FORM 10-Q/A

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   (Mark One)
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002

                                       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)
                 c/o FirstEnergy Corp.
                 76 South Main Street
                 Akron, OH  44308
                 Telephone (800)736-3402

1-446            METROPOLITAN EDISON COMPANY                    23-0870160
                 (A Pennsylvania Corporation)
                 c/o FirstEnergy Corp.
                 76 South Main Street
                 Akron, OH  44308
                 Telephone (800)736-3402

1-3522           PENNSYLVANIA ELECTRIC COMPANY                  25-0718085
                 (A Pennsylvania Corporation)
                 c/o FirstEnergy Corp.
                 76 South Main Street
                 Akron, OH  44308
                 Telephone (800)736-3402


<PAGE>


                                EXPLANATORY NOTE


           Each of Jersey Central Power & Light Company ("JCP&L"), Metropolitan
Edison Company ("Met-Ed") and Pennsylvania Electric Company ("Penelec") is
filing this Amendment No. 1 to its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2002 solely to correct the review report letter of
PricewaterhouseCoopers LLP ("PwC ") accompanying its financial statements
contained in the original version of such report as filed with the Securities
and Exchange Commission on May 15, 2002.

           To give effect to the above correction, each of JCP&L, Met-Ed and
Penelec is including in this filing only the following portions of Part I of
Item 1 of its report as originally filed:

    (i)  the Notes to Financial Statements (without changes) appearing on pages
         1 through 8; and

   (ii)  its financial statements (without changes), the corrected letter of PwC
         and Management's Discussion and Analysis of Results of Operations and
         Financial Condition (without changes), appearing on pages 55 through 63
         for JCP&L, pages 64 through 72 for MetEd and pages 73 through 81 for
         Penelec.

           Reference is made to such report as originally filed for the complete
text of all other portions of such report.



<PAGE>


                                TABLE OF CONTENTS


                                                                          Pages

Part I.    Financial Information

           Notes to Financial Statements..............................     1-8


      Jersey Central Power & Light Company

           Consolidated Statements of Income..........................      55
           Consolidated Balance Sheets................................    56-57
           Consolidated Statements of Cash Flows......................      58
           Report of Independent Public Accountants...................      59
           Management's Discussion and Analysis of Results
             of Operations and Financial Condition....................    60-63

      Metropolitan Edison Company
           Consolidated Statements of Income..........................      64
           Consolidated Balance Sheets................................    65-66
           Consolidated Statements of Cash Flows......................      67
           Report of Independent Public Accountants...................      68
           Management's Discussion and Analysis of Results
             of Operations and Financial Condition....................    69-72

      Pennsylvania Electric Company

           Consolidated Statements of Income..........................      73
           Consolidated Balance Sheets................................    74-75
           Consolidated Statements of Cash Flows......................      76
           Report of Independent Public Accountants...................      77
           Management's Discussion and Analysis of Results
             of Operations and Financial Condition....................    78-81



<PAGE>




PART I.  FINANCIAL INFORMATION
------------------------------

                       FIRSTENERGY CORP. AND SUBSIDIARIES
                      OHIO EDISON COMPANY AND SUBSIDIARIES
          THE CLEVELAND ELECTRIC ILLUMINATING COMPANY AND SUBSIDIARIES
                    THE TOLEDO EDISON COMPANY AND SUBSIDIARY
                           PENNSYLVANIA POWER COMPANY
              JERSEY CENTRAL POWER & LIGHT COMPANY AND SUBSIDIARIES
                  METROPOLITAN EDISON COMPANY AND SUBSIDIARIES
                 PENNSYLVANIA ELECTRIC COMPANY AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1 -  FINANCIAL STATEMENTS:

          The  principal  business of  FirstEnergy  Corp.  (FirstEnergy)  is the
holding,  directly or indirectly,  of all of the outstanding common stock of its
eight principal  electric utility  operating  subsidiaries,  Ohio Edison Company
(OE),  The Cleveland  Electric  Illuminating  Company  (CEI),  The Toledo Edison
Company (TE),  Pennsylvania Power Company (Penn), American Transmission Systems,
Inc. (ATSI),  Jersey Central Power & Light Company (JCP&L),  Metropolitan Edison
Company (Met-Ed) and  Pennsylvania  Electric  Company  (Penelec).  These utility
subsidiaries  are referred to throughout as "Companies."  Penn is a wholly owned
subsidiary of OE. FirstEnergy's results include the results of JCP&L, Met-Ed and
Penelec from the November 7, 2001 merger date with GPU,  Inc., the former parent
company of JCP&L,  Met-Ed and  Penelec.  The  merger  was  accounted  for by the
purchase  method of accounting and the applicable  effects were reflected on the
financial  statements  of JCP&L,  Met-Ed  and  Penelec  as of the  merger  date.
Accordingly,  the  post-merger  financial  statements  reflect  a new  basis  of
accounting,  and pre-merger  period and post-merger  period financial results of
JCP&L,  Met-Ed and Penelec  (separated  by a heavy  black  line) are  presented.
FirstEnergy's consolidated financial statements also include its other principal
subsidiaries: FirstEnergy Solutions Corp. (FES); FirstEnergy Facilities Services
Group,  LLC  (FEFSG);   MYR  Group,  Inc.  (MYR);   MARBEL  Energy  Corporation;
FirstEnergy  Nuclear  Operating Company (FENOC);  GPU Capital,  Inc.; GPU Power,
Inc.;  FirstEnergy  Service Company (FECO);  and GPU Service,  Inc. (GPUS).  FES
provides  energy-related  products and  services  and,  through its  FirstEnergy
Generation Corp. (FGCO) subsidiary, operates FirstEnergy's nonnuclear generation
business. FENOC operates the Companies' nuclear generating facilities.  FEFSG is
the parent company of several heating,  ventilating, air conditioning and energy
management companies,  and MYR is a utility infrastructure  construction service
company.  MARBEL is a fully integrated natural gas company. GPU Capital owns and
operates electric  distribution  systems in foreign countries and GPU Power owns
and operates generation  facilities in foreign countries.  FECO and GPUS provide
legal,  financial and other corporate support services to affiliated FirstEnergy
companies.

          The condensed unaudited  financial  statements of FirstEnergy and each
of the Companies  reflect all normal recurring  adjustments that, in the opinion
of  management,  are necessary to fairly  present  results of operations for the
interim  periods.  These  statements  should  be read in  conjunction  with  the
financial  statements and notes  included in the combined  Annual Report on Form
10-K for the year ended  December 31, 2001 for  FirstEnergy  and the  Companies.
Significant intercompany  transactions have been eliminated.  The preparation of
financial statements in conformity with accounting principles generally accepted
in the  United  States  requires  management  to  make  periodic  estimates  and
assumptions  that affect the reported amounts of assets,  liabilities,  revenues
and expenses and disclosure of contingent assets and liabilities. Actual results
could differ from those  estimates.  The reported  results of operations are not
indicative of results of operations  for any future  period.  Certain prior year
amounts have been reclassified to conform with the current year presentation.

         Preferred Securities-

          The sole  assets of the OE and the CEI  subsidiary  trusts that is the
obligor on their respective  preferred  securities included in FirstEnergy's and
OE's and CEI's capitalization are $123,711,350 and $103,093,000 principal amount
of 9% Junior Subordinated  Debentures of OE due December 31, 2025 and of CEI due
December 31, 2006, respectively.

          Met-Ed and Penelec  have each  formed  statutory  business  trusts for
substantially  similar  transactions  as OE and  CEI for  the  issuance  of $100
million  each of  preferred  securities  due  2039.  However,  ownership  of the
respective  Met-Ed and Penelec trusts is through separate  wholly-owned  limited
partnerships,  of which a  wholly-owned  subsidiary  of


                                       1
<PAGE>



each company is the sole general partner. In these transactions, the sole assets
and  sources of  revenues  of each  trust are the  preferred  securities  of the
applicable  limited  partnership,  whose sole  assets are in the 7.35% and 7.34%
subordinated  debentures  (aggregate principal amount of $103.1 million each) of
Met-Ed and Penelec,  respectively.  In each case, the applicable  parent company
has effectively  provided a full and unconditional  guarantee of its obligations
under its trust's preferred securities.

       Derivative Accounting-

          On January 1, 2001,  FirstEnergy  adopted  SFAS 133,  "Accounting  for
Derivative  Instruments  and  Hedging  Activities",  as  amended  by  SFAS  138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities --
an amendment of FASB  Statement No. 133".  The  cumulative  effect to January 1,
2001 was a charge of $8.5 million (net of $5.8 million of income  taxes) or $.03
per share of common stock.

          FirstEnergy  is  exposed  to  financial   risks   resulting  from  the
fluctuation  of interest  rates and  commodity  prices,  including  electricity,
natural gas and coal.  To manage the  volatility  relating  to these  exposures,
FirstEnergy  uses  a  variety  of  non-derivative  and  derivative  instruments,
including  forward  contracts,   options,   futures  contracts  and  swaps.  The
derivatives are used principally for hedging  purposes,  and to a lesser extent,
for  trading  purposes.   FirstEnergy's  Risk  Policy  Committee,  comprised  of
executive  officers,  exercises an independent risk oversight function to ensure
compliance with corporate risk  management  policies and prudent risk management
practices.

          FirstEnergy uses derivatives to hedge the risk of price, interest rate
and  foreign  currency  fluctuations.   FirstEnergy's  primary  ongoing  hedging
activity involves cash flow hedges of electricity and natural gas purchases. The
maximum  periods over which the  variability of electricity and natural gas cash
flows are hedged are two and three  years,  respectively.  Gains and losses from
hedges of commodity  price risks are included in net income when the  underlying
hedged  commodities  are  delivered.  The  current net  deferred  loss of $133.6
million included in Accumulated Other  Comprehensive Loss (AOCL) as of March 31,
2002,  for  derivative  hedging  activity,  as compared to the December 31, 2001
balance  of $169.4  million  in AOCL,  resulted  from a $18.9  million  increase
related to current  hedging  activity  and a $16.9  million  increase due to net
hedge losses included in earnings during the quarter. Approximately $7.1 million
(after tax) of the current net deferred loss on derivative  instruments  in AOCL
is expected to be  reclassified  to  earnings  during the next twelve  months as
hedged  transactions  occur.   However,  the  fair  value  of  these  derivative
instruments will fluctuate from period to period based on various market factors
and will  generally  be more than  offset by the  margin  on  related  sales and
revenues.

          FirstEnergy  engages  in the  trading  of  commodity  derivatives  and
periodically  experiences  net open  positions.  FirstEnergy's  risk  management
policies limit the exposure to market risk from open positions and require daily
reporting to management of potential financial exposures.

2 -  COMMITMENTS, GUARANTEES AND CONTINGENCIES:

          Capital Expenditures-

          FirstEnergy's  current forecast reflects expenditures of approximately
$3.2 billion (OE-$195  million,  CEI-$256  million,  TE-$129  million,  Penn-$45
million,   JCP&L-$572  million,   Met-Ed-$336  million,   Penelec-$387  million,
ATSI-$118  million,  FES-$814 million and other  subsidiaries-$309  million) for
property additions and improvements from 2002-2006,  of which approximately $863
million (OE-$39  million,  CEI-$57  million,  TE-$27 million,  Penn-$9  million,
JCP&L-$144 million,  Met-Ed-$79 million,  Penelec-$84 million, ATSI-$20 million,
FES-$261  million and other  subsidiaries-$143  million) is  applicable to 2002.
Investments  for  additional  nuclear  fuel  during  the  2002-2006  period  are
estimated to be approximately  $502 million (OE-$136 million,  CEI-$166 million,
TE-$113  million  and  Penn-$87  million),  of which  approximately  $35 million
(OE-$10 million,  CEI-$12 million, TE-$8 million and Penn-$5 million) applies to
2002.

          Environmental Matters-

          Various federal,  state and local  authorities  regulate the Companies
with  regard  to  air  and  water  quality  and  other  environmental   matters.
FirstEnergy   estimates   additional  capital   expenditures  for  environmental
compliance of approximately $235 million,  which is included in the construction
forecast provided under "Capital Expenditures" for 2002 through 2006.

          The Companies are required to meet federally  approved  sulfur dioxide
(SO2) regulations.  Violations of such regulations can result in shutdown of the
generating unit involved and/or civil or criminal penalties of up to $27,500 for
each day the unit is in violation. The Environmental Protection Agency (EPA) has
an  interim  enforcement  policy  for SO2  regulations  in Ohio that  allows for
compliance based on a 30-day averaging period. The Companies cannot predict what
action the EPA may take in the future with  respect to the  interim  enforcement
policy.

                                       2

<PAGE>


          The Companies  believe they are in compliance with the current SO2 and
nitrogen oxides (NOx) reduction  requirements under the Clean Air Act Amendments
of 1990.  SO2  reductions  are being  achieved  by  burning  lower-sulfur  fuel,
generating more electricity from  lower-emitting  plants,  and/or using emission
allowances.  NOx reductions are being achieved through  combustion  controls and
the generation of more electricity at lower-emitting  plants. In September 1998,
the EPA finalized  regulations  requiring  additional  NOx  reductions  from the
Companies'  Ohio and  Pennsylvania  facilities.  The  EPA's NOx  Transport  Rule
imposes  uniform  reductions of NOx emissions (an  approximate  85% reduction in
utility plant NOx emissions from projected  2007  emissions)  across a region of
nineteen  states and the District of Columbia,  including  New Jersey,  Ohio and
Pennsylvania,  based on a conclusion  that such NOx emissions  are  contributing
significantly   to  ozone   pollution  in  the  eastern  United  States.   State
Implementation Plans (SIP) must comply by May 31, 2004 with individual state NOx
budgets  established  by the EPA.  Pennsylvania  submitted  a SIP that  requires
compliance with the NOx budgets at the Companies' Pennsylvania facilities by May
1, 2003 and Ohio submitted a "draft" SIP that requires  compliance  with the NOx
budgets at the Companies' Ohio facilities by May 31, 2004.

          In July 1997, the EPA promulgated  changes in the National Ambient Air
Quality  Standard  (NAAQS)  for ozone  emissions  and  proposed  a new NAAQS for
previously  unregulated  ultra-fine  particulate  matter.  In May 1999, the U.S.
Court of Appeals for the D.C. Circuit found  constitutional and other defects in
the new NAAQS rules.  In February  2001,  the U.S.  Supreme Court upheld the new
NAAQS rules  regulating  ultra-fine  particulates  but found  defects in the new
NAAQS rules for ozone and  decided  that the EPA must revise  those  rules.  The
future cost of compliance  with these  regulations  may be substantial  and will
depend if and how they are  ultimately  implemented  by the  states in which the
Companies operate affected facilities.

          In 1999 and 2000,  the EPA  issued  Notices  of  Violation  (NOV) or a
Compliance Order to nine utilities covering 44 power plants, including the W. H.
Sammis  Plant.  In addition,  the U.S.  Department  of Justice filed eight civil
complaints against various investor-owned utilities,  which included a complaint
against OE and Penn in the U.S.  District  Court for the  Southern  District  of
Ohio.  The NOV and  complaint  allege  violations  of the Clean Air Act based on
operation and maintenance of the Sammis Plant dating back to 1984. The complaint
requests  permanent  injunctive  relief to  require  the  installation  of "best
available  control  technology"  and civil penalties of up to $27,500 per day of
violation.  Although  unable  to  predict  the  outcome  of  these  proceedings,
FirstEnergy  believes the Sammis Plant is in full  compliance with the Clean Air
Act and the NOV and complaint are without merit.  Penalties  could be imposed if
the Sammis Plant continues to operate without  correcting the alleged violations
and a court  determines  that  the  allegations  are  valid.  The  Sammis  Plant
continues to operate while these proceedings are pending.

          In  December  2000,  the EPA  announced  it  would  proceed  with  the
development of  regulations  regarding  hazardous air  pollutants  from electric
power  plants.  The EPA  identified  mercury as the  hazardous  air pollutant of
greatest  concern.  The EPA  established  a schedule to propose  regulations  by
December 2003 and issue final  regulations  by December 2004. The future cost of
compliance with these regulations may be substantial.

          As a result of the Resource  Conservation and Recovery Act of 1976, as
amended,  and the  Toxic  Substances  Control  Act of 1976,  federal  and  state
hazardous  waste   regulations  have  been  promulgated.   Certain   fossil-fuel
combustion waste products,  such as coal ash, were exempted from hazardous waste
disposal  requirements  pending  the  EPA's  evaluation  of the need for  future
regulation.   The  EPA  has  issued  its  final  regulatory  determination  that
regulation of coal ash as a hazardous waste is  unnecessary.  In April 2000, the
EPA announced that it will develop  national  standards  regulating  disposal of
coal ash under its authority to regulate nonhazardous waste.

          Various   environmental   liabilities  have  been  recognized  on  the
Consolidated Balance Sheet as of March 31, 2002, based on estimates of the total
costs of cleanup, the Companies' proportionate responsibility for such costs and
the financial ability of other nonaffiliated entities to pay. The Companies have
been named as "potentially  responsible  parties" (PRPs) at waste disposal sites
which may  require  cleanup  under  the  Comprehensive  Environmental  Response,
Compensation  and  Liability Act of 1980.  Allegations  of disposal of hazardous
substances   at  historical   sites  and  the   liability   involved  are  often
unsubstantiated and subject to dispute. Federal law provides that all PRPs for a
particular site be held liable on a joint and several basis. In addition,  JCP&L
has accrued liabilities for environmental remediation of former manufactured gas
plants  in New  Jersey;  those  costs  are being  recovered  by JCP&L  through a
non-bypassable  societal  benefits  charge.  The  Companies  have total  accrued
liabilities  aggregating   approximately  $58.2  million  (JCP&L-$50.3  million,
CEI-$2.9 million, TE-$0.2 million, Met-Ed-$0.2 million, Penelec-$0.9 million and
other-$3.7  million)  as  of  March  31,  2002.  FirstEnergy  does  not  believe
environmental  remediation  costs  will have a  material  adverse  effect on its
financial condition, cash flows or results of operations.


                                       3

<PAGE>


3 -  PENDING DIVESTITURES:

          FirstEnergy identified certain former GPU international operations for
divestiture within twelve months of the merger date. These operations constitute
individual "lines of business" as defined in Accounting Principles Board Opinion
(APB) 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," with physically and operationally  separable
activities.  Application  of Emerging  Issues Task Force (EITF) Issue No. 87-11,
"Allocation  of Purchase  Price to Assets to Be Sold,"  required that  expected,
pre-sale cash flows, including incremental interest costs on related acquisition
debt, of these  operations be considered part of the purchase price  allocation.
Accordingly,   subsequent  to  the  merger  date,   results  of  operations  and
incremental interest costs related to these international  subsidiaries were not
included  in  FirstEnergy's  Consolidated  Statements  of Income.  Additionally,
assets and liabilities of these  international  operations were segregated under
separate captions in the Consolidated Balance Sheet as "Assets Pending Sale" and
"Liabilities Related to Assets Pending Sale."

          In October 2001,  FirstEnergy  and Aquila,  Inc.  (formerly  UtiliCorp
United)  announced  that Aquila made an offer to  FirstEnergy  to purchase  Avon
Energy Partners Holdings, FirstEnergy's wholly owned holding company of Midlands
Electricity  plc, for $2.1 billion  including the  assumption of $1.7 billion of
debt.  FirstEnergy accepted the offer upon completion of its merger with GPU and
regulatory  approvals for the transaction were received by Aquila.  On March 18,
2002,  FirstEnergy  announced that the terms of the initial offer by Aquila were
modified such that Aquila would now acquire a 79.9 percent  interest in Avon for
approximately  $1.9 billion  (including the assumption of $1.7 billion of debt).
FirstEnergy and Aquila  together will own all of the outstanding  shares of Avon
through a jointly owned subsidiary, with each company having a 50-percent voting
interest.  The transaction  closed on May 8, 2002. In accordance with applicable
accounting  guidance,  the earnings of those foreign operations were capitalized
in advance of the sale and not  recognized in current  earnings from the date of
the GPU acquisition until February 6, 2002. However, the revision to the initial
offer by Aquila  caused a reversal of this  accounting  in the first  quarter of
2002,  resulting  in the  recognition  of a  cumulative  effect  of a change  in
accounting  which increased net income by $31.7 million.  This resulted from the
application of guidance provided by EITF Issue No. 90-6, "Accounting for Certain
Events Not Addressed in Issue No. 87-11  relating to an Acquired  Operating Unit
to Be Sold,"  accounting under EITF Issue No. 87-11,  recognizing the net income
of Avon from  November  7, 2001 to  February  6,  2002 that  previously  was not
recognized by FirstEnergy in its  consolidated  earnings as discussed  above. In
addition, Avon's financial statements are no longer presented as "Assets Pending
Sale"  and  "Liabilities  Related  to  Assets  Pending  Sale"  in  FirstEnergy's
Consolidated Balance Sheet at March 31, 2002.

          GPU's former Argentina  operations were also identified by FirstEnergy
for divestiture within twelve months of the merger date. FirstEnergy is actively
pursuing the sale of these operations.  FirstEnergy determined the fair value of
the Argentina operations based on the best available  information as of the date
of the  merger.  Subsequent  to that  date,  a number of  economic  events  have
occurred  in  Argentina  which may have an impact on  FirstEnergy's  ability  to
realize the  estimated  fair value of the  Argentina  operations.  These  events
include  currency  devaluation,  restrictions  on  repatriation of cash, and the
anticipation  of future asset sales in that region by  competitors.  FirstEnergy
has determined that the current economic conditions in Argentina have not eroded
the fair value  recorded for these  operations,  and as a result,  an impairment
writedown of this investment is not warranted as of March 31, 2002.  FirstEnergy
will continue to assess the potential  impact of these and other related  events
on the realizability of the value recorded for the Argentina  operations.  Other
international companies are being considered for sale; however, as of the merger
date those  sales were not judged to be  probable  of  occurring  within  twelve
months.

       Sale of Generating Assets-

          On November  29, 2001,  FirstEnergy  reached an agreement to sell four
coal-fired  power plants  totaling  2,535 MW to NRG Energy Inc. for $1.5 billion
($1.355 billion in cash and $145 million in debt assumption).  The net after-tax
gain from the sale, based on the difference between the sale price of the plants
and their market price used in the Ohio  restructuring  transition plan, will be
credited  to  customers  by  reducing  the  transition  cost  recovery   period.
FirstEnergy  also entered into a power purchase  agreement (PPA) with NRG. Under
the terms of the PPA, NRG is obligated  to sell  FirstEnergy  up to 10.5 billion
kilowatt-hours of electricity annually,  similar to the average annual output of
the plants, through 2005. The sale is expected to close in mid-2002.

       Other Commitments, Guarantees and Contingencies-

          GPU made significant  investments in foreign businesses and facilities
through its GPU Power subsidiary.  Although FirstEnergy attempts to mitigate its
risks related to foreign  investments,  it faces  additional  risks  inherent in
operating in such locations, including foreign currency fluctuations.


                                       4

<PAGE>


          EI Barranquilla,  a wholly owned subsidiary of GPU Power, is an equity
investor in Termobarranquilla S.A., Empresa de Servicios Publicos (TEBSA), which
owns a Colombian independent power generation project. As of March 31, 2002, GPU
Power  has an  investment  of  approximately  $113.7  million  in  TEBSA  and is
committed,  under  certain  circumstances,  to make  additional  standby  equity
contributions  of $21.3 million,  which  FirstEnergy has  guaranteed.  The total
outstanding  senior  debt of the TEBSA  project is $301  million as of March 31,
2002. The lenders include the Overseas Private Investment Corporation, US Export
Import Bank and a commercial bank syndicate. FirstEnergy has also guaranteed the
obligations  of the  operators  of the TEBSA  project,  up to a maximum  of $5.9
million (subject to escalation)  under the project's  operations and maintenance
agreement.

          GPU had believed that various events of default had occurred under the
loan agreements relating to the TEBSA project. In addition,  questions have been
raised as to the accuracy and  completeness  of information  provided to various
parties to the project in connection with the project's  formation.  FirstEnergy
continues to discuss these issues and related matters with the project  lenders,
CORELCA  (the  government  owned  Colombian  electric  utility with an ownership
interest in the project) and the Government of Colombia.

          Moreover,  in September  2001,  the DIAN (the  Colombian  national tax
authority)  presented  TEBSA with a statement of charges  alleging  that certain
lease payments made under the Lease  Agreement  with Los Amigos Leasing  Company
(an indirect wholly owned  subsidiary of GPU Power) violated  Colombian  foreign
exchange regulations and were, therefore,  subject to substantial penalties. The
DIAN has calculated a statutory penalty amounting to approximately  $200 million
and gave TEBSA two months to respond to the  statement  of charges.  In November
2001,  TEBSA filed a formal  response  to this  statement  of charges.  TEBSA is
continuing  to review the DIAN's  position and has been advised by its Colombian
counsel that the DIAN's position is without substantial legal merit. FirstEnergy
is unable to predict the outcome of these matters.

4 -  REGULATORY MATTERS:

          In Ohio,  New Jersey and  Pennsylvania,  laws  applicable  to electric
industry  deregulation  included the following provisions which are reflected in
the Companies' respective state regulatory plans:

          o  allowing the Companies' electric customers to select their
             generation suppliers;

          o  establishing  provider of last resort  (PLR)  obligations  to
             non-shopping  customers  in the  Companies' service areas;

          o  allowing recovery of potentially stranded investment (or transition
             costs);

          o  itemizing (unbundling) the current price of electricity into its
             component elements -- including generation, transmission,
             distribution and stranded costs recovery charges;

          o  deregulating the Companies' electric generation businesses; and

          o  continuing regulation of the Companies' transmission and
             distribution systems.

         Ohio-

          FirstEnergy's transition plan (which it filed on behalf of OE, CEI and
TE (Ohio  Companies))  included  approval  for  recovery  of  transition  costs,
including  regulatory  assets,  as filed in the transition plan through no later
than 2006 for OE, mid-2007 for TE and 2008 for CEI, except where a longer period
of recovery is provided for in the settlement agreement.  The approved plan also
granted  preferred  access  over  FirstEnergy's  subsidiaries  to  nonaffiliated
marketers,  brokers and aggregators to 1,120 MW of generation  capacity  through
2005 at established  prices for sales to the Ohio Companies'  retail  customers.
Customer  prices  are  frozen  through a  five-year  market  development  period
(2001-2005),  except for certain  limited  statutory  exceptions  including a 5%
reduction in the price of generation for residential customers.

          FirstEnergy's Ohio customers choosing alternative suppliers receive an
additional  incentive applied to the shopping credit  (generation  component) of
45%  for  residential  customers,  30%  for  commercial  customers  and  15% for
industrial  customers.  The  amount of the  incentive  is  deferred  for  future
recovery  from  customers -- recovery  will be  accomplished  by  extending  the
respective  transition  cost recovery  period.  If the customer  shopping  goals
established in the agreement are not achieved by the end of 2005, the transition
cost recovery  periods could be shortened for OE, CEI and TE to reduce  recovery
by as much  as $500  million  (OE-$250  million,  CEI-$170  million  and  TE-$80
million),  but any such  adjustment  would be computed on a  class-by-class  and
pro-rata  basis.  Based on


                                       5

<PAGE>




annualized  shopping  levels  as of March 31,  2002,  FirstEnergy  believes  the
maximum  potential  recovery  reductions are  approximately  $55 million (OE-$48
million and TE-$7 million).

         New Jersey-

          JCP&L's 2001 Final  Decision  and Order (Final  Order) with respect to
its rate  unbundling,  stranded cost and  restructuring  filings  confirmed rate
reductions  set  forth in its 1999  Summary  Order,  which  remain  in effect at
increasing  levels  through  July  2003,  with rates  after July 31,  2003 to be
determined in a rate case commencing in 2002. The Final Order had directed JCP&L
to make a filing,  no later than August 1, 2002, as to the proposed level of all
unbundled rate components for the period  commencing August 1, 2003. All parties
will have an opportunity  to  participate in the process and to examine  JCP&L's
proposed  unbundled rates,  including  distribution and market transition charge
rates.  The New  Jersey  Board of  Public  Utilities  (NJBPU)  will  review  the
unbundled rate components to establish the appropriate level of rates after July
31,  2003.  FirstEnergy  is unable to predict the outcome of this rate case.  In
addition to basic electric industry deregulation provisions discussed above, the
Final  Order  also  confirms  the  establishment  of a  non-bypassable  societal
benefits charge to recover costs which include nuclear plant decommissioning and
manufactured  gas  plant  remediation,   as  well  as  a  non-bypassable  market
transition charge (MTC) primarily to recover stranded costs.  However, the NJBPU
deferred  making a final  determination  of the net proceeds and stranded  costs
related to prior  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.  Should the IRS ruling  support the
return  of the  tax  benefits  to  customers,  JCP&L  would  need  to  record  a
corresponding  charge to income of approximately $25 million;  there would be no
effect to  FirstEnergy's  net income since the contingency  existed prior to the
merger.

          JCP&L's PLR  obligation to provide basic  generation  service (BGS) to
non-shopping  customers is supplied  almost  entirely from  contracted  and open
market  purchases.  JCP&L is  permitted  to defer  for  future  collection  from
customers  the  amounts  by which its  costs of  supplying  BGS to  non-shopping
customers and costs incurred under nonutility generation (NUG) agreements exceed
amounts  collected  through  BGS  and MTC  rates.  As of  March  31,  2002,  the
accumulated deferred cost balance totaled  approximately $320 million. The Final
Order provided for the ability to securitize  stranded costs associated with the
divested  Oyster Creek  Nuclear  Generation  Station.  In February  2002,  JCP&L
received  NJBPU  authorization  to issue  $320  million of  transition  bonds to
securitize  the  recovery of these  costs.  The NJBPU order also  provides for a
usage-based  non-bypassable  transition  bond charge and for the transfer of the
bondable transition  property to another entity.  JCP&L plans to sell transition
bonds in the second quarter of 2002 which will be recognized on the Consolidated
Balance  Sheet.  The Final Order also allows for  additional  securitization  of
JCP&L's  deferred  balance to the extent  permitted by law upon  application  by
JCP&L and a  determination  by the NJBPU that the  conditions  of the New Jersey
restructuring  legislation  are met. There can be no assurance as to the extent,
if any, that the NJBPU will permit such securitization.

          In December 2001,  the NJBPU  authorized the auctioning of BGS for the
period from August 1, 2002 through July 31, 2003 to meet the electric demands of
all customers who have not selected an alternative supplier.  The auction, which
ended on February  13, 2002 and was  approved by the NJBPU on February 15, 2002,
removed JCP&L's BGS obligation of 5,100 MW for the period August 1, 2002 through
July 31, 2003.  The auction  provides a  transitional  mechanism and a different
model for the procurement of BGS commencing August 1, 2003 may be adopted.

         Pennsylvania-

          The Pennsylvania Public Utility Commission (PPUC) authorized 1998 rate
restructuring plans for Penn, Met-Ed and Penelec. In 2000, the PPUC disallowed a
portion of the requested  additional  stranded costs above those amounts granted
in Met-Ed's and Penelec's 1998 rate restructuring plan orders. The PPUC required
Met-Ed  and  Penelec  to seek an IRS  ruling  regarding  the  return of  certain
unamortized  investment tax credits and excess  deferred  income tax benefits to
customers.  Similar to JCP&L's situation,  if the IRS ruling ultimately supports
returning these tax benefits to customers,  Met-Ed and Penelec would then reduce
stranded costs by $12 million and $25 million,  respectively,  plus interest and
record a  corresponding  charge to income;  similar to JCP&L,  there would be no
effect to FirstEnergy's net income.

          As a result of their generating asset divestitures, Met-Ed and Penelec
obtain their supply of electricity to meet their PLR obligations almost entirely
from contracted and open market  purchases.  In 2000, Met-Ed and Penelec filed a
petition with the PPUC seeking permission to defer, for future recovery,  energy
costs in excess of amounts  reflected in their capped generation rates; the PPUC
subsequently consolidated this petition in January 2001 with the FirstEnergy/GPU
merger proceeding.

                                       6


<PAGE>

          In June  2001,  the  PPUC  entered  orders  approving  the  Settlement
Stipulation with all of the major parties in the combined merger and rate relief
proceedings  which approved the merger and provided  Met-Ed and Penelec PLR rate
relief.  The PPUC permitted  Met-Ed and Penelec to defer for future recovery the
difference between their actual energy costs and those reflected in their capped
generation rates, retroactive to January 1, 2001. Correspondingly,  in the event
that energy  costs  incurred  by Met-Ed and  Penelec are below their  respective
capped  generation  rates,  that  difference  will  reduce  costs  that had been
deferred for recovery in future periods. This deferral accounting procedure will
cease on December 31. 2005.  Thereafter,  costs which had been deferred  through
that date would be recoverable  through  application  of competitive  transition
charge (CTC) revenues  received by Met-Ed and Penelec through December 31, 2010.
Met-Ed's and Penelec's PLR obligations  extend through December 31, 2010; during
that period CTC  revenues  will be applied  first to PLR costs,  then to non-NUG
stranded  costs and finally to NUG stranded  costs.  Met-Ed and Penelec would be
permitted to recover any remaining  stranded costs through a continuation of the
CTC after December 31, 2010 through no later than December 31, 2015. Any amounts
not  expected to be  recovered  by December 31, 2015 would be written off at the
time such nonrecovery becomes probable.

          Several parties had filed  Petitions for Review with the  Commonwealth
Court of Pennsylvania regarding the June 2001 PPUC orders. On February 21, 2002,
the Court  affirmed the PPUC  decision  regarding  the  FirstEnergy/GPU  merger,
remanding  the  decision  to the PPUC only with  respect  to the issue of merger
savings. The Court reversed the PPUC's decision regarding the PLR obligations of
Met-Ed and Penelec,  and rejected those parts of the  settlement  that permitted
the  companies to defer for  accounting  purposes the  difference  between their
wholesale  power costs and the amount that they collect  from retail  customers.
FirstEnergy  filed a Petition  for  Allowance  of Appeal  with the  Pennsylvania
Supreme  Court on March 25,  2002,  asking it to review the  Commonwealth  Court
decision.  Also on March 25,  2002,  Citizens  Power  filed a motion  seeking an
appeal of the  Commonwealth  Court's  decision to affirm the FirstEnergy and GPU
merger with the Supreme Court of Pennsylvania. If the February 21, 2002 Order is
not overturned by the Pennsylvania  Supreme Court,  the pretax  write-offs as of
March 31,  2002  would be  approximately  $90.2  million  for  Met-Ed and $103.0
million  for  Penelec.  FirstEnergy  is unable to predict  the  outcome of these
matters.  There would be no adverse effect to FirstEnergy's net income since the
contingency existed prior to the merger.

5 -  NEW ACCOUNTING STANDARDS:

          The Financial  Accounting  Standards  Board (FASB)  approved SFAS 141,
"Business Combinations" and SFAS 142, "Goodwill and Other Intangible Assets," on
June 29, 2001. SFAS 141 requires all business combinations  initiated after June
30, 2001, to be accounted for using purchase  accounting.  The provisions of the
new standard  relating to the  determination  of goodwill  and other  intangible
assets  have  been  applied  to the GPU  merger,  which was  accounted  for as a
purchase  transaction,  and have not materially affected the accounting for this
transaction. Under SFAS 142, amortization of existing goodwill ceased January 1,
2002.  Instead,  goodwill  will be tested for  impairment  at least on an annual
basis -- no impairment of goodwill is  anticipated  as a result of a preliminary
analysis.  Prior to the adoption of SFAS 142,  FirstEnergy  amortized  about $57
million  ($.25 per share of common  stock) of  goodwill  annually.  There was no
goodwill  amortization  in  2001  associated  with  the  GPU  merger  under  the
provisions of the new standard. FirstEnergy's net income in the first quarter of
2001 and the year 2001 of $98 million and $646 million, respectively, would have
been  $111  million  and  $701   million,   respectively,   excluding   goodwill
amortization.

          In July  2001,  the  FASB  issued  SFAS  143,  "Accounting  for  Asset
Retirement  Obligations." The new statement  provides  accounting  standards for
retirement obligations associated with tangible long-lived assets, with adoption
required  by  January  1,  2003.  SFAS 143  requires  that  the fair  value of a
liability for an asset retirement  obligation be recorded in the period in which
it is incurred. The associated asset retirement costs are capitalized as part of
the carrying amount of the long-lived asset. Over time the capitalized costs are
depreciated and the present value of the asset retirement  liability  increases,
resulting in a period expense. Upon retirement,  a gain or loss will be recorded
if the cost to  settle  the  retirement  obligation  differs  from the  carrying
amount.  FirstEnergy  is  currently  assessing  the new standard and has not yet
determined the impact on its financial statements.

          In  September  2001,  the FASB  issued SFAS 144,  "Accounting  for the
Impairment or Disposal of  Long-Lived  Assets."  SFAS 144  supersedes  SFAS 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 APB  30.  FirstEnergy's  adoption  of this  Statement,  effective
January 1, 2002,  will result in its  accounting  for any future  impairments or
disposals of  long-lived  assets under the  provisions of SFAS 144, but will not
change  the  accounting   principles  used  in  previous  asset  impairments  or
disposals.  Application of SFAS 144 is not anticipated to have a major impact on
accounting  for  impairments  or  disposal  transactions  compared  to the prior
application of SFAS 121 or APB 30.

                                       7

<PAGE>


6 -  SEGMENT INFORMATION:

          FirstEnergy   operates  under  the  following   reportable   segments:
regulated services,  competitive services and other (primarily corporate support
services  and  international  operations).   FirstEnergy's  primary  segment  is
regulated services,  which include eight electric utility operating companies in
Ohio,  Pennsylvania  and New  Jersey  that  provide  electric  transmission  and
distribution  services.  Its other  material  business  segment  consists of the
subsidiaries  that operate  unregulated  energy and  energy-related  businesses.
Certain  prior year amounts have been  reclassified  to conform with the current
year presentation.

          The  regulated  services  segment  designs,  constructs,  operates and
maintains FirstEnergy's regulated transmission and distribution systems. It also
provides  generation  services to  regulated  franchise  customers  who have not
chosen an alternative,  competitive  generation supplier. The regulated services
segment  obtains a portion  of its  required  generation  through  power  supply
agreements with the competitive services segment.

     Segment Financial Information
     -----------------------------

<TABLE>
<CAPTION>

                                         Regulated     Competitive               Reconciling
                                          Services       Services     Other      Adjustments       Consolidated
                                          --------       --------     -----      -----------       ------------
                                                                   (In millions)
<S>                                      <C>             <C>         <C>           <C>                <C>
Three Months Ended:
-------------------

       March 31, 2002
       --------------
External revenues.....................   $  1,995        $   678     $  123        $   6   (a)        $ 2,802
Internal revenues.....................        355            410        117         (882)  (b)             --
   Total revenues.....................      2,350          1,088        240         (876)               2,802
Depreciation and amortization.........        244              7         12           --                  263
Net interest charges..................        161             10        103          (14)  (b)            260
Income taxes..........................        162            (41)       (40)          --                   81
Income before cumulative effect of a
   change in accounting...............        198            (60)       (53)          --                   85
Net income (loss).....................        198            (60)       (22)          --                  116
Total assets..........................     29,147          2,706      6,288         (836)  (b)         37,305
Property additions....................        144             37         14           --                  195


       March 31, 2001
       --------------
External revenues.....................   $  1,309        $   633     $    1        $  43   (a)        $ 1,986
Internal revenues.....................        334            500         65         (899)  (b)             --
   Total revenues.....................      1,643          1,133         66         (856)               1,986
Depreciation and amortization.........        215              4          8           --                  227
Net interest charges..................        145             (4)         8          (23)  (b)            126
Income taxes..........................         67             13          4           --                   84
Income before cumulative effect of
   a change in accounting.............        123            (24)         7           --                  106
Net income (loss).....................        123            (32)         7           --                   98
Total assets..........................     15,624          1,896        481           --               18,001
Property additions....................         53             94          4           --                  151

<FN>


Reconciling adjustments to segment operating results from internal management reporting to consolidated external financial
reporting:

(a)  Principally fuel marketing revenues which are reflected as reductions to expenses for internal management reporting purposes.
(b)  Elimination of intersegment transactions.


                                                             8

</FN>
</TABLE>



<PAGE>

<TABLE>
<CAPTION>


                                JERSEY CENTRAL POWER & LIGHT COMPANY

                                  CONSOLIDATED STATEMENTS OF INCOME
                                             (Unaudited)


                                                                                         Three Months Ended
                                                                                              March 31,
                                                                                       -------------------------
                                                                                         2002             2001
                                                                                       ---------        --------
                                                                                            (In thousands)
<S>                                                                                    <C>               <C>
OPERATING REVENUES..............................................................       $450,713    |     $461,682
                                                                                       --------    |     --------
                                                                                                   |
OPERATING EXPENSES AND TAXES:                                                                      |
   Fuel.........................................................................          1,176    |        1,338
   Purchased power..............................................................        210,985    |      215,666
   Other operating costs........................................................         68,517    |       63,644
                                                                                       --------    |     --------
       Total operation and maintenance expenses.................................        280,678    |      280,648
   Provision for depreciation and amortization..................................         63,903    |       61,749
   General taxes................................................................         17,003    |       15,573
   Income taxes.................................................................         27,861    |       30,228
                                                                                       --------    |     --------
       Total operating expenses and taxes.......................................        389,445    |      388,198
                                                                                       --------    |     --------
                                                                                                   |
OPERATING INCOME................................................................         61,268    |       73,484
                                                                                                   |
OTHER INCOME....................................................................          2,826    |        1,158
                                                                                       --------    |     --------
                                                                                                   |
INCOME BEFORE NET INTEREST CHARGES..............................................         64,094    |       74,642
                                                                                       --------    |     --------
                                                                                                   |
NET INTEREST CHARGES:                                                                              |
   Interest on long-term debt...................................................         22,717    |       21,209
   Allowance for borrowed funds used during construction........................           (482)   |         (434)
   Deferred interest............................................................            449    |       (3,076)
   Other interest expense (credit)..............................................         (1,244)   |        2,886
   Subsidiaries' preferred stock dividend requirements..........................          2,675    |        2,675
                                                                                       --------    |     --------
       Net interest charges.....................................................         24,115    |       23,260
                                                                                       --------    |     --------
                                                                                                   |
NET INCOME......................................................................         39,979    |       51,382
                                                                                                   |
PREFERRED STOCK DIVIDEND REQUIREMENTS...........................................            753    |        1,391
                                                                                       --------    |     --------
                                                                                                   |
EARNINGS ON COMMON STOCK........................................................       $ 39,226    |     $ 49,991
                                                                                       ========    |     ========

<FN>


The preceding Notes to Financial Statements as they relate to Jersey Central Power &
Light Company are an integral part of these statements.

</FN>
</TABLE>


                                           55

<PAGE>



<TABLE>
<CAPTION>

                                  JERSEY CENTRAL POWER & LIGHT COMPANY

                                       CONSOLIDATED BALANCE SHEETS



                                                                                  (Unaudited)
                                                                                    March 31,      December 31,
                                                                                      2002            2001
                                                                                  ------------     ------------
                                                                                          (In thousands)

                              ASSETS
                              ------
<S>                                                                               <C>              <C>
UTILITY PLANT:
   In service................................................................     $ 3,453,937      $ 3,431,823
   Less--Accumulated provision for depreciation..............................       1,341,659        1,313,259
                                                                                  -----------      -----------
                                                                                    2,112,278        2,118,564
   Construction work in progress - electric plant............................          62,493           60,482
                                                                                  -----------      -----------
                                                                                    2,174,771        2,179,046
                                                                                  -----------      -----------

OTHER PROPERTY AND INVESTMENTS:
   Nuclear plant decommissioning trusts......................................         114,104          114,899
   Nuclear fuel disposal trust...............................................         140,988          137,098
   Long-term notes receivable from associated companies......................          20,333           20,333
   Other.....................................................................          17,360            6,643
                                                                                  -----------      -----------
                                                                                      292,785          278,973
                                                                                  -----------      -----------

CURRENT ASSETS:
   Cash and cash equivalents.................................................          67,617           31,424
   Receivables-
     Customers (less accumulated provisions of $10,642,000 and $12,923,000
      respectively, for uncollectible accounts)..............................         186,430          226,392
     Associated companies....................................................             475            6,412
     Other ..................................................................          22,506           20,729
   Materials and supplies, at average cost-..................................           1,342            1,348
   Prepayments and other.....................................................          10,313           16,569
                                                                                  -----------      -----------
                                                                                      288,683          302,874
                                                                                  -----------      -----------

DEFERRED CHARGES:
   Regulatory assets.........................................................       3,291,456        3,324,804
   Goodwill..................................................................       1,926,526        1,926,526
   Other.....................................................................          30,333           27,775
                                                                                  -----------      -----------
                                                                                    5,248,315        5,279,105
                                                                                  -----------      -----------
                                                                                  $ 8,004,554      $ 8,039,998
                                                                                  ===========      ===========

<FN>


The preceding Notes to Financial Statements as they relate to Jersey Central Power &
Light Company are an integral part of these balance sheets.

</FN>

</TABLE>

                                            56

<PAGE>



<TABLE>
<CAPTION>

                                 JERSEY CENTRAL POWER & LIGHT COMPANY

                                      CONSOLIDATED BALANCE SHEETS



                                                                                  (Unaudited)
                                                                                    March 31,       December 31,
                                                                                     2002              2001
                                                                                  -----------      ------------
                                                                                          (In thousands)

             CAPITALIZATION AND LIABILITIES
             ------------------------------
<S>                                                                                <C>              <C>
CAPITALIZATION:
   Common stockholder's equity-
     Common stock, par value $10 per share, authorized 16,000,000
       shares - 15,371,270 shares outstanding................................      $  153,713       $  153,713
     Other paid-in capital...................................................       2,981,117        2,981,117
     Accumulated other comprehensive income (loss)...........................             467             (472)
     Retained earnings.......................................................          68,569           29,343
                                                                                   ----------       ----------
         Total common stockholder's equity...................................       3,203,866        3,163,701
   Preferred stock-
     Not subject to mandatory redemption.....................................          12,649           12,649
     Subject to mandatory redemption.........................................          44,868           44,868
   Company-obligated mandatorily redeemable preferred securities.............         125,250          125,250
   Long-term debt............................................................       1,221,114        1,224,001
                                                                                   ----------       ----------
                                                                                    4,607,747        4,570,469
                                                                                   ----------       ----------


CURRENT LIABILITIES:
   Currently payable long-term debt and preferred stock......................          10,848           60,848
   Accounts payable-
     Associated companies....................................................         165,618          171,168
     Other...................................................................          90,323           89,739
   Notes payable to associated companies.....................................              --           18,149
   Accrued taxes.............................................................          70,353           35,783
   Accrued interest..........................................................          29,889           25,536
   Other.....................................................................         107,669           79,589
                                                                                   ----------       ----------
                                                                                      474,700          480,812
                                                                                   ----------       ----------


DEFERRED CREDITS:
   Accumulated deferred income taxes.........................................         516,494          514,216
   Accumulated deferred investment tax credits...............................          12,591           13,490
   Power purchase contract loss liability....................................       1,929,252        1,968,823
   Nuclear fuel disposal costs...............................................         164,087          163,377
   Nuclear plant decommissioning costs.......................................         137,424          137,424
   Other.....................................................................         162,259          191,387
                                                                                   ----------       ----------
                                                                                    2,922,107        2,988,717
                                                                                   ----------       ----------


COMMITMENTS AND CONTINGENCIES (Note 2).......................................
                                                                                   ----------       ----------
                                                                                   $8,004,554       $8,039,998
                                                                                   ==========       ==========


<FN>


The preceding Notes to Financial Statements as they relate to Jersey Central Power &
Light Company are an integral part of these balance sheets.

</FN>
</TABLE>

                                            57
<PAGE>


<TABLE>
<CAPTION>


                               JERSEY CENTRAL POWER & LIGHT COMPANY

                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (Unaudited)


                                                                                         Three Months Ended
                                                                                              March 31,
                                                                                      2002               2001
                                                                                    ---------          --------
                                                                                           (In thousands)
<S>                                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                                            |
Net income...................................................................       $ 39,979     |     $ 51,382
   Adjustments to reconcile net income to net                                                    |
     cash from operating activities-                                                             |
       Provision for depreciation and amortization...........................         63,903     |       61,749
       Other amortization....................................................            511     |        9,052
       Deferred costs, net...................................................        (65,608)    |      (50,737)
       Deferred income taxes, net............................................          8,678     |       16,411
       Investment tax credits, net...........................................           (899)    |         (899)
       Receivables...........................................................         44,122     |      (67,651)
       Materials and supplies................................................              6     |          (28)
       Accounts payable......................................................         (4,966)    |      (77,164)
       Other.................................................................         46,664     |      109,269
                                                                                    --------     |     --------
         Net cash provided from operating activities.........................        132,390     |       51,384
                                                                                    --------     |     --------
                                                                                                 |
CASH FLOWS FROM FINANCING ACTIVITIES:                                                            |
   New Financing-                                                                                |
     Short-term borrowings, net..............................................             --     |       63,100
   Redemptions and Repayments-                                                                   |
     Long-term debt..........................................................         50,000     |           --
     Short-term borrowings, net..............................................         18,149     |           --
   Dividend Payments-                                                                            |
     Common stock............................................................             --     |       75,000
     Preferred stock.........................................................            753     |        1,391
                                                                                    --------     |     --------
         Net cash used for financing activities..............................         68,902     |       13,291
                                                                                    --------     |     --------
                                                                                                 |
CASH FLOWS FROM INVESTING ACTIVITIES:                                                            |
   Property additions........................................................         25,902     |       33,113
   Capital trust investments.................................................            101     |          294
   Other.....................................................................          1,292     |        1,675
                                                                                    --------     |     --------
         Net cash used for investing activities..............................         27,295     |       35,082
                                                                                    --------     |     --------
                                                                                                 |
Net increase in cash and cash equivalents....................................         36,193     |        3,011
Cash and cash equivalents at beginning of period ............................         31,424     |        2,021
                                                                                    --------     |     --------
Cash and cash equivalents at end of period...................................       $ 67,617     |     $  5,032
                                                                                    ========     |     ========

<FN>


The preceding Notes to Financial Statements as they relate to Jersey Central Power &
Light Company are an integral part of these statements.

</FN>
</TABLE>

                                           58
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS











To the Board of Directors and
Shareholders of Jersey Central
Power & Light Company:

We have reviewed the accompanying  consolidated  balance sheet of Jersey Central
Power & Light Company and its subsidiaries as of March 31, 2002, and the related
consolidated  statements  of income and cash flows for the  three-month  period
ended March 31, 2002. These financial statements are the responsibility
of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be  made  to  the  accompanying   consolidated   interim  financial   statements
information for them to be in conformity with  accounting  principles  generally
accepted in the United States of America.





PricewaterhouseCoopers LLP
Cleveland, Ohio
May 15, 2002


                                       59


<PAGE>


                      JERSEY CENTRAL POWER & LIGHT COMPANY

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



          JCP&L is a wholly owned electric  utility  subsidiary of  FirstEnergy.
JCP&L  conducts  business  in  northern,  western  and east  central New Jersey,
offering regulated electric distribution services.  JCP&L also provides power to
those  customers  electing  to  retain  them as their  power  supplier.  JCP&L's
regulatory  plan requires it to itemize,  or unbundle,  the price of electricity
into its component elements - including generation,  transmission,  distribution
and  transition  charges.  JCP&L was formerly a wholly owned  subsidiary of GPU,
Inc., which merged with FirstEnergy on November 7, 2001.

Results of Operations
---------------------

          Operating  revenues  decreased  by $11.0  million or 2.4% in the first
quarter  of 2002  compared  to the first  quarter  of 2001.  The  sources of the
changes in  operating  revenues,  as compared  to the same  period in 2001,  are
summarized in the following table.

   Sources of Operating Revenue Changes
   -----------------------------------------------------------------------
          Increase (Decrease)                                  (In millions)

   Change in kilowatt-hour sales due to level of retail
      customers shopping for generation service..........          $ 27.0
   Change in other retail kilowatt-hour sales............           (35.6)
   All other changes.....................................            (2.4)
   -----------------------------------------------------------------------

   Net Decrease in Operating Revenues....................          $(11.0)
   =======================================================================

Electric Sales

          In the  first  quarter  of  2002,  the  majority  of the  decrease  in
operating  revenues was due to the mild weather compared to the first quarter of
2001, and a 2% rate reduction that was effective  August 1, 2001. The effects of
these decreases more than offset an increase in generation  sales to residential
customers. Sales to industrial  customers  also  decreased due to a decline in
economic  conditions,  while sales to commercial  customers  increased slightly.
Continuing to have an effect on operating  revenues was a significant  reduction
in the number of customers who received  their power from  alternate  suppliers.
During the first quarter of 2001,  11.6% of  kilowatt-hour  deliveries were from
shopping customers;  whereas,  only 0.3% of kilowatt-hour  deliveries during the
first quarter of 2002 were from  shopping  customers.  Changes in  kilowatt-hour
deliveries  by customer  class during the first  quarter of 2002, as compared to
the same period of 2001, are summarized in the following table:

       Changes in Kilowatt-hour Deliveries
       ---------------------------------------------------------------------
              Increase (Decrease)

       Residential...............................               (4.1)%
       Commercial................................                0.1%
       Industrial................................               (6.8)%
       ----------------------------------------------------------------------

       Total Retail..............................               (2.5)%
       Wholesale.................................              (65.8)%
       ----------------------------------------------------------------------

       Total Deliveries..........................               (3.9)%
       ----------------------------------------------------------------------

Operating Expenses and Taxes

          Total operating expenses and taxes increased $1.2 million in the first
quarter of 2002, compared to the first quarter of 2001. Fuel and purchased power
costs (net of deferrals)  decreased  $4.8 million  during the three months ended
March 31, 2002, compared to the same three months of 2001, partly as a result of
the rate reduction  mentioned  above,  which  increased  energy cost  deferrals.
Higher other  operating  costs of $4.9 million were  partially  attributable  to
greater  employee-related costs. An increase of $2.2 million in depreciation and
amortization


                                       60
<PAGE>


expenses  was mostly due to higher  average  depreciable  plant  balances in the
first quarter of 2002 versus the first quarter of 2001.

Net Interest Charges

          Net  interest  charges  increased  by $0.9  million in the first three
months of 2002, compared to the same period in 2001. The increase was attributed
to the issuance of $150 million of senior notes in May 2001, partially offset by
the redemption of $50 million of notes in March 2002.

Capital Resources and Liquidity
-------------------------------

          JCP&L  has   continuing   cash   requirements   for  planned   capital
expenditures  and maturing  debt.  During the remaining  three quarters of 2002,
capital  requirements  for  property  additions  are  expected  to be about $120
million.  JCP&L also has sinking fund  requirements for preferred stock of $10.8
million  during the  remainder of 2002.  These  requirements  are expected to be
satisfied from internal cash and/or short-term credit  arrangements.  JCP&L also
plans to use proceeds from its upcoming sale of transition bonds (see New Jersey
Regulatory Matters) to redeem preferred stock and higher cost debt.

          As of March  31,  2002,  JCP&L  had about  $67.6  million  of cash and
temporary investments, and no short-term indebtedness. JCP&L may borrow from its
affiliates  on a short-term  basis.  JCP&L will not issue first  mortgage  bonds
(FMBs)  other  than as  collateral  for  senior  notes,  since its  senior  note
indentures  prohibit  (subject to certain  exceptions)  it from issuing any debt
which is  senior  to the  senior  notes.  As of March  31,  2002,  JCP&L had the
capability  to issue $307  million of  additional  senior  notes  based upon FMB
collateral. Based upon applicable earnings coverage tests and its charter, JCP&L
could issue $4.6 billion of preferred  stock  (assuming no  additional  debt was
issued) based on earnings through March 31, 2002.

Market Risk Information
-----------------------

          JCP&L uses various market sensitive instruments,  including derivative
contracts,  primarily  to manage the risk of price  fluctuations.  JCP&L's  Risk
Policy  Committee,  comprised of FirstEnergy  executive  officers,  exercises an
independent  risk oversight  function to ensure  compliance  with corporate risk
management policies and prudent risk management practices.

Commodity Price Risk

          JCP&L is exposed  to market  risk  primarily  due to  fluctuations  in
electricity and natural gas prices.  To manage the volatility  relating to these
exposures,  JCP&L uses a variety of derivative  instruments,  including  forward
contracts,  options and futures contracts.  The derivatives are used principally
for  hedging  purposes.  The  change in the fair value of  commodity  derivative
contracts  related  to energy  production  during  the first  quarter of 2002 is
summarized in the following table:

  Change in the Fair Value of Commodity Derivative Contracts
  ----------------------------------------------------------------------
                                                          (In millions)

  Outstanding as of December 31, 2001.................      $ 1.5
  Contract value when entered.........................        1.6
  Increase in value of existing contracts.............       11.5
  ----------------------------------------------------------------------
  Outstanding as of March 31, 2002....................      $14.6
  ======================================================================


          The  valuation of derivative  contracts is based on observable  market
information  to the extent that such  information  is available.  In cases where
such information is not available, JCP&L relies on model-based information.  The
model  provides  estimates  of future  regional  prices for  electricity  and an
estimate of related price volatility. JCP&L utilizes these results in developing
estimates of fair value for the later years of applicable  electricity contracts
for both  financial  reporting  purposes  and for internal  management  decision
making. Sources of information for the valuation of derivative contracts by year
are summarized in the following table:

                                       61
<PAGE>


     Source of Information - Fair Value by Contract Year
     ---------------------------------------------------

                                   2002*    2003    2004    Thereafter   Total
--------------------------------------------------------------------------------
                                                   (In millions)

     Prices actively quoted...     $4.1     $0.9    $0.9       $ --     $ 5.9
     Prices based on models**.     --       --      --          8.7       8.7
     --------------------------------------------------------------------------

       Total..................     $4.1     $0.9    $0.9       $8.7     $14.6
===============================================================================

 *  For the remaining quarters of 2002.
 ** Relates to an embedded option that is offset by a regulatory liability and
    does not affect earnings.


          JCP&L  performs  sensitivity  analyses to estimate its exposure to the
market risk of its  commodity  position.  A  hypothetical  10% adverse  shift in
quoted market prices in the near term on derivative  instruments  would not have
had a material effect on JCP&L's  consolidated  financial position or cash flows
as of March 31, 2002.

New Jersey Regulatory Matters
-----------------------------

          In March 2001,  the NJBPU issued a Final Decision and Order in JCP&L's
restructuring  proceedings  under which JCP&L was directed to make a filing,  no
later than  August 1,  2002,  as to the  proposed  level of all  unbundled  rate
components  for the period  commencing  August 1, 2003. All parties will have an
opportunity  to  participate  in the  process  and to examine  JCP&L's  proposed
unbundled rates,  including distribution and market transition charge rates. The
NJBPU will review the unbundled  rate  components  to establish the  appropriate
level of rates after July 31, 2003.

          On February  6, 2002,  JCP&L  received a Financing  Order from the New
Jersey Board of Public  Utilities  with  authorization  to issue $320 million of
transition  bonds  to  securitize  the  recovery  of  bondable   stranded  costs
associated with the previously divested Oyster Creek nuclear generating station.
The  Order  grants  JCP&L  the  right to  charge a  usage-based,  non-bypassable
transition  bond charge  (TBC) and  provided  for the  transfer of the  bondable
transition  property  relating  to  the  TBC to  JCP&L  Transition  Funding  LLC
(Transition Funding), a wholly owned limited liability  corporation.  Subject to
the  receipt of  authorization  from the  Securities  and  Exchange  Commission,
Transition  Funding is  expected  to issue and sell $320  million of  transition
bonds  in  the  second  quarter  of  2002,  which  will  be  recognized  on  the
Consolidated  Balance  Sheet,  with the TBC  providing  recovery  of  principal,
interest and related fees on the transition bonds.

Environmental Matters
---------------------

          Various   environmental   liabilities  have  been  recognized  on  the
Consolidated Balance Sheet as of March 31, 2002, based on estimates of the total
costs of cleanup,  JCP&L's  proportionate  responsibility for such costs and the
financial ability of other  nonaffiliated  entities to pay. JCP&L has been named
as a  "potentially  responsible  party" (PRP) at waste  disposal sites which may
require cleanup under the Comprehensive Environmental Response, Compensation and
Liability  Act of 1980.  Allegations  of disposal  of  hazardous  substances  at
historical  sites  and the  liability  involved  are often  unsubstantiated  and
subject to dispute.  Federal law provides that all PRPs for a particular site be
held  liable  on a joint and  several  basis.  In  addition,  JCP&L has  accrued
liabilities for environmental  remediation of former  manufactured gas plants in
New Jersey;  those costs are being recovered  through a non-bypassable  societal
benefits charge. JCP&L has total accrued liabilities  aggregating  approximately
$50.3  million  as of March  31,  2002.  JCP&L  does not  believe  environmental
remediation  costs  will  have  a  material  adverse  effect  on  its  financial
condition, cash flows or results of operations.

Significant Accounting Policies
-------------------------------

          JCP&L  prepares its  consolidated  financial  statements in accordance
with accounting principles generally accepted in the United States.  Application
of these  principles  often  requires a high degree of judgment,  estimates  and
assumptions that affect its financial results. All of JCP&L's assets are subject
to their own specific risks and uncertainties and are periodically  reviewed for
impairment.  Assets related to the  application of the policies  discussed below
are  similarly  reviewed  with their risks and  uncertainties  reflecting  these
specific  factors.  JCP&L's more significant  accounting  policies are described
below.

Purchase Accounting - Acquisition of GPU

          On November 7, 2001,  the merger  between  FirstEnergy  and GPU became
effective, and JCP&L became a wholly owned subsidiary of FirstEnergy. The merger
was accounted for by the purchase method of accounting,  which requires judgment
regarding the  allocation of the purchase  price based on the fair values of the
assets acquired

                                       62

<PAGE>



(including  intangible assets) and the liabilities  assumed.  The fair values of
the acquired assets and assumed  liabilities  were based primarily on estimates.
The adjustments reflected in JCP&L's records, which are subject to adjustment in
2002 when finalized,  primarily consist of: (1) revaluation of certain property,
plant  and  equipment;  (2)  adjusting  preferred  stock  subject  to  mandatory
redemption  and  long-term  debt  to  estimated  fair  value;   (3)  recognizing
additional  obligations  related to  retirement  benefits;  and (4)  recognizing
estimated  severance  and  other  compensation  liabilities.  The  excess of the
purchase  price  over the  estimated  fair  values of the  assets  acquired  and
liabilities  assumed was  recognized  as  goodwill,  which will be reviewed  for
impairment at least annually.  As of March 31, 2002, JCP&L had recorded goodwill
of approximately $1.9 billion related to the merger.

Regulatory Accounting

          JCP&L is subject  to  regulation  that sets the  prices  (rates) it is
permitted to charge customers based on costs that regulatory  agencies determine
JCP&L is permitted to recover.  At times,  regulators permit the future recovery
through  rates of costs  that  would  be  currently  charged  to  expense  by an
unregulated  company.  This  rate-making  process  results in the  recording  of
regulatory assets based on anticipated  future cash inflows.  As a result of the
changing regulatory  framework in New Jersey, a significant amount of regulatory
assets have been recorded - $3.3 billion as of March 31, 2002.  JCP&L  regularly
reviews these assets to assess their ultimate recoverability within the approved
regulatory  guidelines.  Impairment risk associated with these assets relates to
potentially adverse legislative, judicial or regulatory actions in the future.

Derivative Accounting

          Determination  of appropriate  accounting for derivative  transactions
requires the involvement of management representing operations, finance and risk
assessment.  In order to determine the  appropriate  accounting  for  derivative
transactions,  the  provisions of the contract need to be carefully  assessed in
accordance  with  the  authoritative   accounting  literature  and  management's
intended use of the derivative.  New authoritative  guidance  continues to shape
the  application  of  derivative  accounting.   Management's   expectations  and
intentions  are key factors in  determining  the  appropriate  accounting  for a
derivative  transaction and, as a result,  such expectations and intentions must
be documented. Derivative contracts that are determined to fall within the scope
of SFAS 133, as amended,  must be  recorded at their fair value.  Active  market
prices are not always  available to determine  the fair value of the later years
of a contract, requiring that various assumptions and estimates be used in their
valuation.  JCP&L continually  monitors its derivative contracts to determine if
its  activities,  expectations,  intentions,  assumptions  and estimates  remain
valid.  As  part  of  its  normal  operations,  JCP&L  enters  into  commodities
contracts, which increase the impact of derivative accounting judgments.

Revenue Recognition

          JCP&L  follows  the  accrual   method  of  accounting   for  revenues,
recognizing  revenue for  kilowatt-hours  that have been  delivered but have not
been billed  through  March 31, 2002.  The  determination  of unbilled  revenues
requires management to make various estimates including:

          o   Net energy generated or purchased for retail load
          o   Losses of energy over transmission and distribution lines
          o   Mix of kilowatt-hour usage by residential, commercial and
              industrial customers
          o   Kilowatt-hour usage of customers receiving electricity from
              alternative suppliers

Implementation of Recently Issued Accounting Standards
------------------------------------------------------

          Under SFAS 142, "Goodwill and Other Intangible  Assets," goodwill must
be tested for  impairment  at least on an annual  basis.  JCP&L did not have any
goodwill prior to its 2001 merger.  Goodwill associated with the merger will not
be amortized,  but will be reviewed for  impairment at least  annually under the
provisions  of the new standard.  JCP&L expects to have its goodwill  impairment
analysis completed later this year.

          In July 2001,  the Financial  Accounting  Standards  Board issued SFAS
143,  "Accounting for Asset Retirement  Obligations." The new statement provides
accounting  standards  for  retirement   obligations  associated  with  tangible
long-lived  assets  with  adoption  required  as of January  1,  2003.  SFAS 143
requires that the fair value of a liability for an asset  retirement  obligation
be  recorded  in the  period  in  which it is  incurred.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  Over  time the  capitalized  costs are  depreciated  and the
present value of the asset retirement  liability increases resulting in a period
expense. Upon retirement,  a gain or loss will be recorded if the cost to settle
the retirement  obligation differs from the carrying amount.  JCP&L is currently
assessing its asset  retirement  obligations  under the new standard and has not
yet determined the impact on its financial statements.

                                       63

<PAGE>


<TABLE>
<CAPTION>

                                     METROPOLITAN EDISON COMPANY

                                  CONSOLIDATED STATEMENTS OF INCOME
                                            (Unaudited)


                                                                                           Three Months Ended
                                                                                               March 31,
                                                                                       -------------------------
                                                                                         2002             2001
                                                                                       --------         --------
                                                                                            (In thousands)

<S>                                                                                    <C>               <C>
OPERATING REVENUES..............................................................       $245,790   |      $221,020
                                                                                       --------   |      --------
                                                                                                  |
                                                                                                  |
OPERATING EXPENSES AND TAXES:                                                                     |
   Purchased power..............................................................        148,949   |       125,227
   Other operating costs........................................................         29,005   |        36,553
                                                                                       --------   |      --------
       Total operation and maintenance expenses.................................        177,954   |       161,780
   Provision for depreciation and amortization..................................         15,292   |        17,794
   General taxes................................................................         16,912   |        10,632
   Income taxes.................................................................          9,556   |         6,413
                                                                                       --------   |      --------
       Total operating expenses and taxes.......................................        219,714   |       196,619
                                                                                       --------   |      --------
                                                                                                  |
OPERATING INCOME................................................................         26,076   |        24,401
                                                                                                  |
OTHER INCOME....................................................................          5,131   |         4,685
                                                                                       --------   |      --------
                                                                                                  |
INCOME BEFORE NET INTEREST CHARGES..............................................         31,207   |        29,086
                                                                                       --------   |      --------
                                                                                                  |
NET INTEREST CHARGES:                                                                             |
   Interest on long-term debt...................................................         10,455   |         9,154
   Allowance for borrowed funds used during construction........................           (284)  |          (159)
   Deferred interest............................................................           (193)  |            --
   Other interest expense.......................................................            273   |         2,236
   Subsidiaries' preferred stock dividend requirements..........................          1,838   |         1,838
                                                                                       --------   |      --------
       Net interest charges.....................................................         12,089   |        13,069
                                                                                       --------   |      --------
                                                                                                  |
                                                                                                  |
NET INCOME......................................................................       $ 19,118   |      $ 16,017
                                                                                       ========   |      ========

<FN>


The preceding Notes to Financial Statements as they relate to Metropolitan Edison
Company are an integral part of these statements.

</FN>
</TABLE>

                                             64

<PAGE>



<TABLE>
<CAPTION>

                                     METROPOLITAN EDISON COMPANY

                                     CONSOLIDATED BALANCE SHEETS



                                                                                 (Unaudited)
                                                                                   March 31,       December 31,
                                                                                      2002             2001
                                                                                  -----------      ------------
                                                                                         (In thousands)

                              ASSETS
                              ------
<S>                                                                                <C>              <C>
UTILITY PLANT:
   In service................................................................      $1,618,998       $1,609,974
   Less--Accumulated provision for depreciation..............................         541,786          530,006
                                                                                   ----------       ----------
                                                                                    1,077,212        1,079,968
  Construction work in progress..............................................          13,701           14,291
                                                                                   ----------       ----------
                                                                                    1,090,913        1,094,259
                                                                                   ----------       ----------

OTHER PROPERTY AND INVESTMENTS:
   Nuclear plant decommissioning trusts......................................         159,952          157,699
   Long-term notes receivable from associated companies......................          12,418           12,418
   Other.....................................................................          33,490           13,391
                                                                                   ----------       ----------
                                                                                      205,860          183,508
                                                                                   ----------       ----------

CURRENT ASSETS:
   Cash and cash equivalents.................................................          20,812           25,274
   Receivables-
     Customers (less accumulated provisions of $10,641,000 and $12,271,000
       respectively, for uncollectible accounts).............................         104,258          112,257
     Associated companies....................................................           1,628            8,718
     Other...................................................................          18,850           16,675
   Prepayments and other.....................................................          39,136           12,239
                                                                                   ----------       ----------
                                                                                      184,684          175,163
                                                                                   ----------       ----------

DEFERRED CHARGES:
   Regulatory assets.........................................................       1,296,378        1,320,412
   Goodwill..................................................................         784,443          784,443
   Other.....................................................................          52,802           49,402
                                                                                   ----------       ----------
                                                                                    2,133,623        2,154,257
                                                                                   ----------       ----------
                                                                                   $3,615,080       $3,607,187
                                                                                   ==========       ==========

<FN>


The preceding Notes to Financial Statements as they relate to Metropolitan Edison
Company are an integral part of these balance sheets.

</FN>
</TABLE>

                                           65

<PAGE>


<TABLE>
<CAPTION>

                                      METROPOLITAN EDISON COMPANY

                                      CONSOLIDATED BALANCE SHEETS



                                                                                  (Unaudited)
                                                                                    March 31,       December 31,
                                                                                     2002              2001
                                                                                  -----------      ------------
                                                                                          (In thousands)

             CAPITALIZATION AND LIABILITIES
             ------------------------------
<S>                                                                                <C>              <C>
CAPITALIZATION:
   Common stockholder's equity-
     Common stock, without par value, authorized 900,000 shares -
       859,500 shares outstanding............................................      $1,274,325       $1,274,325
     Accumulated other comprehensive income (loss)...........................            (158)              11
     Retained earnings.......................................................          33,735           14,617
                                                                                   ----------       ----------
         Total common stockholder's equity...................................       1,307,902        1,288,953
   Company-obligated trust preferred securities..............................          92,200           92,200
   Long-term debt............................................................         541,779          583,077
                                                                                   ----------       ----------
                                                                                    1,941,881        1,964,230
                                                                                   ----------       ----------


CURRENT LIABILITIES:
   Currently payable long-term debt and preferred stock......................          40,029           30,029
   Accounts payable-
     Associated companies....................................................          53,019           67,351
     Other...................................................................          30,270           36,750
   Notes payable to associated companies.....................................         127,558           72,011
   Accrued taxes.............................................................           5,686            7,037
   Accrued interest..........................................................          10,635           17,468
   Other.....................................................................          11,205           13,652
                                                                                   ----------       ----------
                                                                                      278,402          244,298
                                                                                   ----------       ----------


DEFERRED CREDITS:
   Accumulated deferred income taxes.........................................         304,907          300,438
   Accumulated deferred investment tax credits...............................          13,098           13,310
   Purchase power contract loss liability....................................         721,812          730,662
   Nuclear fuel disposal costs...............................................          37,066           36,906
   Nuclear plant decommissioning costs.......................................         269,834          268,967
   Other.....................................................................          48,080           48,376
                                                                                   ----------       ----------
                                                                                    1,394,797        1,398,659
                                                                                   ----------       ----------


COMMITMENTS AND CONTINGENCIES (Note 2).......................................
                                                                                   ----------        ---------
                                                                                   $3,615,080       $3,607,187
                                                                                   ==========       ==========

<FN>


The preceding Notes to Financial Statements as they relate to Metropolitan Edison
Company are an integral part of these balance sheets.

</FN>
</TABLE>

                                            66

<PAGE>



<TABLE>
<CAPTION>

                                     METROPOLITAN EDISON COMPANY

                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (Unaudited)


                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                    ---------------------------
                                                                                      2002               2001
                                                                                    --------           --------
                                                                                          (In thousands)
<S>                                                                                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                                            |
Net income...................................................................       $ 19,118     |     $ 16,017
   Adjustments to reconcile net income to net                                                    |
     cash from operating activities-                                                             |
       Provision for depreciation and amortization...........................         15,292     |       17,794
       Other amortization....................................................           (938)    |          237
       Deferred costs, net...................................................          5,889     |          296
       Deferred income taxes, net............................................          2,567     |        1,372
       Investment tax credits, net...........................................           (212)    |         (212)
       Receivables...........................................................         12,914     |         (173)
       Accounts payable......................................................        (20,812)    |       (2,283)
       Other.................................................................        (51,331)    |      (40,473)
                                                                                    --------     |     --------
         Net cash used for operating activities..............................        (17,513)    |       (7,425)
                                                                                    --------     |     --------
                                                                                                 |
CASH FLOWS FROM FINANCING ACTIVITIES:                                                            |
   New Financing-                                                                                |
     Short-term borrowings, net..............................................         55,547     |       40,300
   Redemptions and Repayments-                                                                   |
     Long-term debt..........................................................         30,000     |           --
   Dividend Payments-                                                                            |
     Common stock............................................................             --     |       15,000
                                                                                    --------     |     --------
         Net cash provided from financing activities.........................         25,547     |       25,300
                                                                                    --------     |     --------
                                                                                                 |
CASH FLOWS FROM INVESTING ACTIVITIES:                                                            |
   Property additions........................................................          9,096     |       11,793
   Capital trust investments.................................................          3,161     |        2,371
   Other.....................................................................            239     |        2,991
                                                                                    --------     |     --------
         Net cash used for investing activities..............................         12,496     |       17,155
                                                                                    --------     |     --------
                                                                                                 |
Net increase (decrease) in cash and cash equivalents.........................         (4,462)    |          720
Cash and cash equivalents at beginning of period ............................         25,274     |        3,439
                                                                                    --------     |     --------
Cash and cash equivalents at end of period...................................       $ 20,812     |     $  4,159
                                                                                    ========     |     ========

<FN>

The preceding Notes to Financial Statements as they relate Metropolitan Edison Company
are an integral part of these statements.

</FN>
</TABLE>

                                           67

<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS









To the Board of Directors and
Shareholders of Metropolitan
Edison Company:

We have reviewed the  accompanying  consolidated  balance sheet of  Metropolitan
Edison  Company  and its  subsidiaries  as of March 31,  2002,  and the  related
consolidated  statements  of income and cash flows for the  three-month  period
ended March 31, 2002. These financial statements are the responsibility
of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be  made  to  the  accompanying   consolidated   interim  financial   statements
information for them to be in conformity with  accounting  principles  generally
accepted in the United States of America.





PricewaterhouseCoopers LLP
Cleveland, Ohio
May 15, 2002





                                       68

<PAGE>


                           METROPOLITAN EDISON COMPANY

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



          Met-Ed is a wholly owned electric  utility  subsidiary of FirstEnergy.
Met-Ed  conducts  business in eastern and south central  parts of  Pennsylvania,
offering regulated electric distribution services. Met-Ed also provides power to
those  customers  electing  to retain  them as their  power  supplier.  Met-Ed's
regulatory  plan requires it to itemize,  or unbundle,  the price of electricity
into its component elements - including generation,  transmission,  distribution
and transition  charges.  Met-Ed was formerly a wholly owned  subsidiary of GPU,
Inc., which merged with FirstEnergy on November 7, 2001.

Results of Operations
---------------------

          Operating  revenues  increased by $24.8  million or 11.2% in the first
quarter  of 2002  compared  to the first  quarter  of 2001.  The  sources of the
changes in  operating  revenues,  as compared  to the same  period in 2001,  are
summarized in the following table.

   Sources of Operating Revenue Changes
   ----------------------------------------------------------------------
          Increase (Decrease)                                 (In millions)

   Change in kilowatt-hour sales due to level of retail
      customers shopping for generation service                  $  35.5
   Change in other retail kilowatt-hour sales...............        (6.2)
   Decrease in wholesale sales..............................        (1.0)
   All other changes........................................        (3.5)
   ----------------------------------------------------------------------

   Net Increase in Operating Revenues.......................     $  24.8
   ======================================================================


Electric Sales

          In the first quarter of 2002, a significant reduction in the number of
customers who received their power from alternate suppliers continued to have an
effect on  operating  revenues.  During  the  first  quarter  of 2001,  32.0% of
kilowatt-hour  deliveries  were to  shopping  customers;  whereas,  only 7.7% of
kilowatt-hour  deliveries  during  the first  quarter  of 2002 were to  shopping
customers.  More than  offsetting  this  increase  in  revenues  from  returning
shopping  customers  was lower  kilowatt-hour  sales to  residential  customers,
primarily due to milder weather during the first quarter of 2002 compared to the
first quarter of 2001.  Sales to industrial  customers  also  decreased due to a
decline in economic conditions.  Changes in kilowatt-hour deliveries by customer
class during the first  quarter of 2002, as compared to the same period of 2001,
are summarized in the following table:

    Changes in Kilowatt-hour Deliveries
    ----------------------------------------------------------------
           Increase (Decrease)

    Residential...............................        (7.1)%
    Commercial................................         0.7%
    Industrial................................        (8.9)%
    ----------------------------------------------------------------

    Total Retail..............................        (5.4)%
    Wholesale.................................         7.4%
    ----------------------------------------------------------------

    Total Deliveries..........................        (4.5)%
    ----------------------------------------------------------------

Operating Expenses and Taxes

          Total  operating  expenses and taxes  increased  $23.1  million in the
first  quarter of 2002  compared  to the same period of 2001.  Higher  purchased
power costs accounted for the majority of the increase,  as Met-Ed required more
power to satisfy its provider of last resort (PLR)  obligation  to customers who
returned from alternate suppliers in the first quarter of 2002. The $7.5 million
decrease in other  operating  costs in the first quarter of 2002 compared to the
same period of 2001 was primarily  attributable  to the absence of costs related
to early  retirement  programs  offered to certain  bargaining unit employees in
2001.

                                       69
<PAGE>

Net Interest Charges

          Net  interest  charges  decreased  by $1.0  million in the first three
months of 2002, compared to the same period in 2001 due to the redemption of $30
million of long-term debt in the first quarter of 2002.

Capital Resources and Liquidity
-------------------------------

          Met-Ed  has  continuing   cash   requirements   for  planned   capital
expenditures  and maturing  debt.  During the remaining  three quarters of 2002,
capital  requirements  for  property  additions  are  expected  to be about  $69
million.  These  requirements  are expected to be satisfied  from  internal cash
and/or short-term credit arrangements.

          As of March 31,  2002,  Met-Ed  had about  $20.8  million  of cash and
temporary investments and $127.6 million of short-term indebtedness.  Met-Ed may
borrow from its  affiliates on a short-term  basis.  Met-Ed will not issue first
mortgage  bonds  (FMBs) other than as  collateral  for senior  notes,  since its
senior note indentures  prohibit (subject to certain exceptions) it from issuing
any debt which is senior to the senior notes.  As of March 31, 2002,  Met-Ed had
the  capability to issue $112 million of additional  senior notes based upon FMB
collateral. Met-Ed has no restrictions on the issuance of preferred stock.

Market Risk Information
-----------------------

          Met-Ed uses various market sensitive instruments, including derivative
contracts,  primarily to manage the risk of price  fluctuations.  Met-Ed's  Risk
Policy  Committee,  comprised of FirstEnergy  executive  officers,  exercises an
independent  risk oversight  function to ensure  compliance  with corporate risk
management policies and prudent risk management practices.

Commodity Price Risk

          Met-Ed is exposed to market  risk  primarily  due to  fluctuations  in
electricity and natural gas prices.  To manage the volatility  relating to these
exposures,  Met-Ed uses a variety of derivative  instruments,  including options
and  futures  contracts.  The  derivatives  are  used  principally  for  hedging
purposes. The change in the fair value of commodity derivative contracts related
to energy  production  during  the first  quarter of 2002 is  summarized  in the
following table:

   Change in the Fair Value of Commodity Derivative Contracts
   ----------------------------------------------------------------------
                                                           (In millions)

   Outstanding as of December 31, 2001.................       $ 2.3
   Contract value when entered.........................         0.2
   Increase in value of existing contracts.............        18.8
   ----------------------------------------------------------------------
   Outstanding as of March 31, 2002....................       $21.3
   ======================================================================

          The  valuation of derivative  contracts is based on observable  market
information  to the extent that such  information  is available.  In cases where
such information is not available, Met-Ed relies on model-based information. The
model  provides  estimates  of future  regional  prices for  electricity  and an
estimate  of  related  price  volatility.   Met-Ed  utilizes  these  results  in
developing estimates of fair value for the later years of applicable electricity
contracts for financial  reporting purposes and for internal management decision
making. Sources of information for the valuation of derivative contracts by year
are summarized in the following table:

     Source of Information - Fair Value by Contract Year
     ---------------------------------------------------

                               2002*    2003     2004     Thereafter    Total
-------------------------------------------------------------------------------
                                                (In millions)

   Prices actively quoted...   $0.3     $1.8     $1.9        $ --       $ 4.0
   Prices based on models**.   --       --       --           17.3       17.3
   ----------------------------------------------------------------------------

     Total..................   $0.3     $1.8     $1.9        $17.3      $21.3
===============================================================================

     *  For the remaining quarters of 2002.
     ** Relates to an embedded option that is offset by a regulatory liability
        and does not affect earnings.

          Met-Ed performs  sensitivity  analyses to estimate its exposure to the
market risk of its  commodity  position.  A  hypothetical  10% adverse  shift in
quoted market prices in the near term on derivative  instruments  would not have
had a material effect on Met-Ed's consolidated  financial position or cash flows
as of March 31, 2002.

                                       70

<PAGE>

Pennsylvania Regulatory Matters
-------------------------------

          In June 2001,  Met-Ed  entered into a settlement  agreement with major
parties in the  combined  merger  and rate  proceedings  that,  in  addition  to
resolving certain issues concerning the PPUC's approval of FirstEnergy's  merger
with GPU, also addressed  Met-Ed's request for PLR rate relief.  Several parties
appealed  the  PPUC  decision  to the  Commonwealth  Court of  Pennsylvania.  On
February 21, 2002,  the Court affirmed the PPUC decision  regarding  approval of
the merger, remanding the decision to the PPUC only with respect to the issue of
merger savings.  The Court reversed the PPUC's decision  regarding  Met-Ed's PLR
obligation,  and denied Met-Ed's  related request for rate relief.  On March 25,
2002, Met-Ed filed a petition asking the Supreme Court of Pennsylvania to review
the  Commonwealth  Court  decision  denying  Met-Ed the  ability to defer  costs
associated  with its PLR obligation.  If the  Commonwealth  Court's  decision is
affirmed  by the  Supreme  Court of  Pennsylvania,  Met-Ed  would have a pre-tax
write-off  of  approximately  $90.2  million  based on the  March  31,  2002 PLR
deferred balance.  Also on March 25, 2002, Citizens Power filed a motion seeking
an appeal of the Commonwealth Court's decision to affirm the FirstEnergy and GPU
merger with the Supreme Court of  Pennsylvania.  Met-Ed is unable to predict the
outcome of these matters.

Significant Accounting Policies
-------------------------------

          Met-Ed prepares its  consolidated  financial  statements in accordance
with accounting principles generally accepted in the United States.  Application
of these  principles  often  requires a high degree of judgment,  estimates  and
assumptions  that  affect its  financial  results.  All of  Met-Ed's  assets are
subject  to their own  specific  risks and  uncertainties  and are  periodically
reviewed  for  impairment.  Assets  related to the  application  of the policies
discussed  below are  similarly  reviewed  with  their  risks and  uncertainties
reflecting these specific factors. Met-Ed's more significant accounting policies
are described below.

Purchase Accounting - Acquisition of GPU

          On November 7, 2001,  the merger  between  FirstEnergy  and GPU became
effective,  and Met-Ed  became a wholly owned  subsidiary  of  FirstEnergy.  The
merger was accounted for by the purchase  method of  accounting,  which requires
judgment regarding the allocation of the purchase price based on the fair values
of the  assets  acquired  (including  intangible  assets)  and  the  liabilities
assumed.  The fair values of the acquired  assets and assumed  liabilities  were
based  primarily on estimates.  The adjustments  reflected in Met-Ed's  records,
which are subject to adjustment in 2002 when  finalized,  primarily  consist of:
(1)  revaluation  of  certain  property,  plant  and  equipment;  (2)  adjusting
preferred stock subject to mandatory  redemption and long-term debt to estimated
fair  value;  (3)  recognizing  additional  obligations  related  to  retirement
benefits;  and  (4)  recognizing  estimated  severance  and  other  compensation
liabilities.  The excess of the purchase price over the estimated fair values of
the assets  acquired and liabilities  assumed was recognized as goodwill,  which
will be reviewed for impairment at least annually.  As of March 31, 2002, Met-Ed
had recorded goodwill of approximately $784.4 million related to the merger.

Regulatory Accounting

          Met-Ed is subject  to  regulation  that sets the prices  (rates) it is
permitted to charge customers based on costs that regulatory  agencies determine
Met-Ed is permitted to recover. At times,  regulators permit the future recovery
through  rates of costs  that  would  be  currently  charged  to  expense  by an
unregulated  company.  This  rate-making  process  results in the  recording  of
regulatory assets based on anticipated  future cash inflows.  As a result of the
changing  regulatory   framework  in  Pennsylvania,   a  significant  amount  of
regulatory assets have been recorded - $1.3 billion as of March 31, 2002. Met-Ed
regularly  reviews these assets to assess their ultimate  recoverability  within
the approved regulatory guidelines. Impairment risk associated with these assets
relates to potentially  adverse  legislative,  judicial or regulatory actions in
the future.

Derivative Accounting

          Determination  of appropriate  accounting for derivative  transactions
requires the involvement of management representing operations, finance and risk
assessment.  In order to determine the  appropriate  accounting  for  derivative
transactions,  the  provisions of the contract need to be carefully  assessed in
accordance  with  the  authoritative   accounting  literature  and  management's
intended use of the derivative.  New authoritative  guidance  continues to shape
the  application  of  derivative  accounting.   Management's   expectations  and
intentions  are key factors in  determining  the  appropriate  accounting  for a
derivative  transaction and, as a result,  such expectations and intentions must
be documented. Derivative contracts that are determined to fall within the scope
of SFAS 133, as amended,  must be  recorded at their fair value.  Active  market
prices are not always  available to determine  the fair value of the later years
of a contract, requiring that various assumptions and estimates be used in their
valuation.  Met-Ed continually monitors its derivative contracts to determine if
its  activities,  expectations,  intentions,  assumptions


                                       71
<PAGE>


and estimates remain valid. As part of its normal operations, Met-Ed enters into
commodities  contracts,  which  increase  the  impact of  derivative  accounting
judgments.

Revenue Recognition

          Met-Ed   follows  the  accrual  method  of  accounting  for  revenues,
recognizing  revenue for  kilowatt-hours  that have been  delivered but have not
been billed  through  March 31, 2002.  The  determination  of unbilled  revenues
requires management to make various estimates including:

          o   Net energy generated or purchased for retail load
          o   Losses of energy over transmission and distribution lines
          o   Mix of kilowatt-hour usage by residential, commercial and
              industrial customers
          o   Kilowatt-hour usage of customers receiving electricity from
              alternative suppliers

Implementation of Recently Issued Accounting Standards
------------------------------------------------------

          Under SFAS 142, "Goodwill and Other Intangible  Assets," goodwill must
be tested for  impairment at least on an annual  basis.  Met-Ed did not have any
goodwill prior to its 2001 merger.  Goodwill associated with the merger will not
be amortized,  but will be reviewed for  impairment at least  annually under the
provisions of the new standard.  Met-Ed expects to have its goodwill  impairment
analysis completed later this year.

          In July 2001,  the Financial  Accounting  Standards  Board issued SFAS
143,  "Accounting for Asset Retirement  Obligations." The new statement provides
accounting  standards  for  retirement   obligations  associated  with  tangible
long-lived  assets  with  adoption  required  as of January  1,  2003.  SFAS 143
requires that the fair value of a liability for an asset  retirement  obligation
be  recorded  in the  period  in  which it is  incurred.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  Over  time the  capitalized  costs are  depreciated  and the
present value of the asset retirement  liability increases resulting in a period
expense. Upon retirement,  a gain or loss will be recorded if the cost to settle
the retirement  obligation differs from the carrying amount. Met-Ed is currently
assessing its asset  retirement  obligations  under the new standard and has not
yet determined the impact on its financial statements.


                                       72
<PAGE>


<TABLE>
<CAPTION>


                                    PENNSYLVANIA ELECTRIC COMPANY

                                  CONSOLIDATED STATEMENTS OF INCOME
                                             (Unaudited)


                                                                                           Three Months Ended
                                                                                       -------------------------
                                                                                               March 31,
                                                                                         2002             2001
                                                                                       ---------        --------
                                                                                            (In thousands)

<S>                                                                                    <C>              <C>
OPERATING REVENUES..............................................................       $242,820    |     $243,827
                                                                                       --------    |     --------
                                                                                                   |
OPERATING EXPENSES AND TAXES:                                                                      |
   Purchased power..............................................................        146,148    |      169,064
   Other operating costs........................................................         33,800    |       43,083
                                                                                       --------    |     --------
       Total operation and maintenance expenses.................................        179,948    |      212,147
   Provision for depreciation and amortization..................................         14,831    |       14,529
   General taxes................................................................         15,030    |       11,690
   Income taxes (benefit).......................................................          9,172    |       (3,336)
                                                                                       --------    |     --------
       Total operating expenses and taxes.......................................        218,981    |      235,030
                                                                                       --------    |     --------
                                                                                                   |
OPERATING INCOME................................................................         23,839    |        8,797
                                                                                                   |
OTHER INCOME....................................................................            298    |          605
                                                                                       --------    |     --------
                                                                                                   |
INCOME BEFORE NET INTEREST CHARGES..............................................         24,137    |        9,402
                                                                                       --------    |     --------
                                                                                                   |
NET INTEREST CHARGES:                                                                              |
   Interest on long-term debt...................................................          8,421    |        8,241
   Allowance for borrowed funds used during construction........................           (120)   |         (144)
   Deferred interest............................................................           (751)   |           --
   Other interest expense ......................................................            605    |        1,575
   Subsidiaries' preferred stock dividend requirements..........................          1,835    |        1,835
                                                                                       --------    |     --------
       Net interest charges.....................................................          9,990    |       11,507
                                                                                       --------    |     --------
                                                                                                   |
NET INCOME (LOSS)...............................................................       $ 14,147    |     $ (2,105)
                                                                                       ========    |     ========


<FN>



The preceding Notes to Financial Statements as they relate to the Pennsylvania Electric
Company are an integral part of these statements.

</FN>
</TABLE>

                                             73

<PAGE>
<TABLE>
<CAPTION>


                                       PENNSYLVANIA ELECTRIC COMPANY

                                        CONSOLIDATED BALANCE SHEETS



                                                                                  (Unaudited)
                                                                                    March 31,       December 31,
                                                                                      2002             2001
                                                                                  -----------      ------------
                                                                                         (In thousands)

                              ASSETS
                              ------
<S>                                                                                <C>              <C>
UTILITY PLANT:
   In service................................................................      $1,851,968       $1,845,187
   Less--Accumulated provision for depreciation..............................         644,012          630,957
                                                                                   ----------       ----------
                                                                                    1,207,956        1,214,230
  Construction work in progress-
     Electric plant..........................................................          15,578           12,857
                                                                                   ----------       ----------
                                                                                    1,223,534        1,227,087
                                                                                   ----------       ----------
OTHER PROPERTY AND INVESTMENTS:
   Non-utility generation trusts.............................................         121,686          154,067
   Nuclear plant decommissioning trusts......................................          96,293           96,610
   Long-term notes receivable from associated companies......................          15,515           15,515
   Other.....................................................................          11,410            2,265
                                                                                   ----------       ----------
                                                                                      244,904          268,457
                                                                                   ----------       ----------

CURRENT ASSETS:
   Cash and cash equivalents.................................................          18,460           39,033
   Receivables-
     Customers (less accumulated provisions of $12,215,000 and $14,719,000
        respectively, for uncollectible accounts)............................          95,093          107,170
     Associated companies....................................................          40,493           40,203
     Other...................................................................          14,825           14,842
   Prepayments and other.....................................................          37,449            8,605
                                                                                   ----------       ----------
                                                                                      206,320          209,853
                                                                                   ----------       ----------

DEFERRED CHARGES:
   Regulatory assets.........................................................         752,791          769,807
   Goodwill..................................................................         797,362          797,362
   Other.....................................................................          27,664           27,703
                                                                                   ----------       ----------
                                                                                    1,577,817        1,594,872
                                                                                   ----------       ----------
                                                                                   $3,252,575       $3,300,269
                                                                                   ==========       ==========

<FN>



The preceding Notes to Financial Statements as they relate to the Pennsylvania Electric
Company are an integral part of these balance sheets.

</FN>
</TABLE>


                                            74
<PAGE>

<TABLE>
<CAPTION>

                                       PENNSYLVANIA ELECTRIC COMPANY

                                        CONSOLIDATED BALANCE SHEETS



                                                                                 (Unaudited)
                                                                                   March 31,       December 31,
                                                                                     2002              2001
                                                                                  -----------      ------------
                                                                                        (In thousands)

             CAPITALIZATION AND LIABILITIES
             ------------------------------
<S>                                                                                <C>              <C>
CAPITALIZATION:
   Common stockholder's equity-
     Common stock, par value $20 per share, authorized 5,400,000
       shares, 5,290,596 shares outstanding..................................      $  105,812       $  105,812
     Other paid-in capital...................................................       1,188,190        1,188,190
     Accumulated other comprehensive income..................................             929            1,779
     Retained earnings.......................................................          24,942           10,795
                                                                                   ----------       ----------
         Total common stockholder's equity...................................       1,319,873        1,306,576
   Company-obligated trust preferred securities .............................          92,000           92,000
   Long-term debt............................................................         471,918          472,400
                                                                                   ----------       ----------
                                                                                    1,883,791        1,870,976
                                                                                   ----------       ----------


CURRENT LIABILITIES:
   Currently payable long-term debt and preferred stock......................          50,769           50,756
   Accounts payable-
     Associated companies....................................................         114,706          126,390
     Other...................................................................          38,582           38,720
   Notes payable to associated companies.....................................          38,050           77,623
   Accrued taxes.............................................................          44,517           29,255
   Accrued interest..........................................................          18,373           12,284
   Other.....................................................................           7,600           10,993
                                                                                   ----------       ----------
                                                                                      312,597          346,021
                                                                                   ----------       ----------


DEFERRED CREDITS:
   Accumulated deferred income taxes.........................................           4,490           21,682
   Accumulated deferred investment tax credits...............................          11,671           11,956
   Nuclear plant decommissioning costs.......................................         135,795          135,483
    Nuclear fuel disposal costs..............................................          18,533           18,453
   Power purchase contract loss liability....................................         855,759          867,046
   Other.....................................................................          29,939           28,652
                                                                                   ----------       ----------
                                                                                    1,056,187        1,083,272
                                                                                   ----------       ----------


COMMITMENTS AND CONTINGENCIES (Note 2).......................................
                                                                                   ----------       ----------
                                                                                   $3,252,575       $3,300,269
                                                                                   ==========       ==========
<FN>


The preceding Notes to Financial Statements as they relate to the Pennsylvania Electric
Company are an integral part of these balance sheets.

</FN>
</TABLE>

                                            75
<PAGE>

<TABLE>
<CAPTION>

                                     PENNSYLVANIA ELECTRIC COMPANY

                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (Unaudited)


                                                                                         Three Months Ended
                                                                                              March 31,
                                                                                    ---------------------------
                                                                                      2002               2001
                                                                                    --------           --------
                                                                                          (In thousands)
<S>                                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                                            |
Net income (loss)............................................................       $ 14,147     |     $ (2,105)
   Adjustments to reconcile net income (loss) to net                                             |
     cash from operating activities-                                                             |
       Provision for depreciation and amortization...........................         14,831     |       13,154
       Other amortization....................................................            782     |          462
       Deferred costs, net...................................................        (10,415)    |      (10,367)
       Deferred income taxes, net............................................         (9,631)    |          797
       Investment tax credits, net...........................................           (285)    |         (285)
       Receivables...........................................................         11,803     |        2,882
       Accounts payable......................................................        (11,822)    |       (5,317)
       Other.................................................................        (14,185)    |      (20,742)
                                                                                    --------     |     --------
         Net cash used for operating activities..............................         (4,775)    |      (21,521)
                                                                                    --------     |     --------
CASH FLOWS FROM FINANCING ACTIVITIES:                                                            |
    New Financing-                                                                               |
     Short-term borrowings, net..............................................             --     |       30,700
   Redemptions and Repayments-                                                                   |
     Short-term borrowings, net..............................................         39,573     |           --
                                                                                    --------     |     --------
   Net cash used for (provided from) financing activities....................         39,573     |      (30,700)
                                                                                    --------     |     --------
                                                                                                 |
CASH FLOWS FROM INVESTING ACTIVITIES:                                                            |
   Property additions........................................................         10,194     |       14,223
   Proceeds from non-utility generation trusts...............................        (34,208)    |       (8,465)
   Contributions to decommissioning trusts...................................             --     |           12
   Other.....................................................................            239     |        3,319
                                                                                    --------     |     --------
         Net cash used for (provided from) investing activities..............        (23,775)    |        9,089
                                                                                    --------     |     --------
                                                                                                 |
Net increase (decrease) in cash and cash equivalents.........................        (20,573)    |           90
Cash and cash equivalents at beginning of period ............................         39,033     |          580
                                                                                    --------     |     --------
Cash and cash equivalents at end of period...................................       $ 18,460     |     $    670
                                                                                    ========     |     ========


<FN>


The preceding Notes to Financial Statements as they relate to the Pennsylvania Electric
Company are an integral part of these statements.

</FN>
</TABLE>

                                             76
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS













To the Board of Directors and
Shareholders of Pennsylvania
Electric Company:

We have reviewed the  accompanying  consolidated  balance sheet of  Pennsylvania
Electric  Company and its  subsidiaries  as of March 31,  2002,  and the related
consolidated  statements  of income and cash flows for the  three-month  period
ended March 31, 2002. These financial statements are the responsibility
of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be  made  to  the  accompanying   consolidated   interim  financial   statements
information for them to be in conformity with  accounting  principles  generally
accepted in the United States of America.



PricewaterhouseCoopers LLP
Cleveland, Ohio
May 15, 2002

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                          PENNSYLVANIA ELECTRIC COMPANY

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


          Penelec is a wholly owned electric utility  subsidiary of FirstEnergy.
Penelec  conducts  business in northern,  western,  and south  central  parts of
Pennsylvania,  offering regulated electric distribution  services.  Penelec also
provides  power  to those  customers  electing  to  retain  them as their  power
supplier.  Penelec's  regulatory plan requires it to itemize,  or unbundle,  the
price of  electricity  into  its  component  elements  -  including  generation,
transmission, distribution and transition charges. Penelec was formerly a wholly
owned  subsidiary of GPU,  Inc.,  which merged with  FirstEnergy  on November 7,
2001.

Results of Operations
---------------------

          Operating  revenues  decreased  by $1.0  million  or 0.4% in the first
quarter  of 2002  compared  to the first  quarter  of 2001.  The  sources of the
changes in  operating  revenues,  as compared  to the same  period in 2001,  are
summarized in the following table.

   Sources of Operating Revenue Changes
   --------------------------------------------------------------------------
          Increase (Decrease)                                    (In millions)

   Change in kilowatt-hour sales due to level of retail
      customers shopping for generation service                     $  35.4
   Change in other retail kilowatt-hour sales...............           (5.5)
   Decrease in wholesale sales..............................          (27.9)
   Provision for rate refunds...............................           (0.8)
   All other changes........................................           (2.2)
   ---------------------------------------------------------------------------

   Net Decrease in Operating Revenues.......................        $  (1.0)
   ===========================================================================


Electric Sales

          In the first quarter of 2002, a significant reduction in the number of
customers who received their power from alternate suppliers continued to have an
effect on  operating  revenues.  During  the  first  quarter  of 2001,  25.9% of
kilowatt-hour  deliveries  were from  shopping  customers,  whereas only 4.4% of
kilowatt-hour  deliveries  during the first  quarter of 2002 were from  shopping
customers.  More than  offsetting  this  increase  in  revenues  from  returning
shopping customers was lower kilowatt-hour  deliveries to residential customers,
primarily due to milder weather during the first quarter of 2002 compared to the
first quarter of 2001.  Sales to industrial  customers  also  decreased due to a
decline in economic conditions;  lower sales to wholesale customers in the first
quarter  of 2002 also  reduced  operating  revenues.  Changes  in  kilowatt-hour
deliveries  by customer  class during the first  quarter of 2002, as compared to
the same period of 2001, are summarized in the following table:

    Changes in Kilowatt-hour Deliveries
    ----------------------------------------------------------------------
           Increase (Decrease)

    Residential...............................               (3.8)%
    Commercial................................               (0.1)%
    Industrial................................              (16.5)%
    ----------------------------------------------------------------------

    Total Retail..............................              (10.8)%
    Wholesale.................................              (81.4)%
    ----------------------------------------------------------------------

    Total Deliveries..........................              (20.4)%
    ----------------------------------------------------------------------


Operating Expenses and Taxes

          Total  operating  expenses and taxes  decreased  $16.0  million in the
first quarter of 2002 compared to the same period of 2001. Purchased power costs
decreased  $22.9  million  in the first  quarter of 2002  compared  to the first
quarter of 2001  primarily due to the absence in 2002 of a $16.0 million  charge
related to the  termination  of a  wholesale  energy  contract  in 2001.  A $9.3
million  decrease in other operating costs in the first quarter of 2002


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<PAGE>



compared to the same period of 2001 was primarily attributable to the absence of
costs related to early retirement  programs  offered to certain  bargaining unit
employees in 2001.

Net Interest Charges

          Net  interest  charges  decreased  by $1.5  million in the first three
months of 2002, compared to the same period in 2001. The decrease was attributed
to higher deferred interest related to Penelec's deferred energy costs and lower
short-term borrowing levels.

Capital Resources and Liquidity
-------------------------------

          Penelec  has  continuing   cash   requirements   for  planned  capital
expenditures  and maturing  debt.  During the remaining  three quarters of 2002,
capital  requirements for property  additions and capital leases are expected to
be about $75 million.  Penelec also has sinking fund  requirements  for maturing
long-term debt of $50.2 million during the remainder of 2002. These requirements
are  expected  to be  satisfied  from  internal  cash and/or  short-term  credit
arrangements.

          As of March 31,  2002,  Penelec  had about  $18.5  million of cash and
temporary investments and $38.1 million of short-term indebtedness.  Penelec may
borrow from its affiliates on a short-term  basis.  Penelec will not issue first
mortgage  bonds  (FMBs) other than as  collateral  for senior  notes,  since its
senior note indentures  prohibit (subject to certain exceptions) it from issuing
any debt which is senior to the senior notes. As of March 31, 2002,  Penelec had
the  capability to issue $450 million of additional  senior notes based upon FMB
collateral. Penelec has no restrictions on the issuance of preferred stock.

Market Risk Information
-----------------------

          Penelec  uses  various   market   sensitive   instruments,   including
derivative  contracts,  primarily  to  manage  the risk of  price  fluctuations.
Penelec's Risk Policy Committee,  comprised of FirstEnergy  executive  officers,
exercises an  independent  risk  oversight  function to ensure  compliance  with
corporate risk management policies and prudent risk management practices.

Commodity Price Risk

          Penelec is exposed to market risk  primarily  due to  fluctuations  in
electricity and natural gas prices.  To manage the volatility  relating to these
exposures,  Penelec uses a variety of derivative instruments,  including options
and  futures  contracts.  The  derivatives  are  used  principally  for  hedging
purposes. The change in the fair value of commodity derivative contracts related
to energy  production  during  the first  quarter of 2002 is  summarized  in the
following table:

     Change in the Fair Value of Commodity Derivative Contracts
     ----------------------------------------------------------------------
                                                             (In millions)

     Outstanding as of December 31, 2001.................        $1.3
     Contract value when entered.........................         0.2
     Increase in value of existing contracts.............         9.0
     ----------------------------------------------------------------------
     Outstanding as of March 31, 2002....................       $10.5
     ======================================================================


          The  valuation of derivative  contracts is based on observable  market
information  to the extent that such  information  is available.  In cases where
such  information is not available,  Penelec relies on model-based  information.
The model provides  estimates of future  regional  prices for electricity and an
estimate  of  related  price  volatility.  Penelec  utilizes  these  results  in
developing estimates of fair value for the later years of applicable electricity
contracts  for both  financial  reporting  purposes and for internal  management
decision  making.  Sources  of  information  for  the  valuation  of  derivative
contracts by year are summarized in the following table:


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<PAGE>


     Source of Information - Fair Value by Contract Year
     ---------------------------------------------------

                                2002*   2003     2004     Thereafter   Total
------------------------------------------------------------------------------
                                                (In millions)

  Prices actively quoted...   $ --      $0.9     $0.9       $ --       $ 1.8
  Prices based on models**.     --      --       --           8.7        8.7
  ----------------------------------------------------------------------------

    Total..................   $ --      $0.9     $0.9       $ 8.7      $10.5
==============================================================================

     *  For the remaining quarters of 2002.
     ** Relates to an embedded option that is offset by a regulatory liability
        and does not affect earnings.

          Penelec performs  sensitivity analyses to estimate its exposure to the
market risk of its  commodity  position.  A  hypothetical  10% adverse  shift in
quoted market prices in the near term on derivative  instruments  would not have
had a material effect on Penelec's consolidated financial position or cash flows
as of March 31, 2002.

Pennsylvania Regulatory Matters
-------------------------------

          In June 2001,  Penelec entered into a settlement  agreement with major
parties in the  combined  merger  and rate  proceedings  that,  in  addition  to
resolving certain issues concerning the PPUC's approval of FirstEnergy's  merger
with GPU, also addressed Penelec's request for PLR rate relief.  Several parties
appealed  the  PPUC  decision  to the  Commonwealth  Court of  Pennsylvania.  On
February 21, 2002,  the Court affirmed the PPUC decision  regarding  approval of
the merger, remanding the decision to the PPUC only with respect to the issue of
merger savings.  The Court reversed the PPUC's decision regarding  Penelec's PLR
obligation,  and denied Penelec's  related request for rate relief. On March 25,
2002,  Penelec  filed a petition  asking the Supreme  Court of  Pennsylvania  to
review the  Commonwealth  Court  decision  denying  Penelec the ability to defer
costs associated with its PLR obligation.  If the Commonwealth  Court's decision
is affirmed by the Supreme Court of  Pennsylvania,  Penelec would have a pre-tax
write-off  of  approximately  $103.0  million  based on the March  31,  2002 PLR
deferred balance.  Also on March 25, 2002, Citizens Power filed a motion seeking
an appeal of the Commonwealth Court's decision to affirm the FirstEnergy and GPU
merger with the Supreme Court of Pennsylvania.  Penelec is unable to predict the
outcome of these matters.

Significant Accounting Policies
-------------------------------

          Penelec prepares its consolidated  financial  statements in accordance
with accounting principles generally accepted in the United States.  Application
of these  principles  often  requires a high degree of judgment,  estimates  and
assumptions  that affect its  financial  results.  All of  Penelec's  assets are
subject  to their own  specific  risks and  uncertainties  and are  periodically
reviewed  for  impairment.  Assets  related to the  application  of the policies
discussed  below are  similarly  reviewed  with  their  risks and  uncertainties
reflecting  these  specific  factors.   Penelec's  more  significant  accounting
policies are described below.

Purchase Accounting - Acquisition of GPU

          On November 7, 2001,  the merger  between  FirstEnergy  and GPU became
effective,  and Penelec  became a wholly owned  subsidiary of  FirstEnergy.  The
merger was accounted for by the purchase  method of  accounting,  which requires
judgment regarding the allocation of the purchase price based on the fair values
of the  assets  acquired  (including  intangible  assets)  and  the  liabilities
assumed.  The fair values of the acquired  assets and assumed  liabilities  were
based primarily on estimates.  The adjustments  reflected in Penelec's  records,
which are subject to adjustment in 2002 when  finalized,  primarily  consist of:
(1)  revaluation  of  certain  property,  plant  and  equipment;  (2)  adjusting
preferred stock subject to mandatory  redemption and long-term debt to estimated
fair  value;  (3)  recognizing  additional  obligations  related  to  retirement
benefits;  and  (4)  recognizing  estimated  severance  and  other  compensation
liabilities.  The excess of the purchase price over the estimated fair values of
the assets  acquired and liabilities  assumed was recognized as goodwill,  which
will be reviewed for impairment at least annually. As of March 31, 2002, Penelec
had recorded goodwill of approximately $797.4 million related to the merger.

Regulatory Accounting

          Penelec is subject to  regulation  that sets the prices  (rates) it is
permitted to charge customers based on costs that regulatory  agencies determine
Penelec is permitted to recover. At times, regulators permit the future recovery
through  rates of costs  that  would  be  currently  charged  to  expense  by an
unregulated  company.  This  rate-making  process  results in the  recording  of
regulatory assets based on anticipated  future cash inflows.  As a result of the
changing  regulatory   framework  in  Pennsylvania,   a  significant  amount  of
regulatory  assets  have been  recorded - $752.8  million as of March 31,  2002.
Penelec regularly  reviews these assets to assess their ultimate  recoverability

                                       80
<PAGE>


within the approved regulatory guidelines. Impairment risk associated with these
assets  relates to  potentially  adverse  legislative,  judicial  or  regulatory
actions in the future.

Derivative Accounting

          Determination  of appropriate  accounting for derivative  transactions
requires the involvement of management representing operations, finance and risk
assessment.  In order to determine the  appropriate  accounting  for  derivative
transactions,  the  provisions of the contract need to be carefully  assessed in
accordance  with  the  authoritative   accounting  literature  and  management's
intended use of the derivative.  New authoritative  guidance  continues to shape
the  application  of  derivative  accounting.   Management's   expectations  and
intentions  are key factors in  determining  the  appropriate  accounting  for a
derivative  transaction and, as a result,  such expectations and intentions must
be documented. Derivative contracts that are determined to fall within the scope
of SFAS 133, as amended,  must be  recorded at their fair value.  Active  market
prices are not always  available to determine  the fair value of the later years
of a contract, requiring that various assumptions and estimates be used in their
valuation. Penelec continually monitors its derivative contracts to determine if
its  activities,  expectations,  intentions,  assumptions  and estimates  remain
valid.  As  part of its  normal  operations,  Penelec  enters  into  commodities
contracts, which increase the impact of derivative accounting judgments.

Revenue Recognition

          Penelec  follows  the  accrual  method  of  accounting  for  revenues,
recognizing  revenue for  kilowatt-hours  that have been  delivered but have not
been billed  through  March 31, 2002.  The  determination  of unbilled  revenues
requires management to make various estimates including:

          o    Net energy generated or purchased for retail load
          o    Losses of energy over transmission and distribution lines
          o    Mix of kilowatt-hour usage by residential, commercial and
               industrial customers
          o    Kilowatt-hour usage of customers receiving electricity from
               alternative suppliers

Implementation of Recently Issued Accounting Standards
------------------------------------------------------

          Under SFAS 142, "Goodwill and Other Intangible  Assets," goodwill must
be tested for  impairment at least on an annual basis.  Penelec did not have any
goodwill prior to its 2001 merger.  Goodwill associated with the merger will not
be amortized,  but will be reviewed for  impairment at least  annually under the
provisions of the new standard.  Penelec expects to have its goodwill impairment
analysis completed later this year.

          In July 2001,  the Financial  Accounting  Standards  Board issued SFAS
143,  "Accounting for Asset Retirement  Obligations." The new statement provides
accounting  standards  for  retirement   obligations  associated  with  tangible
long-lived  assets  with  adoption  required  as of January  1,  2003.  SFAS 143
requires that the fair value of a liability for an asset  retirement  obligation
be  recorded  in the  period  in  which it is  incurred.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  Over  time the  capitalized  costs are  depreciated  and the
present value of the asset retirement  liability increases resulting in a period
expense. Upon retirement,  a gain or loss will be recorded if the cost to settle
the retirement obligation differs from the carrying amount. Penelec is currently
assessing its asset  retirement  obligations  under the new standard and has not
yet determined the impact on its financial statements.


                                       81
<PAGE>










                                    SIGNATURE



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


June 3, 2002







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

                                        METROPOLITAN EDISON COMPANY
                                        ---------------------------
                                                Registrant

                                       PENNSYLVANIA ELECTRIC COMPANY
                                       -----------------------------
                                                Registrant



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


                                       83

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