FORM 10-Q/A
                                 AMENDMENT NO. 1

                       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 June 30, 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.
-----------     -----------------------------                ------------------

1-3522         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


           Pennsylvania Electric Company (Penelec) is filing this Amendment No.
1 to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 to
amend its financial statements, management's discussion and analysis of results
of operations and financial condition and the fixed charge ratios contained in
the initial report as filed with the Securities and Exchange Commission on
August 8, 2002, to solely reflect the potential adverse impact of a pending
Pennsylvania Supreme Court decision related to Penelec's Provider of Last Resort
Obligation (see amended Note 4).

           As part of the combined Form 10-Q filing for FirstEnergy Corp. and
its subsidiaries, Penelec is including the following in this amended filing:

Portions of Part I of Item 1 of Penelec's report as originally filed -

           (i)  The Notes to Financial Statements appearing on pages 1 through 9
                with Note 4 - "Regulatory Matters: Pennsylvania" amendment on
                page 7; and

           (ii) Its financial statements (as amended), the amended letter of
                PricewaterhouseCoopers LLP and Management's Discussion and
                Analysis of Results of Operations and Financial Condition (as
                amended), appearing on pages 79 through 87.

and Exhibit 12 - fixed charge ratios as originally filed.

           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.............................     1-7

        Pennsylvania Electric Company

        Consolidated Statements of Income.........................     79
        Consolidated Balance Sheets...............................    80-81
        Consolidated Statements of Cash Flows.....................     82
        Report of Independent Accountants.........................     83
        Management's Discussion and Analysis of Results of
         Operations and Financial Condition.......................    84-87



<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

           Met-Ed and Penelec have each formed statutory business trusts 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 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.

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<PAGE>


       Securitized Transition Bonds

           On June 11, 2002, JCP&L Transition Funding LLC (the Issuer), a wholly
owned limited liability company of JCP&L, sold $320 million of transition bonds
to securitize the recovery of JCP&L's bondable stranded costs associated with
the previously divested Oyster Creek Nuclear Generating Station.

           JCP&L does not own or did not purchase any of the transition bonds,
which are included in Long-term debt on FirstEnergy's and JCP&L's Consolidated
Balance Sheet. The transition bonds represent obligations only of the Issuer and
are collateralized solely by the equity and assets of the Issuer, which consist
primarily of bondable transition property. The bondable transition property is
solely the property of the Issuer.

           Bondable transition property is a presently existing property right
which includes the right to charge, collect and receive from JCP&L's utility
customers, through a non-bypassable transition bond charge, the principal amount
and interest on the transition bonds and other fees and expenses associated with
their issuance. JCP&L, as servicer, manages and administers the bondable
transition property, including the billing, collection and remittance of the
transition bond charge, pursuant to a servicing agreement with the Issuer. JCP&L
is entitled to a quarterly servicing fee of $100,000 that is payable from
transition bond charge collections.

       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 $133.0
million included in Accumulated Other Comprehensive Loss (AOCL) as of June 30,
2002, for derivative hedging activity as compared to the March 31, 2002 balance
of $133.6 million in AOCL, resulted from the sale of $6.0 million of derivative
losses with Avon, a $3.8 million loss related to current hedging activity and
$1.6 million of net hedge gains included in earnings during the quarter.
Approximately $15.7 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 $911
million (OE-$92 million, CEI-$152 million, TE-$101 million, Penn-$36 million,
JCP&L-$115 million, Met-Ed-$56 million, Penelec-$51 million, ATSI-$28 million,
FES-$184 million and other subsidiaries -$96 million) is applicable to 2002.
Investments for additional nuclear fuel during the 2002-2006 period are
estimated to be approximately $515 million (OE-$141 million, CEI-$169 million,
TE-$114 million and Penn-$91 million), of which approximately $54 million
(OE-$16 million, CEI-$17 million, TE-$11 million and Penn-$10 million) applies
to 2002.

                                      2
<PAGE>


       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 $31,500 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.

           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 June 30, 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


                                    3
<PAGE>


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 $57.3 million (JCP&L-$50.0
million,  CEI-$2.8 million, TE-$0.2 million,  Met-Ed-$0.2 million,  Penelec-$0.4
million  and  other-$3.7  million)  as of June 30,  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 -  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."

           Upon completion of its merger with GPU, FirstEnergy accepted an
October 2001 offer from Aquila, Inc. (formerly UtiliCorp United) 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. The transaction closed on May 8, 2002 and reflected the March
2002 modification of Aquila's initial offer such that Aquila acquired a 79.9
percent interest in Avon for approximately $1.9 billion (including the
assumption of $1.7 billion of debt). FirstEnergy received approximately $155
million in cash proceeds and approximately $87 million of long-term notes
(representing the present value of $19 million per year to be received over six
years beginning in 2003) from Aquila for its 79.9 percent interest. As of May 8,
2002, Avon had approximately $380 million in cash and cash equivalents.
FirstEnergy and Aquila together own all of the outstanding shares of Avon
through a jointly owned subsidiary, with each company having a 50-percent voting
interest. Originally, in accordance with applicable accounting guidance, the
earnings of those foreign operations were anticipated cash flows 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.

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.

       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. Should the IRS ruling ultimately support returning these
tax benefits to customers, there would be no effect to FirstEnergy's, Met-Ed's
or Penelec's net income since the contingency existed prior to the merger.

           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

                                      4
<PAGE>


their capped generation rates; the PPUC subsequently  consolidated this petition
in January 2001 with the FirstEnergy/GPU merger proceeding.

           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-nonutility generation (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 in June and July 2001
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 non-NUG wholesale power costs and the amount that they
collect from retail customers. FirstEnergy and the PPUC each 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, one
intervenor 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.
In September 2002, Met-Ed and Penelec established reserves for their PLR
deferred energy costs. The reserves reflect the potential adverse impact of a
pending Pennsylvania Supreme Court decision as to whether or not it will review
the Commonwealth Court ruling. In the original interim financial statements for
the quarter ended June 30, 2002, FirstEnergy, Met-Ed and Penelec had previously
disclosed, in consultation with its independent accountants, that the
finalization of that potential pre-acquisition contingency relating to the
FirstEnergy/GPU merger would be reflected as an adjustment to the allocation of
the purchase price prior to the end of the third quarter of 2002.

           During the third quarter of 2002 and in connection with FirstEnergy
finalizing the purchase accounting relating to the FirstEnergy/GPU merger,
Met-Ed and Penelec revised the previously disclosed accounting for this
potential pre-acquisition contingency after further consultation with its
independent accountants. Accordingly, Met-Ed and Penelec amended their interim
financial statements for the quarter ended June 30, 2002 to reflect
establishment of the reserve in the first quarter of 2002 totaling $103.0
million at Met-Ed and $111.1 million at Penelec, with a corresponding increase
in goodwill, net of tax ($60.3 million at Met-Ed and $65.0 million at Penelec).
In addition, net income for the quarter ended June 30, 2002 decreased $3.7
million for Met-Ed and $4.4 million for Penelec from the amounts previously
reported. The decrease in net income reflects the difference between the non-NUG
cost of power and the amounts that Met-Ed and Penelec collected from their
customers for the quarter ended June 30, 2002. That difference had been
previously reflected as a change in regulatory assets based on the PPUC
decision. Since these revisions are not significant to FirstEnergy's
consolidated financial statements for this period, there will be no restatement
of FirstEnergy's consolidated financial statements. The following tables
summarize the impact on net income for Met-Ed and Penelec for the second quarter
of 2002.


  Met-Ed                                 3 Months Ended       6 Months Ended
  ------                                 --------------       ---------------
                                          June 30, 2002        June 30, 2002
                                         --------------       ---------------
                                                     (In thousands)

  Net income as previously reported...       $19,667              $38,785
  Effect of revision..................        (3,706)               3,788
                                             -------              -------
  Net income as revised...............       $15,961              $42,573
                                             =======              =======


  Penelec                                3 Months Ended       6 Months Ended
  -------                                --------------       ---------------
                                          June 30, 2002        June 30, 2002
                                         --------------       ---------------
                                                     (In thousands)

  Net income as previously reported...       $11,245              $25,392
  Effect of revision..................        (4,390)                 302
                                            --------              -------
  Net income as revised...............      $  6,855              $25,694
                                            ========              =======


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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 -- based on the results of the transition analysis, no impairment of
goodwill is required. 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 second quarter
of 2001 and the first half of 2001 of $146 million and $244 million,
respectively, would have been $160 million and $271 million, respectively,
excluding goodwill amortization.

           In June 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 has identified various applicable legal obligations as
defined under the new standard and expects to complete an analysis of their
financial impact in the second half of 2002.

           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.

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.


                                  6
<PAGE>

<TABLE>
<CAPTION>


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

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

       June 30, 2002
       -------------
External revenues.....................    $ 2,161         $  696    $   86      $     6   (a)         $ 2,949
Internal revenues.....................        177            417       125         (719)  (b)              --
   Total revenues.....................      2,338          1,113       211         (713)                2,949
Depreciation and amortization.........        233              6        12           --                   251
Net interest charges..................        156              7       102          (15)  (b)             250
Income taxes..........................        213              5       (33)          --                   185
Income before cumulative effect of a
   change in accounting...............        273              7       (47)          --                   233
Net income (loss).....................        273              7       (47)          --                   233
Total assets..........................     30,261          2,010     2,009           --                34,280
Property additions....................        120             72        32           --                   224


       June 30, 2001
       -------------
External revenues.....................    $ 1,260         $  499    $    1      $    44   (a)         $ 1,804
Internal revenues.....................        223            448        64         (735)  (b)              --
   Total revenues.....................      1,483            947        65         (691)                1,804
Depreciation and amortization.........        196              4         7           --                   207
Net interest charges..................        107             13         8           (7)  (b)             121
Income taxes..........................        158            (41)        3           --                   120
Income before cumulative effect of
   a change in accounting.............        159            (17)        4           --                   146
Net income (loss).....................        159            (17)        4           --                   146
Total assets..........................     15,494          2,154       490           --                18,138
Property additions....................         36             84         5           --                   125


Six Months Ended:
-----------------

       June 30, 2002
       -------------
External revenues.....................    $ 4,156         $1,374    $  209      $    12   (a)         $ 5,751
Internal revenues.....................        532            827       242       (1,601)  (b)              --
   Total revenues.....................      4,688          2,201       451       (1,589)                5,751
Depreciation and amortization.........        477             13        24           --                   514
Net interest charges..................        317             17       205          (29)  (b)             510
Income taxes..........................        375            (37)      (73)          --                   265
Income before cumulative effect of a
   change in accounting...............        471            (53)     (100)          --                   318
Net income (loss).....................        471            (53)      (68)          --                   350
Total assets..........................     30,261          2,010     2,009           --                34,280
Property additions....................        264            110        46           --                   420


       June 30, 2001
       -------------
External revenues.....................    $ 2,569         $1,132    $    2      $    87   (a)         $ 3,790
Internal revenues.....................        557            948       129       (1,634)  (b)              --
   Total revenues.....................      3,126          2,080       131       (1,547)                3,790
Depreciation and amortization.........        411              8        15           --                   434
Net interest charges..................        252              9        16          (30)  (b)             247
Income taxes..........................        225            (28)        7           --                   204
Income before cumulative effect of
   a change in accounting.............        282            (41)       11           --                   252
Net income (loss).....................        282            (49)       11           --                   244
Total assets..........................     15,494          2,154       490           --                18,138
Property additions....................         89            178         9           --                   276


<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.

</FN>
</TABLE>

                                                      7

<PAGE>
<TABLE>
<CAPTION>


                                                     PENNSYLVANIA ELECTRIC COMPANY

                                                   CONSOLIDATED STATEMENTS OF INCOME
                                                              (Unaudited)


                                                                 Three Months Ended                Six Months Ended
                                                                       June 30,                        June 30,
                                                                ----------------------         -----------------------
                                                                  2002          2001              2002          2001
                                                                --------      --------         ---------      --------
                                                               (Restated)                      (Restated)
                                                                                    (In thousands)

<S>                                                             <C>           <C>               <C>           <C>
OPERATING REVENUES........................................      $237,576   |  $230,600         $480,396   |   $474,427
                                                                --------   |  --------         --------   |   --------
                                                                           |                              |
OPERATING EXPENSES AND TAXES:                                              |                              |
   Purchased power........................................       150,723   |   142,327          288,852   |    311,391
   Other operating costs..................................        38,418   |    37,682           72,218   |     80,765
                                                                --------   |  --------         --------   |   --------
       Total operation and maintenance expenses...........       189,141   |   180,009          361,070   |    392,156
   Provision for depreciation and amortization............        14,814   |    15,099           29,645   |     29,628
   General taxes..........................................        14,426   |    12,461           29,456   |     24,151
   Income taxes...........................................         3,300   |     4,638           15,799   |      1,302
                                                                --------   |  --------         --------   |   --------
       Total operating expenses and taxes.................       221,681   |   212,207          435,970   |    447,237
                                                                --------   |  --------         --------   |   --------
                                                                           |                              |
OPERATING INCOME..........................................        15,895   |    18,393           44,426   |     27,190
                                                                           |                              |
OTHER INCOME..............................................           789   |     1,414            1,087   |      2,019
                                                                --------   |  --------         --------   |   --------
                                                                           |                              |
INCOME BEFORE NET INTEREST CHARGES........................        16,684   |    19,807           45,513   |     29,209
                                                                --------   |  --------         --------   |   --------
                                                                           |                              |
NET INTEREST CHARGES:                                                      |                              |
   Interest on long-term debt.............................         7,907   |     8,178           16,328   |     16,419
   Allowance for borrowed funds used during construction..          (163)  |      (140)            (283)  |       (284)
   Deferred interest......................................          (691)  |        --           (1,442)  |         --
   Other interest expense.................................           834   |     2,744            1,439   |      4,319
   Subsidiaries' preferred stock dividend requirements....         1,942   |     1,835            3,777   |      3,670
                                                                --------   |  --------         --------   |   --------
       Net interest charges...............................         9,829   |    12,617           19,819   |     24,124
                                                                --------   |  --------         --------   |   --------
                                                                           |                              |
NET INCOME................................................      $  6,855   |  $  7,190         $ 25,694   |   $  5,085
                                                                ========   |  ========         ========   |   ========

<FN>


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

</FN>
</TABLE>

                                                                 79


<PAGE>
<TABLE>
<CAPTION>


                                                     PENNSYLVANIA ELECTRIC COMPANY

                                                      CONSOLIDATED BALANCE SHEETS


                                                                                   (Unaudited)
                                                                                    June 30,       December 31,
                                                                                      2002             2001
                                                                                   ----------      ------------
                                                                                   (Restated)
                                                                                          (In thousands)

                              ASSETS
                              ------
<S>                                                                                <C>              <C>
UTILITY PLANT:
   In service................................................................      $1,860,346       $1,845,187
   Less--Accumulated provision for depreciation..............................         656,265          630,957
                                                                                   ----------       ----------
                                                                                    1,204,081        1,214,230
  Construction work in progress-
     Electric plant..........................................................          13,720           12,857
                                                                                   ----------       ----------
                                                                                    1,217,801        1,227,087
                                                                                   ----------       ----------

OTHER PROPERTY AND INVESTMENTS:
   Non-utility generation trusts.............................................         122,162          154,067
   Nuclear plant decommissioning trusts......................................          94,733           96,610
   Long-term notes receivable from associated companies......................          15,515           15,515
   Other.....................................................................           6,673            2,265
                                                                                   ----------       ----------
                                                                                      239,083          268,457
                                                                                   ----------       ----------

CURRENT ASSETS:
   Cash and cash equivalents.................................................          20,311           39,033
   Receivables-
     Customers (less accumulated provisions of $11,432,000 and $14,719,000,
        respectively, for uncollectible accounts)............................          92,933          107,170
     Associated companies....................................................          62,119           40,203
     Other...................................................................          16,815           14,842
   Prepayments and other.....................................................          21,302            8,605
                                                                                   ----------       ----------
                                                                                      213,480          209,853
                                                                                   ----------       ----------

DEFERRED CHARGES:
   Regulatory assets.........................................................         572,256          769,807
   Goodwill..................................................................         862,335          797,362
   Accumulated deferred income taxes.........................................          30,014               --
   Other.....................................................................          27,469           27,703
                                                                                   ----------       ----------
                                                                                    1,492,074        1,594,872
                                                                                   ----------       ----------
                                                                                   $3,162,438       $3,300,269
                                                                                   ==========       ==========

</TABLE>



<PAGE>

<TABLE>
<CAPTION>

                                                     PENNSYLVANIA ELECTRIC COMPANY

                                                      CONSOLIDATED BALANCE SHEETS


                                                                                  (Unaudited)
                                                                                   June 30,        December 31,
                                                                                     2002              2001
                                                                                  -----------      ------------
                                                                                   (Restated)
                                                                                         (In thousands)
<S>                                                                                <C>             <C>

             CAPITALIZATION AND LIABILITIES
             ------------------------------

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..................................             198            1,779
     Retained earnings.......................................................          22,489           10,795
                                                                                   ----------      -----------
         Total common stockholder's equity...................................       1,316,689        1,306,576
   Company-obligated trust preferred securities .............................          92,107           92,000
   Long-term debt............................................................         471,444          472,400
                                                                                   ----------      -----------
                                                                                    1,880,240        1,870,976
                                                                                   ----------      -----------


CURRENT LIABILITIES:
   Currently payable long-term debt..........................................          25,783           50,756
   Accounts payable-
     Associated companies....................................................         122,110          126,390
     Other...................................................................          44,092           38,720
   Notes payable to associated companies.....................................         103,488           77,623
   Accrued taxes.............................................................           9,430           29,255
   Accrued interest..........................................................          12,647           12,284
   Other.....................................................................           8,267           10,993
                                                                                   ----------      -----------
                                                                                      325,817          346,021
                                                                                   ----------      -----------


DEFERRED CREDITS:
   Accumulated deferred income taxes.........................................              --           21,682
   Accumulated deferred investment tax credits...............................          11,385           11,956
   Nuclear plant decommissioning costs.......................................         135,999          135,483
    Nuclear fuel disposal costs..............................................          18,617           18,453
   Power purchase contract loss liability....................................         763,489          867,046
   Other.....................................................................          26,891           28,652
                                                                                   ----------      -----------
                                                                                      956,381        1,083,272
                                                                                   ----------      -----------


COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 2)...........................
                                                                                   ----------      -----------
                                                                                   $3,162,438       $3,300,269
                                                                                   ==========       ==========


<FN>


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

</FN>
</TABLE>

                                                    81
<PAGE>

<TABLE>
<CAPTION>

                                                     PENNSYLVANIA ELECTRIC COMPANY

                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                              (Unaudited)


                                                                 Three Months Ended                Six Months Ended
                                                                       June 30,                        June 30,
                                                                ----------------------         -----------------------
                                                                  2002          2001             2002           2001
                                                                --------      --------         ---------      --------
                                                               (Restated)                      (Restated)
                                                                                    (In thousands)
<S>                                                             <C>             <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                      |                             |
Net income................................................      $  6,855   |    $  7,190        $ 25,694 |    $  5,085
   Adjustments to reconcile net income to net                              |                             |
     cash from operating activities-                                       |                             |
       Provision for depreciation and amortization........        14,814   |      12,660          29,645 |      25,814
       Other amortization.................................          (595)  |         582             187 |       1,044
       Deferred costs, net................................        (9,266)  |     (24,388)        (27,700)|     (34,755)
       Deferred income taxes, net.........................         4,866   |       8,085          (1,438)|       8,882
       Investment tax credits, net........................          (286)  |        (286)           (571)|        (571)
       Receivables........................................       (21,455)  |       6,619          (9,652)|       9,501
       Accounts payable...................................        12,915   |      48,397           1,093 |      43,080
       Accrued taxes......................................       (35,087)  |       4,620         (19,825)|      (5,644)
       Other..............................................        15,248   |       3,321         (14,199)|      (7,157)
                                                                --------   |    --------        -------- |    --------
         Net cash provided from (used for) operating                       |                             |
          activities .....................................       (11,991)  |      66,800         (16,766)|      45,279
                                                                --------   |    --------        -------- |    --------
                                                                           |                             |
CASH FLOWS FROM FINANCING ACTIVITIES:                                      |                             |
   New Financing-                                                          |                             |
     Short-term borrowings, net...........................        65,438   |      22,500          25,865 |      53,200
     Contributions from parent............................            --   |      50,000              -- |      50,000
   Redemptions and Repayments-                                             |                             |
     Long-term debt.......................................        24,973   |          --          24,973 |          --
   Dividend Payments-                                                      |                             |
     Common stock.........................................        14,000   |          --          14,000 |          --
                                                                --------   |    --------        -------- |    --------
         Net cash used for (provided from) financing                       |                             |
          activities .....................................       (26,465)  |     (72,500)         13,108 |    (103,200)
                                                                --------   |    --------        -------- |    --------
                                                                           |                             |
CASH FLOWS FROM INVESTING ACTIVITIES:                                      |                             |
   Property additions.....................................        12,623   |      15,149          22,817 |      29,372
   Proceeds from non-utility generation trusts............            --   |      (7,720)        (34,208)|     (16,185)
   Decommissioning trust investments......................            --   |           3              -- |          15
   Other..................................................            --   |         852             239 |       4,171
                                                                --------   |    --------        -------- |    --------
         Net cash used for (provided from) investing                       |                             |
          activities .....................................        12,623   |       8,284         (11,152)|      17,373
                                                                --------   |    --------        -------- |    --------
                                                                           |                             |
Net increase (decrease) in cash and cash equivalents......         1,851   |     131,016         (18,722)|     131,106
Cash and cash equivalents at beginning of period..........        18,460   |         670          39,033 |         580
                                                                --------   |    --------        -------- |    --------
Cash and cash equivalents at end of period................      $ 20,311   |    $131,686        $ 20,311 |    $131,686
                                                                ========   |    ========        ======== |    ========

<FN>


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

</FN>
</TABLE>






<PAGE>


                        REPORT OF INDEPENDENT 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 June 30, 2002, and the related
consolidated statements of income and cash flows for each of the three-month and
six-month periods ended June 30, 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, after the
restatement described in Note 4, for them to be in conformity with accounting
principles generally accepted in the United States of America.





PricewaterhouseCoopers LLP
Cleveland, Ohio
August 8, 2002, except as to Note 4,
which is as of November 26, 2002



                                    83

<PAGE>


                          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 portions of
Pennsylvania, offering regulated electric transmission and distribution
services. Penelec also provides power to those customers electing to retain them
as their power supplier. Penelec's regulatory plan itemizes, or unbundles, 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 increased by $7.0 million or 3.0% in the second
quarter of 2002, and by $6.0 million or 1.3% in the first half of 2002, compared
to the same periods in 2001. The sources of the changes in operating revenues,
as compared to the same periods in 2001, are summarized in the following table.


<TABLE>
<CAPTION>
                                                             Three Months Ended      Six Months Ended
       Sources of Operating Revenue Changes                    June 30, 2002          June 30, 2002
       -----------------------------------------------------------------------------------------------
       Increase (Decrease)                                                (In millions)
       <S>                                                         <C>                   <C>

       Change in kilowatt-hour sales due to level of retail
            customers shopping for generation service.....         $ 25.0                $ 60.4
       Change in other retail kilowatt-hour sales.........           (3.3)                 (8.8)
       Change in wholesale sales..........................          (12.7)                (40.6)
       All other changes..................................           (2.0)                 (5.0)
                                                                   ------                ------

       Net Increase in Operating Revenues.................         $  7.0                $  6.0
                                                                   ======                ======

</TABLE>


       Electric Sales

           In the first half of 2002, a significant reduction in the number of
customers receiving their power from alternate suppliers continued to have a
positive effect on operating revenues. During the first six months of 2001,
21.5% of kilowatt-hours delivered were to shopping customers, whereas only 4.9%
of kilowatt-hours delivered during the first six months of 2002 were to shopping
customers. Offsetting this increase in revenues from returning shopping
customers were lower sales to wholesale customers during the first half of 2002.
A decline in economic conditions resulted in a decrease in sales to industrial
customers during the six months ended June 30, 2002; however, conditions began
to improve in the quarter ended June 30, 2002, resulting in an increase in
industrial sales during that period. Changes in kilowatt-hour deliveries by
customer class during the three and six months periods ended June 30, 2002, as
compared to the same periods in 2001, are summarized in the following table:


 Changes in Distribution Deliveries   Three Months Ended      Six Months Ended
   and Wholesale Generation Sales       June 30, 2002          June 30, 2002
 -----------------------------------------------------------------------------
 Increase (Decrease)

 Residential.......................           1.5%                 (1.5)%
 Commercial........................           2.0%                  0.9%
 Industrial........................           9.3%                 (4.9)%
                                            -----                 -----

 Total Retail......................           4.2%                 (1.8)%
 Wholesale.........................         (56.9)%               (71.9)%
                                            -----                 -----

 Total.............................          (2.5)%               (10.7)%
                                            -----                 -----

       Operating Expenses and Taxes

           Total operating expenses and taxes increased by $9.5 million in the
second quarter of 2002 compared to the same period in 2001, as a result of a
slight increase in operation and maintenance expenses, as well as higher general
taxes.

           Total operating expenses and taxes decreased by $11.3 million in the
first six months of 2002 compared to the same period in 2001. A $22.5 million
decrease in purchased power costs during this period was 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 decrease of $8.5 million during the same
period was primarily attributable to the absence of costs related to early
retirement

                                     84

<PAGE>


programs  offered to certain  bargaining unit employees during the first quarter
of 2001. These decreases were partially offset by an increase of $5.3 million in
general  taxes in the first six months of 2002  compared  to the same  period in
2001, as well as higher pension and other employee related costs.

       Net Interest Charges

           Net interest charges decreased by $2.8 million in the second quarter
of 2002, and $4.3 million in the first half of 2002, compared to the same
periods in 2001. The decreases reflect higher interest deferrals related to
Penelec's deferred provider of last resort costs, and reduced short-term
borrowing levels.

       Financial Statements Revision

           During the third quarter of 2002, Penelec established a reserve and
recorded a non-cash charge for deferred energy costs incurred subsequent to the
merger (see Pennsylvania Regulatory Matters). The reserve reflects the potential
adverse impact of a pending Pennsylvania Supreme Court decision whether to
review the Commonwealth Court ruling. In the originally filed interim financial
statements for the quarter ended June 30, 2002, Penelec had previously
disclosed, in consultation with its independent accountants, that the
finalization of that potential pre-acquisition contingency relating to the
FirstEnergy/GPU merger would be reflected as an adjustment to the allocation of
the purchase price prior to the end of the third quarter of 2002. During the
third quarter of 2002 and in connection with FirstEnergy finalizing the purchase
accounting relating to the FirstEnergy/GPU merger, Penelec revised the
previously disclosed accounting for this potential pre-acquisition contingency
after further consultation with its independent accountants. This resulted in
the recognition of a reserve related to deferred energy costs. Accordingly,
Penelec amended its interim consolidated financial statements for the quarter
ended June 30, 2002 to reflect a decrease of net income by approximately $4.4
million related to changes in PLR related energy costs incurred that had been
previously reflected as changes to its regulatory assets (see Note 4). Should
the Pennsylvania Supreme Court ultimately uphold FirstEnergy's appeal, the
charge relating to 2002 would be reversed into earnings.

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

           Penelec has continuing cash requirements for planned capital
expenditures and maturing debt. During the remaining six months of 2002, capital
requirements for property additions and capital leases are expected to be about
$31.6 million. Penelec also has requirements for maturing long-term debt of
$25.2 million during the remainder of 2002. These requirements are expected to
be satisfied from internal cash and/or short-term credit arrangements.

           As of June 30, 2002, Penelec had about $20.3 million of cash and
temporary investments and $103.5 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 indenture prohibits (subject to certain exceptions) it from issuing
any debt which is senior to the senior notes. As of June 30, 2002, Penelec had
the capability to issue up to $463 million of additional FMBs on the basis of
property additions and retired bonds. 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 for hedging purposes. The change
in the fair value of commodity derivative contracts related to energy production
during the second quarter of 2002 is summarized in the following table:


           Change in the Fair Value of Commodity Derivative Contracts
   ----------------------------------------------------------------------
                                                           (In millions)
   Outstanding net asset as of March 31, 2002..........        $10.5
   Settled contracts...................................         (0.2)
   Change in techniques/assumptions....................          --
   Decrease in value of existing contracts.............         (4.6)
                                                               -----

   Outstanding net asset as of June 30, 2002...........        $ 5.7
                                                               =====

                                     85

<PAGE>

           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:


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

                                2002*     2003      2004   Thereafter    Total
-------------------------------------------------------------------------------
                                               (In millions)
 Prices actively quoted...     $(0.1)     $0.1     $ --       $ --       $ --
 Prices based on models**.       --        --        --        5.7        5.7
                               -----      ----     ----       ----       ----

   Total..................     $(0.1)     $0.1     $ --       $5.7       $5.7
                               =====      ====     ====       ====       ====

 * For the last half 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 and volatilities 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 June 30, 2002.

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

           In June and July 2001, several parties had filed Petitions for Review
with the Commonwealth Court of Pennsylvania regarding the June 2001 PPUC orders
which approved the FirstEnergy/GPU merger and provided rate relief for Met-Ed.
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
Met-Ed's PLR obligation, and rejected those parts of the settlement that
permitted the Company to defer for accounting purposes the difference between
its wholesale power costs and the amount collected from retail customers. Met-Ed
and PPUC each filed a Petition for Allowance of Appeal with the Pennsylvania
Supreme Court on March 25, 2002, asking it to review the Commonwealth Court's
decision. Also on March 25, 2002, Citizens Power filed a motion seeking an
appeal of the Commonwealth Court's decision to affirm the FirstEnergy/GPU merger
with the Supreme Court of Pennsylvania (see Financial Statements Revision and
Note 4).

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 financial results. All of Penelec's assets are subject
to their own specific risks and uncertainties and are regularly 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. FirstEnergy's most recent
review was completed in June 2002. The results of that review indicate that no
impairment of Penelec's $862.3 million of goodwill is appropriate.

       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


                                   86
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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 - $572.3 million as
of June 30,  2002.  Penelec  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. 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 commodity
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 not yet
billed through the end of the accounting period. 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

Recently Issued Accounting Standards Not Yet Implemented
--------------------------------------------------------

           In June 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 has
identified various applicable legal obligations as defined under the new
standard and expects to complete an analysis of their financial impact in the
second half of 2002.

                                       87

<PAGE>











                                    SIGNATURE



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



November 26, 2002








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



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



                                   90



<PAGE>









                                  Certification




I, H. Peter Burg, certify that:

  1.  I have reviewed this quarterly report on Form 10-Q/A of Pennsylvania
      Electric Company;

  2.  Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

  3.  Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report.




Date:  November 26, 2002


                                               /s/H. Peter Burg
                                          ------------------------------
                                                  H. Peter Burg
                                              Chief Executive Officer

<PAGE>


                                  90.1


                                  Certification




I, Richard H. Marsh, certify that:

  1.  I have reviewed this quarterly report on Form 10-Q/A of Pennsylvania
      Electric Company;

  2.  Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

  3.  Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report.




Date:  November 26, 2002


                                              /s/Richard H. Marsh
                                       ---------------------------------------
                                                 Richard H. Marsh
                                               Chief Financial Officer


                                    90.2

<PAGE>