,710 |   |
| Adjustments                    to                    reconcile net income to net cash from operating                    activities-                                                                                                                                             |   |   |   |   |   |   |   |
| Provision                    for                    depreciation                                                                                                                                                                                                                |   |   | 20,516 |   |   | 20,628 |   |
| Amortization                    of regulatory assets                                                                                                                                                                                                                            |   |   | 95,228 |   |   | 66,745 |   |
| Deferred                    purchased power and other costs                                                                                                                                                                                                                     |   |   | (78,303 | ) |   | (61,868 | ) |
| Deferred                    income taxes and investment tax credits, net                                                                                                                                                                                                        |   |   | 8,076 |   |   | 3,826 |   |
| Accrued                    compensation and retirement benefits                                                                                                                                                                                                                 |   |   | (8,374 | ) |   | (2,736 | ) |
| Cash                    collateral from (returned to) suppliers                                                                                                                                                                                                                 |   |   | 1 |   |   | (108,657 | ) |
| Pension                    trust                    contribution                                                                                                                                                                                                                |   |   | (17,800 | ) |   | - |   |
| Decrease                    (increase) in operating assets:                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                                                                                     |   |   | (23,381 | ) |   | 48,005 |   |
| Materials                    and                    supplies                                                                                                                                                                                                                    |   |   | (1 | ) |   | 255 |   |
| Prepaid                    taxes                                                                                                                                                                                                                                                |   |   | 11,946 |   |   | 8,992 |   |
| Other                    current                    assets                                                                                                                                                                                                                      |   |   | 454 |   |   | (929 | ) |
| Increase                    (decrease) in operating liabilities:                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Accounts                    payable                                                                                                                                                                                                                                             |   |   | (62,038 | ) |   | (68,993 | ) |
| Accrued                    taxes                                                                                                                                                                                                                                                |   |   | 31,599 |   |   | 32,106 |   |
| Accrued                    interest                                                                                                                                                                                                                                             |   |   | 9,794 |   |   | 13,769 |   |
| Other                                                                                                                                                                                                                                                                           |   |   | (3,832 | ) |   | (5,773 | ) |
| Net                    cash                    provided from (used for) operating activities                                                                                                                                                                                    |   |   | 22,231 |   |   | (20,920 | ) |
|                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| New                    Financing-                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Short-term                    borrowings, net                                                                                                                                                                                                                                   |   |   | 37,071 |   |   | 96,812 |   |
| Redemptions                    and Repayments-                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Long-term                    debt                                                                                                                                                                                                                                               |   |   | (9,569 | ) |   | (3,731 | ) |
| Dividend                    Payments-                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Common                    stock                                                                                                                                                                                                                                                 |   |   | (15,000 | ) |   | (25,000 | ) |
| Preferred                    stock                                                                                                                                                                                                                                              |   |   | - |   |   | (125 | ) |
|  Net                    cash                    provided from financing activities                                                                                                                                                                                         |   |   | 12,502 |   |   | 67,956 |   |
|                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Property                    additions                                                                                                                                                                                                                                           |   |   | (40,015 | ) |   | (45,361 | ) |
| Loan                    repayments from (loans to) associated companies, net                                                                                                                                                                                                    |   |   | 532 |   |   | (3,132 | ) |
| Proceeds                    from                    nuclear decommissioning trust fund sales                                                                                                                                                                                    |   |   | 22,407 |   |   | 45,865 |   |
| Investments                    in                    nuclear decommissioning trust funds                                                                                                                                                                                        |   |   | (23,131 | ) |   | (46,588 | ) |
| Other                                                                                                                                                                                                                                                                           |   |   | 5,479 |   |   | 2,181 |   |
|  Net                    cash used                    for investing activities                                                                                                                                                                                              |   |   | (34,728 | ) |   | (47,035 | ) |
|                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Net                    increase                    in cash and cash equivalents                                                                                                                                                                                                 |   |   | 5 |   |   | 1 |   |
| Cash                    and cash                    equivalents at beginning of period                                                                                                                                                                                          |   |   | 41 |   |   | 102 |   |
| Cash                    and cash                    equivalents at end of period                                                                                                                                                                                                |   | $ | 46 |   | $ | 103 |   |
|                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Jersey                    Central Power & Light Company are an integral                    part                    of these statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**JERSEY      CENTRAL POWER & LIGHT COMPANY**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION**
** **
**AND      RESULTS      OF OPERATIONS **

**Results      of Operations**

*Revenues*

| **Increases                in KWH Sales**          |   |   |
|----------------------------------------------------|--------|--------|
|                                               |   |   |
| Electric                Generation:                |   |   |
| Retail                                             |   | 2.8    | % |
| Wholesale                                          |   | 1.0    | % |
| **Total                Electric Generation Sales** |   | 2.4    | % |
|                                               |   |   |   |
| Distribution                Deliveries:            |   |   |   |
| Residential                                        |   | 4.4    | % |
| Commercial                                         |   | 4.2    | % |
| Industrial                                         |   | 1.7    | % |
| **Total                Distribution Deliveries**   |   | 3.9    | % |

----

*Expenses*

| **Expenses                - Changes**            |   | **Increase                (Decrease)** |   |
|--------------------------------------------------|--------|----------------------------------------|--------|
|                                             |   | ***(In                millions)***     |   |
|                                             |   |                                   |   |
| Purchased                power costs             |   | $                                      | 71     |   |
| Other                operating costs             |   |                                   | (8     | ) |
| Amortization                of regulatory assets |   |                                   | 28     |   |
| General                taxes                     |   |                                   | 1      |   |
| **Net                increase in expenses**      |   | $                                      | 92     |   |

**Capital      Resources and Liquidity**

*Changes      in Cash      Position*

*Cash      Flows From      Operating Activities*

|                                                                                 |   | **Three                Months Ended March 31,** |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
| **Operating                Cash Flows**                                              |   | **2007**                                        |   | **2006** |   |
|                                                                                 |   | ***(In                millions)***              |   |
| Net                income                                                            |   | $                                               | 38     |   | $ | 34 |   |
| Net                non-cash                charges                                   |   |                                            | 37     |   |   | 27 |   |
| Pension                trust                contribution                             |   |                                            | (18    | ) |   | - |   |
| Cash                collateral from (returned to) suppliers                          |   |                                            | 1      |   |   | (109 | ) |
| Working                capital and other                                             |   |                                            | (36    | ) |   | 27 |   |
| Net                cash                provided from (used for) operating activities |   | $                                               | 22     |   | $ | (21 | ) |

*Cash      Flows From      Financing Activities*

----

*Cash      Flows From      Investing Activities*

**Market      Risk Information**

**Equity      Price Risk**

**Regulatory      Matters**

**Environmental      Matters**

**Other      Legal Proceedings**

**New      Accounting Standards and Interpretations**

----

| **METROPOLITAN                  EDISON COMPANY**                                                                                                                                                                                      |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                  |   |    |   |    |   |
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**                                                                                                                                                       |   |
| **(Unaudited)**                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                                  |   |    |   |    |   |
|                                                                                                                                                                                                                                  |   | **Three                  Months Ended** |   |
|                                                                                                                                                                                                                                  |   | **March                  31,** |   |
|                                                                                                                                                                                                                                  |   |    |   |    |   |
|                                                                                                                                                                                                                                  |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                  |   | ***(In                  thousands)*** |   |
|                                                                                                                                                                                                                                  |   |    |   |    |   |
| **REVENUES:**                                                                                                                                                                                                                         |   |    |   |    |   |
| Electric                  sales                                                                                                                                                                                                       |   | $ | 352,136 |   | $ | 294,037 |   |
| Gross                  receipts                  tax collections                                                                                                                                                                      |   |   | 18,120 |   |   | 17,176 |   |
| Total                  revenues                                                                                                                                                                                                       |   |   | 370,256 |   |   | 311,213 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Purchased                  power                                                                                                                                                                                                      |   |   | 191,589 |   |   | 159,887 |   |
| Other                  operating costs                                                                                                                                                                                                |   |   | 98,018 |   |   | 61,079 |   |
| Provision                  for                  depreciation                                                                                                                                                                          |   |   | 10,284 |   |   | 10,905 |   |
| Amortization                  of regulatory assets                                                                                                                                                                                    |   |   | 34,140 |   |   | 30,048 |   |
| Deferral                  of                  new regulatory assets                                                                                                                                                                   |   |   | (42,726 | ) |   | - |   |
| General                  taxes                                                                                                                                                                                                        |   |   | 21,052 |   |   | 20,621 |   |
| Total                  expenses                                                                                                                                                                                                       |   |   | 312,357 |   |   | 282,540 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **OPERATING                  INCOME**                                                                                                                                                                                                 |   |   | 57,899 |   |   | 28,673 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE):**                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Interest                  income                                                                                                                                                                                                      |   |   | 7,726 |   |   | 8,750 |   |
| Miscellaneous                  income                                                                                                                                                                                                 |   |   | 1,109 |   |   | 2,612 |   |
| Interest                  expense                                                                                                                                                                                                     |   |   | (11,756 | ) |   | (11,184 | ) |
| Capitalized                  interest                                                                                                                                                                                                 |   |   | 260 |   |   | 267 |   |
| Total                  other                  income (expense)                                                                                                                                                                        |   |   | (2,661 | ) |   | 445 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **INCOME                  BEFORE INCOME TAXES**                                                                                                                                                                                       |   |   | 55,238 |   |   | 29,118 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **INCOME                  TAXES**                                                                                                                                                                                                     |   |   | 23,599 |   |   | 11,204 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                       |   |   | 31,639 |   |   | 17,914 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **OTHER                  COMPREHENSIVE INCOME (LOSS):**                                                                                                                                                                               |   |   |   |   |   |   |   |
| Pension                  and                  other postretirement benefits                                                                                                                                                           |   |   | (1,452 | ) |   | - |   |
| Unrealized                  gain on derivative hedges                                                                                                                                                                                 |   |   | 84 |   |   | 84 |   |
| Other                  comprehensive income (loss)                                                                                                                                                                                    |   |   | (1,368 | ) |   | 84 |   |
| Income                  tax                  expense (benefit) related to other                                                                                                                                                       |   |   |   |   |   |   |   |
| comprehensive                  income                                                                                                                                                                                                 |   |   | (692 | ) |   | 35 |   |
| Other                  comprehensive income (loss), net of tax                                                                                                                                                                        |   |   | (676 | ) |   | 49 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **TOTAL                  COMPREHENSIVE INCOME**                                                                                                                                                                                       |   | $ | 30,963 |   | $ | 17,963 |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to Metropolitan                  Edison Company are an                  integral                  part of these statements. |   |

----

| **METROPOLITAN                    EDISON COMPANY**                                                                                                                                                                                                                     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                   |   |    |   |    |   |
| **CONSOLIDATED                    BALANCE SHEETS**                                                                                                                                                                                                                     |   |
| **(Unaudited)**                                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                                                   |   | **March                    31,** |   | **December                    31,** |   |
|                                                                                                                                                                                                                                                                   |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                   |   | ***(In                    thousands)*** |   |
| **ASSETS**                                                                                                                                                                                                                                                             |   |    |   |    |   |
| **CURRENT                    ASSETS:**                                                                                                                                                                                                                                 |   |    |   |    |   |
| Cash                    and cash                    equivalents                                                                                                                                                                                                        |   | $ | 129 |   | $ | 130 |   |
| Receivables-                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Customers                    (less accumulated provisions of $4,063,000 and $4,153,000,                                                                                                                                                                                |   |   |   |   |   |   |   |
| respectively,                    for uncollectible accounts)                                                                                                                                                                                                           |   |   | 154,261 |   |   | 127,084 |   |
| Associated                    companies                                                                                                                                                                                                                                |   |   | 10,909 |   |   | 3,604 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 27,337 |   |   | 8,107 |   |
| Notes                    receivable from associated companies                                                                                                                                                                                                          |   |   | 33,931 |   |   | 31,109 |   |
| Prepaid                    gross                    receipts taxes                                                                                                                                                                                                     |   |   | 41,100  |   |   | -  |   |
| Prepayments                    and other                                                                                                                                                                                                                               |   |   | 988 |   |   | 14,957 |   |
|                                                                                                                                                                                                                                                                   |   |   | 268,655 |   |   | 184,991 |   |
| **UTILITY                    PLANT:**                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| In                    service                                                                                                                                                                                                                                          |   |   | 1,927,244 |   |   | 1,920,563 |   |
| Less                    -                    Accumulated provision for depreciation                                                                                                                                                                                    |   |   | 742,774 |   |   | 739,719 |   |
|                                                                                                                                                                                                                                                                   |   |   | 1,184,470 |   |   | 1,180,844 |   |
| Construction                    work in progress                                                                                                                                                                                                                       |   |   | 23,290 |   |   | 18,466 |   |
|                                                                                                                                                                                                                                                                   |   |   | 1,207,760 |   |   | 1,199,310 |   |
| **OTHER                    PROPERTY AND INVESTMENTS:**                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Nuclear                    plant                    decommissioning trusts                                                                                                                                                                                             |   |   | 273,627 |   |   | 269,777 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 1,361 |   |   | 1,362 |   |
|                                                                                                                                                                                                                                                                   |   |   | 274,988 |   |   | 271,139 |   |
| **DEFERRED                    CHARGES AND OTHER ASSETS:**                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Goodwill                                                                                                                                                                                                                                                               |   |   | 496,129 |   |   | 496,129 |   |
| Regulatory                    assets                                                                                                                                                                                                                                   |   |   | 454,997 |   |   | 409,095 |   |
| Pension                    assets                                                                                                                                                                                                                                      |   |   | 20,928 |   |   | 7,261 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 41,073 |   |   | 46,354 |   |
|                                                                                                                                                                                                                                                                   |   |   | 1,013,127 |   |   | 958,839 |   |
|                                                                                                                                                                                                                                                                   |   | $ | 2,764,530 |   | $ | 2,614,279 |   |
| **LIABILITIES                    AND CAPITALIZATION**                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **CURRENT                    LIABILITIES:**                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Currently                    payable long-term debt                                                                                                                                                                                                                    |   | $ | 50,000 |   | $ | 50,000 |   |
| Short-term                    borrowings-                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                                |   |   | 70,120 |   |   | 141,501 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 222,000 |   |   | - |   |
| Accounts                    payable-                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                                |   |   | 32,895 |   |   | 100,232 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 67,427 |   |   | 59,077 |   |
| Accrued                    taxes                                                                                                                                                                                                                                       |   |   | 1,466 |   |   | 11,300 |   |
| Accrued                    interest                                                                                                                                                                                                                                    |   |   | 8,739 |   |   | 7,496 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 20,415 |   |   | 22,825 |   |
|                                                                                                                                                                                                                                                                   |   |   | 473,062 |   |   | 392,431 |   |
| **CAPITALIZATION:**                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Common                    stockholder's equity-                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Common                    stock,                    without par value, authorized 900,000 shares-                                                                                                                                                                      |   |   |   |   |   |   |   |
| 859,000                    shares                    outstanding                                                                                                                                                                                                       |   |   | 1,276,094 |   |   | 1,276,075 |   |
| Accumulated                    other comprehensive loss                                                                                                                                                                                                                |   |   | (27,192 | ) |   | (26,516 | ) |
| Accumulated                    deficit                                                                                                                                                                                                                                 |   |   | (203,029 | ) |   | (234,620 | ) |
| Total                    common                    stockholder's equity                                                                                                                                                                                                |   |   | 1,045,873 |   |   | 1,014,939 |   |
| Long-term                    debt                    and other long-term obligations                                                                                                                                                                                   |   |   | 542,039 |   |   | 542,009 |   |
|                                                                                                                                                                                                                                                                   |   |   | 1,587,912 |   |   | 1,556,948 |   |
| **NONCURRENT                    LIABILITIES:**                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                   |   |   | 398,561 |   |   | 387,456 |   |
| Accumulated                    deferred investment tax credits                                                                                                                                                                                                         |   |   | 9,037 |   |   | 9,244 |   |
| Nuclear                    fuel                    disposal costs                                                                                                                                                                                                      |   |   | 41,983 |   |   | 41,459 |   |
| Asset                    retirement obligations                                                                                                                                                                                                                        |   |   | 153,469 |   |   | 151,107 |   |
| Retirement                    benefits                                                                                                                                                                                                                                 |   |   | 18,425 |   |   | 19,522 |   |
| Other                                                                                                                                                                                                                                                                  |   |   | 82,081 |   |   | 56,112 |   |
|                                                                                                                                                                                                                                                                   |   |   | 703,556 |   |   | 664,900 |   |
| **COMMITMENTS                    AND CONTINGENCIES (Note 9)**                                                                                                                                                                                                          |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                   |   | $ | 2,764,530 |   | $ | 2,614,279 |   |
|                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Metropolitan                    Edison Company are an integral part of                    these                    balance sheets. |   |

----

| **METROPOLITAN                    EDISON COMPANY**                                                                                                                                                                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                               |   |    |   |    |   |
| **CONSOLIDATED                    STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                       |   |
| **(Unaudited)**                                                                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                                                                               |   |    |   |    |   |
|                                                                                                                                                                                                                                                               |   | **Three                    Months Ended** |   |
|                                                                                                                                                                                                                                                               |   | **March                    31,** |   |
|                                                                                                                                                                                                                                                               |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                               |   | ***(In                    thousands)*** |   |
| **CASH                    FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                                                                       |   |    |   |    |   |
| Net                    income                                                                                                                                                                                                                                      |   | $ | 31,639 |   | $ | 17,914 |   |
| Adjustments                    to                    reconcile net income to net cash from operating                    activities-                                                                                                                                |   |   |   |   |   |   |   |
| Provision                    for                    depreciation                                                                                                                                                                                                   |   |   | 10,284 |   |   | 10,905 |   |
| Amortization                    of regulatory assets                                                                                                                                                                                                               |   |   | 34,140 |   |   | 30,048 |   |
| Deferred                    costs                    recoverable as regulatory assets                                                                                                                                                                              |   |   | (19,160 | ) |   | (22,818 | ) |
| Deferral                    of                    new regulatory assets                                                                                                                                                                                            |   |   | (42,726 | ) |   | - |   |
| Deferred                    income taxes and investment tax credits, net                                                                                                                                                                                           |   |   | 16,178 |   |   | 1,704 |   |
| Accrued                    compensation and retirement benefits                                                                                                                                                                                                    |   |   | (7,683 | ) |   | (3,912 | ) |
| Commodity                    derivative transactions, net                                                                                                                                                                                                          |   |   | - |   |   | (2,148 | ) |
| Cash                    collateral                                                                                                                                                                                                                                 |   |   | 3,050 |   |   | - |   |
| Pension                    trust                    contribution                                                                                                                                                                                                   |   |   | (11,012 | ) |   | - |   |
| Decrease                    (increase) in operating assets-                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                                                                        |   |   | (49,818 | ) |   | 27,829 |   |
| Prepayments                    and other current assets                                                                                                                                                                                                            |   |   | (27,131 | ) |   | (37,665 | ) |
| Increase                    (decrease) in operating liabilities-                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Accounts                    payable                                                                                                                                                                                                                                |   |   | (58,986 | ) |   | 1,160 |   |
| Accrued                    taxes                                                                                                                                                                                                                                   |   |   | (9,835 | ) |   | (6,080 | ) |
| Accrued                    interest                                                                                                                                                                                                                                |   |   | 1,243 |   |   | (109 | ) |
| Other                                                                                                                                                                                                                                                              |   |   | 1,999 |   |   | (4,649 | ) |
| Net                    cash                    provided from (used for) operating activities                                                                                                                                                                       |   |   | (127,818 | ) |   | 12,179 |   |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| New                    Financing-                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Short-term                    borrowings, net                                                                                                                                                                                                                      |   |   | 150,619 |   |   | 17,065 |   |
| Net                    cash                    provided from financing activities                                                                                                                                                                                  |   |   | 150,619 |   |   | 17,065 |   |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Property                    additions                                                                                                                                                                                                                              |   |   | (18,803 | ) |   | (25,277 | ) |
| Proceeds                    from                    nuclear decommissioning trust fund sales                                                                                                                                                                       |   |   | 25,323 |   |   | 42,061 |   |
| Investments                    in                    nuclear decommissioning trust funds                                                                                                                                                                           |   |   | (26,579 | ) |   | (44,432 | ) |
| Loans                    to                    associated companies, net                                                                                                                                                                                           |   |   | (2,822 | ) |   | (2,145 | ) |
| Other                                                                                                                                                                                                                                                              |   |   | 79 |   |   | 549 |   |
| Net                    cash used                    for investing activities                                                                                                                                                                                       |   |   | (22,802 | ) |   | (29,244 | ) |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Net                    change in                    cash and cash equivalents                                                                                                                                                                                      |   |   | (1 | ) |   | - |   |
| Cash                    and cash                    equivalents at beginning of period                                                                                                                                                                             |   |   | 130 |   |   | 120 |   |
| Cash                    and cash                    equivalents at end of period                                                                                                                                                                                   |   | $ | 129 |   | $ | 120 |   |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Metropolitan                    Edison Company are an integral                    part                    of these statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**METROPOLITAN      EDISON COMPANY**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION**
** **
**AND      RESULTS      OF OPERATIONS **

**Results      of Operations**

*Revenues      *

| **Changes                in KWH Sales**                   |   |   |    |
|-----------------------------------------------------------|--------|--------|---------|
|                                                      |   |   |    |
| Retail                Electric Generation:                |   |   |    |
| Residential                                               |   |   | 6.4     | % |
| Commercial                                                |   |   | 3.7     | % |
| Industrial                                                |   |   | 2.9     | % |
| **Total                Retail Electric Generation Sales** |   |   | **4.6** | **%** |
| Distribution                Deliveries:                   |   |   |    |   |
| Residential                                               |   |   | 6.4     | % |
| Commercial                                                |   |   | 3.5     | % |
| Industrial                                                |   |   | 1.0     | % |
| **Total                Distribution Deliveries**          |   |   | **4.0** | **%** |

----

*Expenses*

| **Expenses                - Changes**                           |   | **Increase                (Decrease)** |   |
|-----------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                            |   | **(In                millions)**       |   |
|                                                            |   |                                   |   |   |
| Purchased                power costs                            |   | $                                      | 32     |   |
| Other                operating costs                            |   |                                   | 37     |   |
| Provision                for                depreciation        |   |                                   | (1     | ) |
| Amortization                of regulatory assets                |   |                                   | 4      |   |
| Deferral                of                new regulatory assets |   |                                   | (43    | ) |
| General                taxes                                    |   |                                   | 1      |   |
| **Net                increase in expenses**                     |   | $                                      | 30     |   |

**Capital      Resources and Liquidity**

*Changes      in Cash      Position*

*Cash      Flows From      Operating Activities*

|                                                                                 |   | **Three                Months Ended****March                31,** |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
| **Operating                Cash Flows**                                              |   | **2007**                                                          |   | **2006** |   |
|                                                                                 |   | ***(In                millions)***                                |   |
| Net                income                                                            |   | $                                                                 | 32     |   | $ | 18 |   |
| Net                non-cash                charges (credits)                         |   |                                                              | (9     | ) |   | 13 |   |
| Pension                trust                contribution                             |   |                                                              | (11    | ) |   | - |   |
| Working                capital and other                                             |   |                                                              | (140   | ) |   | (19 | ) |
| Net                cash                provided from (used for) operating activities |   | $                                                                 | (128   | ) | $ | 12 |   |

----

*Cash      Flows From      Financing Activities*

*Cash      Flows From      Investing Activities*

**Market      Risk Information**

**Equity      Price Risk**

**Regulatory      Matters**

**Environmental      Matters**

**Other      Legal Proceedings**

**New      Accounting Standards and Interpretations**

----

| **PENNSYLVANIA                  ELECTRIC COMPANY**                                                                                                                                                                                      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                    |   |    |   |    |   |
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**                                                                                                                                                         |   |
| **(Unaudited)**                                                                                                                                                                                                                         |   |
|                                                                                                                                                                                                                                    |   |    |   |    |   |
|                                                                                                                                                                                                                                    |   | **Three                  Months Ended** |   |
|                                                                                                                                                                                                                                    |   | **March                  31,** |   |
|                                                                                                                                                                                                                                    |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                    |   | ***(In                  thousands)*** |   |
|                                                                                                                                                                                                                                    |   |    |   |    |   |
| **REVENUES:**                                                                                                                                                                                                                           |   |    |   |    |   |
| Electric                  sales                                                                                                                                                                                                         |   | $ | 339,226 |   | $ | 275,827 |   |
| Gross                  receipts                  tax collections                                                                                                                                                                        |   |   | 16,680 |   |   | 15,925 |   |
| Total                  revenues                                                                                                                                                                                                         |   |   | 355,906 |   |   | 291,752 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **EXPENSES:**                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Purchased                  power                                                                                                                                                                                                        |   |   | 200,842 |   |   | 161,641 |   |
| Other                  operating costs                                                                                                                                                                                                  |   |   | 59,461 |   |   | 38,342 |   |
| Provision                  for                  depreciation                                                                                                                                                                            |   |   | 11,777 |   |   | 12,643 |   |
| Amortization                  of regulatory assets                                                                                                                                                                                      |   |   | 15,394 |   |   | 14,815 |   |
| Deferral                  of                  new regulatory assets                                                                                                                                                                     |   |   | (17,088 | ) |   | - |   |
| General                  taxes                                                                                                                                                                                                          |   |   | 19,851 |   |   | 19,389 |   |
| Total                  expenses                                                                                                                                                                                                         |   |   | 290,237 |   |   | 246,830 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **OPERATING                  INCOME**                                                                                                                                                                                                   |   |   | 65,669 |   |   | 44,922 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE):**                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Miscellaneous                  income                                                                                                                                                                                                   |   |   | 1,417 |   |   | 2,370 |   |
| Interest                  expense                                                                                                                                                                                                       |   |   | (11,337 | ) |   | (10,536 | ) |
| Capitalized                  interest                                                                                                                                                                                                   |   |   | 258 |   |   | 347 |   |
| Total                  other                  expense                                                                                                                                                                                   |   |   | (9,662 | ) |   | (7,819 | ) |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **INCOME                  BEFORE INCOME TAXES**                                                                                                                                                                                         |   |   | 56,007 |   |   | 37,103 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **INCOME                  TAXES**                                                                                                                                                                                                       |   |   | 24,263 |   |   | 13,954 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **NET                  INCOME**                                                                                                                                                                                                         |   |   | 31,744 |   |   | 23,149 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **OTHER                  COMPREHENSIVE INCOME (LOSS):**                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Pension                  and                  other postretirement benefits                                                                                                                                                             |   |   | (2,825 | ) |   | - |   |
| Unrealized                  gain on derivative hedges                                                                                                                                                                                   |   |   | 16 |   |   | 16 |   |
| Unrealized                  loss on available for sale securities                                                                                                                                                                       |   |   | (3 | ) |   | (4 | ) |
| Other                  comprehensive income (loss)                                                                                                                                                                                      |   |   | (2,812 | ) |   | 12 |   |
| Income                  tax                  expense (benefit) related to other                                                                                                                                                         |   |   |   |   |   |   |   |
| comprehensive                  income                                                                                                                                                                                                   |   |   | (1,298 | ) |   | 6 |   |
| Other                  comprehensive income (loss), net of tax                                                                                                                                                                          |   |   | (1,514 | ) |   | 6 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **TOTAL                  COMPREHENSIVE INCOME**                                                                                                                                                                                         |   | $ | 30,230 |   | $ | 23,155 |   |
|                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| The                  preceding                  Notes to Consolidated Financial Statements as they relate to Pennsylvania                  Electric Company are                  an                  integral part of these statements. |   |

----

| **PENNSYLVANIA                    ELECTRIC COMPANY**                                                                                                                                                                                                                     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                     |   |    |   |    |   |
| **CONSOLIDATED                    BALANCE SHEETS**                                                                                                                                                                                                                       |   |
| **(Unaudited)**                                                                                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                                                                     |   | **March                    31,** |   | **December                    31,** |   |
|                                                                                                                                                                                                                                                                     |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                     |   | ***(In                    thousands)*** |   |
| **ASSETS**                                                                                                                                                                                                                                                               |   |    |   |    |   |
| **CURRENT                    ASSETS:**                                                                                                                                                                                                                                   |   |    |   |    |   |
| Cash                    and cash                    equivalents                                                                                                                                                                                                          |   | $ | 42 |   | $ | 44 |   |
| Receivables-                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| Customers                    (less accumulated provisions of $3,845,000 and $3,814,000                                                                                                                                                                                   |   |   |   |   |   |   |   |
| respectively,                    for uncollectible accounts)                                                                                                                                                                                                             |   |   | 147,874 |   |   | 126,639 |   |
| Associated                    companies                                                                                                                                                                                                                                  |   |   | 47,552 |   |   | 49,728 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 32,057 |   |   | 16,367 |   |
| Notes                    receivable from associated companies                                                                                                                                                                                                            |   |   | 18,840 |   |   | 19,548 |   |
| Prepaid                    gross                    receipts taxes                                                                                                                                                                                                       |   |   | 39,502 |   |   | 1,917 |   |
| Prepayments                    and other                                                                                                                                                                                                                                 |   |   | 959  |   |   | 2,319  |   |
|                                                                                                                                                                                                                                                                     |   |   | 286,826 |   |   | 216,562 |   |
| **UTILITY                    PLANT:**                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| In                    service                                                                                                                                                                                                                                            |   |   | 2,149,976 |   |   | 2,141,324 |   |
| Less                    -                    Accumulated provision for depreciation                                                                                                                                                                                      |   |   | 813,112 |   |   | 809,028 |   |
|                                                                                                                                                                                                                                                                     |   |   | 1,336,864 |   |   | 1,332,296 |   |
| Construction                    work in progress                                                                                                                                                                                                                         |   |   | 26,964 |   |   | 22,124 |   |
|                                                                                                                                                                                                                                                                     |   |   | 1,363,828 |   |   | 1,354,420 |   |
| **OTHER                    PROPERTY AND INVESTMENTS:**                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Nuclear                    plant                    decommissioning trusts                                                                                                                                                                                               |   |   | 127,014 |   |   | 125,216 |   |
| Non-utility                    generation trusts                                                                                                                                                                                                                         |   |   | 100,514 |   |   | 99,814 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 531 |   |   | 531 |   |
|                                                                                                                                                                                                                                                                     |   |   | 228,059 |   |   | 225,561 |   |
| **DEFERRED                    CHARGES AND OTHER ASSETS:**                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Goodwill                                                                                                                                                                                                                                                                 |   |   | 860,716 |   |   | 860,716 |   |
| Pension                    assets                                                                                                                                                                                                                                        |   |   | 28,101 |   |   | 11,474 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 33,129 |   |   | 36,059 |   |
|                                                                                                                                                                                                                                                                     |   |   | 921,946 |   |   | 908,249 |   |
|                                                                                                                                                                                                                                                                     |   | $ | 2,800,659 |   | $ | 2,704,792 |   |
| **LIABILITIES                    AND CAPITALIZATION**                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **CURRENT                    LIABILITIES:**                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Short-term                    borrowings-                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                                  |   | $ | 94,592 |   | $ | 199,231 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 224,000 |   |   | - |   |
| Accounts                    payable-                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Associated                    companies                                                                                                                                                                                                                                  |   |   | 40,112 |   |   | 92,020 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 53,369 |   |   | 47,629 |   |
| Accrued                    taxes                                                                                                                                                                                                                                         |   |   | 2,518 |   |   | 11,670 |   |
| Accrued                    interest                                                                                                                                                                                                                                      |   |   | 12,742 |   |   | 7,224 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 19,522 |   |   | 21,178 |   |
|                                                                                                                                                                                                                                                                     |   |   | 446,855 |   |   | 378,952 |   |
| **CAPITALIZATION:**                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Common                    stockholder's equity-                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Common                    stock,                    $20 par value, authorized 5,400,000 shares-                                                                                                                                                                          |   |   |   |   |   |   |   |
| 5,290,596                    shares outstanding                                                                                                                                                                                                                          |   |   | 105,812 |   |   | 105,812 |   |
| Other                    paid-in                    capital                                                                                                                                                                                                              |   |   | 1,189,453 |   |   | 1,189,434 |   |
| Accumulated                    other comprehensive loss                                                                                                                                                                                                                  |   |   | (8,707 | ) |   | (7,193 | ) |
| Retained                    earnings                                                                                                                                                                                                                                     |   |   | 121,702 |   |   | 90,005 |   |
| Total                    common                    stockholder's equity                                                                                                                                                                                                  |   |   | 1,408,260 |   |   | 1,378,058 |   |
| Long-term                    debt                    and other long-term obligations                                                                                                                                                                                     |   |   | 477,504 |   |   | 477,304 |   |
|                                                                                                                                                                                                                                                                     |   |   | 1,885,764 |   |   | 1,855,362 |   |
| **NONCURRENT                    LIABILITIES:**                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Regulatory                    liabilities                                                                                                                                                                                                                                |   |   | 69,668 |   |   | 96,151 |   |
| Asset                    retirement obligations                                                                                                                                                                                                                          |   |   | 78,126 |   |   | 76,924 |   |
| Accumulated                    deferred income taxes                                                                                                                                                                                                                     |   |   | 190,513 |   |   | 193,662 |   |
| Retirement                    benefits                                                                                                                                                                                                                                   |   |   | 50,662 |   |   | 50,328 |   |
| Other                                                                                                                                                                                                                                                                    |   |   | 79,071 |   |   | 53,413 |   |
|                                                                                                                                                                                                                                                                     |   |   | 468,040 |   |   | 470,478 |   |
| **COMMITMENTS                    AND CONTINGENCIES (Note 9)**                                                                                                                                                                                                            |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                     |   | $ | 2,800,659 |   | $ | 2,704,792 |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Pennsylvania                    Electric Company are an integral                    part                    of these balance sheets. |   |

----

| **PENNSYLVANIA                    ELECTRIC COMPANY**                                                                                                                                                                                                                 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                 |   |    |   |    |   |
| **CONSOLIDATED                    STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                         |   |
| **(Unaudited)**                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                 |   |    |   |    |   |
|                                                                                                                                                                                                                                                                 |   | **Three                    Months Ended** |   |
|                                                                                                                                                                                                                                                                 |   | **March                    31,** |   |
|                                                                                                                                                                                                                                                                 |   | **2007** |   | **2006** |   |
|                                                                                                                                                                                                                                                                 |   | ***(In                    thousands)*** |   |
| **CASH                    FLOWS FROM OPERATING ACTIVITIES:**                                                                                                                                                                                                         |   |    |   |    |   |
| Net                    income                                                                                                                                                                                                                                        |   | $ | 31,744 |   | $ | 23,149 |   |
| Adjustments                    to                    reconcile net income to net cash from operating                    activities-                                                                                                                                  |   |   |   |   |   |   |   |
| Provision                    for                    depreciation                                                                                                                                                                                                     |   |   | 11,777 |   |   | 12,643 |   |
| Amortization                    of regulatory assets                                                                                                                                                                                                                 |   |   | 15,394 |   |   | 14,815 |   |
| Deferral                    of                    new regulatory assets                                                                                                                                                                                              |   |   | (17,088 | ) |   | - |   |
| Deferred                    costs                    recoverable as regulatory assets                                                                                                                                                                                |   |   | (18,433 | ) |   | (19,211 | ) |
| Deferred                    income taxes and investment tax credits, net                                                                                                                                                                                             |   |   | 13,366 |   |   | 5,361 |   |
| Accrued                    compensation and retirement benefits                                                                                                                                                                                                      |   |   | (8,786 | ) |   | (472 | ) |
| Cash                    collateral                                                                                                                                                                                                                                   |   |   | 1,450 |   |   | - |   |
| Commodity                    derivative transactions, net                                                                                                                                                                                                            |   |   | - |   |   | (4,206 | ) |
| Pension                    trust                    contribution                                                                                                                                                                                                     |   |   | (13,436 | ) |   | - |   |
| Decrease                    (Increase) in operating assets-                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Receivables                                                                                                                                                                                                                                                          |   |   | (30,050 | ) |   | 16,729 |   |
| Prepayments                    and other current assets                                                                                                                                                                                                              |   |   | (36,225 | ) |   | (36,540 | ) |
| Increase                    (Decrease) in operating liabilities-                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Accounts                    payable                                                                                                                                                                                                                                  |   |   | (46,168 | ) |   | (9,623 | ) |
| Accrued                    taxes                                                                                                                                                                                                                                     |   |   | (9,152 | ) |   | (4,904 | ) |
| Accrued                    interest                                                                                                                                                                                                                                  |   |   | 5,518 |   |   | 5,401 |   |
| Other                                                                                                                                                                                                                                                                |   |   | 1,943 |   |   | (6,745 | ) |
| Net                    cash used                    for operating activities                                                                                                                                                                                         |   |   | (98,146 | ) |   | (3,603 | ) |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES:**                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| New                    Financing-                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Short-term                    borrowings, net                                                                                                                                                                                                                        |   |   | 119,361 |   |   | 39,315 |   |
| Net                    cash                    provided from financing activities                                                                                                                                                                                    |   |   | 119,361 |   |   | 39,315 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Property                    additions                                                                                                                                                                                                                                |   |   | (20,404 | ) |   | (35,610 | ) |
| Loan                    repayments from (loans to) associated companies, net                                                                                                                                                                                         |   |   | 708 |   |   | (1,134 | ) |
| Proceeds                    from                    nuclear decommissioning trust fund sales                                                                                                                                                                         |   |   | 9,758 |   |   | 14,942 |   |
| Investments                    in                    nuclear decommissioning trust funds                                                                                                                                                                             |   |   | (10,532 | ) |   | (14,942 | ) |
| Other,                    net                                                                                                                                                                                                                                        |   |   | (747 | ) |   | 1,032 |   |
| Net                    cash used                    for investing activities                                                                                                                                                                                         |   |   | (21,217 | ) |   | (35,712 | ) |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Net                    change in                    cash and cash equivalents                                                                                                                                                                                        |   |   | (2 | ) |   | - |   |
| Cash                    and cash                    equivalents at beginning of period                                                                                                                                                                               |   |   | 44 |   |   | 35 |   |
| Cash                    and cash                    equivalents at end of period                                                                                                                                                                                     |   | $ | 42 |   | $ | 35 |   |
|                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| The                    preceding                    Notes to Consolidated Financial Statements as they relate to                    Pennsylvania                    Electric Company are an integral                    part                    of these statements. |   |

----

***Report      of Independent Registered Public Accounting Firm***

----

**PENNSYLVANIA      ELECTRIC COMPANY**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION**
** **
**AND      RESULTS      OF OPERATIONS **

**Results      of Operations**

*Revenues*

|                                                      |   |   |    |
|-----------------------------------------------------------|--------|--------|---------|
| **Changes                in KWH Sales**                   |   |   |    |
| **Increase                (Decrease)**                    |   |   |    |
| Retail                Electric Generation:                |   |   |    |
| Residential                                               |   |   | 5.7     |  % |
| Commercial                                                |   |   | 5.0     |  % |
| Industrial                                                |   |   | 0.1     |  % |
| **Total                Retail Electric Generation Sales** |   |   | **3.8** |  % |
|                                                      |   |   |    |
| Distribution                Deliveries:                   |   |   |    |
| Residential                                               |   |   | 5.7     |  % |
| Commercial                                                |   |   | 5.0     |  % |
| Industrial                                                |   |   | (1.8    | )% |
| **Total                Distribution Deliveries**          |   |   | **3.0** | ** %** |

----

*Expenses*

|                                                            |   | **Increase**                             |   |
|-----------------------------------------------------------------|--------|------------------------------------------|--------|
| **Expenses                - Changes**                           |   | **(Decrease)**                           |   |
|                                                            |   |  ***(In                millions)*** |   |
| **Increase                (Decrease)**                          |   |                                     |   |
| Purchased                power costs                            |   | $                                        | 39     |   |
| Other                operating costs                            |   |                                     | 21     |   |
| Provision                for                depreciation        |   |                                     | (1     | ) |
| Amortization                of regulatory assets                |   |                                     | 1      |   |
| Deferral                of                new regulatory assets |   |                                     | (17    | ) |
| General                taxes                                    |   |                                     | 1      |   |
| **Net                increase in expenses**                     |   | $                                        | 44     |   |
|                                                            |   |                                     |   |   |

**Capital      Resources and Liquidity **

*Changes      in Cash      Position*

*Cash      Flows From      Operating Activities*

|                                                                 |   | **Three                Months Ended** |   |
|----------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                 |   | **March                31,**          |   |
|  **Operating                Cash Flows**                        |   | **2007**                              |   | **2006** |   |
|                                                                 |   | ***(In                millions)***    |   |
|                                                                 |   |                                  |   |   |   |
| Net                income                                            |   | $                                     | 32     |   | $ | 23 |   |
| Net                non-cash                charges (credits)         |   |                                  | (4     | ) |   | 9 |   |
| Pension                trust                contribution             |   |                                  | (13    | ) |   | - |   |
| Working                capital and other                             |   |                                  | (113   | ) |   | (36 | ) |
| Net                cash used                for operating activities |   | $                                     | (98    | ) | $ | (4 | ) |

----

*Cash      Flows From      Financing Activities*

*Cash      Flows From      Investing Activities*

**Market      Risk Information**

**Equity      Price Risk**

**Regulatory      Matters**

**Environmental      Matters**

**Other      Legal Proceedings**

**New      Accounting Standards and Interpretations**

----

**COMBINED      MANAGEMENT’S DISCUSSION**

**AND      ANALYSIS      OF REGISTRANT SUBSIDIARIES**

**Financing      Capability**

|            |   | **Revolving**                      |   | **Regulatory                and**          |   |
|-----------------|--------|------------------------------------|--------|--------------------------------------------|--------|
|            |   | **Credit                Facility** |   | **Other                Short-Term**        |   |
| **Borrower**    |   | **Sub-Limit**                      |   | **Debt                Limitations****(1)** |   |
|            |   | ***(In                millions)*** |   |
| **FirstEnergy** |   |                               | $      | 2,750                                      |   |   | $ | 1,500 |   |
| **OE**          |   |                               | 500    |                                       |   | 500 |   |
| **Penn**        |   |                               | 50     |                                       |   | 39 |   |
| **CEI**         |   |                               | 250    | (2)                                        |   | 500 |   |
| **TE**          |   |                               | 250    | (2)                                        |   | 500 |   |
| **JCP&L**   |   |                               | 425    |                                       |   | 412 |   |
| **Met-Ed**      |   |                               | 250    |                                       |   | 250 | (3) |
| **Penelec**     |   |                               | 250    |                                       |   | 250 | (3) |

|   | (2) | Borrowing                sub-limits for CEI and TE may be increased to up to $500 million by                delivering notice to the administrative                agent that such borrower has senior unsecured debt ratings of at                least BBB                by S&P and Baa2                by                Moody’s. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Borrower**    |   |   |
|-----------------|--------|--------|
| **FirstEnergy** |   | 61     | % |
| **OE**          |   | 49     | % |
| **Penn**        |   | 28     | % |
| **CEI**         |   | 57     | % |
| **TE**          |   | 49     | % |
| **JCP&L**   |   | 25     | % |
| **Met-Ed**      |   | 46     | % |
| **Penelec**     |   | 36     | % |

| **Issuer**  |   | **Securities**                  |   | **S&P** |   | **Moody’s** |   | **Fitch** |
|-------------|--------|---------------------------------|--------|-------------|--------|-------------------|--------|-----------|
|        |   |                            |   |        |   |              |   |      |
| FirstEnergy |   | Senior                unsecured |   | BBB-        |   | Baa3              |   | BBB       |
|        |   |                            |   |        |   |              |   |      |
| OE          |   | Senior                unsecured |   | BBB-        |   | Baa2              |   | BBB       |
|        |   |                            |   |        |   |              |   |      |
| CEI         |   | Senior                secured   |   | BBB         |   | Baa2              |   | BBB       |
|        |   | Senior                unsecured |   | BBB-        |   | Baa3              |   | BBB-      |
|        |   |                            |   |        |   |              |   |      |
| TE          |   | Senior                secured   |   | BBB         |   | Baa2              |   | BBB       |
|        |   | Senior                unsecured |   | BBB-        |   | Baa3              |   | BBB-      |
|        |   |                            |   |        |   |              |   |      |
| Penn        |   | Senior                secured   |   | BBB+        |   | Baa1              |   | BBB+      |
|        |   |                            |   |        |   |              |   |      |
| JCP&L   |   | Senior                secured   |   | BBB+        |   | Baa1              |   | A-        |
|        |   |                            |   |        |   |              |   |      |
| Met-Ed      |   | Senior                unsecured |   | BBB         |   | Baa2              |   | BBB       |
|        |   |                            |   |        |   |              |   |      |
| Penelec     |   | Senior                unsecured |   | BBB         |   | Baa2              |   | BBB       |

|  **Subsidiary                Company**             |   | **Parent                Company**  |   |   | **Borrowing****Capacity** |   |   | **Outstanding                Balance** |   | **Annual                Facility Fee** |
|---------------------------------------------------------|--------|------------------------------------|--------|--------|---------------------------|--------|--------|----------------------------------------|--------|----------------------------------------|
|                                                    |   | ***(In                millions)*** |
| OES                Capital,                Incorporated |   | OE                                 |   | $      | 170                       |   | $      | 156                                    |   | 0.15%                                  |
| Centerior                Funding Corp.                  |   | CEI                                |   |   | 200                       |   |   | -                                      |   | 0.15                                   |
| Penn                Power                Funding LLC    |   | Penn                               |   |   | 25                        |   |   | 19                                     |   | 0.125                                  |
| Met-Ed                Funding                LLC        |   | Met-Ed                             |   |   | 80                        |   |   | 72                                     |   | 0.125                                  |
| Penelec                Funding LLC                      |   | Penelec                            |   |   | 75                        |   |   | 74                                     |   | 0.125                                  |
|                                                    |   |                               |   | $      | 550                       |   | $      | 321                                    |   |                                   |

----

**Regulatory      Matters**
** **

| · | restructuring                the electric generation business and allowing customers to select                a                competitive electric generation                supplier other than the Companies;                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                  |
| · | establishing                or defining the PLR obligations to customers in the Companies' service                areas;                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                  |
| · | providing                the                Companies with the opportunity to recover potentially stranded investment                (or transition costs)                not                otherwise recoverable in a competitive generation                market; |
|   |                                                                                                                                                                                                                                                                  |
| · | itemizing                (unbundling) the price of electricity into its component elements                -                including generation, transmission,                distribution and stranded costs recovery charges;                                       |
|   |                                                                                                                                                                                                                                                                  |
| · | continuing                regulation of the Companies' transmission and distribution systems;                and                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                  |
| · | requiring                corporate separation of regulated and unregulated business                activities.                                                                                                                                                        |

|                                  |   | **March                31,**       |   | **December                31,** |   | **Increase**   |   |
|---------------------------------------|--------|------------------------------------|--------|---------------------------------|--------|----------------|--------|
| **Regulatory                Assets*** |   | **2007**                           |   | **2006**                        |   | **(Decrease)** |   |
|                                  |   | ***(In                millions)*** |   |
| OE                                    |   | $                                  | 729    |                            | $      | 741            |   | $ | (12 | ) |
| CEI                                   |   |                               | 854    |                            |   | 855            |   |   | (1 | ) |
| TE                                    |   |                               | 237    |                            |   | 248            |   |   | (11 | ) |
| JCP&L                             |   |                               | 2,059  |                            |   | 2,152          |   |   | (93 | ) |
| Met-Ed                                |   |                               | 455    |                            |   | 409            |   |   | 46 |   |
| Total                                 |   | $                                  | 4,334  |                            | $      | 4,405          |   | $ | (71 | ) |

| * | Penelec                had                net regulatory liabilities of approximately $70 millionand                $96 million as of March 31, 2007 and December 31,                2006,respectively.                These net regulatory liabilities are included in Other Non-current                Liabilities on the Consolidated Balance                Sheets. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Ohio***
*** ***

----

| **Amortization**                        |   |                                 |   |    |   |   |   |     |   |   | **Total** |   |
|-----------------------------------------|--------|--------------------------------------|--------|---------|--------|--------|--------|----------|--------|--------|-----------|--------|
| **Period**                              |   | **OE**                               |   | **CEI** |   | **TE** |   | **Ohio** |   |
|                                    |   | ***(In                  millions)*** |   |
| 2007                                    |   | **$**                                | 179    |    | **$**  | 108    |   | **$**    | 93     |   | **$**     | 380    |   |
| 2008                                    |   |                                 | 208    |    |   | 124    |   |     | 119    |   |      | 451    |   |
| 2009                                    |   |                                 | -      |    |   | 216    |   |     | -      |   |      | 216    |   |
| 2010                                    |   |                                 | -      |    |   | 273    |   |     | -      |   |      | 273    |   |
| **Total                  Amortization** |   | **$**                                | 387    |    | **$**  | 721    |   | **$**    | 212    |   | **$**     | 1,320  |   |

***Pennsylvania***

----

----

***New      Jersey***
*** ***

----

| ·   |   Reduce the total              projected electricity demand by 20% by              2020; |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   |   Meet 22.5% of New              Jersey’s electricity needs with renewable energy resources by that              date; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   |  Reduce                air pollution related to energy                use; |
|--------------------|---------------------------------------------------------------------------------|

| ·   |                  Encourage and maintain economic growth and development; |
|--------------------|-------------------------------------------------------------------------------|

| ·   |  Achieve                a 20% reduction in both Customer Average Interruption Duration Index                and                System Average                  Interruption Frequency Index by                2020; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |  Unit                prices for electricity should remain no more than +5% of the regional                average price (region                  includes New York, New Jersey, Pennsylvania, Delaware, Maryland and                the                District of Columbia); and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |   Eliminate transmission              congestion by 2020. |
|--------------------|----------------------------------------------------------------|

***FERC      Matters***

----

*** ***

**Environmental      Matters**
** **

----

*Regulation      of      Hazardous Waste *

*W.      H. Sammis      Plant *

**Other      Legal Proceedings**
** **

*Power      Outages      and Related Litigation*

----

----

*Other      Legal      Matters*

**New      Accounting Standards and Interpretations**
** **

*SFAS      159 - “The      Fair Value Option for Financial Assets and Financial Liabilities - Including      an      amendment of FASB *

*Statement      No.      115”*

* *
*.      *

----

*SFAS      157 - “Fair      Value Measurements”*

*EITF      06-10 -“Accounting for Deferred Compensation and Postretirement Benefit Aspects of      Collateral *

*Split-Dollar      Life Insurance Arrangements”*

* *

----

**ITEM      3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK**

**ITEM      4.      CONTROLS AND PROCEDURES**

**(a)**
**EVALUATION      OF DISCLOSURE CONTROLS AND PROCEDURES **

**(b)**
**CHANGES      IN      INTERNAL CONTROLS **

----

***PART      II. OTHER INFORMATION***

**ITEM      1.**
**LEGAL      PROCEEDINGS**

**ITEM      1A.**
**RISK      FACTORS**

**ITEM      2.**
**UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS **

**(c)**
**FirstEnergy**

|                                                                    |   | **Period**                         |   |
|-------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                    |   | **January                  1-31,** |   | **February                  1-28,** |   | **March                  1-31,** |   | **First** |   |
|                                                                    |   | **2007**                           |   | **2007** |   | **2007** |   | **Quarter** |   |
| Total                  Number                  of Shares Purchased (a)  |   | 62,469                             |   | 226,418 |   | 15,272,836 |   | 15,561,723 |   |
| Average                  Price                  Paid per Share          |   | $59.61                             |   | $63.78 |   | $62.69 |   | $62.69 |   |
| Total                  Number                  of Shares Purchased      |   |                               |   |   |   |   |   |   |   |
| As                  Part of                  Publicly Announced Plans   |   |                               |   |   |   |   |   |   |   |
| or                  Programs                  (b)                       |   | -                                  |   | - |   | 14,370,110 |   | 14,370,110 |   |
| Maximum                  Number                  (or Approximate Dollar |   |                               |   |   |   |   |   |   |   |
| Value)                  of                  Shares that May Yet Be      |   |                               |   |   |   |   |   |   |   |
| Purchased                  Under the Plans or Programs                  |   | 16,000,000                         |   | 16,000,000 |   | 1,629,890 |   | 1,629,890 |   |

| (a)    | Share                amounts                reflect purchases on the open market to satisfy FirstEnergy's obligations                to deliver common stock under its Executive                and                Director Incentive Compensation Plan, Deferred Compensation Plan                for                Outside Directors, Executive Deferred Compensation                Plan, Savings Plan and Stock Investment Plan. In addition, such amounts                reflect shares tendered by employees to                pay the                exercise price or withholding taxes upon exercise of stock options                granted                under the Executive and Director Incentive Compensation                Plan and shares purchased as part of publicly announced                plans. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (b)    | FirstEnergy                publicly announced, on January 30, 2007, a plan to repurchase up to                16 million shares of its common stock through June 30,                2008. On March 2, 2007, FirstEnergy repurchased approximately                14.4 million shares, or 4.5%, of its outstanding common                stock                under this plan through an accelerated share repurchase program with                an                affiliate of Morgan Stanley and Co., Incorporated                at an initial price of $62.63 per                share.                                                                                                                                                                                                       |

**ITEM      6.**
**EXHIBITS      **

| **Exhibit****Number** |   |
|-----------------------|--------|
|                  |
|                  |   |   |
| **FirstEnergy**       |   |
|                  |   |   |
|                  | 10.1   | Confirmation                dated March 1, 2007 between FirstEnergy Corp. and Morgan Stanley and                Co., International                Limited (1) |
|                  | 10.2   | Form                of U.S.                $250,000,000 Credit Agreement, dated as of March 2, 2007, between                FirstEnergyCorp.,                as                Borrower, and Morgan Stanley Senior Funding, Inc., as Lender. (2) |
|                  | 10.3   | Form                of                Guaranty dated as of March 2, 2007, between FirstEnergy Corp., as                Guarantor, andMorgan                Stanley                Senior Funding, Inc., as Lender under a U.S. $250,000,000 Credit                Agreement, dated                as of                March 2, 2007, with FirstEnergy Solutions Corp., as                Borrower. |
|                  | 12     | Fixed                charge                ratios |
|                  | 15     | Letter                from                independent registered public accounting firm |
|                  | 31.1   | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|                  | 31.2   | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|                  | 32     | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|                  |   |   |

----

| **OE**        |     |
|---------------|----------|
|          |     |   |
|          | 12       | Fixed                charge                ratios |
|          | 15       | Letter                from                independent registered public accounting firm |
|          | 31.1     | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 31.2     | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 32       | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|          |     |
| **CEI**       |     |
|          |     |   |
|          |   4 | Officer’s                Certificate (including the form of 5.70% Senior Notes due 2017),                dated as                of March 27,2007(Form                8-K                dated March 28, 2007, Exhibit 4). |
|          | 31.1     | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 31.2     | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 32       | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|          |     |   |
| **TE**        |     |
|          |     |   |
|          | 31.1     | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 31.2     | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 32       | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|          |     |   |
| **JCP&L** |     |
|          |     |   |
|          | 12       | Fixed                charge                ratios |
|          | 31.1     | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 31.2     | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 32       | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|          |     |   |
| **Met-Ed**    |     |
|          |     |   |
|          | 12       | Fixed                charge                ratios |
|          | 31.1     | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 31.2     | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 32       | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|          |     |   |
| **Penelec**   |     |
|          |     |   |
|          | 12       | Fixed                charge                ratios |
|          | 15       | Letter                from                independent registered public accounting firm |
|          | 31.1     | Certification                of chief executive officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 31.2     | Certification                of chief financial officer, as adopted pursuant to Rule                13a-15(e)/15d-(e). |
|          | 32       | Certification                of chief executive officer and chief financial officer, pursuant                to 18                U.S.C. Section 1350. |
|          |     |   |

| (1)   | Confidential                treatment has been requested for certain portions of the Exhibit.                Omitted                portions have been filed separately                with the SEC. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | A                substantially similar agreement, dated as of the same date and in                the same                amount, was executed and delivered by the                registrant’s subsidiary, FirstEnergy Solutions Corp., for which the                registrant provided its guaranty in the form filed as Exhibit                10.2                above, all as described in the registrant’s Form 8-K filed March 5,                2007. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURE**

|   | **FIRSTENERGY                CORP.**                        |
|--------|-------------------------------------------------------------|
|   | Registrant                                                  |
|   |                                                        |
|   | **OHIO                EDISON COMPANY**                      |
|   | Registrant                                                  |
|   |                                                        |
|   | **THE                CLEVELAND ELECTRIC**                   |
|   | **ILLUMINATING                COMPANY**                     |
|   | Registrant                                                  |
|   |                                                        |
|   | **THE                TOLEDO EDISON COMPANY**                |
|   | Registrant                                                  |
|   |                                                        |
|   | **JERSEY                CENTRAL POWER & LIGHT COMPANY** |
|   | Registrant                                                  |
|   |                                                        |
|   | **METROPOLITAN                EDISON COMPANY**              |
|   | Registrant                                                  |
|   |                                                        |
|   | **PENNSYLVANIA                ELECTRIC COMPANY**            |
|   | Registrant                                                  |

|   | /s/ Harvey                L.                Wagner    |
|--------|------------------------------------------------------------|
|   | Harvey                L.                Wagner             |
|   | Vice                President, Controller                  |
|   | and                Chief                Accounting Officer |

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