SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 20, 2002
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
----------- ----------------------------- ------------------
333-21011 FIRSTENERGY CORP. 34-1843785
(An Ohio Corporation)
76 South Main Street
Akron, Ohio 44308
Telephone (800)736-3402
1-2323 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY 34-0150020
(An Ohio Corporation)
c/o FirstEnergy Corp.
76 South Main Street
Akron, OH 44308
Telephone (800)736-3402
1-3583 THE TOLEDO EDISON COMPANY 34-4375005
(An Ohio Corporation)
c/o FirstEnergy Corp.
76 South Main Street
Akron, OH 44308
Telephone (800)736-3402
Item 9 Regulation FD Disclosure
On December 20, 2002, FirstEnergy Corp. announced that it will retain
ownership of its four coal-fired power plants located along Lake Erie in Ohio
after reviewing bids it received from parties interested in purchasing the
plants from subsidiaries of FirstEnergy, including The Cleveland Electric
Illuminating Company (CEI) and The Toledo Edison Company (TE). Bids for the
376-megawatt (MW) Ashtabula Plant in Ashtabula, 648-MW Bay Shore Plant in
Oregon, 1,262-MW Eastlake Plant in Eastlake, and 249-MW Lake Shore Plant in
Cleveland were due to FirstEnergy by December 2, 2002.
Since FirstEnergy has decided to retain ownership, it will record an
aggregate charge of $43 million, net of tax (CEI - $26 million; TE - $8 million
and other subsidiaries - $9 million), or $0.15 per share of common stock, in the
fourth quarter of 2002 -- $33 million in non-cash depreciation charges that were
not recorded while the plants were pending sale and $10 million in
transaction-related fees.
Based on the bids FirstEnergy received, retaining the plants to serve
its customers represents a greater value to FirstEnergy than selling the plants
at this time. The market for generating plants has softened significantly since
FirstEnergy reached its original agreement to sell the plants to Minneapolis,
Minnesota-based NRG Energy, Inc. in November 2001.
While details of the bids remain confidential, the offers fell short
of the $1.5 billion NRG previously agreed to pay for the plants. The agreement
with NRG was canceled by FirstEnergy on August 8, 2002, because of the
anticipatory breach of certain obligations in the agreements by NRG's affiliate,
NRG Able Acquisition LLC. FirstEnergy has reserved the right to pursue legal
action against NRG, its NRG Able Acquisition LLC affiliate, and its parent Xcel
Energy.
FirstEnergy also confirmed that its recently updated 2003 earnings
guidance is unaffected by the decision to retain ownership of the plants.
FirstEnergy estimates that its 2003 debt retirements will be approximately $1.2
billion, including $0.7 billion of mandatory redemption obligations. This
continues to represent a significant amount of deleveraging and would result in
a consolidated debt-to-capitalization ratio of approximately 60% by year-end
2003, including the debt equivalents of sale and leaseback transactions of its
generating units that are not reflected on the balance sheet.
This Form 8-K includes forward-looking statements based on
information currently available to management. Such statements are subject to
certain risks and uncertainties. These statements typically contain, but are not
limited to, the terms "anticipate," "potential," "expect," "believe," "estimate"
and similar words. Actual results may differ materially due to the speed and
nature of increased competition and deregulation in the electric utility
industry, economic or weather conditions affecting future sales and margins,
changes in markets for energy services, changing energy market prices,
legislative and regulatory changes (including revised environmental
requirements), availability and cost of capital, inability to accomplish or
realize anticipated benefits of strategic goals and other similar factors.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, each Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
December 20, 2002
FIRSTENERGY CORP.
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Registrant
THE CLEVELAND ELECTRIC
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ILLUMINATING COMPANY
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Registrant
THE TOLEDO EDISON COMPANY
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Registrant
/s/ Harvey L. Wagner
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Harvey L. Wagner
Vice President, Controller
and Chief Accounting Officer
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