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 September 30, 2001
                               -------------------

                                       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.
-----------       -----------------------------------     ------------------

1-3141            Jersey Central Power & Light Company      21-0485010
                  (a New Jersey corporation)
                  2800 Pottsville Pike
                  Reading, Pennsylvania 19640-0001
                  Telephone (610) 929-3601





      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No



      The number of shares  outstanding of each of the  registrant's  classes of
voting stock, as of November 13, 2001, was as follows:

                                                                   Shares
Registrant                           Title                         Outstanding
-----------------------------------  ----------------------------  -------------
Jersey Central Power & Light Company Common Stock, $10 par value    15,371,270



<PAGE>






                      Jersey Central Power & Light Company
                          Quarterly Report on Form 10-Q
                               September 30, 2001


                                Table of Contents
                                -----------------

                                                                         Page
                                                                         ----
PART I - Financial Information

      Management's Discussion and Analysis
        of Financial Condition and Results of
        Operations                                                         1

      Consolidated Financial Statements:

            Balance Sheets                                                10
            Statements of Income                                          12
            Statements of Cash Flows                                      13

      Notes to Consolidated Financial Statements                          14

PART II - Other Information                                               26

Signature                                                                 27



      The financial statements (not examined by independent accountants) reflect
all adjustments (which consist of only normal recurring accruals), which are, in
the opinion of management, necessary for a fair statement of the results for the
interim periods presented.

      This  Quarterly  Report on Form 10-Q is filed by  Jersey  Central  Power &
Light Company.  This Form 10-Q supplements and updates the 2000 Annual Report on
Form 10-K, filed by the registrant with the Securities and Exchange  Commission,
and should be read in conjunction therewith.


<PAGE>


              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


      We caution  you that this Form 10-Q  contains  forward-looking  statements
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Exchange  Act of 1934.  They  are  statements  about  future
performance  or results (such as statements  including,  but not limited to, the
terms "potential,"  "estimate," "believe," "expect" and "anticipate" and similar
words)  when we discuss  our  financial  condition,  results of  operations  and
business.  Forward-looking  statements  involve  certain risks,  assumptions and
uncertainties.  They are not guarantees of future performance. Factors may cause
actual   results   to  differ   materially   from  those   expressed   in  these
forward-looking statements. These factors include:

      -  changes in national and regional economic conditions;

      -  changes in markets for energy services;

      -  changing commodity market prices;

      -  the availability and cost of capital;

      -  inability to accomplish or realize anticipated benefits of strategic
         goals;

      -  legislative and regulatory changes (including revised environmental
         requirements);

      -  economic or weather conditions affecting future sales and margins;

      -  the speed and nature of increased competition and deregulation in
         the electric utility industry; and

      -  outcomes of legal proceedings.

       We  believe  that  the  expectations  reflected  in  our  forward-looking
statements are reasonable. However, we cannot assure you that these expectations
will prove to be correct. You should consider the factors we have noted above as
you read the  forward-looking  statements  in this Form 10-Q.  We  undertake  no
obligation to release publicly any revisions to such forward-looking  statements
to reflect events or circumstances after the date of this document or to reflect
the occurrence of unanticipated events.



<PAGE>




                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      Jersey Central Power & Light Company  (JCP&L) is a  wholly-owned  electric
utility  subsidiary of  FirstEnergy  Corp.  (FirstEnergy),  an Ohio  corporation
headquartered in Akron,  Ohio. JCP&L conducts business under the name GPU Energy
along with its affiliates  Metropolitan Edison Company (Met-Ed) and Pennsylvania
Electric  Company  (Penelec),  which are also electric  utility  subsidiaries of
FirstEnergy.

      In August 2000,  FirstEnergy  entered into an agreement to merge with GPU,
Inc.,  under which  FirstEnergy  would acquire all of the outstanding  shares of
GPU, Inc.'s common stock for approximately  $4.5 billion in cash and FirstEnergy
common  stock.  The merger  became  effective on November 7, 2001  and is being
accounted  for  by  the  purchase  method.  Prior  to  that  time,  JCP&L  was a
wholly-owned subsidiary of GPU, Inc.



                              RESULTS OF OPERATIONS
                              ---------------------

      JCP&L's  earnings for the third quarter 2001 were $89.8 million,  compared
to third quarter 2000 earnings of $91.4 million.  Earnings for the third quarter
2000 would have been $74.9 million,  excluding a non-recurring after-tax gain of
$16.5 million,  which  resulted from the reversal of certain  deferred taxes and
realization  of an investment tax credit related to the sale of the Oyster Creek
Nuclear  Generating Station (Oyster Creek). The third quarter earnings increase,
excluding  this  non-recurring  item,  was primarily due to lower  operation and
maintenance  (O&M)  expenses (net of increased  purchased  power  expenses) as a
result of the sale of Oyster  Creek in August 2000,  and higher  weather-related
sales  during  the  summer  of 2001.  Partially  offsetting  these  were  higher
amortization expenses, and increased financing costs.

      For the nine months ended September 30, 2001, JCP&L's earnings were $184.5
million,  compared to $177.3 million for the same period in 2000.  Excluding the
non-recurring  gain  discussed  above,  earnings for 2000 would have been $160.8
million.  The same  factors  affecting  the  comparable  quarterly  results also
affected the year to date comparison.  Also contributing to the increase for the
nine-month  period  was  higher  weather-related  sales  due  to  colder  winter
temperatures in 2001 compared to the previous winter.

OPERATING REVENUES:
------------------

      Operating  revenues for the third quarter 2001 increased  $67.1 million to
$672.1 million, as compared to the third quarter 2000. For the nine months ended
September 30, 2001, operating revenues increased $106.9 million to $1.7 billion,
compared  to the same  period last year.  The  components  of the changes are as
follows:










                                        1


<PAGE>


                                            2001 vs. 2000 (in millions)
                                     ----------------------------------------
                                      Three Months Ended    Nine Months Ended
                                         September 30,        September 30,
                                      ------------------    -----------------
KWH revenues                                $16.8                $ 23.0
Energy and restructuring-related
  revenues                                   50.3                  89.0
Other revenues                                 -                   (5.1)
                                             ----                 -----
     Increase in revenues                   $67.1                $106.9
                                             ====                 =====


KWH revenues
------------

     The increase for both periods was primarily  due to higher  weather-related
sales in 2001 compared to the previous year.

Energy and restructuring-related revenues
-----------------------------------------

     Changes in energy and restructuring-related revenues do not affect earnings
as they are offset by  corresponding  changes in expense.  The increase for both
periods was  primarily  due to the return of numerous  shopping  customers  from
alternate generation suppliers and increased sales to other utilities.

Other revenues
--------------

      The decrease for the nine months ended  September  30, 2001 was  primarily
due to a decrease in building rental revenues of approximately  $4 million,  and
decreased  transmission  revenues as a result of fewer  customers  shopping  for
their energy supply.

OPERATING INCOME:
----------------

      Operating  income for the third  quarter 2001  increased  $34.4 million to
$170.3 million, as compared to the third quarter 2000. For the nine months ended
September 30, 2001,  operating  income  increased $41 million to $372.4 million,
versus the same period last year.  The increase  for the third  quarter 2001 was
primarily  due to increased  KWH  revenues,  as discussed  above;  and lower O&M
expenses  of  approximately  $37  million as a result  primarily  of the sale of
Oyster Creek and lower pension  costs.  Partially  offsetting  these were higher
amortization  expenses  of  approximately  $5 million  primarily  due to the New
Jersey  Board of Public  Utilities'  (NJBPU)  order  related to the Oyster Creek
sale, and higher energy costs due to increased  demand for  electricity  and the
need to purchase more  electricity as a result of the sale of Oyster Creek.  The
same factors  affecting the comparable  quarterly results also affected the year
to date  comparison.  These factors included  increased KWH revenues,  lower O&M
expenses  of  approximately  $113  million,   higher  amortization  expenses  of
approximately $17 million, and higher energy costs.

OTHER INCOME AND DEDUCTIONS:
---------------------------

     Other  income and  deductions  for the third  quarter 2001  decreased  $8.2
million to $7.9 million,  as compared to the third  quarter  2000. In 2000,  the
discounting effect on a long-term receivable due from AmerGen Energy Company LLC
related to Oyster Creek outage  costs was removed,  accounting  for $8.8 million
(pre-tax) of the decrease in other income as compared to last year.



                                        2


<PAGE>


      For the nine months ended September 30, 2001,  other income and deductions
increased  $5 million to $25.5  million,  versus the same period last year.  The
increase  was  primarily  due to  higher  interest  income of  approximately  $5
million.

INTEREST CHARGES AND PREFERRED DIVIDENDS:
----------------------------------------

      Interest  charges  and  preferred  dividends  for the third  quarter  2001
increased $2 million to $30.1  million,  as compared to the third  quarter 2000.
For the nine months ended  September  30, 2001,  interest  charges and preferred
dividends  increased $5.2 million to $88.2 million,  versus the same period last
year.  The  increase  for both  periods  was  primarily  due to  interest on the
issuance  of $150  million  of senior  notes in May  2001,  and  higher  average
short-term  debt levels.  Partially  offsetting  these was lower preferred stock
dividends due to the  redemption of $8.3 million and $16.7 million  stated value
cumulative  preferred  stock  pursuant to mandatory  and  optional  sinking fund
provisions in the second quarter of 2001 and 2000, respectively.


                         LIQUIDITY AND CAPITAL RESOURCES
                         -------------------------------

Capital Expenditures and Investments
------------------------------------

      Capital  spending  for the nine months ended  September  30, 2001 was $109
million, and was used primarily to expand and improve existing  transmission and
distribution  facilities  and for new customer  connections.  JCP&L's  remaining
capital  expenditures  for 2001 are  estimated to be $35 million,  primarily for
ongoing  transmission and distribution system development.  Management estimates
that a substantial portion of the 2001 capital spending will be supplied through
internally generated funds.

Financing
---------

      Upon the November 7, 2001 effective date of the  FirstEnergy and GPU, Inc.
merger, JCP&L's available short-term bank borrowing facilities (these included a
revolving  credit agreement and various bank lines of credit) were terminated by
their terms and conditions. As a result, on this date all of JCP&L's outstanding
bank  borrowings  from these  facilities,  totaling $20 million,  were repaid by
FirstEnergy.  FirstEnergy  is in the process of  establishing a new $1.5 billion
revolving credit facility to meet the short-term  liquidity  requirements of the
new combined company, including those requirements of JCP&L. JCP&L is limited by
its charter or SEC  authorization to $281 million of short-term debt outstanding
at any one time.

      JCP&L has regulatory  approval to issue senior notes through  December 31,
2002 in the amount of $150 million.  JCP&L's  financing program is designed such
that it would issue secured senior notes (collateralized by first mortgage bonds
(FMBs)  issued to the senior note  trustee)  until such time as more than 80% of
its outstanding FMBs are held by the senior note trustee. At that time, the FMBs
will be  cancelled  and the  outstanding  senior  notes  will  become  unsecured
obligations.  JCP&L will not issue any additional  FMBs other than as collateral
for the senior  notes  since the senior  note  indenture  prohibits  (subject to
certain  exceptions)  JCP&L from  issuing any debt which is senior to the senior
notes.

      JCP&L's bond indenture includes  provisions that limits the amount of FMBs
the company may issue. JCP&L's interest coverage ratio is currently in excess of
indenture  restrictions.  In  addition,  JCP&L's  certificate  of  incorporation
includes provisions that limit the amount of preferred stock it

                                        3


<PAGE>


may issue.  JCP&L's preferred  dividend coverage ratio is currently in excess of
this charter restriction.

      JCP&L has filed a  petition  with the NJBPU  requesting  authorization  to
issue $320 million of transition  bonds to  securitize  the recovery of bondable
stranded costs attributable to the projected net investment in Oyster Creek. The
petition  also  requests  that the NJBPU order  provide for the  imposition  and
collection of a usage-based  non-bypassable transition bond charge (TBC) and for
the transfer of the bondable  transition property relating to the TBC to another
entity.  JCP&L currently plans to sell transition  bonds in the first quarter of
2002.

      In the  fourth  quarter  2001 and for the year 2002,  JCP&L has  scheduled
long-term debt maturities totaling $40 million and $50 million, respectively.


                    COMPETITIVE ENVIRONMENT AND RATE MATTERS
                    ----------------------------------------

Recent Regulatory Actions
-------------------------

      With the transition to a competitive marketplace for generation service in
New  Jersey,  certain   generation-related   costs,  which  generally  would  be
recoverable  in a regulated  environment,  may no longer be  recoverable.  These
costs are generally referred to as stranded costs.

Restructuring Order

      In March 2001,  the NJBPU issued a Final  Decision and Order (Final Order)
with  respect  to  JCP&L's  rate  unbundling,  stranded  cost and  restructuring
filings,  which  supersedes a Summary Order issued by the NJBPU in May 1999. The
Final Order confirms rate reductions set forth in the Summary Order, which began
in August 1999 and will remain in effect at increasing levels through July 2003,
and provides for, among other things,  deregulation of the costs associated with
providing   electric   generation   service.   The  Final  Order   confirms  the
establishment  of a  non-bypassable  societal  benefits  charge to recover costs
associated  with,  among  other  things,   nuclear  plant   decommissioning  and
manufactured  gas  plant  remediation,   as  well  as  a  non-bypassable  market
transition  charge  (MTC).  The Final Order  provides for the ability to recover
stranded costs;  however, the NJBPU deferred making a final determination of the
net proceeds and stranded  costs related to the  generating  asset  divestitures
until JCP&L's request for an Internal Revenue Service (IRS) ruling regarding the
treatment of associated federal income tax benefits is acted upon.

      In  addition,  JCP&L is  permitted  to defer for  future  collection  from
customers the amounts by which its costs of supplying basic  generation  service
(BGS) to non-shopping  customers and costs incurred under nonutility  generation
(NUG)  agreements  exceed amounts  collected in its BGS and MTC rates. The Final
Order allows for  securitization  of the NUG portion of JCP&L's deferred balance
so long as  conditions  of the New  Jersey  restructuring  legislation  are met.
However,  JCP&L must seek NJBPU  authorization to securitize that portion of its
deferred balance related to above-market NUG costs. There can be no assurance as
to the extent, if any, that the NJBPU will permit such securitization.

      The Final Order also provides for the ability to securitize stranded costs
associated  with  Oyster  Creek.  JCP&L  has  filed a  petition  with the  NJBPU
requesting authorization to issue $320 million of transition bonds to securitize
the recovery of certain of these costs.

                                        4


<PAGE>


Basic Generation Service ("BGS") Provider

      JCP&L is required to provide BGS to retail  customers who choose to remain
with JCP&L as generation customers for a three-year period ending July 31, 2002.
Thereafter,  BGS is to be bid out, with the details of the bidding process to be
the subject of a NJBPU  proceeding.  On June 29, 2001,  the New Jersey  electric
utilities,  including JCP&L,  filed a joint proposal seeking NJBPU approval of a
competitive  bidding  process to procure supply for the provision of BGS for the
period from August 1, 2002 through July 31, 2003.  The NJBPU has  established  a
procedural  schedule which  provides for a decision in December 2001.  Under its
Final Order, JCP&L is permitted to defer for future recovery the amount by which
its reasonable and prudently  incurred  costs  associated  with providing BGS to
non-shopping  customers and costs incurred  under NUG agreements  exceed amounts
currently  reflected in its BGS and MTC rates.  As of September  30, 2001,  such
deferred balance totaled $551 million.

NJBPU Approval of Merger

     On September 26, 2001, the NJBPU  approved the merger  between  FirstEnergy
and GPU, Inc., subject to the terms and conditions set forth in a Stipulation of
Settlement which had been signed by the major parties in the merger discussions.
Under this  Stipulation  of  Settlement,  FirstEnergy  agreed to reduce  JCP&L's
deferred balance by $300 million,  in order to ensure that customers receive the
benefit of future merger savings. In accordance with the Settlement, JCP&L wrote
off $300 million of its  deferred  balance  effective  upon receipt of the final
regulatory approval for the merger, which occurred on October 29, 2001.

Supply Plan and Market Risk
---------------------------

      As a result of the  NJBPU's  Restructuring  Orders,  JCP&L is  required to
supply electricity to customers who do not choose an alternate supplier. In 1999
and  2000,  JCP&L  completed  the  sales of  substantially  all of its  electric
generating  stations.  As a  result,  JCP&L  now has to  supply  electricity  to
non-shopping   customers   almost  entirely  from  contracted  and  open  market
purchases.

Generation Agreements

      Electricity supply planning is currently performed on a combined basis for
JCP&L  and its GPU  Energy  affiliates,  with the goal of  supplying  all of the
energy requirements of their non-shopping  customers at a reasonable cost. As of
September 30, 2001,  JCP&L and its GPU Energy  affiliates had only 285 megawatts
(MW) (of which JCP&L's share is 266 MW) of owned generation capacity and related
energy  remaining to meet customer needs.  The companies also had contracts with
nonutility  generators  totaling 1,595 MW (of which JCP&L's share is 926 MW) and
agreements with other parties to provide varying amounts of capacity through May
31, 2004.  These capacity amounts from third parties vary from a monthly high of
approximately  4,500 MW in 2002 to 500 MW in May 2004.  Based on the exercise of
call options, JCP&L and its GPU Energy affiliates may take the energy associated
with up to 150 MW of this capacity  through May 2003.  The  companies  have also
purchased all of the capacity and energy from their  previously owned Three Mile
Island Unit 1 (TMI-1)  and Oyster  Creek  nuclear  generating  stations  through
December 31, 2001 and March 31, 2003, respectively. In addition, through May 31,
2002,  the  companies  have the right to 3,970 MW of  capacity  associated  with
generating  stations they sold in 1999. The remaining  capacity and energy needs
of  JCP&L   and  its  GPU   Energy   affiliates   will  be  met  by   short-  to
intermediate-term commitments


                                        5


<PAGE>


(one month to three years),  and any residual  needs will be purchased  from the
short-term  market  (one  hour  to  one  month).   Payments  pursuant  to  these
agreements,  which  include  firm  commitments  as well as  certain  assumptions
regarding,  among other things, call/put arrangements,  are estimated to be $282
million for the remainder of 2001,  $781 million in 2002,  $115 million in 2003,
and $5 million in 2004.

      Pursuant to the mandates of the Public Utility Regulatory Policies Act and
state  regulatory  directives,  JCP&L was required to enter into long-term power
purchase  agreements  with NUGs for the purchase of energy and  capacity,  which
agreements  have  remaining  terms of up to 15  years.  The  NJBPU  Final  Order
provides JCP&L full recovery of its NUG costs (including  above-market NUG costs
and  certain  buyout  costs).  JCP&L has  recorded,  on a present  value  basis,
estimated  liabilities  of $1.5 billion on its  Consolidated  Balance  Sheet for
above-market  NUG costs,  which is offset by  corresponding  regulatory  assets.
JCP&L  is  continuing   efforts  to  reduce  the  above-market  costs  of  these
agreements;  however,  there can be no assurance as to the extent to which these
efforts will be successful.

Supply Market Risk

      With the divestiture of all but two of its generating plants,  JCP&L is in
a net short position (load in excess of supply). Consequently, JCP&L must manage
its purchase and sale of installed  capacity and ancillary  services to minimize
business  risk   associated   with  its   reliability   obligation  in  the  PJM
Interconnection,  LLC (PJM). As discussed  above,  JCP&L  currently  manages its
electricity  supply planning on a combined basis with its GPU Energy affiliates.
Supply/risk  management  transactions  will be made  based on the  objective  of
decreasing  price  uncertainty.  JCP&L  will enter  into  supply/hedging  market
arrangements for hedging purposes only.

      JCP&L  is  generally  at  risk  of  rising  prices  for   electricity  and
electricity-related  products and  services.  These risks may differ during some
months of the year. To manage these risks,  JCP&L  employs a portfolio  approach
which  primarily  consists of two party forward  purchases and options,  but may
also include New York Mercantile  Exchange  (NYMEX) PJM electricity  futures and
similar  instruments,  as they become widely available.  This portfolio includes
transactions  of various  durations  ranging  from one hour to greater  than one
year.

      JCP&L's  electricity market risks can be price-related,  volume-related or
cost recovery-related as follows:

-     Price-related risk refers to the price exposure  associated with having to
      purchase amounts of electricity, installed capacity and ancillary services
      for load  requirements from the PJM interchange spot market. To the extent
      that  JCP&L  must  rely on the  PJM  pool to  satisfy  load  requirements,
      financial  exposure  exists for the difference  between the PJM energy and
      installed  capacity  spot  market  prices  and  the  fixed  rates  paid by
      customers.

-     Volume-related  risk refers to the uncertainty  associated with the amount
      of load JCP&L is required to serve.  Deregulation of the electric  utility
      industry has resulted in the ability of customers to purchase  electricity
      from other  electric  suppliers.  This  customer  shopping,  combined with
      weather  changes,  which affect customer energy usage,  can affect JCP&L's
      position.




                                        6


<PAGE>


-    Cost recovery-related risk refers to the financial risk associated with the
     potential  prudency  audits of the NJBPU that are part of JCP&L's  deferred
     energy and capacity cost recovery  mechanism  (Market  Transition  Charge).
     Cost recovery-related risk also refers to the prudency risk associated with
     future NUG cost recovery  under the  Restructuring  Orders  approved by the
     NJBPU which require continued mitigation of above-market NUG costs.


      JCP&L purchases natural gas for its Forked River generating  facility.  In
addition, as part of its NUG cost mitigation program,  JCP&L manages the natural
gas  requirements  of certain  NUGs that  produce and sell energy to JCP&L under
long-term  contracts.  Prudently  incurred  costs  associated  with  natural gas
commodity and  transportation  are included in JCP&L's BGS costs to be recovered
through BGS charges and the Market Transition Charge.

      JCP&L  employs  a  portfolio  approach  consisting  of two  party  forward
purchases  and  NYMEX  natural  gas  futures  contracts.  JCP&L  is  exposed  to
price-related,  volume-related  and cost  recovery-related  market risks for its
natural gas  purchases,  similar to those  electricity  market risks  previously
described.


                              ENVIRONMENTAL MATTERS
                              ---------------------

      As a result of existing  and proposed  legislation  and  regulations,  and
ongoing legal proceedings dealing with environmental matters including,  but not
limited to, air and water quality,  global warming,  electromagnetic fields, and
storage and disposal of hazardous and/or toxic wastes,  JCP&L may be required to
incur  substantial  additional  costs to  construct  new  facilities;  modify or
replace existing and proposed equipment; or remediate,  decommission or clean up
waste  disposal  and other sites  currently  or formerly  used by it,  including
formerly owned  manufactured  gas plants,  coal mine refuse piles and generation
facilities.  In  addition,   federal  and  state  law  provide  for  payment  by
responsible parties for damage to natural resources.

      JCP&L records  environmental  liabilities (on an undiscounted basis) where
it is probable  that a loss has been  incurred and the amount of the loss can be
reasonably  estimated,  and  adjusts  these  liabilities  as required to reflect
changes in circumstances.  At September 30, 2001, JCP&L had liabilities recorded
on its Consolidated Balance Sheet for environmental remediation of $52 million.

      For more  information,  see the  Environmental  Matters section of Note 1,
Commitments  and   Contingencies,   of  the  Notes  to  Consolidated   Financial
Statements.


                      LEGAL MATTERS - TMI-2 ACCIDENT CLAIMS
                      -------------------------------------

      As a  result  of the 1979  Three  Mile  Island  Unit 2  (TMI-2)  accident,
individual  claims for alleged  personal injury  (including  claims for punitive
damages),  which are material in amount,  were asserted  against JCP&L,  Met-Ed,
Penelec and GPU, Inc. (the defendants).  Approximately 2,100 of such claims were
filed in the US District Court for the Middle District of Pennsylvania.  Some of
the  claims  also  seek  recovery  for  injuries   from  alleged   emissions  of
radioactivity before and after the accident.




                                        7


<PAGE>


      In 1996, the District Court granted a motion for summary judgment filed by
the  defendants,  and  dismissed  the ten initial  "test  cases"  which had been
selected for a test case trial,  as well as all of the  remaining  2,100 pending
claims. The Court ruled that there was no evidence which created a genuine issue
of material fact  warranting  submission of  plaintiffs'  claims to a jury.  The
plaintiffs  appealed the District Court's ruling to the Court of Appeals for the
Third Circuit. In November 1999, the Third Circuit affirmed the District Court's
dismissal of the ten "test cases," but set aside the dismissal of the additional
pending claims, remanding them to the District Court for further proceedings. In
remanding these claims, the Third Circuit held that the District Court had erred
in extending its summary judgment  decision to the other plaintiffs and imposing
on these plaintiffs the District Court's finding that radiation  exposures below
10 rems were too speculative to establish a causal link to cancer.  The Court of
Appeals stated that the non-test case plaintiffs  should be permitted to present
their own  individual  evidence  that  exposure to  radiation  from the accident
caused their cancers.  In June 2000,  the US Supreme Court denied  petitions for
review filed by the defendants and the plaintiffs.

      In September 2000, the defendants  filed a Motion for Summary  Judgment in
the District Court.  Meanwhile,  the plaintiffs took an interlocutory  appeal to
the Third Circuit seeking review of the District Court's  determination that the
remaining  plaintiffs should be allowed to advance causation theories based only
on the  admissible  evidence of record at the close of discovery in the case. On
April 30, 2001, the Third Circuit  affirmed the District  Court's  decision.  In
July 2001,  the  defendants  renewed  their  motion for Summary  Judgment of the
remaining 2,100 claims in the District Court.

      There can be no assurance as to the outcome of this litigation.

      JCP&L  believes  that any liability to which it might be subject by reason
of the  TMI-2  accident  will not  exceed  its  financial  protection  under the
Price-Anderson Act.


























                                        8


<PAGE>

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                                        9


<PAGE>
<TABLE>
<CAPTION>




           JERSEY CENTRAL POWER & LIGHT COMPANY AND SUBSIDIARY COMPANY

                           Consolidated Balance Sheets
                           ---------------------------

                                                                    In Thousands
                                                          --------------------------
                                                          September 30,  December 31,
                                                              2001          2000
                                                          -------------  ------------
                                                           (Unaudited)
ASSETS
Utility Plant:
<S>                                                        <C>           <C>
  Utility plant in service                                 $3,351,697    $3,269,676
  Accumulated depreciation                                 (1,281,627)   (1,212,784)
                                                            ---------     ---------
      Net utility plant in service                          2,070,070     2,056,892
  Construction work in progress                                90,956        75,201
  Other, net                                                   13,311        13,311
                                                            ---------     ---------
      Net utility plant                                     2,174,337     2,145,404
                                                            ---------     ---------

Other Property and Investments:
  Nuclear decommissioning trusts, at market (Note 1)          113,076       115,311
  Nuclear fuel disposal trust, at market                      137,734       126,336
  Other, net                                                   19,722         6,342
                                                            ---------     ---------
      Total other property and investments                    270,532       247,989
                                                            ---------     ---------

Current Assets:
  Cash and temporary cash investments                          72,984           801
  Special deposits                                              1,188         1,220
  Accounts receivable:
    Customers, less provision for doubtful accounts
      of $13,974 for 2001 and $21,479 for 2000                194,988       156,358
    Affiliates                                                  7,642         8,520
    Other                                                      61,367        38,107
  Unbilled revenues                                            80,369        80,864
  Materials and supplies, at average cost or less               1,350           508
  Deferred income taxes                                        16,815        20,669
  Prepayments                                                  31,201        96,916
                                                            ---------     ---------
      Total current assets                                    467,904       403,963
                                                            ---------     ---------

Deferred Debits and Other Assets:
  Regulatory assets, net (Note 1)                           3,167,145     3,185,072
  Deferred income taxes                                       179,958       187,632
  Other                                                        54,389        47,295
                                                            ---------     ---------
      Total deferred debits and other assets                3,401,492     3,419,999
                                                            --------      ---------

      Total Assets                                         $6,314,265    $6,217,355
                                                            =========     =========

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.
</TABLE>

                                       10


<PAGE>
<TABLE>
<CAPTION>


           JERSEY CENTRAL POWER & LIGHT COMPANY AND SUBSIDIARY COMPANY

                           Consolidated Balance Sheets
                           ---------------------------

                                                                    In Thousands
                                                          ---------------------------
                                                          September 30,  December 31,
                                                              2001          2000
                                                          -------------  ------------
                                                           (Unaudited)
LIABILITIES AND CAPITALIZATION
Capitalization:
<S>                                                        <C>           <C>
  Common stock                                             $  153,713    $  153,713
  Capital surplus                                             510,769       510,769
  Retained earnings                                           904,287       794,786
  Accumulated other comprehensive income/(loss) (Note 3)          922            (8)
                                                            ---------     ---------
      Total common stockholder's equity                     1,569,691     1,459,260
  Cumulative preferred stock:
    With mandatory redemption                                  40,667        51,500
    Without mandatory redemption                               12,649        12,649
  Company-obligated mandatorily redeemable
    preferred securities                                      125,000       125,000
  Long-term debt                                            1,193,873     1,093,987
                                                            ---------     ---------
      Total capitalization                                  2,941,880     2,742,396
                                                            ---------     ---------

Current Liabilities:
  Securities due within one year                              100,846        50,847
  Notes payable                                                   -          29,200
  Accounts payable:
    Affiliates                                                 41,020        98,526
    Other                                                     103,415        95,988
  Taxes accrued                                                63,121         8,836
  Interest accrued                                             31,573        23,625
  Other                                                        41,207        37,786
                                                            ---------     ---------
      Total current liabilities                               381,182       344,808
                                                            ---------     ---------

Deferred Credits and Other Liabilities:
  Deferred income taxes                                       941,536       866,058
  Unamortized investment tax credits                           14,389        17,087
  Power purchase contract loss liability (Note 1)           1,514,445     1,699,473
  Nuclear fuel disposal fee                                   162,417       156,959
  Three Mile Island Unit 2 future costs (Note 1)              131,841       128,735
  Other                                                       226,575       261,839
                                                            ---------     ---------
      Total deferred credits and other liabilities          2,991,203     3,130,151
                                                            ---------     ---------

Commitments and Contingencies (Note 1)

      Total Liabilities and Capitalization                 $6,314,265    $6,217,355
                                                            =========     =========

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.
</TABLE>

                                       11


<PAGE>
<TABLE>
<CAPTION>


           JERSEY CENTRAL POWER & LIGHT COMPANY AND SUBSIDIARY COMPANY

                        Consolidated Statements of Income
                        ---------------------------------
                                   (Unaudited)

                                                         In Thousands
                                         -------------------------------------------
                                             Three Months           Nine Months
                                         Ended September 30,    Ended September 30,
                                         ------------------     --------------------
                                           2001      2000         2001       2000
                                           ----      ----         ----       ----
<S>                                      <C>       <C>        <C>         <C>
Operating Revenues                       $672,131  $605,045   $1,654,867  $1,547,940
                                          -------   -------    ---------   ---------
Operating Expenses:
  Fuel                                      1,524     4,773        4,302      19,966
  Power purchased and interchanged:
    Affiliates                              2,902     6,430       14,574      37,683
    Others                                546,203   417,837    1,139,698     835,112
  Deferred costs, net                    (189,228) (131,954)    (303,102)   (198,950)
  Other operation and maintenance          59,875    97,579      191,331     305,406
  Depreciation and amortization            62,272    57,467      186,705     169,773
  Taxes, other than income taxes           18,295    17,078       48,949      47,567
                                          -------   -------    ---------   ---------
      Total operating expenses            501,843   469,210    1,282,457   1,216,557
                                          -------   -------    ---------   ---------
Operating Income                          170,288   135,835      372,410     331,383
                                          -------   -------    ---------   ---------
Other Income and Deductions:
  Allowance for other funds used during
    construction                              (61)      442         (117)        955
  Other income, net                         7,981    15,701       25,688      19,632
                                          -------    ------     ---------  ---- ----
      Total other income and deductions     7,920    16,143       25,571      20,587
                                          -------   -------    ---------   ---------
Income Before Interest Charges            178,208   151,978      397,981     351,970
                                          -------   -------    ---------   ---------
Interest Charges:
  Long-term debt and notes payable         25,671    24,143       74,892      69,965
  Company-obligated mandatorily
    redeemable preferred securities         2,675     2,675        8,025       8,025
  Other interest                              332       537        1,512         897
  Allowance for borrowed funds used
    during construction                       170      (620)        (261)     (1,439)
                                          -------   -------    ---------   ---------
      Total interest charges               28,848    26,735       84,168      77,448
                                           ------   -------    ---------   ---------
Income Before Income Taxes                149,360   125,243      313,813     274,522
  Income taxes                             58,214    32,450      125,231      91,725
                                          -------   -------    ---------   ---------
Net Income                                 91,146    92,793      188,582     182,797
  Preferred stock dividends                 1,299     1,391        4,081       5,513
                                          -------   -------    ---------   ---------
Earnings Available for Common Stock      $ 89,847  $ 91,402   $  184,501  $  177,284
                                          =======   =======    =========   =========

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

</TABLE>

                                       12


<PAGE>
<TABLE>
<CAPTION>


           JERSEY CENTRAL POWER & LIGHT COMPANY AND SUBSIDIARY COMPANY

                      Consolidated Statements of Cash Flows
                      -------------------------------------
                                   (Unaudited)
                                                                    In Thousands
                                                          -------------------------
                                                                 Nine Months
                                                             Ended September 30,
                                                          -------------------------
                                                             2001            2000
Operating Activities:                                        ----            ----
<S>                                                       <C>             <C>
  Net income                                              $ 188,582       $ 182,797
  Adjustments to reconcile income to cash provided:
    Depreciation and amortization                           208,290         195,620
    Provision for doubtful accounts                             247           6,995
    Regulatory assets, net                                    9,113        (111,026)
    Amortization of property under capital leases               -            11,472
    Loss on sale of investments                                  80             -
    Deferred income taxes and investment tax
      credits, net                                           67,525         285,710
    Deferred costs, net                                    (303,102)       (198,950)
    Allowance for funds used during construction                117            (955)
  Changes in working capital:
    Receivables                                             (61,642)        (39,934)
    Materials and supplies                                     (842)             95
    Special deposits and prepayments                         65,745        (160,487)
    Payables and accrued liabilities                         73,079         (11,983)
    Due to/from affiliates                                  (56,627)         52,108
  Other, net                                                (35,304)          8,227
                                                           --------        --------
      Net cash provided by operating activities             155,261         219,689
                                                           --------        --------
Investing Activities:
  Capital expenditures and investments                     (109,006)        (84,569)
  Contributions to decommissioning trusts                      (902)       (130,141)
  Proceeds from sale of investments                             -             9,265
  Other, net                                                 (2,852)            320
                                                           --------        --------
      Net cash required by investing activities            (112,760)       (205,125)
                                                           --------        --------
Financing Activities:
  Issuance of long-term debt                                148,796             -
  Increase/(decrease) in notes payable, net                 (29,200)        163,000
  Retirement of long-term debt                                  -           (40,000)
  Redemption of preferred stock                             (10,833)        (21,667)
  Capital lease principal payments                              -           (48,516)
  Dividends paid on common stock                            (75,000)       (130,000)
  Dividends paid on preferred stock                          (4,081)         (5,674)
                                                           --------        --------
      Net cash provided/(required) by financing activities   29,682         (82,857)
                                                           --------        --------
Net increase/(decrease) in cash and temporary
  cash investments from above activities                     72,183         (68,293)
Cash and temporary cash investments, beginning of year          801          68,684
                                                           --------        --------
Cash and temporary cash investments, end of period        $  72,984       $     391
                                                           ========        ========
Supplemental Disclosure:
  Interest and preferred dividends paid                   $  77,683       $  79,007
                                                           ========        ========
  Income taxes paid/(refunded)                            $   8,009       $ (40,634)
                                                           ========        ========
  New capital lease obligations incurred                  $     -         $  41,580
                                                           ========        ========
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.
</TABLE>

                                       13

<PAGE>



                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Jersey Central Power & Light Company (JCP&L) is a wholly-owned electric
utility  subsidiary of  FirstEnergy  Corp.  (FirstEnergy),  an Ohio  corporation
headquartered in Akron,  Ohio. JCP&L conducts business under the name GPU Energy
along with its affiliates  Metropolitan Edison Company (Met-Ed) and Pennsylvania
Electric  Company  (Penelec),  which are also electric  utility  subsidiaries of
FirstEnergy.

         In August  2000,  FirstEnergy  entered  into an agreement to merge with
GPU, Inc., under which FirstEnergy  would acquire all of the outstanding  shares
of GPU,  Inc.'s  common  stock  for  approximately  $4.5  billion  in  cash  and
FirstEnergy common stock. The merger became effective on November 7, 2001 and is
being  accounted  for by the purchase  method.  Prior to that time,  JCP&L was a
wholly-owned subsidiary of GPU, Inc.



1.  COMMITMENTS AND CONTINGENCIES


               COMPETITION AND THE CHANGING REGULATORY ENVIRONMENT
               ---------------------------------------------------


Stranded Costs and Regulatory Restructuring Orders:
--------------------------------------------------

         With the transition to a competitive marketplace for generation service
in New  Jersey,  certain  generation-related  costs,  which  generally  would be
recoverable  in a regulated  environment,  may no longer be  recoverable.  These
costs are generally referred to as stranded costs.

         In March 2001, the New Jersey Board of Public Utilities  (NJBPU) issued
a  Final  Decision  and  Order  (Final  Order)  with  respect  to  JCP&L's  rate
unbundling,  stranded cost and restructuring filings, which supersedes a Summary
Order issued by the NJBPU in May 1999. The Final Order confirms rate  reductions
set forth in the  Summary  Order,  which began in August 1999 and will remain in
effect at increasing  levels  through July 2003,  and provides for,  among other
things,  deregulation of the costs associated with providing electric generation
service. The Final Order confirms the establishment of a non-bypassable societal
benefits charge to recover costs associated  with,  among other things,  nuclear
plant  decommissioning  and  manufactured  gas plant  remediation,  as well as a
non-bypassable  market transition charge (MTC). The Final Order provides for the
ability to recover  stranded costs;  however,  the NJBPU deferred making a final
determination  of the net proceeds and stranded  costs related to the generating
asset  divestitures  until JCP&L's request for an Internal Revenue Service (IRS)
ruling  regarding  the treatment of  associated  federal  income tax benefits is
acted upon.

         In addition,  JCP&L is permitted  to defer for future  collection  from
customers the amounts by which its costs of supplying basic  generation  service
(BGS) to non-shopping  customers and costs incurred under nonutility  generation
(NUG)  agreements  exceed amounts  collected in its BGS and MTC rates. The Final
Order allows for  securitization  of the NUG portion of JCP&L's deferred balance
so long as  conditions  of the New  Jersey  restructuring  legislation  are met.
However,  JCP&L must seek NJBPU  authorization to securitize that portion of its
deferred balance related to above-market NUG costs. There can be no assurance as
to the extent, if any, that the NJBPU will permit such securitization.


                                       14


<PAGE>


         The Final Order also  provides for the ability to  securitize  stranded
costs  associated  with Oyster Creek.  JCP&L has filed a petition with the NJBPU
requesting authorization to issue $320 million of transition bonds to securitize
the recovery of certain of these costs.

Supply of Electricity:
---------------------

         As a result of the NJBPU's  Restructuring  Order,  JCP&L is required to
supply electricity to customers who do not choose an alternate  supplier.  Given
that JCP&L has  essentially  exited  the  generation  business  and will have to
supply electricity to non-shopping customers almost entirely from contracted and
open market  purchases,  there will be increased risks associated with supplying
that electricity.

         JCP&L is permitted to defer for future recovery the amount by which its
reasonable  and  prudently   incurred  costs  associated  with  providing  basic
generation  service  to  non-shopping  customers  and costs  incurred  under NUG
agreements  exceed amounts  currently  reflected in its BGS and MTC rates. As of
September 30, 2001, such deferred balance totaled $551 million.

         On  September  26,  2001,   the  NJBPU   approved  the  merger  between
FirstEnergy  and GPU,  Inc.,  subject to the terms and conditions set forth in a
Stipulation  of  Settlement  which had been  signed by the major  parties in the
merger discussions. Under this Stipulation of Settlement,  FirstEnergy agreed to
reduce  JCP&L's  deferred  balance  by $300  million,  in order to  ensure  that
customers  receive the benefit of future merger savings.  In accordance with the
Settlement,  JCP&L wrote off $300 million of its deferred balance effective upon
receipt of the final  regulatory  approval  for the  merger,  which  occurred on
October 29, 2001.

Generation Agreements:
---------------------

         The  evolving  competitive  generation  market has created  uncertainty
regarding the  forecasting of energy supply needs,  which has caused the company
to seek  shorter-term  agreements  offering more  flexibility.  JCP&L  currently
manages its electricity  supply planning on a combined basis with its GPU Energy
affiliates.   The   current   supply   plan   generally   utilizes   short-   to
intermediate-term  commitments  (one month to three  years),  with any  residual
needs being purchased from the short-term market (one hour to one month).

         JCP&L and its GPU Energy  affiliates  have entered into agreements with
third party  suppliers  to purchase  capacity  and energy  through  2004.  As of
September 30, 2001,  payments pursuant to these  agreements,  which include firm
commitments  as well as  certain  assumptions  regarding,  among  other  things,
call/put  arrangements,  are  estimated to be $282 million for the  remainder of
2001, $781 million in 2002, $115 million in 2003 and $5 million in 2004.

         Pursuant  to the  mandates  of the federal  Public  Utility  Regulatory
Policies Act and state regulatory  directives,  JCP&L was required to enter into
long-term  power  purchase  agreements  with NUGs for the purchase of energy and
capacity,  which  agreements have remaining  terms of up to 15 years.  The rates
under  virtually  all of these NUG  agreements  are  substantially  in excess of
current and projected prices from alternative  sources,  except for periods when
JCP&L is required to meet high  customer  demand,  typically  during  periods of
extremely hot weather or when power  supplies are limited.  The following  table
shows  JCP&L's  actual  payments  from 1999  through  September  30,  2001,  and
estimated payments thereafter through 2006:



                                       15


<PAGE>


                        Calendar               Payments Under NUG Agreements
                          Year                         (in millions)
                          ----                         -------------

                          1999                            $388
                          2000                             364
                          2001                             411
                          2002                             480
                          2003                             480
                          2004                             472
                          2005                             462
                          2006                             458

         The NJBPU Final Order provides JCP&L  assurance of full recovery of its
NUG costs  (including  above-market  NUG costs and  certain  buyout  costs).  At
September 30, 2001,  JCP&L had recorded,  on a present value basis, an estimated
liability of $1.5 billion on its Consolidated Balance Sheet for above-market NUG
costs, which was offset by corresponding  regulatory assets. JCP&L is continuing
efforts to reduce the above-market costs of these agreements; however, there can
be no assurance as to the extent to which these efforts will be successful.

         In 1997, the NJBPU approved a Stipulation  of Final  Settlement  which,
among other  things,  provided  for the  recovery of costs  associated  with the
buyout of the Freehold  Cogeneration power purchase agreement (Freehold buyout).
The NJBPU  approved the cost  recovery of up to $135 million on an interim basis
subject to refund.  In March 2001,  the NJBPU issued a Final Order that provided
for the continued  recovery of the Freehold buyout, but this order did not alter
the interim nature of such recovery,  pending a final decision by the NJBPU.  As
of July 2001,  JCP&L had completely  recovered the Freehold buyout costs.  There
can be no assurance as to the outcome of this matter.


                               ACCOUNTING MATTERS
                               ------------------

         In 1999,  JCP&L  discontinued the application of Statement of Financial
Accounting  Standards  No. 71 (FAS 71),  "Accounting  for the Effects of Certain
Types of  Regulation,"  and adopted the  provisions  of  Statement  of Financial
Accounting Standards No. 101 (FAS 101), "Regulated  Enterprises - Accounting for
the  Discontinuation  of  Application  of FASB  Statement  No. 71," and Emerging
Issues Task Force (EITF) Issue 97-4, "Deregulation of the Pricing of Electricity
- Issues Related to the  Application of FAS 71 and FAS 101," with respect to its
electric  generation  operations.  The transmission and distribution  portion of
JCP&L's  operations  continues  to be  subject  to the  provisions  of  FAS  71.
Regulatory  assets,  net as reflected in the September 30, 2001 and December 31,
2000 Consolidated Balance Sheets in accordance with the provisions of FAS 71 and
EITF Issue 97-4 were as follows:

                                                          In Thousands
                                              ---------------------------------
                                              September 30,        December 31,
                                                  2001                2000
                                              -------------        -----------


MTC / basic generation service                  $2,640,277          $2,592,663
Costs recoverable through distribution rates       271,201             298,266
Societal benefits charge                           160,479             206,555
Income taxes recoverable through future
  MTC / distribution rates, net                     95,188              87,588
                                                 ---------           ---------
     Total regulatory assets, net               $3,167,145          $3,185,072
                                                 =========           =========



                                       16


<PAGE>


         As of September 30, 2001,  Regulatory  assets, net shown above included
$551  million  of  deferred   energy-related   costs  plus   interest   (net  of
collections).  This  deferred  balance  includes  the  under-recovered  costs of
supplying  electricity to customers who did not choose an alternate supplier, as
well  as  above-market   NUG  costs,  but  excludes  the  net  generation  asset
divestiture  gains which were used to reduce stranded costs. As discussed in the
Competition and the Changing  Regulatory  Environment  section,  JCP&L wrote off
$300 million of its deferred balance upon  consummation of the  FirstEnergy/GPU,
Inc. merger.


                               NUCLEAR FACILITIES
                               ------------------

Investments:
-----------

         In 1999,  JCP&L and its GPU Energy  affiliates  sold Three Mile  Island
Unit 1 (TMI-1) to AmerGen Energy Company,  LLC (AmerGen) for approximately  $100
million,  and in 2000, JCP&L sold Oyster Creek to AmerGen for  approximately $10
million.  As part of the sales,  AmerGen has  assumed  full  responsibility  for
decommissioning  the  plants,  and  JCP&L  and its GPU  Energy  affiliates  have
transferred  $320  million of TMI-1  decommissioning  trust funds to AmerGen (of
which JCP&L's share was $80 million),  and JCP&L has transferred $430 million of
Oyster Creek  decommissioning  trust funds to AmerGen.  Three Mile Island Unit 2
(TMI-2), which was damaged during a 1979 accident, is jointly owned by JCP&L and
its GPU Energy affiliates, with JCP&L having a 25% ownership percentage. JCP&L's
net  investment  in TMI-2 as of September 30, 2001 and December 31, 2000 was $51
million and $55 million, respectively. JCP&L is collecting revenues for TMI-2 on
a basis which provides for the recovery of its remaining investment in the plant
by 2008.

TMI-2:
------

         As a result of the 1979 TMI-2 accident,  individual  claims for alleged
personal injury (including claims for punitive  damages),  which are material in
amount,  were  asserted  against  JCP&L,  Met-Ed,  Penelec  and GPU,  Inc.  (the
defendants).  Approximately  2,100 of such  claims were filed in the US District
Court for the Middle  District  of  Pennsylvania.  Some of the claims  also seek
recovery for injuries from alleged  emissions of radioactivity  before and after
the accident.

         At  the  time  of  the  TMI-2   accident,   as  provided   for  in  the
Price-Anderson  Act,  JCP&L,  Met-Ed  and  Penelec  had  (a)  primary  financial
protection in the form of insurance policies with groups of insurance  companies
providing  an  aggregate  of $140  million of primary  coverage,  (b)  secondary
financial  protection  in the  form of  private  liability  insurance  under  an
industry  retrospective  rating plan  providing  for up to an  aggregate of $335
million in premium  charges under such plan and (c) an indemnity  agreement with
the Nuclear  Regulatory  Commission (NRC) for up to $85 million,  bringing their
total  financial  protection  up to an  aggregate  of $560  million.  Under  the
secondary  level,  JCP&L,  Met-Ed and  Penelec  are  subject to a  retrospective
premium  charge of up to $5 million per reactor,  or a total of $15 million,  of
which JCP&L's share is $7.5 million.

         In 1995,  the US Court of Appeals for the Third  Circuit ruled that the
Price-Anderson  Act provides coverage under its primary and secondary levels for
punitive as well as compensatory damages, but that punitive damages could not be
recovered  against the  Federal  Government  under the third level of  financial
protection. In so doing, the Court of Appeals referred to the



                                       17


<PAGE>


"finite  fund"  (the $560  million  of  financial  protection  under the  Price-
Anderson Act) to which  plaintiffs  must resort to get  compensatory  as well as
punitive damages.

         The Court of Appeals  also ruled that the  standard of care owed by the
defendants  to a plaintiff  was  determined  by the specific  level of radiation
which was  released  into the  environment,  as measured  at the site  boundary,
rather than as measured at the specific  site where the plaintiff was located at
the time of the accident (as the defendants proposed). The Court of Appeals also
held that each plaintiff still must demonstrate  exposure to radiation  released
during the TMI-2  accident and that such  exposure had resulted in injuries.  In
1996,  the US Supreme Court denied  petitions  filed by the defendants to review
the Court of Appeals' rulings.

         In 1996, the District Court granted a motion for summary judgment filed
by the  defendants,  and  dismissed  the ten initial "test cases" which had been
selected for a test case trial,  as well as all of the  remaining  2,100 pending
claims. The Court ruled that there was no evidence which created a genuine issue
of material fact  warranting  submission of  plaintiffs'  claims to a jury.  The
plaintiffs  appealed the District Court's ruling to the Court of Appeals for the
Third Circuit. In November 1999, the Third Circuit affirmed the District Court's
dismissal of the ten "test cases," but set aside the dismissal of the additional
pending claims, remanding them to the District Court for further proceedings. In
remanding these claims, the Third Circuit held that the District Court had erred
in extending its summary judgment  decision to the other plaintiffs and imposing
on these plaintiffs the District Court's finding that radiation  exposures below
10 rems were too speculative to establish a causal link to cancer.  The Court of
Appeals stated that the non-test case plaintiffs  should be permitted to present
their own  individual  evidence  that  exposure to  radiation  from the accident
caused their cancers.  In June 2000,  the US Supreme Court denied  petitions for
review filed by the defendants and the plaintiffs.

         In September 2000, the defendants  filed a Motion for Summary  Judgment
in the District Court. Meanwhile, the plaintiffs took an interlocutory appeal to
the Third Circuit seeking review of the District Court's  determination that the
remaining  plaintiffs should be allowed to advance causation theories based only
on the  admissible  evidence of record at the close of discovery in the case. On
April 30, 2001, the Third Circuit  affirmed the District  Court's  decision.  In
July 2001,  the  defendants  renewed  their  motion for Summary  Judgment of the
remaining 2,100 claims in the District Court.

         There can be no assurance as to the outcome of this litigation.

         JCP&L  believes  that any  liability  to which it might be  subject  by
reason of the TMI-2 accident will not exceed its financial  protection under the
Price-Anderson Act.


                         NUCLEAR PLANT RETIREMENT COSTS
                         ------------------------------

         Retirement  costs  for  nuclear  plants  include   decommissioning  the
radiological  portions of the plants and the cost of removal of  nonradiological
structures  and  materials.  The  disposal  of  spent  nuclear  fuel is  covered
separately by contracts with the US Department of Energy (DOE).

         In 1995, a  consultant  performed a  site-specific  study of TMI-2 that
considered various decommissioning methods and estimated the cost of


                                       18


<PAGE>


decommissioning  the  radiological  portion  and  the  cost  of  removal  of the
nonradiological  portion  of the plant,  using the prompt  removal/dismantlement
method.  Management has reviewed the methodology  and  assumptions  used in this
study, is in agreement with them, and believes the results are  reasonable.  The
TMI-2  funding  completion  date is 2014,  consistent  with TMI-2  remaining  in
long-term  storage.  JCP&L's share of the estimated  retirement  costs under the
1995  site-specific  study,  assuming  decommissioning of TMI-2 in 2014, is $115
million for radiological  decommissioning and $9.8 million for  non-radiological
removal  costs (net of $3.2 million  spent as of  September  30,  2001)(in  2001
dollars).

         JCP&L and its GPU Energy affiliates are each responsible for retirement
costs in proportion to its respective ownership percentage. The ultimate cost of
retiring  TMI-2  may be  different  from the  cost  estimate  contained  in this
site-specific  study. The NRC has established a  decommissioning  funding target
which,  while not an actual  cost  estimate,  is a reference  level  designed to
assure  that  licensees   demonstrate  adequate  financial   responsibility  for
decommissioning.  The current NRC funding target exceeds the site-specific study
cost estimate by $10 million.

         JCP&L's   estimated   liability  for  future  TMI-2   retirement  costs
(reflected as Three Mile Island Unit 2 future costs on the Consolidated  Balance
Sheet) as of September  30, 2001 was $132  million,  and as of December 31, 2000
was $129  million.  This  liability is based upon the 1995  site-specific  study
estimate  (in  2001 and  2000  dollars,  respectively)  discussed  above  and an
estimate for remaining  incremental  monitored storage costs of $7 million, both
as of September  30, 2001 and December 31, 2000,  as a result of TMI-2  entering
long-term monitored storage in 1993.

         Offsetting the $132 million liability for future TMI-2 retirement costs
as of September 30, 2001 was $20 million which  management  believes is probable
of recovery  from  customers  and  included  in  Regulatory  assets,  net on the
Consolidated  Balance  Sheet,  and $113  million  in trust  funds  for TMI-2 and
included  in  Nuclear  decommissioning  trusts,  at market  on the  Consolidated
Balance Sheet.

         The NJBPU has granted JCP&L revenues for TMI-2  retirement  costs based
on the 1995  site-specific  study estimate.  In addition,  JCP&L is recovering a
portion of its share of TMI-2 incremental monitored storage costs.

         As of  September  30,  2001,  the  accident-related  portion  of  TMI-2
radiological  decommissioning  costs was  estimated to be $20 million for JCP&L,
which is based on the 1995 site-specific study (in 2001 dollars).  In connection
with rate case resolutions,  JCP&L made contributions to an irrevocable external
trust  for its  share of the  accident-related  portion  of the  decommissioning
liability in the amount of $15 million.  This  contribution  was not recoverable
from customers and was expensed in 1990.

         JCP&L intends to seek  recovery for any  increases in TMI-2  retirement
costs, but recognizes that recovery cannot be assured.

         JCP&L and its GPU Energy  affiliates own all of the common stock of the
Saxton  Nuclear  Experimental  Corporation,  which  owns a  small  demonstration
nuclear  reactor.  Decommissioning  of the plant is expected to be  completed in
2002.  JCP&L's estimated  liability for future Saxton  decommissioning  costs at
September  30, 2001 was $7 million,  net of $19 million  spent by JCP&L  through
September 30, 2001.




                                       19


<PAGE>


                                    INSURANCE
                                    ---------

         JCP&L has insurance  (subject to retentions  and  deductibles)  for its
operations and facilities  including coverage for property damage,  liability to
employees  and  third  parties,  and  loss of use  and  occupancy.  There  is no
assurance that JCP&L will maintain all existing insurance  coverages.  Losses or
liabilities  that are not  completely  insured,  unless  allowed to be recovered
through  ratemaking,  could  have a  material  adverse  effect on the  financial
position of JCP&L.

         JCP&L  and  its GPU  Energy  affiliates  have  purchased  property  and
decontamination insurance coverage for TMI-2 totaling $150 million.

         The  Price-Anderson  Act limits an owner's  liability to third  parties
resulting from a nuclear  incident to approximately  $9.5 billion.  Coverage for
the first $200 million of such liability is provided by private  insurance.  The
remaining  coverage,   or  secondary  financial   protection,   is  provided  by
retrospective premiums payable by all nuclear reactor owners.  Although TMI-2 is
exempt from retrospective premium assessments, the plant is still covered by the
provisions  of the  Price-Anderson  Act. In  addition,  JCP&L and its GPU Energy
affiliates are subject to other  retrospective  premium  assessments  related to
policies applicable to TMI-1 prior to its sale to AmerGen.


                              ENVIRONMENTAL MATTERS
                              ---------------------

         As a result of existing and proposed  legislation and regulations,  and
ongoing legal proceedings dealing with environmental matters including,  but not
limited to, air and water quality,  global warming,  electromagnetic fields, and
storage and disposal of hazardous and/or toxic wastes,  JCP&L may be required to
incur  substantial  additional  costs to  construct  new  facilities;  modify or
replace existing and proposed equipment; or remediate,  decommission or clean up
waste  disposal  and other sites  currently  or formerly  used by it,  including
formerly  owned  manufactured  gas  plants  (MGP),  coal mine  refuse  piles and
generation facilities.  In addition,  federal and state laws provide for payment
by responsible parties for damage to natural resources.

         At  September  30,  2001,   JCP&L  had  liabilities   recorded  on  its
Consolidated  Balance Sheet for  environmental  remediation  of $52 million,  as
discussed below.

         JCP&L has been  formally  notified by the US  Environmental  Protection
Agency  (EPA)  and  state  environmental   authorities  that  it  is  among  the
potentially  responsible  parties (PRPs) who may be jointly and severally liable
to pay for the costs associated with the  investigation and remediation at eight
hazardous and/or toxic waste sites.

         In addition, JCP&L has been requested to participate in the remediation
or supply information to the EPA and state environmental  authorities on several
other sites for which it has not been formally named as a PRP,  although the EPA
and/or state authorities may nevertheless consider it a PRP. JCP&L has also been
named in  lawsuits  requesting  damages  (which  are  material  in  amount)  for
hazardous and/or toxic substances allegedly released into the environment. As of
September 30, 2001, a liability of approximately  $0.8 million had been recorded
for PRP sites where it is probable  that a loss has been incurred and the amount
could be reasonably estimated.




                                       20


<PAGE>


         The ultimate cost of remediation of all these and other hazardous waste
sites will depend upon changing  circumstances as site investigations  continue,
including  (a) the  existing  technology  required  for  site  cleanup,  (b) the
remedial  action  plan chosen and (c) the extent of site  contamination  and the
portion attributed to JCP&L.

         JCP&L has entered into  agreements  with the New Jersey  Department  of
Environmental  Protection for the  investigation  and remediation of 17 formerly
owned MGP sites.  JCP&L has also entered into  various  cost-sharing  agreements
with other utilities for most of the sites. As of September 30, 2001,  JCP&L has
spent  approximately  $48 million in connection with the cleanup of these sites.
In addition,  JCP&L has recorded an estimated  environmental  liability of $49.1
million  relating to expected  future costs of these sites (as well as two other
properties).  This estimated liability is based upon ongoing site investigations
and remediation  efforts,  which generally involve capping the sites and pumping
and  treatment  of  ground  water.  The cost to clean  up these  sites  could be
materially  in excess of the $49.1  million  due to  significant  uncertainties,
including changes in acceptable remediation methods and technologies.

         The NJBPU has granted JCP&L recovery of MGP  remediation  costs through
the Societal  Benefits  Charge.  As of September 30, 2001, JCP&L had recorded on
its  Consolidated  Balance Sheet a regulatory  asset of $41.3 million.  In 1994,
JCP&L filed a complaint with the Superior Court of New Jersey against several of
its  insurance  carriers,  relating to these MGP sites.  JCP&L has settled  with
those carriers and the recoveries from those  settlements will be used to reduce
the amounts collected from ratepayers to remediate these sites.


                       OTHER COMMITMENTS AND CONTINGENCIES
                       -----------------------------------

Class Action Litigation:
-----------------------

         In July 1999, the Mid-Atlantic  states  experienced a severe heat storm
which  resulted in power  outages  throughout  the service  territories  of many
electric utilities,  including the territory of JCP&L.  Following these outages,
the NJBPU  initiated  an  investigation  into the causes of the  outages and the
reliability of the transmission and distribution  systems of all four New Jersey
electric  utilities.  This investigation was essentially  completed in May 2000,
with the  issuance  of Phase I and Phase II reports  and orders  from the NJBPU.
Both the Phase I and Phase II reports and orders  contain,  among other  things,
directions for JCP&L to undertake  certain  actions and report back to the NJBPU
on the results.  Additionally,  the NJBPU Phase II order concluded that there is
not a prima facie case  demonstrating  that,  overall,  JCP&L  provided  unsafe,
inadequate or improper service to its customers.

         Two class action  lawsuits were commenced in New Jersey  Superior Court
in  July  1999.  These  suits  were  subsequently  consolidated  into  a  single
proceeding,  and they seek  compensatory  and punitive  damages arising from the
service interruptions of July 1999 in the JCP&L territory. JCP&L, GPU, Inc., GPU
Service,  Inc. and GPU Generation,  Inc. (the  defendants  named in these suits)
moved to dismiss or stay the  litigation  pending  the  NJBPU's  exercise of its
primary  jurisdiction to investigate the causes of the outages.  The trial court
denied that motion,  and also  certified a plaintiff  class  consisting of JCP&L
customers  and  their  "dependents,   tenants,   employees  and  other  intended
beneficiaries  of  customers  who  suffered  damages as a result" of the service
interruptions.


                                       21


<PAGE>


         In  January  2000,  the  New  Jersey  Appellate  Division  granted  the
defendants'  motion  for  leave to take an  interlocutory  appeal  of the  trial
court's  decision on the issue of primary  jurisdiction.  On June 14, 2000,  the
Appellate  Division  affirmed  the trial court but  determined  that the NJBPU's
findings   in  the   exercise   of  its   "exclusive   jurisdiction"   could  be
"probative...but  not  determinative"  of at  least  some of the  issues  in the
litigation,  and leaving it to the trial court to "decide in the first  instance
just what weight and validity to give the [NJBPU's] findings and conclusions."

         In response to the defendants'  demand for a statement of damages,  the
plaintiffs  have  stated  that they are  seeking  $700  million,  subject to the
results of pretrial discovery.  JCP&L has notified its insurance carriers of the
plaintiffs'  allegations.  The primary  insurance carrier has stated that, while
the substance of the plaintiffs'  allegations is covered under the policy, it is
reserving its rights  concerning  coverage as circumstances  develop.  JCP&L has
received indemnification payments from its primary insurance carrier for certain
expenses incurred by JCP&L relative to this action.

         In May 2001, the court denied without prejudice the defendants'  motion
seeking  decertification of the class.  Discovery continues in the class action,
but no trial date has been set. The judge has set a schedule under which factual
legal  discovery  would  conclude in March  2002,  and expert  reports  would be
exchanged  by June  2002.  In  October  2001,  the court  held  argument  on the
plaintiffs'  motion for partial summary  judgment,  which contends that JCP&L is
bound to several findings of the NJBPU investigation.  The plaintiffs' motion is
pending. There can be no assurance as to the outcome of these matters.

Other:
-----

         JCP&L and Public Service Electric & Gas Company (PSE&G) each hold a 50%
undivided  ownership  interest in Yards Creek  Pumped  Storage  Facility  (Yards
Creek).  In  December  1998,  JCP&L  filed a petition  with the NJBPU  seeking a
declaratory  order  that  PSE&G's  right of first  refusal to  purchase  JCP&L's
ownership  interest at its current book value under a 1964 agreement between the
companies is void and  unenforceable.  Management  believes that the fair market
value of JCP&L's ownership interest in Yards Creek is substantially in excess of
its September  30, 2001 book value of $21 million.  There can be no assurance as
to the outcome of this matter.

         In accordance  with the Nuclear Waste Policy Act of 1982 (NWPA),  JCP&L
has  entered  into  contracts  with,  and paid fees to,  the DOE for the  future
disposal of spent nuclear fuel in a repository or interim storage  facility.  In
1996, the DOE notified JCP&L and other Standard  Contract  holders that it would
be unable to begin  acceptance of spent nuclear fuel for disposal by January 31,
1998, as mandated by the NWPA. The DOE requested  recommendations  from contract
holders  for  handling  the  delay.  In June  1997,  a  consortium  of  electric
utilities,  including  GPU  Nuclear,  Inc.  (GPUN),  the former  operator of the
nuclear plants previously owned by JCP&L and its GPU Energy affiliates,  filed a
license  application  with  the NRC  seeking  permission  to  build  an  interim
above-ground storage facility for spent nuclear fuel in Utah.

         At September  30, 2001,  JCP&L had recorded a liability of $162 million
owed to the Nuclear Waste Fund, related to spent nuclear fuel generated prior to
the  sales of TMI-1  and  Oyster  Creek to  AmerGen.  AmerGen  has  assumed  all
liability for disposal costs related to spent nuclear fuel  generated  following
its purchase of the plants.

                                       22


<PAGE>


         On July 26, 2000, GPUN filed suit in the United States Court of Federal
Claims  seeking to recover  damages as a result of the DOE's failure to commence
disposal of GPUN's spent  nuclear  fuel by January 31, 1998,  as required by the
terms of the  Standard  Contracts  between  GPUN and DOE.  The  complaint  seeks
damages from the  Government in an amount to be  determined  at trial.  GPUN has
alleged that it is entitled to damages  attributable to operations at both TMI-1
and Oyster Creek.  In an August 20, 2001 pleading,  the Government  acknowledged
that the  DOE's  inability  to begin  providing  the  services  required  by the
Standard  Contract  by January  31,  1998  constituted  a partial  breach of the
Standard  Contract.  In the same pleading,  the Government  stated that GPUN may
lack  standing to maintain its suit  because it assigned its Standard  Contracts
and title to its spent nuclear fuel to the buyer of TMI-1 and Oyster  Creek.  By
order dated  September 24, 2001, the Court stated that it would hold in abeyance
any final determination on standing until the completion of discovery,  which is
currently underway. There can be no assurance as to the outcome of this matter.

         During the normal course of the operation of its business,  in addition
to the  matters  described  above,  JCP&L  is,  from time to time,  involved  in
disputes,  claims and, in some cases,  as a  defendant  in  litigation  in which
compensatory  and  punitive  damages  are  sought  by  the  public,   customers,
contractors,  vendors and other  suppliers  of  equipment  and  services  and by
employees  alleging  unlawful  employment  practices.  While management does not
expect that the outcome of these matters will have a material  effect on JCP&L's
financial position or results of operations, there can be no assurance that this
will continue to be the case.



2.  NEW ACCOUNTING STANDARDS

         JCP&L's use of derivative instruments is intended to manage the risk of
price  fluctuations.  JCP&L does not hold or issue  derivative  instruments  for
trading purposes.

         Effective  January  1,  2001,  JCP&L  adopted  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by FAS 137,  "Accounting for Derivative  Instruments and
Hedging  Activities - Deferral of the Effective  Date of FASB Statement No. 133"
and FAS 138, "Accounting for Certain Derivative  Instruments and Certain Hedging
Activities - An Amendment of FASB  Statement No. 133"  (collectively,  FAS 133).
FAS  133   establishes   accounting  and  reporting   standards  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities.

         In general,  FAS 133 requires that companies  recognize all derivatives
as either assets or  liabilities  on the balance  sheet,  measured at their fair
value.  Derivatives not designated as hedges must be adjusted to fair value with
an offset to income.  If the  derivative is designated as a hedge,  depending on
the nature of the hedge,  changes  in fair  value of the  derivative  are either
offset  against  the  change  in fair  value of the asset or  liability  through
income, or recognized in accumulated other comprehensive income until the hedged
item is  recognized  in  income.  To the extent  the hedge is  determined  to be
ineffective,   that  portion  of  the  derivative's  change  in  fair  value  is
immediately  recognized  in income.  FAS 133 provides an  exemption  for certain
contracts  that  qualify as "normal  purchases  and  sales." To qualify for this
exclusion,  certain  criteria,  including  that  it must be  probable  that  the
contract will result in physical delivery, must be met.



                                       23


<PAGE>


         The adoption of FAS 133 on January 1, 2001 resulted in the  recognition
of derivative assets on the Consolidated Balance Sheet at January 1, 2001 in the
amount  of $21.8  million  with  offsetting  amounts,  net of tax,  recorded  in
Accumulated  other  comprehensive  income,  of $5.1  million  and in  Regulatory
assets, net, of $13 million.

         JCP&L uses New York Mercantile  Exchange  futures and  Over-the-Counter
forward  contracts  and  options  on  forward  contracts  to manage  the risk of
fluctuations in the market price of electricity.  JCP&L also manages the natural
gas  requirements  of certain NUG  facilities  that  generate and sell energy to
JCP&L under long-term contracts. The majority of the forward commodity contracts
are  considered  "normal  purchases  and  sales,"  as  defined  by FAS 133,  and
therefore are excluded from the scope of FAS 133.

         The  energy  options,  forward  contracts  and  gas  futures  contracts
determined to be derivatives under FAS 133 are accounted for as cash flow hedges
and expire on various dates through June 2002.  These  contracts are recorded at
fair value on JCP&L's  September  30,  2001  Consolidated  Balance  Sheet in the
amount of $1  million.  The offset of the change in fair  value is  recorded  in
Accumulated other comprehensive income, net of tax, and subsequently  recognized
as a component of Power purchased and interchanged on the Consolidated Statement
of Income when the  underlying  power  being  hedged is  purchased.  Of the $1.6
million recorded in Accumulated other  comprehensive  income as of September 30,
2001,  JCP&L  expects  a  pre-tax  gain  of  approximately  $2.7  million  to be
recognized in income within the next twelve months.  The ineffective  portion of
these  commodity  contracts was immaterial  for the quarter ended  September 30,
2001.

         When JCP&L and its GPU Energy  affiliates  sold TMI-1 to  AmerGen,  the
parties  entered into an agreement which calls for an adjustment to the purchase
price of TMI-1 in the event of future  energy  price  increases.  If the  future
price of energy exceeds the strike price during the contract year as defined per
the agreement,  JCP&L and its GPU Energy  affiliates will receive  payments from
AmerGen,  subject to a market price cap. However,  if the future price of energy
is less than the  strike  price  during a  contract  year,  a credit is  applied
against  future  contract  payments that would be received  from  AmerGen.  This
agreement  qualifies  as a  derivative  as defined by FAS 133,  and its value is
recorded on the  Consolidated  Balance  Sheet based on the present  value of the
contract's  projected future cash flows. As of September 30, 2001, JCP&L's share
of this  amount  was  $13.7  million  and was  included  in Other  Property  and
Investments  - Other,  net on the  Consolidated  Balance  Sheet.  An  offsetting
regulatory  liability was recorded against Regulatory assets, net,  representing
the obligation to treat the retail portion of payments received as stranded cost
revenues when received.

         In June 2001, the Financial  Accounting Standards Board (FASB) approved
Statement  of  Financial  Accounting  Standards  No.  141 (FAS  141),  "Business
Combinations,"  and  Statement of Financial  Accounting  Standards  No. 142 (FAS
142), "Goodwill and Other Intangible Assets".  These new standards are effective
beginning  July 1, 2001.  FAS 141 requires all business  combinations  initiated
after June 30, 2001, to be accounted for using  purchase  accounting.  Under FAS
142, amortization of existing goodwill will cease on January 1, 2002 and instead
goodwill  will be  tested  for  impairment  at least on an annual  basis.  As of
September  30,  2001,  JCP&L did not have any  goodwill  on its  balance  sheet,
however,  as a result of the merger of  FirstEnergy  and GPU, Inc.  which became
effective  on November  7, 2001,  there will be  goodwill  associated  with this
merger  applied to JCP&L.  The amount of goodwill to be applied to JCP&L has not
yet been determined.



                                       24


<PAGE>


         In July  2001,  the  FASB  issued  Statement  of  Financial  Accounting
Standards No. 143 (FAS 143), "Accounting for Asset Retirement  Obligations." FAS
143 provides the accounting  requirements for retirement  obligations associated
with tangible long-lived assets. FAS 143 is effective for fiscal years beginning
after  June 15,  2002,  with  early  adoption  encouraged.  JCP&L  is  currently
assessing  the  new  standard  and  has not yet  determined  the  impact  on its
financial statements.

         In September  2001, the FASB issued  Statement of Financial  Accounting
Standards  No. 144 (FAS 144),  "Accounting  for the  Impairment  or  Disposal of
Long-Lived  Assets."  FAS  144  supersedes  Statement  of  Financial  Accounting
Standards No. 121,  "Accounting for the Impairment of Long-Lived  Assets and for
Long-Lived  Assets  to Be  Disposed  Of."  The  Statement  also  supersedes  the
accounting and reporting  provisions of Accounting  Principles Board Opinion No.
30,  "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business and  Extraordinary,  Unusual and Infrequently  Occurring
Events and  Transactions." FAS 144 is effective for fiscal years beginning after
June 15, 2001, with early adoption encouraged.  JCP&L is currently assessing the
new standard and has not yet determined the impact on its financial statements.



3.  COMPREHENSIVE INCOME

      For the nine  months  ended  September  30,  2001 and 2000,  comprehensive
income is summarized below.

                                                             In Thousands
                                                        ----------------------
                                                             Nine months
                                                          Ended September 30,
                                                        ----------------------
                                                           2001          2000
                                                           ----          ----

Net income                                              $184,501      $182,797
                                                         -------       -------
Other comprehensive income, net of tax:
     Cumulative effect of change in accounting
       for derivative instruments at 1/1/01                5,180          -
     Net unrealized loss on derivative instruments        (4,250)         -
                                                         -------       -------
       Total other comprehensive income                      930          -
                                                         -------       -------
Comprehensive income                                    $185,431      $182,797
                                                         =======       =======










                                       25


<PAGE>



                                     PART II

ITEM 1 -    LEGAL PROCEEDINGS
            -----------------
            Information   concerning   the  current   status  of  certain  legal
            proceedings  instituted  against  JCP&L  discussed in Part I of this
            report  in  the  Notes  to  Consolidated   Financial  Statements  is
            incorporated herein by reference and made a part hereof.

ITEM 6 -    EXHIBITS AND REPORTS ON FORM 8-K
            --------------------------------
           (a) Exhibits

               (12)  Statements Showing Computation of Ratio of Earnings to
                     Fixed Charges and Ratio of Earnings to Combined Fixed
                     Charges and Preferred Stock Dividends Based on SEC
                     Regulation S-K, Item 503

           (b) Reports on Form 8-K

               Dated August 28, 2001, under Item 5 (Other Events)

               Dated September 4, 2001, under Item 5 (Other Events)

               Dated  September  28,  2001,  under Item 5 (Other  Events)

               Dated October 30, 2001, under Item 5 (Other Events)

               Dated  November  9, 2001,  under  Item 1  (Changes  in Control of
               Registrant) and under Item 4 (Changes in Registrant's  Certifying
               Accountant)




                                       26


<PAGE>


                                    Signature
                                    ---------

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



November 14, 2001

                                   JERSEY CENTRAL POWER & LIGHT COMPANY
                                   ------------------------------------
                                               Registrant






                                        /s/ Harvey L. Wagner
                                   ------------------------------------
                                            Harvey L. Wagner
                                      Vice President and Controller
                                     (Principal Accounting Officer)




                                       27