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Unassociated Document

    FirstEnergy
      Solutions Corp.                                                             EXHIBIT
      10.9

    FERC
      Electric
      Tariff, First Revised Volume No.1

    Service
      Agreement
      No.4

    

    

    POWER
      SUPPLY AGREEMENT

    

    Between
      FirstEnergy Solutions Corp., Seller

    

    And
      the
      FirstEnergy Operating Companies, Buyer

    

    This
      Electric Power Supply Agreement (“Agreement”)
      dated October 31,
      2005, is made by and between FirstEnergy Solutions Corp. (“SOLUTIONS” or
“Seller”), and the following FirstEnergy Operating Companies: The Cleveland
      Electric Illuminating Company, Ohio Edison Company, and The Toledo Edison
      Company (collectively referred to as “FEOCs” or “Buyer”). SOLUTIONS and FEOCs
      may be identified collectively as “Parties” or individually as a “Party.” This
      Agreement is entered into in connection with the Ohio electric restructuring
      legislation and the Ohio rate stabilization plan approved by the Public
      Utilities Commission of Ohio (“PUCO”) in Case No. 03-2144-EL-ATA, et al.,
      (hereinafter, “Ohio Rate Stabilization Plan”).

     

    WHEREAS,
      Seller has
      purchased: all of the electric output of nuclear generating units of its
      affiliate, FirstEnergy Nuclear Generation Corp. (including the electric output
      of nuclear generating units owned by others that is purchased by FirstEnergy
      Nuclear Generation Corp.); all of the electric output of fossil and pumped
      storage generating facilities owned or operated by its subsidiary, FirstEnergy
      Generation Corp.; and power from unaffiliated companies (collectively referred
      to as “Generating Resources”); and

     

    WHEREAS,
      Seller is engaged
inter
      alia,
      in the business
      of generating, purchasing, and selling Power at wholesale and retail;
      and

     

    WHEREAS,
      Buyer is
      responsible for obtaining and delivering sufficient Capacity and Energy, and
      related services necessary to meet its Provider of Last Resort obligations
      under
      Ohio law, as well as other power supply obligations incurred by law, contract
      or
      tariff;

     

    WHEREAS,
      Buyer desires to
      obtain from Seller sufficient Power to satisfy its Power Supply Requirements
      to
      Ohio customers under the rates, terms and conditions set forth herein;

     

    

     

    

     

    
      	
              Issued
                By: Richard
                H. Marsh, Senior Vice President

              Issue
                Date: October
                31, 2005

               

            	
              Effective
                Date: January 1, 2006

               

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    It
      is agreed as follows:

     

    I.         
      TERM

     

    
      	 	
              A.

            	
              The
                sale and
                purchase of Power pursuant to this Agreement shall begin on January
                1,
                2006, or such later effective date authorized by the Federal Energy
                Regulatory Commission, and unless terminated by mutual agreement
                of the
                Parties shall remain in effect through December 31,
                2008.

            

    

     

    
      	 	
              B.

            	
              This
                Agreement may be terminated at the sole option of Seller with sixty
                days
                notice to become effective upon the implementation of a winning bid
                for
                Provider of Last Resort service resulting from the auction process
                established pursuant to the Ohio Rate Stabilization Plan approved
                in PUCO
                Case No. 03-2144-EL-ATA, et al, and any subsequent modifications
                or
                proceedings related thereto (“Ohio Auction”). In the event Buyer obtains
                Capacity and Energy for Provider of Last Resort service from an
                unaffiliated supplier through the Ohio Auction, Buyer is not obligated
                to
                obtain and pay for that portion of its Power Supply Requirements
                from
                Seller. 

            

    

     

    
      	
              II.

            	
              SALE
                AND PURCHASE OF CAPACITY AND ENERGY

            

    

     

    
      	 	
              A.

            	
              Seller
                shall
                make available to Buyer Capacity and Energy sufficient to satisfy
                Buyer’s
                Power Supply Requirements. Seller shall make such firm Capacity and
                Energy
                available at the Delivery Points. Capacity and Energy supplied shall
                be
                sixty-hertz, three phase alternating current. The Power Supply
                Requirements will be provided in accordance with Good Utility Practice,
                and where applicable, the provisions of the OATT of the Transmission
                Provider or any superseding tariff. The Capacity and Energy provided
                by
                Seller will comply with all requirements for Network Resources under
                the
                Transmission Provider’s OATT and Buyer’s Network Transmission Agreements
                with Transmission Provider. 

            

    

     

    
      	 	
              B.

            	
              Except
                as
                provided in Section I.B., Buyer will purchase its full Power Supply
                Requirements from Seller during the term of this Agreement. Buyer
                will pay
                for the Power Supply Requirements in accordance with Section IV of
                this
                Agreement. Buyer is responsible for obtaining all Network Transmission
                Service, Ancillary Services, congestion charges, marginal transmission
                losses, and such other services and administrative charges as are
                required
                and imposed by the Transmission Provider OATT on the Buyer as a Load
                Serving Entity for the delivery of Capacity and Energy at and from
                the
                Delivery Points under this Agreement.

            

    

     

    
      	 	
              C.

            	
              Seller
                may
                purchase Power from third parties in the Spot Market as necessary
                to
                satisfy its obligations under this Agreement. Buyer will pay for
                this
                Power at the price specified in Section IV.B of this
                Agreement.

            

    

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	 	
              D.

            	
              If
                Seller’s
                credit is adversely impacted during the term of this Agreement, Buyer
                agrees to allow Seller to acquire purchased Power as agent for the
                Buyer
                as reasonably necessary to minimize supply costs under this Agreement.
                Buyer will pay all of the costs associated with acquiring this Power,
                but
                Seller will not charge Buyer any broker fee for performing this service.
                

            

    

     

    II.        
      SCHEDULING
      AND SYSTEM PLANNING

     

    
      	 	
              A.

            	
              On
                or before
                November 1, 2005 and on November 1 of each subsequent year during
                the term
                of this Agreement, Buyer will inform Seller of its initial annual
                Capacity
                and Energy forecast for the next calendar year. Such initial annual
                forecast shall include Buyer’s Power Supply Requirements for the year, by
                month. Based on Buyer’s initial annual forecast, as well as other
                information that may be communicated between Buyer and Seller as
                necessary
                and appropriate for system planning, Seller shall procure the necessary
                Generation Resources and develop forecasts of Buyer’s Power Supply
                Requirements on a weekly, daily and hourly basis, and shall periodically
                update such forecasts to reflect current circumstances.
                

            

    

     

    
      	 	
              B.

            	
              Buyer
                shall
                update its annual forecast of Capacity and Energy for any change
                or
                expected change in its Power Supply Requirements that would materially
                affect the annual forecast provided to Solutions. Buyer shall provide
                the
                updated forecast to Solutions for any full month(s) remaining in
                the
                calendar year within thirty days of becoming aware of the change
                or
                expected change in its Power Supply Requirements.
                

            

    

     

    
      	 	
              C.

            	
              Buyer
                is
                responsible for scheduling delivery of its Power Supply Requirements
                with
                Transmission Provider in accordance with the OATT. Buyer will
                simultaneously furnish its schedule to Seller and Transmission Provider.
                Seller will supply Capacity and Energy to Buyer in accordance with
                the
                schedule provided to Transmission Provider. Buyer and Seller acknowledge
                that Buyer’s Power Supply Requirements may vary from the schedule provided
                to Transmission Provider. Buyer agrees that it is responsible for
                payment
                of any Transmission Provider charges incurred when actual Power Supply
                Requirements differ from the schedule provided. Seller shall be
                responsible for payment of any Transmission Provider charges incurred
                by
                its failure to deliver the scheduled amount of Capacity and Energy.
                

            

    

     

    
      	 	
              D.

            	
              Seller
                agrees
                to operate its Generating Resources in accordance with Good Utility
                Practice, including, but not limited to the efficient and economic
                dispatch of the Generating Resources. Seller will self-schedule sufficient
                Generating Resources to supply Buyer’s Power Supply Requirements in
                accordance with Buyer’s delivery schedule and the Transmission Provider
                OATT. 

            

    

     

    
       

      
        
          Effective
            Date:  January 1, 2006

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

    

    
      	 	
              E.

            	
              Load
                Management. To minimize supply risk to the Seller hereunder, Buyer
                agrees
                to enforce its applicable Retail Tariffs, Special Contracts, and
                federal
                tariffs and contracts, including, but not limited to, those tariffs
                or
                contracts that provide for curtailment or interruption of electric
                service, real time pricing, or other load management devices. At
                Buyer’s
                request, Seller will provide estimates of the Spot Market price of
                Energy
                in sufficient detail for Buyer to implement and administer its tariffs
                and
                contracts with retail customers. Any such data furnished to Buyer
                shall be
                treated as Confidential
                Information.

            

    

     

    
      	 	
              F.

            	
              Buyer
                and
                Seller agree to cooperate in fulfilling their respective obligations
                to
                the Transmission Provider, NERC, regional reliability council, Electric
                Reliability Organization, Regional Entity or Government Authority
                related
                to service provided under this
                Agreement.

            

    

     

    IV.       PRICE

     

    Seller
      shall
      charge, and Buyer shall pay, for Buyer’s Power Supply Requirements the sum of
      the following charges. The method for calculating this amount is set forth
      in
      Exhibit B.

     

    A.   Capacity
      and
      Energy Charges

     

    Buyer
      shall pay
      Seller an amount up to, but not exceeding, the amount of money that Buyer bills
      its retail customers taking Capacity and Energy from Buyer as the generation
      charge, fuel cost adder and Rate Stabilization Charge under the Buyer’s Retail
      Tariffs and Special Contracts as approved by the Public Utilities Commission
      of
      Ohio. As soon as practicable after the end of the month, Buyer shall provide
      Seller load data, metered sales, and rates used for billing retail customers
      in
      sufficient detail for Seller to determine after the fact, the revenues due
      Seller for Buyer’s Power Supply Requirements and delivered to the applicable
      retail customer classes during a billing period. Buyer and Seller will abide
      by
      all applicable Code of Conduct provisions in exchanging this data, and such
      data
      will be considered Confidential Information under Section VII.C of this
      Agreement.

     

    B.   Adjustments
      to
      Capacity and Energy Charges

     

    In
      addition to the charges specified above, Buyer will pay a monthly charge equal
      to its pro rata share of the total cost of Energy purchased by Seller in the
      Spot Market for delivery to the FirstEnergy Balancing Area in the previous
      calendar month. The pro rata share of total cost of Energy payable by Buyer
      shall be determined in accordance with Exhibit B.

    
 

    
      
        Effective
          Date:  January 1, 2006

      

      
        4

        
          

        

      

      
        
        

      

    

     

    C.   Power
      Supply for
      Buyer’s Existing Wholesale Contracts 

     

    During
      the term of
      this Agreement, Seller will supply sufficient Capacity and Energy to fulfill
      Power supply obligations under Buyer’s wholesale contracts in effect on January
      1, 2006. Buyer is responsible for scheduling and delivery of Power under such
      wholesale contracts, as well as payment of any charges imposed by the
      Transmission Provider for delivery of Power under the wholesale contracts.
      Buyer
      will pay Seller the amount billed by Buyer under its wholesale contracts for
      Power supply, including, but not limited to, charges for demand Capacity,
      Energy, or reserves. As soon as practicable after the end of the month, Buyer
      shall provide Seller load data, metered sales, and rates used for billing
      wholesale customers in sufficient detail for Seller to determine after the
      fact,
      the revenues due Seller for Buyer’s existing wholesale contracts.

     

    D.   Billing
      and
      Payment

     

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

     

    E.   Records

     

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

     

    F.   Audit
      and
      Adjustment Rights

     

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

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        5

        
          

        

      

      
        
        

      

    

     

    G.   Section
      205
      Rights

     

    The
      rates for
      service specified herein shall remain in effect for the Term of this Agreement,
      and shall not be subject to change through application to the FERC pursuant
      to
      the provisions of Section 205 of the Federal Power Act absent the written
      agreement of all Parties hereto. 

     

    V.   METERING

     

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

     

    VI.  
NOTICES

     

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

     

    NOTICES
      & CORRESPONDENCE:

     

    
      
        	
                To
                  Seller: FirstEnergy
                  Solutions Corp

                      Director,
                  FES Back
                  Office

                      395
                  Ghent Road

                      Akron,
                  Ohio
                  44333

              	
                To
                  Buyer:
                  FirstEnergy
                  Service Company

                      Vice
                  President

                      76
                  South Main
                  Street

                      Akron,
                  Ohio
                  44308

              

      

    

     

     

    INVOICES
      & PAYMENTS:

     

    
      
        	
                To
                  Seller: FirstEnergy
                  Solutions Corp

                      Director,
                  FES Back
                  Office

                      395
                  Ghent Road

                      Akron,
                  Ohio
                  44333

              	
                To
                  Buyer:
                  FirstEnergy
                  Service Company

                      Vice
                  President

                      76
                  South Main
                  Street

                      Akron,
                  Ohio
                  44308

              

      

    

     

    SCHEDULING:

     

    

      
        	
                To
                  Seller: FirstEnergy
                  Solutions Corp

                      Director,
                  FES Back
                  Office

                      395
                  Ghent Road

                      Akron,
                  Ohio
                  44333

              	
                To
                  Buyer:
                  FirstEnergy
                  Service Company

                      Vice
                  President

                      76
                  South Main
                  Street

                      Akron,
                  Ohio
                  44308

              

      

    

     

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    VII    MISCELLANEOUS

     

    A.    Performance
      Excused

     

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

     

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

     

    B.    Transfer
      of
      Title and Indemnification

     

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

     

    C.    Confidentiality

     

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

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        7

        
          

        

      

      
        
        

      

    

     

    D.    Further
      Assurances

     

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

     

    E.    Defined
      Terms

     

    Terms
      not
      specifically defined in this Agreement shall have the meaning given in the
      applicable Transmission Provider OATT. 

     

    F.    Assignment

     

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

     

    G.    Governing
      Law

     

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

     

    H.    Counterparts

     

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

     

    I.    Waiver

     

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

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        8

        
          

        

      

      
        
        

      

    

     

    J.    No
      Third Party
      Beneficiaries

     

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

     

    K.    Severability

     

    Any
      provision
      declared or rendered unlawful by Government Authority or deemed unlawful because
      of a statutory change will not otherwise affect the remaining lawful obligations
      that arise under this Agreement.

     

    L.    Construction

     

    The
      term
“including” when used in this Agreement shall be by way of example only and
      shall not be considered in any way to be a limitation. The headings used herein
      are for convenience and reference purposes only.

     

    

    IN
      WITNESS
      WHEREOF,
      the Parties have
      caused their duly authorized representatives to execute this Power Supply
      Agreement on their behalf as of October 31, 2005.

     

    

    
      	
              FirstEnergy
                Solutions Corp.

            	
              The
                Cleveland
                Electric Illuminating Company

              Ohio
                Edison
                Company

              The
                Toledo
                Edison Company

            
	 	 
	 	 
	
              By:______________________________

              Senior
                Vice
                President,

              FirstEnergy
                Solutions Corp.

            	
              By:____________________________________

              Vice
                President, FirstEnergy Service
                Company

            

    

     

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

    DEFINITIONS

     

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

     

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

     

    Ancillary
      Services
      means all services
      as defined in the Transmission Provider OATT that Buyer must obtain to deliver
      Capacity and Energy under this Agreement.

     

    Buyer’s
      Network Transmission Agreements
      means the service
      agreements for Network Integration Transmission Service and the Network
      Operating Agreement among the Transmission Provider, The Cleveland Electric
      Illuminating Company, Ohio Edison Company, Pennsylvania Power, and The Toledo
      Edison Company

     

    Buyer’s
      Power Supply Requirements
      means Capacity and
      Energy, necessary to meet its Provider of Last Resort obligations under Ohio
      law, as well as other power supply obligations incurred by law, contract or
      tariff. Buyer’s Power Supply Requirements do not include deviations in the
      amount of energy scheduled and consumed under this Agreement, including, but
      not
      limited to, energy imbalance, transmission losses, and congestion as defined
      in
      the Transmission Provider OATT.

     

    Buyer’s
      Retail Tariffs
      mean all retail
      tariffs of The Cleveland Electric Illuminating Company, Ohio Edison Company,
      and
      The Toledo Edison Company as approved by the PUCO.

     

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

     

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

     

    Code
      of
      Conduct
      means statutes,
      rules, regulations, or orders issued by a Government Authority that prohibit,
      restrict, or condition the exchange of information between the regulated and
      competitive business operations of Affiliates.

     

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

    
 

    
      
        Effective
          Date:  January 1, 2006

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Delivery
      Point
      means where
      Capacity and Energy are supplied from generating facilities owned or controlled
      by the Seller within the FirstEnergy Balancing Area at the point of
      interconnection between the generating facility and the transmission facilities
      of the Transmission Owner. Delivery Point means, where Capacity and Energy
      are
      supplied from generating resources outside of the FirstEnergy Balancing Area,
      the interface between the transmission facilities of the adjacent balancing
      area
      and the transmission facilities of the Transmission Owner.

     

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

    

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

     

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

     

    FirstEnergy
      Balancing Area
      means the
      collection of generation, transmission, and loads within the metered boundaries
      of the FirstEnergy system where FirstEnergy maintains load resource balance.
      

     

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

     

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

     

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

     

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

     

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

     

    Power
      means Capacity
      and/or Energy.

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

        
Rate
      Stabilization Charge
      means the
      market-based charge as approved by the Public Utilities Commission of Ohio
      to
      compensate Buyer for the cost of reserving and supplying Provider of Last Resort
      generation service to Ohio retail customers. 

    

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

    

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

    

    Special
      Contracts
      mean contracts
      between the Buyer and Ohio retail customers for the sales of Power and other
      related services at prices that differ from the Buyer’s Retail
      Tariffs.

     

    Spot
      Market
      means the Day
      Ahead or Real Time Energy Markets administered by the Regional Transmission
      Organization or any other over-the-counter Energy market in which the
      transaction date of the Energy purchase is within thirty calendar days of the
      last day of the delivery period specified for the purchase.

     

    Transmission
      Owner
      means the entity
      that owns facilities used for the transmission of Power from the Seller’s
      Generating Facilities.

     

    Transmission
      Provider
      means the Midwest
      Independent System Transmission Operator, Inc., or other utility, including
      Regional Transmission Organizations, transmitting Power on behalf of Buyer
      to or
      from the Delivery Point(s) under this Agreement.

     

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

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

     

    TOTAL
      BILL
      CALCULATION

     

    

     

    Total
      Bill will not
      exceed S [gn+
      FCn +
      RSCn
      ]+ ((BPS ÷ (BPS +
      SPS)) * PP) + WCR

     

    where:

     

    
      
        	
                n

                 

              	
                =

                 

              	
                Ohio
                  Edison,
                  Cleveland Electric Illuminating, Toledo Edison

                 

              
	
                g

                 

              	
                =

                 

              	
                the
                  generation charge, expressed in total dollars, billed to Buyer’s retail
                  customers which elect to receive generation service from
                  Buyer

                 

              
	
                FC

                 

              	
                =

                 

              	
                the
                  fuel
                  charge, if any, billed to Buyer’s retail customers which elect to receive
                  generation service from Buyer

                 

              
	
                RSC

                 

              	
                =

                 

              	
                the
                  Rate
                  Stabilization Charge, expressed in total dollars, billed to Buyer’s retail
                  customers which elect to receive generation service from
                  Buyer,

                 

              
	
                BPS

                 

              	
                =

                 

              	
                Buyer’s
                  Power
                  Supply Requirements as defined herein, expressed in mWh,

                 

              
	
                SPS

                 

              	
                =

                 

              	
                Seller’s
                  Power Supply Requirements, expressed in mWh, for customers served
                  within
                  the FirstEnergy Balancing Area,

                 

              
	
                PP

                 

              	
                =

                 

              	
                Spot
                  Market
                  purchases, expressed in total dollars, made by Seller which are
                  delivered
                  to the FirstEnergy Balancing Area.

                 

              
	
                WCR

                 

              	
                =

                 

              	
                Wholesale
                  Contract Revenues for Power Supply

                 

              

      

    

     

     

    
      
        Effective
          Date:  January 1, 2006

      

      
        13Unassociated Document

    

      FirstEnergy
        Solutions Corp.                                                     EXHIBIT
        10.10

      FERC
        Electric
        Tariff, Original Volume No.1

      Service
        Agreement
        No.5

      

      

      ELECTRIC
        POWER SUPPLY AGREEMENT

       

      Between
        FirstEnergy Solutions Corp., Seller

       

      And
        Pennsylvania Power Company, Buyer

       

      This
        Electric Power Supply Agreement (“Agreement”)
        dated October 31,
        2005, is made by and between FirstEnergy Solutions Corp., (“SOLUTIONS” or
“Seller”), and Pennsylvania Power Company (“Penn Power” or “Buyer”). SOLUTIONS
        and Penn Power may be identified collectively as “Parties” or individually as a
“Party.” This Agreement is entered into in connection with Pennsylvania electric
        restructuring legislation and is designed to provide Penn Power’s Power Supply
        Requirements:

       

      WHEREAS,
        Seller has
        purchased: all of the electric output of nuclear generating units of its
        affiliate, FirstEnergy Nuclear Generation Corp. (including the electric output
        of nuclear generating units owned by others that is purchased by FirstEnergy
        Nuclear Generation Corp.); all of the electric output of fossil and pumped
        storage generating facilities owned or operated by its subsidiary, FirstEnergy
        Generation Corp.; and power from unaffiliated companies (collectively referred
        to as “Generating Resources”); and

       

      WHEREAS,
        Seller is engaged
inter
        alia,
        in the business
        of generating, purchasing, and selling electric power at wholesale and retail;
        and

       

      WHEREAS,
        Buyer is
        responsible for obtaining and delivering sufficient Capacity, Energy, and
        related services necessary to meet its Provider of Last Resort obligations
        under
        Pennsylvania law, as well as other power supply obligations incurred by law,
        contract or tariff;

       

      WHEREAS,
        Buyer desires to
        obtain from Seller sufficient Power to satisfy its Power Supply Requirements
        to
        Pennsylvania customers under the rates, terms and conditions set forth herein;
        

       

      It
        is agreed as follows:

       

      

      
        
          	I.	
                    
                    TERM

                

        

      

       

      
        The
          sale and
          purchase of electric power pursuant to this Agreement shall begin on January
          1,
          2006, or such later effective date authorized by the Federal Energy Regulatory
          Commission, and shall remain in effect through December 31, 2006.

         

      

      Issued
        By:   Richard
        H.
        Marsh, Senior Vice President                                 Effective
        Date: January 1, 2006

      Issue
        Date: October
        31,
        2005 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	II.	
                    SALE
                  AND PURCHASE OF CAPACITY AND ENERGY

              

      

       

        
        
          	
                	    A.	
                  Seller
                    shall
                    make available to Buyer, Capacity and Energy sufficient to satisfy
                    Buyer’s
                    Power Supply Requirements. Seller shall make such firm Capacity
                    and Energy
                    available at the Delivery Points. Capacity and Energy supplied
                    shall be
                    sixty-hertz, three phase alternating current. The Power Supply
                    Requirements will be provided in accordance with Good Utility
                    Practice,
                    and where applicable, the provisions of the OATT of the Transmission
                    Provider or any superseding tariff. The Capacity and Energy provided
                    by
                    Seller will comply with all requirements for Network Resources
                    under the
                    Transmission Provider OATT and Buyer’s Network Transmission Agreements
                    with Transmission Provider. 

                

        

      

       

      
        	
              	    B.	
                Buyer
                  will
                  purchase its full Power Supply Requirements from Seller during
                  the term of
                  this Agreement. Buyer will receive and pay for its Power Supply
                  Requirements in accordance with Section IV of this Agreement. Buyer
                  will
                  be responsible for obtaining all Network Transmission Service,
                  Ancillary
                  Services, congestion charges, marginal transmission losses, and
                  such other
                  services and administrative charges as are required and imposed
                  by the
                  Transmission Provider OATT on the Buyer as a Load Serving Entity
                  for the
                  delivery of Capacity and Energy at and from the Delivery Points
                  under this
                  Agreement. 

              

      

       

      
        	
              	    C.	
                Seller
                  may
                  purchase power from third parties in the Spot Market as necessary
                  to
                  satisfy its obligations under this Agreement.

              

      

       

      
        	
              	    D.	
                If
                  Seller’s
                  credit is adversely impacted during the term of this Agreement,
                  Buyer
                  agrees to allow Seller to acquire purchased power as agent for
                  the Buyer
                  where reasonably necessary to minimize supply costs under this
                  Agreement.
                  Buyer will pay all of the costs associated with acquiring this
                  Power, but
                  Seller will not charge Buyer any broker fee for performing this
                  service.
                  

              

      

       

      
        	III.	
                    SCHEDULING
                  AND
                  SYSTEM PLANNING

              

      

       

      
        	
              	    A.	
                On
                  or before
                  November 1, 2005, Buyer will inform Seller of its initial annual
                  Capacity
                  and Energy forecast for calendar year 2006. Such initial annual
                  forecast
                  shall include Buyer’s Power Supply Requirements for the year, by month.
                  Based on Buyer’s initial annual forecast, as well as other information
                  that may be communicated between Buyer and Seller as necessary
                  and
                  appropriate for system planning, Seller shall procure the necessary
                  Generation Resources and develop forecasts of Buyer’s Power Supply
                  Requirements on a weekly, daily and hourly basis, and shall periodically
                  update such forecasts to reflect current
                  circumstances.

              

      

       

      
        	
              	    B.	
                Buyer
                  shall
                  update its initial annual forecast of Capacity and Energy for any
                  change
                  or expected change in its Power Supply Requirements that would
                  materially
                  affect the forecast provided to Solutions. Buyer shall provide
                  the updated
                  forecast to Solutions for any full month(s) remaining in the calendar
                  year
                  within thirty days of becoming aware of the change or expected
                  change in
                  its Power Supply Requirements. 

              

      

       

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      
        	
              	    C.	
                Buyer
                  is
                  responsible for scheduling delivery of its Power Supply Requirements
                  with
                  Transmission Provider in accordance with the OATT. Buyer will
                  simultaneously furnish its schedule to Seller and Transmission
                  Provider.
                  Seller will supply Capacity and Energy to Buyer in accordance with
                  the
                  schedule provided to Transmission Provider. Buyer and Seller acknowledge
                  that Buyer’s Power Supply Requirements may vary from the schedule provided
                  to Transmission Provider. Buyer agrees that it is responsible for
                  payment
                  of any Transmission Provider charges incurred when actual Power
                  Supply
                  Requirements differ from the schedule provided. Seller shall be
                  responsible for payment of any Transmission Provider charges incurred
                  by
                  its failure to deliver the scheduled amount of Capacity and Energy.
                  

              

      

       

      
        	
              	    D.	
                Load
                  Management. To minimize supply risk to the Seller hereunder, Buyer
                  agrees
                  to enforce its applicable Retail Tariffs, Special Contracts, and
                  federal
                  tariffs and contracts, including, but not limited to, those tariffs
                  or
                  contracts that provide for curtailment or interruption of electric
                  service, real time pricing, or other load management devices. At
                  Buyer’s
                  request Seller will provide estimates of the Spot Market price
                  of Energy
                  in sufficient detail for Buyer to implement and administer its
                  tariffs and
                  contracts with retail customers. Any such data furnished to Buyer
                  shall be
                  treated as Confidential
                  Information.

              

      

       

      
        	 	
                 E.

              	
                Seller
                  agrees
                  to operate its Generating Resources in accordance with Good Utility
                  Practice, including, but not limited to the efficient and economic
                  dispatch of the Generating Resources. Seller will self-schedule
                  sufficient
                  Generating Resources to supply Buyer’s Power Supply Requirements in
                  accordance with the Buyer’s delivery schedule and Transmission Provider
                  OATT.

              

      

       

      
        	 	
                 F.

              	
                Buyer
                  and
                  Seller agree to cooperate in providing any information required
                  by the
                  Transmission Provider, NERC, regional reliability council, Electric
                  Reliability Organization, Regional Entity or Government Authority
                  related
                  to service provided under this Agreement.

              

      

       

      
        	IV.	
                   PRICE

              

      

       

      Seller
        shall
        charge, and Buyer shall pay the following charges for Buyer’s Power Supply
        Requirements. The method for calculating this amount is set forth in Exhibit
        B.

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
              	    A.	
                Capacity
                  and Energy Charges

              

      

       

      Buyer
        shall pay
        Seller an amount up to, but not exceeding, the amount of money that Buyer
        bills
        its retail customers who elect to receive generation service from Buyer as
        generation service charges, including the retail charge for losses billed
        to
        Buyer’s retail customers, under the Buyer’s Retail Tariffs and Special Contracts
        as approved by the Pennsylvania Public Utility Commission. This amount will
        be
        reduced for any gross receipts taxes contained in the generation service
        portion
        of Buyer’s Retail Tariffs and Special Contracts. As soon as practicable after
        the end of the month, Buyer shall provide Seller load data, metered sales,
        and
        rates used for billing in sufficient detail for Seller to determine after
        the
        fact, the revenues due Seller for Buyer’s Power Supply Requirements and
        delivered to the applicable retail customer classes during a billing period.
        Buyer and Seller will abide by all applicable Code of Conduct provisions
        in
        exchanging this data, and such data will be considered Confidential Information
        under Section VII.C of this Agreement.

       

      
        	
              	    B.	
                Power
                  Supply for Buyer’s Existing Wholesale Contracts
                  

              

      

       

      During
        the term of
        this Agreement, Seller will supply sufficient Capacity and Energy to fulfill
        Power supply obligations under Buyer’s wholesale contracts in effect on January
        1, 2006. Buyer is responsible for scheduling and delivery of Power under
        such
        wholesale contracts, as well as payment of any charges imposed by the
        Transmission Provider for delivery of Power under the wholesale contracts.
        Buyer
        will pay Seller the amount billed by Buyer under its wholesale contracts
        for
        Power supply, including, but not limited to, charges for demand Capacity,
        Energy, or reserves. As soon as practicable after the end of the month, Buyer
        shall provide Seller load data, metered sales, and rates used for billing
        wholesale customers in sufficient detail for Seller to determine after the
        fact,
        the revenues due Seller for Buyer’s existing wholesale contracts.

       

      
        	
              	    C.	
                Billing
                  and Payment

              

      

       

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

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      
        	
              	    D.	
                Records

              

      

       

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

       

      
        	
              	    E.	
                Audit
                  and
                  Adjustment Rights

              

      

       

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

       

      
        	
              	    F.	
                Section
                  205 Rights

              

      

       

      The
        rates for
        service specified herein shall remain in effect for the Term of this Agreement,
        and shall not be subject to change through application to the FERC pursuant
        to
        the provisions of Section 205 of the Federal Power Act absent the written
        agreement of all Parties hereto. 

       

      
        	V.	
                    METERING

              

      

       

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

       

      
        	VI.	
                    NOTICES

              

      

       

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

       

      
        
          
             

             

            
            

            Effective
              Date:  January 1, 2006

          

          
            5

            
              

            

          

          
            
            

          

        

      

       

      NOTICES
        & CORRESPONDENCE:

       

      

        
          	
                  To
                    Seller:

                	
                  FirstEnergy
                    Solutions Corp.

                	
                  To
                    Buyer:

                	
                  FirstEnergy
                    Service Company 

                	 
	 	
                  Director,
                    FES
                    Back Office

                	 	
                  Vice
                    President

                	 
	 	
                  395
                    Ghent
                    Road

                	 	
                  76
                    South Main
                    Street

                	 
	 	
                  Akron,
                    Ohio
                    44333

                	 	
                  Akron,
                    Ohio
                    44308

                	 

        

      

       

      INVOICES
        & PAYMENTS:

       

      

        
          	
                  To
                    Seller:

                	
                  FirstEnergy
                    Solutions Corp.

                	
                  To
                    Buyer:

                	
                  FirstEnergy
                    Service Company 

                	 
	 	
                  Director,
                    FES
                    Back Office

                	 	
                  Vice
                    President

                	 
	 	
                  395
                    Ghent
                    Road

                	 	
                  76
                    South Main
                    Street

                	 
	 	
                  Akron,
                    Ohio
                    44333

                	 	
                  Akron,
                    Ohio
                    44308

                	 

        

      

       

      SCHEDULING:

       

      
        
          	
                  To
                    Seller:

                	
                  FirstEnergy
                    Solutions Corp.

                	
                  To
                    Buyer:

                	
                  FirstEnergy
                    Service Company 

                	 
	 	
                  Director,
                    FES
                    Back Office

                	 	
                  Vice
                    President

                	 
	 	
                  395
                    Ghent
                    Road

                	 	
                  76
                    South Main
                    Street

                	 
	 	
                  Akron,
                    Ohio
                    44333

                	 	
                  Akron,
                    Ohio
                    44308

                	 

        

      

      

      
        	VII.	 	
                MISCELLANEOUS

              

      

       

      A.     Performance
        Excused

       

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

       

      
        
          
            
            

            Effective
              Date:  January 1, 2006

          

          
            6

            
              

            

          

          
            
            

          

        

      

       

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

       

      B.     Transfer
        of
        Title and Indemnification

       

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

       

      C.     Confidentiality

       

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

       

      D.     Further
        Assurances

       

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

       

      E.     Defined
        Terms

       

      Terms
        not
        specifically defined in this Agreement shall have the meaning given in the
        applicable Transmission Provider OATT. 

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          7

          
            

          

        

        
          
          

        

      

       

      F.     Assignment

       

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

       

      G.     Governing
        Law

       

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

       

      H.     Counterparts

       

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

       

      I.     Waiver

       

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

       

      J.     No
        Third Party
        Beneficiaries

       

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

       

      K.     Severability

       

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

       

      
        
          
            
            

            Effective
              Date:  January 1, 2006

          

          
            8

            
              

            

          

          
            
            

          

        

      

       

      L.     Construction

       

      The
        term
“including” when used in this Agreement shall be by way of example only and
        shall not be considered in any way to be a limitation. The headings used
        herein
        are for convenience and reference purposes only.

       

      IN
        WITNESS
        WHEREOF,
        the Parties have
        caused their duly authorized representatives to execute this Electric Power
        Supply Agreement on their behalf as of October 31, 2005.

       

      

        
          	
                  FirstEnergy
                    Solutions Corp.

                	
                  Pennsylvania
                    Power Company

                
	 	 	 	 	 	 	 	 	 
	
                  By
                    ______________________________

                	
                  By:
                    _______________________________________

                
	
                  Senior
                    Vice
                    President,

                  FirstEnergy
                    Solutions Corp.

                	
                  Vice
                    President, FirstEnergy Service
                    Company

                

        

      

       

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Exhibit
        A

      DEFINITIONS

       

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

       

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

       

      Ancillary
        Services
        means all services
        as defined in the Transmission Provider OATT that Buyer must obtain to deliver
        Capacity and Energy under this Agreement.

       

      Buyer’s
        Network Transmission Agreements
        means the service
        agreements for Network Integration Transmission Service and the Network
        Operating Agreement among the Transmission Provider and The Cleveland Electric
        Illuminating Company, Ohio Edison Company, Pennsylvania Power, and The Toledo
        Edison Company. 

       

      Buyer’s
        Retail Tariffs
        mean all retail
        tariffs of Pennsylvania Power Company as approved by the Pennsylvania Public
        Utility Commission.

       

      Buyer’s
        Power Supply Requirements means
        Capacity and
        Energy, necessary to meet its Provider of Last Resort obligations under
        Pennsylvania law, as well as other power supply obligations incurred by law,
        contract or tariff. Buyer’s Power Supply Requirements do not include deviations
        in the amount of energy scheduled and consumed under this Agreement, including,
        but not limited to, energy imbalance, transmission losses, and congestion
        as
        defined in the Transmission Provider OATT.

       

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

       

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

       

      Code
        of
        Conduct
        means statutes,
        rules, regulations, or orders issued by a Government Authority that prohibit,
        restrict, or condition the exchange of information between the regulated
        and
        competitive business operations of Affiliates.

       

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

       

       

       

       

      Delivery
        Point
        means, where
        Capacity and Energy are supplied from generating facilities owned or controlled
        by the Seller within the FirstEnergy Balancing Area, the point of
        interconnection between the generating facility and the transmission facilities
        of Transmission Owner. Delivery Point means, where Capacity and Energy are
        supplied from generating facilities outside of the FirstEnergy Balancing
        Area,
        the interface between the transmission facilities of the adjacent balancing
        area
        and the transmission facilities of Transmission Owner.

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          10

          
            

          

        

        
          
          

        

      

      
         

      

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

      

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

       

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

       

      FirstEnergy
        Balancing Area
        means the
        collection of generation, transmission, and loads within the metered boundaries
        of the FirstEnergy system where FirstEnergy maintains load resource balance.
        

      

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

       

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

       

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

       

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

       

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

       

      Power
        means Capacity
        and/or Energy.

       

      
        
          
             

             

            
            

            Effective
              Date:  January 1, 2006

          

          
            11

            
              

            

          

          
            
            

          

        

      

       

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

       

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

      

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

      

      Special
        Contracts
        mean contracts
        between the Buyer and retail customers for the sales of Power and other related
        services at prices that differ from the Buyer’s Retail Tariffs.

       

      Spot
        Market
        means the Day
        Ahead or Real Time Energy Markets administered by the Regional Transmission
        Organization or any other over-the-counter Energy market in which the
        transaction date of the Energy purchase is within thirty calendar days of
        the
        last day of the delivery period specified for the purchase.

       

      Transmission
        Owner
        means the entity
        that owns facilities used for the transmission of Power from the Seller’s
        Generating Facilities.

       

      Transmission
        Provider
        means the Midwest
        Independent Transmission System Operator, Inc. or other utility, including
        Regional Transmission Organizations, transmitting Power on behalf of Buyer
        to or
        from the Delivery Point(s) under this Agreement.

       

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

      

      
        
          
            
            

            Effective
              Date:  January 1, 2006

          

          
            12

            
              

            

          

          
            
            

          

        

      

      

      Exhibit
        B

      Total
        Bill
        Calculation 

      

      Total
        Bill will not
        exceed ∑ [g + L + WCR] 

       

      where:

       

      
        	 	
                g

              	
                =

              	
                the
                  generation charge, expressed in total dollars, billed to Buyer’s retail
                  customers which elect to receive generation service from Buyer,
                  less any
                  gross receipts taxes contained in the generation
                  charge.

              

      

       

      
        	 	
                L

              	
                =

              	
                the
                  retail
                  charge for losses billed to Buyer’s retail customers which elect to
                  receive generation service from
                  Buyer

              

      

       

      
        	 	
                WCR=

              	
                Wholesale
                  Contract Revenues for Power supply
                  obligations.

              

      

       

       

       

      
        
          Effective
            Date:  January 1, 2006

        

        
          13

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