Firstenergy Corp · U-1/A · On 7/25/00

Filed On 7/25/00 5:25pm ET   ·   SEC File 70-09501   ·   Accession Number 1031296-0-24

Pre-Effective Amendment to Application or Declaration   ·   Form U-1
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                                          AS
FILED WITH                                                                      
                 THE SECURITIES AND EXCHANGE
COMMISSION                                                                      
            ON <RR>May 4, 2000 </RR>    July
25, 2000                                                                        

                                FILE NO.    070-
09501                                                                           

UNITED STATES     
SECURITIES AND EXCHANGE COMMISSION        
WASHINGTON, D.C. 20549        

----------------        

<RR>AMENDMENT NO. 1</RR>      
AMENDMENT No. 2       
TO        

FORM U-1  APPLICATION/DECLARATION           
UNDER           
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935      
File No. 070-09501            

FIRSTENERGY CORP.         
76 SOUTH MAIN STREET      
AKRON, OHIO 44308         
(NAME OF COMPANY FILING THIS STATEMENT AND ADDRESS OF                   
PRINCIPAL                                                                       
EXECUTIVE OFFICE)             

NANCY C. ASHCOM, CORPORATE SECRETARY        
FIRSTENERGY CORP.       
76 SOUTH MAIN STREET        
AKRON, OHIO 44308         
(NAMES AND ADDRESS OF AGENT FOR SERVICE)      

The Commission is requested to send copies of all notices,            
orders and                                                                      
communications in connection with this Application/Declaration                  
to:                                                                             

MICHAEL F. CUSICK       
Winthrop, Stimson, Putnam & Roberts       
One Battery Park Plaza        
New York, New York 10004        
(212) 858-1000        

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ITEM 1.  DESCRIPTION OF PROPOSED TRANSACTION                                    

INTRODUCTION    

Pursuant to Sections (9)(a)(2) and 10 of the Public               
Utility Holding                                                                 
Company Act of 1935 (the "1935 Act" or the "Act"), FirstEnergy                  
Corp., an                                                                       
Ohio corporation ("FirstEnergy" or the "Applicant"), hereby                     
requests that                                                                   
the Securities and Exchange Commission (the "Commission") issue                 
an order                                                                        
<RR>(i)</RR> approving the direct acquisition by FirstEnergy of                 
all of the issued and outstanding voting securities of American                 
Transmission Systems,                                                           
Incorporated, a newly formed Ohio corporation ("ATSI")<RR>,and                  
(ii) granting such other authorizations as may be necessary in                  
connection therewith</RR>.                                                      

<RR>FirstEnergy proposes that </RR> ATSI     will                 
acquire certain transmission assets as described in Item 1.B.1                  
hereof (the "Transmission Assets") owned by each of Ohio Edison                 
Company, an Ohio corporation ("Ohio Edison"), The Cleveland                     
Electric Illuminating Company, an Ohio corporation ("Cleveland                  
Electric"), The Toledo Edison Company, an Ohio corporation                      
("Toledo Edison") and Pennsylvania Power Company, a                             
Pennsylvania corporation (individually, "Penn Power," and                       
collectively, the "Operating Companies").<RR> FirstEnergy's                     
</RR>     The      proposed creation of ATSI and transfer of                    
the Transmission Assets to ATSI is part of <RR> its </RR>                       
FirstEnergy's     plan to participate in an independent                         
regional transmission organization("RTO"). The                                  
<RR>proposed</RR> formation of the new transmission company is                  
intended to provide the following benefits to FirstEnergy and                   
its Operating Companies' customers:  (i) greater corporate and                  
organizational separation of transmission from generation                       
;     and (ii) by tying together control, planning,                       
maintenance and financial responsibilities of the Operating                     
Companies' transmission facilities into a single company having                 
an independent, streamlined and cost-efficient                                  
operation   ,     <RR>:</RR> (a) creating synergies that result                 
in better service in the region and (b) assuring non-                           
discriminatory access for all transmission users.                               
FirstEnergy's plan to participate in a transco-based RTO, with                  
the creation of ATSI as a significant step toward this end,                     
will maximize the value of the Transmission Assets to                           
shareholders.                                                                   

FirstEnergy is a public-utility holding company under             
the 1935 Act.                                                                   
It directly owns all of the issued and outstanding voting                       
securities of                                                                   
Cleveland Electric, Toledo Edison and Ohio Edison and                           
indirectly owns all                                                             
of the issued and outstanding voting securities of Penn Power.                  
FirstEnergy has claimed an exemption from all provisions of the                 
1935 Act                                                                        
(except for Section 9(a)(2) thereof) pursuant to Rule 2                         
thereunder.  See                                                                
FirstEnergy Form U-3A-2, "Statement by Holding Company Claiming                 
Exemption                                                                       
Under Rule U-2 from the Provisions of the Public Utility                        
Holding Company                                                                 
Act of 1935," dated February 29, 2000, attached hereto as                       
Exhibit G-1.                                                                    

Ohio Edison currently owns all of the issued and                  
outstanding voting                                                              
securities of Penn Power.  Ohio Edison, Penn Power, Cleveland                   
Electric and                                                                    
Toledo Edison are all "public-utility companies" as defined in                  
the 1935                                                                        
Act.  Ohio Edison is also a "holding company" as defined in the                 
1935 Act.                                                                       
Ohio Edison is currently exempt from the registration and other                 
requirements of the 1935 Act, other than from Section 9(a)(2)                   
thereof,                                                                        
pursuant to Section 3(a)(2) thereof.                                            

ATSI is incorporated as an Ohio corporation.  It                  
currently does not                                                              
conduct any business or own any utility assets.  Upon                           
completion of the                                                               
transfer of the Transmission Assets from the Operating                          
Companies to it,                                                                
ATSI will become a "public-utility company" as defined in the                   
1935 Act.                                                                       

The <RR> transactions contemplated hereby </RR>                   
establishment                                                                   
of ATSI as the transmission company in FirstEnergy's system                     
will be accomplished through (i) FirstEnergy's acquisition            
of all of the issued and outstanding voting securities of ATSI                  
in exchange for approximately $300 million, (ii) the sale and                   
transfer by the Operating Companies of their Transmission                       
Assets to ATSI in consideration for the purchase price (the                     
"Purchase Price") which will be the net book value of the                       
Transmission Assets as of December 31, 1999 (approximately $647                 
million) and (iii) ATSI's financing of the purchase of the                      
Transmission Assets by <RR>(a) </RR>     (A)      the use of                    
FirstEnergy's purchase price for all of the issued and                          
outstanding voting securities of ATSI for an amount equal to                    
45% of the Purchase Price and <RR>(b)</RR>     (B)      ATSI's                  
issuance of promissory notes (which may be secured by a lien on                 
the assets transferred) to the Operating Companies in an                        
aggregate amount equal to 55% of the Purchase Price.  The                       
interest rate on the promissory notes will be based on the                      
embedded cost of debt of the Operating Companies on a                           
consolidated basis (which is approximately 7.75%).                              

A.  DESCRIPTION OF PARTIES TO THE TRANSACTION                                   

1.  General Description.    (a)  FirstEnergy.                     
FirstEnergy was                                                                 
-------------------          -----------                  
organized under the laws of the State of Ohio in 1996.  The                     
principal                                                                       
executive offices of FirstEnergy are located in Akron, Ohio.                    
FirstEnergy                                                                     
is a holding company within the meaning of Section 2(a)(7) of                   
the 1935                                                                        
Act.                                                                            

FirstEnergy's principal business is the holding of all            
of the                                                                          
issued and outstanding voting securities of the following 12                    
direct active                                                                   
subsidiaries:  Ohio Edison; Cleveland Electric; Toledo Edison;                  
FirstEnergy                                                                     
Properties, Inc.; FirstEnergy Ventures Corp.; FirstEnergy                       
Trading                                                                         
Services, Inc.; FirstEnergy Securities Transfer Company;                        
FirstEnergy                                                                     
Facilities Services Group, LLC.; MARBEL Energy Corporation;                     
FirstEnergy Services Corp.; FE Acquisition Corp.; and                           
FirstEnergy Nuclear Operating Company; and all of the issued                    
and outstanding voting securities of the following three direct                 
inactive subsidiaries:  Centerior Service Company; FE Holdings,                 
LLC; and ATSI.  Unless otherwise noted, all these subsidiaries                  
are incorporated in the State of Ohio and have their principal                  
offices in Akron, Ohio.                                                         

(b) ATSI.ATSI was incorporated as an Ohio                   
----                                                
corporation on October 8, 1998.  It currently does not conduct                  
any                                                                             
business or own any utility assets.  Upon consummation of the                   
transactions                                                                    
contemplated hereby, ATSI will become a "public-utility                         
company" as                                                                     
defined in the 1935 Act.                                                        

(c)  Ohio Edison.  Ohio Edison was organized under          
the laws of                                                                     
-----------                                       
the State of Ohio in 1930 and is both a public utility and a                    
public                                                                          
utility holding company which is exempt from regulation by the                  
Commission                                                                      
under the 1935 Act (except for Section 9(a)(2) thereof) because                 
it is                                                                           
predominantly a public-utility company whose operations as such                 
do not                                                                          
extend beyond the State of Ohio and contiguous states.  See                     
Ohio Edison                                                                     
Company, Holding Co.  Act Release No. 21019 (April 26, 1979).                   
Ohio Edison                                                                     
owns all of the issued and outstanding voting securities of                     
Penn Power.                                                                     
Ohio Edison also owns directly 16.5% of the issued and                          
outstanding voting                                                              
securities of Ohio Valley Electric Corporation, an Ohio                         
corporation                                                                     
("OVEC") (which, in turn, owns all of the issued and                            
outstanding voting                                                              
securities of Indiana-Kentucky Electric Corporation ("IKEC")).                  
OVEC is a                                                                       
public utility company organized under the laws of Ohio in                      
1952. On the                                                                    
same date, IKEC was organized under the laws of Indiana.  The                   
two                                                                             
companies were formed by 15 independent investor-owned public                   
utilities                                                                       
(including Ohio Edison, Penn Power and Toledo Edison),                          
furnishing electric                                                             
service in the Ohio River Valley for the purpose of providing                   
the large                                                                       
electric power requirements projected for the major uranium                     
enrichment                                                                      
complex near Portsmouth, Ohio, then being built by the Atomic                   
Energy                                                                          
Commission, the predecessor to the Nuclear Regulatory                           
Commission ("NRC").                                                             

In addition to Penn Power, Ohio Edison has nine other             
wholly-owned subsidiaries organized, unless otherwise noted,                    
under the laws of the State of Ohio:  (i) OES Capital,                          
Incorporated, re-organized in December 1999 under the laws of                   
the State of Delaware; (ii) OES Fuel, Incorporated; (iii) OES                   
Finance, Incorporated; (iv) Ohio Edison Financing Trust,                        
organized under the laws of the State of Delaware; (v) Ohio                     
Edison Financing Trust II, organized under the laws of the                      
State of Delaware; (vi) OES Nuclear, Incorporated; and (vii)                    
OES Ventures, Incorporated.  These subsidiaries manage and                      
finance nuclear fuel for Ohio Edison and Penn Power, finance                    
certain electric accounts receivable, provide structures for                    
investment in energy-related projects and the raising of                        
capital by Ohio Edison, finance and manage business                             
opportunities not directly related to the provision of electric                 
service, or provide other energy-related products and services.                 
Ohio Edison's ninth subsidiary, OES Ventures, Incorporated has                  
a 49% beneficial interest in the PNBV Capital Trust, a business                 
trust organized under the laws of the State of Delaware to                      
facilitate the acquisition of lease obligation bonds relating                   
to Ohio Edison's sale and leaseback of                                          
individual interests in Beaver Valley Nuclear Power Station                     
Unit No. 2 and                                                                  
Perry Nuclear Power Plant Unit No. 1 and the resultant                          
reduction in                                                                    
effective cost to Ohio Edison under those leases.  Finally,                     
Ohio Edison                                                                     
has a 49% interest in FirstEnergy Engineering, Incorporated, a                  
corporation that provides engineering services at cost as a                     
subcontractor on construction projects undertaken by Ohio                       
Edison for third parties.  Other than Penn Power, these                         
subsidiaries do not, individually or in the aggregate, have a                   
material effect on the consolidated financial statements of                     
Ohio Edison.                                                                    

(d)  Penn Power.  Penn Power was organized under the      
laws of                                                                         
----------                                      
the Commonwealth of Pennsylvania in 1930 and owns property and                  
does                                                                            
business as an electric public utility in that state.  Penn                     
Power is also                                                                   
authorized to do business and owns property in the State of                     
Ohio.                                                                           

(e)  Cleveland Electric.  Cleveland Electric was          
organized                                                                       
------------------                              
under the laws of the State of Ohio in 1892 and is a public                     
utility                                                                         
company engaged primarily in the generation, transmission,                      
distribution                                                                    
and sale of electric energy to an area of approximately 1,700                   
square miles                                                                    
in northeastern Ohio, including the City of Cleveland.  It has                  
one                                                                             
subsidiary, Centerior Funding Corporation, which is a Delaware                  
corporation organized in 1996 that finances accounts                            
receivable.  It also owns 10% of The Toledo Edison Capital                      
Corporation ("TECC"), which is a Delaware corporation organized                 
in 1997 that makes equity investments in Delaware                               
business trusts that hold lessor debt instruments issued in                     
connection                                                                      
with Cleveland Electric's and Toledo Edison's sale and                          
leaseback of                                                                    
interests in the Bruce Mansfield Plant.                                         

(f)  Toledo Edison.  Toledo Edison was organized          
under the laws                                                                  
-------------                                   
of the State of Ohio in 1901 and is a public utility company                    
engaged                                                                         
primarily in the generation, transmission, distribution and                     
sale of                                                                         
electric energy to an area of approximately 2,500 square miles                  
in                                                                              
northwestern Ohio, including the City of Toledo.  It owns 90%                   
of TECC.                                                                        
Toledo Edison owns directly 4% of the issued and outstanding                    
voting                                                                          
securities of OVEC.                                                             

(g)  FirstEnergy Properties, Inc.  FirstEnergy            
Properties, Inc.                                                                
----------------------------                    
was organized in 1929 and primarily manages non-residential                     
real estate.                                                                    
It has one subsidiary, BSG Properties, Inc., organized in 1996                  
that                                                                            
pursues real estate development.                                                

(h)  FirstEnergy Ventures Corp.  FirstEnergy              
Ventures Corp. was                                                              
--------------------------                      
organized in 1971.  Its principal business involves the                         
ownership of stock                                                              
investments in certain non-utility ventures.  It has six                        
subsidiaries organized under the laws of the State of Ohio:                     
(i) Centerior Power Enterprises, Inc. which, together with                      
CPICOR Management LLC (a non-affiliate), is responsible for                     
implementing a Department of Energy ("DOE") clean coal project;                 
(ii) Centerior Energy Services, Inc., which provides various                    
energy consulting services under the registered trade name "The                 
E Group"; (iii) FirstEnergy Telecom Corp., which provides                       
telecommunications services; (iv) Centerior Communications                      
Holdings, Inc.,which holds equity investments for certain                       
telecommunications ventures; (v) Bay Shore Power Company, which                 
proposes to provide steam to a Toledo Edison generating unit                    
and a nonaffiliated refinery; and (vi) FirstEnergy Fuel                         
Marketing Company which provides products and services to                       
electricity generators and industrial fuel users.  FirstEnergy                  
Ventures is also part owner of seven Ohio limited liability                     
companies:  Eastroc, LLC, Eastroc Technologies, LLC and                         
Engineered Processes, LTD, which own or apply technologies for                  
the production of gypsum products; Carbon Plus, LLC, which                      
converts nonhazardous waste by-products into new products;                      
Warrenton River Terminal, LTD, which owns facilities for the                    
transloading of bulk materials on the Ohio River; Soils                         
Technology, LLC, which recycles discarded materials to                          
manufacture nutrient-rich soils; and Ohio National Energy, LTD,                 
which is involved in the East Burger Merchant Repowering                        
Project.                                                                        

(i)  FirstEnergy Trading Services, Inc.  FirstEnergy      
Trading                                                                         
----------------------------------              
Services, Inc.<RR> (formerly known as FirstEnergy Trading &                     
Power                                                                           
Marketing, Inc.) </RR> is an Ohio corporation organized in 1995                 
that                                                                            
<RR>acquires and arranges for the delivery of electricity and                   
natural gas                                                                     
to the retail customers of FirstEnergy's unregulated marketing                  
and sales                                                                       
affiliates.</RR>    is a natural gas and power marketer in                      
wholesale markets.                                                              

(j)  FirstEnergy Securities Transfer Company.               
FirstEnergy                                                                     
---------------------------------------         
Securities Transfer Company is an Ohio corporation organized in                 
1997 to                                                                         
act as transfer agent and registrar for the securities of                       
FirstEnergy and                                                                 
its direct and indirect subsidiaries.                                           

(k) FirstEnergy Facilities Services Group, LLP.             
FirstEnergy Facilities Services Group is the parent company                     
of the eleven direct subsidiaries engaged in heating,                           
ventilating, air conditioning and energy management.  These                     
subsidiaries consist of the following:  (i) Ancoma, Inc. of                     
Rochester New York (New York corporation); (ii) Colonial                        
Mechanical Corporation of Richmond, Virginia (a Virginia                        
corporation); (iii) Webb Technologies, Inc. of Norfolk,                         
Virginia (a Virginia corporation); (iv) Dunbar Mechanical Inc.                  
of Toledo, Ohio (Ohio corporation); (v) Edwards Electrical &                    
Mechanical, Inc. of Indianapolis, Indiana (Indiana                              
corporation); (vi) Elliott-Lewis Corporation of Philadelphia,                   
Pennsylvania (Pennsylvania corporation); (vii) L.H. Cranston &                  
Sons, Inc. of Timonium, Maryland (Maryland corporation); (viii)                 
Roth Bros., Inc. of Youngstown, Ohio (Ohio corporation); (ix)                   
The Hattenbach Company of Cleveland, Ohio (Ohio corporation);                   
(x) R.P.C. Mechanical, Inc. of Cincinnati, Ohio (Ohio                           
corporation); and (xi) Spectrum Controls Systems of Cincinnati,                 
Ohio (Ohio corporation).                                                        

(l)  MARBEL Energy Corporation. MARBEL Energy                 
Corporation                                                                     
-------------------------                           
is a company owning interests in crude oil and natural gas                      
production, as well as natural gas distribution and                             
transmission facilities. MARBEL's subsidiaries include Marbel                   
HoldCo. Inc. a holding company which has a 50% ownership in                     
Great Lakes Energy Partners, LLC, an oil and natural gas                        
exploration and production venture and Northeast Ohio Operating                 
Companies, Inc. which has as subsidiaries Gas Transport, Inc.                   
(Delaware Corporation) and NEO Construction Company (Ohio                       
Corporation).                                                                   

(m)  FirstEnergy Services Corp.  A                            
--------------------------                          
national sales group was established within FirstEnergy Corp.                   
to pursue sales offer energy-related products and services in                   
the unregulated gas and electric markets. FirstEnergy Services                  
Corp. has one wholly-owned subsidiary, Penn Power Energy, Inc.                  
(a Pennsylvania Corporation)                                                    

(n)   FE Acquisition Corp.  FE Acquisition Corp.          
holds all                                                                       
-------------------                           
of the outstanding shares of Mid-Atlantic Energy Development                    
Co., which is                                                                   
constructing a peaking generation unit in Richland, Ohio.                       

(o)  FirstEnergy Nuclear Operating Company.               
-------------------------------------           
FirstEnergy Nuclear Operating Company operates the Davis-Besse                  
Nuclear                                                                         
Power Station, the Perry Nuclear Power Plant and the Beaver                     
Valley Nuclear Power Station under the supervision and                          
direction of the owners of those facilities.                                    

2.  Description of Utility Operations.                            
---------------------------------                         

(a)     The Operating Companies' Utility Operations.              
--------------------------------------------      
Currently, neither of FirstEnergy and ATSI directly owns any                    
utility properties or performs any utility operations. The                      
following discussion focuses on the Operating Companies utility                 
operations with a detailed description of their transmission                    
systems in (b) below.                                                           

Ohio Edison and Penn Power.    Ohio Edison        
furnishes                                                                       
--------------------------                        
electric service to communities in a 7,500 square mile area of                  
central and                                                                     
northeastern Ohio. Ohio Edison has ownership interests in                       
certain generating facilities located in the Commonwealth of                    
Pennsylvania.  Ohio Edison also engages in the sale, purchase                   
and interchange of electric energy with other electric                          
companies.  During the twelve months ended December 31, 1999,                   
the principal source of Ohio Edison's operating revenues was                    
derived from the sale of electricity.                                           

Penn Power furnishes electric service to communities in           
a 1,500                                                                         
square mile area of western Pennsylvania. During the twelve                     
months ended                                                                    
December 31, 1999, the principal source of Penn Power's                         
operating revenues was derived from the sale of electricity.                    

Ohio Edison and Penn Power own or lease all or a portion              
of 31 electric generating units, consisting of 13 coal fired                    
units, three nuclear units, six oil fired units, one gas/oil                    
fired unit and eight diesel generators (located at two sites),                  
which have total net generating capacity of 6,057 megawatts                     
(MW). All of the electric properties owned by Ohio Edison and                   
Penn Power are located within the State of Ohio and the                         
Commonwealth of Pennsylvania.                                                   

Nine of the 13 coal fired units are 100% owned by           
Ohio Edison,                                                                    
and all such units are located in Ohio. Four of the 13 coal                     
fired units                                                                     
are held in a combined Ohio Edison-Penn Power ownership along                   
with Toledo                                                                     
Edison and Cleveland Electric.                                                  

The three nuclear units consist of (i) Beaver Valley      
1 (810                                                                          
MW), located in Pennsylvania, (ii) Beaver Valley Unit 2, also                   
located in                                                                      
Pennsylvania and representing a 456 MW share from a combined                    
Ohio Edison-                                                                    
Penn Power ownership and leasehold interest of 55.61%, and                      
(iii) Perry                                                                     
Unit 1, located in Ohio and representing a 421 MW share from a                  
combined                                                                        
Ohio Edison-Penn Power ownership and leasehold interest of                      
35.24%.                                                                         

The six oil-fired units are also located in Ohio and      
are held                                                                        
in a combined Ohio Edison-Penn Power ownership. The oil/natural                 
gas unit                                                                        
is located in Ohio and is 100% owned by Ohio Edison. The two                    
diesel                                                                          
generator sites are located in Ohio and are held in a combined                  
Ohio                                                                            
Edison-Penn Power ownership.                                                    

OVEC and IKEC.  OVEC owns the Kyger Creek               
-------------                                           
Plant at Cheshire, Ohio, which is a coal-fired facility with a                  
capacity of                                                                     
1,075 MW. IKEC owns the Clifty Creek Plant at Madison, Indiana,                 
which is a                                                                      
coal-fired facility with a capacity of 1,290 MW.  These plants                  
are                                                                             
connected by a 780-mile 345 kV transmission network and are                     
interconnected                                                                  
with the major transmission systems of OVEC's sponsor                           
companies, although                                                             
OVEC's transmission facilities do not interconnect directly                     
with the Ohio                                                                   
Edison-Penn Power or Toledo Edison systems.                                     

Cleveland Electric.  Cleveland Electric is                
------------------                                        
engaged primarily in the generation, transmission, distribution                 
and sale                                                                        
of electric energy to an area of approximately 1,700 square                     
miles in                                                                        
northeastern Ohio, including the City of Cleveland.  Cleveland                  
Electric                                                                        
also has ownership interests in certain generating facilities                   
located in                                                                      
the Commonwealth of Pennsylvania.  Cleveland Electric also                      
engages in the                                                                  
sale, purchase and interchange of electric energy with other                    
electric                                                                        
companies.  During the twelve months ended December 31, 1999,                   
the principal source of Cleveland Electric's operating revenues                 
was derived from the sale of electricity.                                       

Cleveland Electric's generating properties consist of       
all or a portion of: (i)10 units at four fossil fuel plants                     
including the Sammis Plant, located in Stratton, Ohio, the Lake                 
Shore Plant, located in Cleveland, Ohio, the Eastlake Plant,                    
located in Eastlake, Ohio, and the Ashtabula Plant, located in                  
Ashtabula, Ohio; (ii) a 454 MW share of Davis-Besse Nuclear                     
Power Station located in Oak Harbor, Ohio; and a (iii) pumped                   
storage hydroelectric plant (Seneca Plant) located in Warren,                   
Pennsylvania. These Cleveland Electric-owned plants have a net                  
demonstrated capability of 2,923 MW.                                            

Cleveland Electric and Toledo Edison as co-lessees,       
have an                                                                         
ownership share of 6.5% (51 MW), 47.56% (371 MW) and 44.38%                     
(355 MW) of                                                                     
Units 1, 2 and 3, respectively, of the coal-fired Bruce                         
Mansfield Plant                                                                 
located in Pennsylvania.  Cleveland Electric also has a 44.81%                  
ownership                                                                       
share (535 MW) of Perry Unit 1 located in Ohio, and a 24.47%                    
share (201                                                                      
MW) of Beaver Valley 2 located in Pennsylvania, and leases, as                  
co- lessee                                                                      
with Toledo Edison, another 19.88% (163 MW) of Beaver Valley 2.                 
Cleveland                                                                       
Electric owns the distribution facilities located in the area                   
it serves in                                                                    
northeastern Ohio for distributing electric energy to all of                    
its                                                                             
customers. These distribution facilities consist primarily of                   
distribution                                                                    
lines and distribution substations and related service                          
facilities and are                                                              
used to serve electric energy to customers.                                     

Toledo Edison.  Toledo Edison is engaged              
-------------                                         
primarily in the generation, transmission, distribution and                     
sale of                                                                         
electric energy to an area of approximately 2,500 square miles                  
in                                                                              
northwestern Ohio, including the City of Toledo.  Toledo Edison                 
also has                                                                        
ownership interests in certain generating facilities located in                 
the                                                                             
Commonwealth of Pennsylvania.  Toledo Edison also engages in                    
the sale,                                                                       
purchase and interchange of electric energy with other electric                 
companies.                                                                      
During the twelve months ended December 31, 1999, the principal                 
source of Toledo Edison's operating revenues was derived from                   
the sale of electricity.                                                        

Toledo Edison's generating properties consist of:  (i)            
one wholly-owned fossil fuel electric generating station, Bay                   
Shore, located in Lucas County, Ohio; (ii) a 429 MW share of                    
Davis-Besse Nuclear Power Station located in Oak Harbor, Ohio;                  
and (iii) five internal combustion turbine generator units with                 
an                                                                              
aggregate capability of 77 MW located in northwestern Ohio.                     
These Toledo                                                                    
Edison-owned plants have a net demonstrated capability of 1,137                 
MW.                                                                             

Toledo Edison and Cleveland Electric as co-lessees, have          
an                                                                              
ownership share of 6.5% (51 MW), 47.56% (371 MW) and 44.38%                     
(355 MW) of Units 1, 2 and 3, respectively, of the coal-fired                   
Bruce Mansfield Plant located in Shippingport, Pennsylvania.                    

Toledo Edison also has a 19.91% ownership share (238 MW)          
of Perry                                                                        
Unit 1.  Toledo Edison has a tenant-in-common interest and                      
leasehold                                                                       
interest (with Cleveland Electric as co-lessee with respect to                  
150 MW) in                                                                      
19.91% (163 MW) in Beaver Valley Unit 2.  Toledo Edison is                      
currently selling 150 MW of its Beaver Valley Unit 2 leased                     
capacity entitlement to Cleveland Electric.                                     

Toledo Edison owns the distribution facilities              
located in the                                                                  
area it serves in northwestern Ohio for distributing electric                   
energy to                                                                       
all of its customers.  These distribution facilities consist                    
primarily of                                                                    
distribution lines and distribution substations and related                     
service                                                                         
facilities and are used to serve electric energy to its                         
customers.                                                                      

(b)  Transmission System.  The Operating    
Companies own                                                                   
-------------------               
and operate approximately 12,000 MW of generation resources                     
that are                                                                        
connected directly to the transmission facilities to be                         
transferred.  ATSI                                                              
will acquire from the Operating Companies and will operate                      
transmission                                                                    
facilities currently operating at voltages of generally 345 kV                  
and 138 kV                                                                      
(the "Bulk Transmission System"), and 69 kV facilities (the                     
"Area                                                                           
Transmission System," and together with the Bulk Transmission                   
System, the                                                                     
"Transmission System").  The Transmission System is planned and                 
operated                                                                        
to integrate the generation resources of the Operating                          
Companies with the                                                              
their native retail and wholesale loads.  To perform this                       
network                                                                         
function, the higher voltage 345 kV and 138 kV facilities, (the                 
"Bulk                                                                           
Transmission System"), and the 69 kV facilities, (the "Area                     
Transmission                                                                    
System" and together with the Bulk Transmission System, the                     
"Transmission                                                                   
System"), are integrated and operate in a parallel manner to                    
each other.                                                                     
The Operating Companies also operate low voltage 23, 33, 34.5,                  
and 36 kV                                                                       
facilities.  These facilities were originally developed as                      
transmission                                                                    
systems when load levels were such that the power transferred                   
by these                                                                        
facilities was considered significant.  Today, however, these                   
facilities                                                                      
are isolated and do not play a significant role in the transfer                 
of power                                                                        
on the system.  Thus, these 23, 33, 34.5, and 36 kV facilities                  
no longer                                                                       
provide a transmission function.                                                

The Transmission System consists of over 7,100 circuit            
miles of                                                                        
transmission lines with nominal voltages of 345 kV, 138 kV and                  
69 kV. The                                                                      
Transmission System services over 2.2 million customers in a                    
13,200 square                                                                   
mile area in northern and central Ohio and western                              
Pennsylvania.  The                                                              
Transmission System has 37 interconnections at voltages of 69                   
kV or higher                                                                    
with six neighboring control areas.  The Transmission System is                 
connected                                                                       
to other systems to the East via ties with the Pennsylvania-New                 
Jersey-                                                                         
Maryland Interconnection ("PJM"), Duquesne Light Company                        
("Duquesne"), and                                                               
Allegheny Energy System ("Allegheny").  The Transmission System                 
is                                                                              
connected to other systems to the North through ties with the                   
Michigan                                                                        
Electric Coordination Systems, and is connected to other                        
systems to the                                                                  
South through ties with American Electric Power ("AEP") and                     
Dayton Power                                                                    
and Light Company ("Dayton").                                                   

(c)  Utility Regulation.   Ohio Edison, Cleveland         
Electric and Toledo Edison are subject to broad regulation as                   
to rates and other matters by the Public Utilities Commission                   
of Ohio (the "PUCO").  Under Ohio law, municipalities may                       
regulate rates, subject to appeal to the PUCO if not acceptable                 
to the utility.  Penn Power is subject to broad regulation as                   
to rates and other matters by the Pennsylvania Public Utility                   
Commission (the "PPUC").                                                        

Ohio Edison, Cleveland Electric, Toledo Edison and Penn           
Power are                                                                       
also subject to the jurisdiction of the Federal Energy                          
Regulatory                                                                      
Commission (the "FERC") under the Federal Power Act with                        
respect to                                                                      
wholesale electric rates, transmission service, and other                       
matters.  Construction and operation of nuclear generating                      
units are subject to the regulatory jurisdiction of the NRC,                    
including the issuance by it of construction permits and                        
operating licenses.                                                             

ATSI will be subject to the jurisdiction of the FERC              
with respect                                                                    
to its rates and other matters.                                                 

B.  DESCRIPTION OF THE PROPOSED TRANSACTION                                     

1.  Description of the Transmission Assets.  The                      
Transmission Assets                                                             
--------------------------------------                        
to be transferred from the Operating Companies to ATSI are                      
identified in                                                                   
detail in Appendix D to the Operating Agreement between ATSI                    
and the                                                                         
Operating Companies, and Schedule A to the Bill of Sale.                        
Appendix D to the Operating Agreement also describes the                        
generation and distribution facilities retained by the                          
Operating Companies.  The Operating Agreement appears in full                   
in Exhibit B-2 to this Application/Declaration.  Essentially,                   
ATSI will acquire from the Operating Companies and will operate                 
the Bulk Transmission System and the Area Transmission System.                  
The Transmission Assets to be transferred shall include:                        

(1)  transmission lines (including towers, poles, and       
conductors) and transmission stations;                                          

(2)  transformers providing transformation within the       
Bulk                                                                            
Transmission System and between the Bulk Transmission System                    
and Area                                                                        
Transmission System;                                                            

(3)  the System Control Center facility and equipment       
in                                                                              
Wadsworth, Ohio not including the associated land and land                      
rights;                                                                         

(4)  lines providing connections to generation              
facilities;                                                                     

(5)  radial taps from the Transmission System that          
are 69kV and                                                                    
above (up to, but not including, the facilities that establish                  
the final                                                                       
circuit connection to distribution facilities or retail                         
customers);                                                                     

(6)  substations that provide primarily a                   
transmission function;                                                          

(7)  voltage control devices and power flow control         
devices                                                                         
directly connected to the Transmission System;                                  

(8)  mobile capacitor banks 69kV or higher; and             

(9)  equipment spares for transmission facilities.          

The Transmission Assets include all the facilities                
currently                                                                       
recorded on the books of the Operating Companies as                             
"transmission", with the exception of certain 36 kV, 34.5kV,                    
33kV and 23 kV facilities ("Subtransmission Facilities") and do                 
not include "distribution facilities" used to provide retail                    
service.  Distribution facilities include all facilities with                   
voltages below 69 kV, including both Subtransmission Facilities                 
and the final circuit connection                                                
to substations providing transformation or connection to any                    
retail                                                                          
customer regardless of voltage level.  The Operating Companies                  
currently                                                                       
provide transmission service to certain wholesale customers at                  
delivery                                                                        
points less than 69 kV.  In order to ensure continuity of                       
service to such                                                                 
customers who decide to take service under the new FERC-                        
approved                                                                        
transmission tariff under which ATSI will offer its                             
transmission service                                                            
(the "ATSI Tariff"), ATSI and the Operating Companies have                      
entered into an                                                                 
Agency Agreement.  A copy of the Agency Agreement is attached                   
as Appendix                                                                     
C to the Operating Agreement, which in turn is included in                      
Exhibit B-1 to                                                                  
this Application/Declaration.  Under the Agency Agreement, the                  
Operating                                                                       
Companies and ATSI have expressly provided for use of certain                   
distribution                                                                    
facilities necessary to continue transmission service to                        
wholesale                                                                       
customers served at delivery points whose voltages are less                     
than 69 kV.                                                                     
Transmission service to wholesale customers over these                          
distribution                                                                    
facilities will be offered under the ATSI Tariff, and                           
associated                                                                      
distribution costs will be recovered in the rates on a direct                   
assignment                                                                      
basis as a distribution adder.  This procedure is necessary to                  
ensure that                                                                     
existing wholesale customers served at voltages below 69 kV                     
will have                                                                       
access to comparable transmission service under the ATSI                        
Tariff.                                                                         

2.  Operation of the Transmission System.  ATSI will              
operate the                                                                     
------------------------------------                      
Transmission System pursuant to the ATSI Tariff and the                         
Operating                                                                       
Agreement.  ATSI will have operational control of the                           
Transmission Assets,                                                            
serve as the control area operator over the Transmission                        
System, offer and                                                               
arrange for ancillary services, operate the Open Access Same-                   
Time                                                                            
Information System ("OASIS") in conformance with FERC Order No.                 
889*, and                                                                       
administer the ATSI Tariff,                                                     

------------                                                                    
*Open Access Same-Time Information System (Formerly Real-Time                   
Information                                                                     
Network) and Standards of Conduct, Order No. 889, Docket No.                  
RM95-9-000,                                                                     
61 Fed. Reg. 21737 (May 10, 1996), FERC Stats. & Regs. [Reg.                  
Preambles                                                                       
1991-96] 31,035 (1996)(subsequent history omitted).                           

including all requests for service under the ATSI Tariff.  ATSI                 
will also be responsible for maintenance of the Transmission                    
Assets, and will initially contract with the Operating                          
Companies to perform the maintenance.                                           

As control area operator, ATSI will establish operation         
standards, procedures and criteria by which the Transmission                    
System is administered, adhering to all NERC policies.  It will                 
oversee the dispatch of the Transmission System and ensure that                 
system reliability, integrity and safety are maintained.  ATSI                  
will evaluate and respond to transmission requests and                          
coordinate with ECAR Security Coordination Centers.  ATSI will                  
schedule energy flows into, out of and across the control area                  
and monitor control area performance.  ATSI will accommodate                    
maintenance outages, respond to forced outages, and coordinate                  
transmission switching functions with adjacent interconnected                   
companies along with the distribution facilities of the                         
FirstEnergy Operating Companies.                                                

ATSI will offer all ancillary services required by the            
FERC in its                                                                     
Order No. 888    , including scheduling, system control and                     
dispatch service; reactive supply and voltage control from                      
generation sources service; regulation and frequency response                   
service; energy imbalance service; operating reserve -                          
spinning; and operating reserve - supplemental     .  Since                     
ATSI owns no generating facilities, it will purchase the                        
necessary ancillary services from third parties.  Under the                     
Operating Agreement, the Operating Companies are required to                    
sell ancillary services to ATSI upon request at FERC approved                   
rates.  ATSI is free, however, to purchase ancillary services                   
from unaffiliated generators, and will do so consistent with a                  
least cost procurement strategy.  ATSI expects to enter into                    
agreements to purchase ancillary services from unaffiliated                     
generators in its control area.  ATSI will not, however, engage                 
in the purchase and sale of energy other than to obtain the                     
necessary ancillary                                                             
services.                                                                       

In short, upon receipt of the necessary regulatory                
approvals, ATSI                                                                 
will commence providing open access transmission service to                     
those existing                                                                  
open access customers served by the Operating Companies under                   
the existing                                                                    
transmission tariff ("FirstEnergy Open Access Tariff"), and any                 
other                                                                           
eligible customer requesting transmission service from ATSI.                    
In addition,                                                                    
post-transfer, the Operating Companies will become customers of                 
ATSI under                                                                      
the ATSI Tariff.  Where the Operating Companies are responsible                 
for                                                                             
providing transmission service under agreements or tariffs                      
predating Order                                                                 
No. 888 ("Grandfathered Transmission Agreements"), ATSI will                    
work to                                                                         
ensure obligations are satisfied, and will make its                             
Transmission System                                                             
available to provide transmission service under the                             
Grandfathered                                                                   
Transmission Agreements unless otherwise directed by the FERC.                  

3.  Financial Aspects of the Transaction.  A Bill of              
Sale will be                                                                    
------------------------------------                      
entered into between FirstEnergy Corp., on behalf of the                        
Operating                                                                       
Companies, and ATSI covering the conveyance of the Transmission                 
Assets.                                                                         
The Transmission Assets transferred to ATSI under the Bill of                   
Sale include                                                                    
the Operating Companies' rights and interests in any contracts                  
under the FirstEnergy Open Access Tariff.  A copy of the form                   
of Bill of Sale is included as part of Exhibit B-1 to this                      
Application/Declaration.                                                        

The transactions contemplated hereby will be                      
accomplished through                                                            
(i) FirstEnergy's acquisition of all of the issued and                          
outstanding voting                                                              
securities of ATSI in exchange for approximately $300 million,                  
(ii) the                                                                        
sale and transfer by the Operating Companies of their                           
Transmission Assets                                                             
to ATSI in consideration for the Purchase Price which will be                   
the net book                                                                    
value of the Transmission Assets as of December 31, 1999                        
(approximately $647 million) and (iii) ATSI's financing of the                  
purchase of the Transmission Assets by (a) the use of                           
FirstEnergy's purchase price for all of the issued and                          
outstanding voting securities of ATSI for an amount equal to                    
45% of the Purchase Price and (b) ATSI's issuance of promissory                 
notes (which may be secured by a lien on the assets                             
transferred) to the Operating Companies in an aggregate amount                  
equal to 55% of the Purchase Price.  The interest rate on the                   
promissory notes will be based on the embedded cost of debt of                  
the Operating Companies on a consolidated basis which is                        
approximately 7.75%.  The 45/55 equity-debt ratio is the same                   
as the Operating Companies' consolidated ratio as of November                   
30, 1998.                                                                       

The Transmission Assets have been released from the               
liens of the indentures securing mortgage bonds of Ohio Edison,                 
Cleveland Electric and                                                          
Toledo Edison, and the release from the liens of the indentures                 
securing                                                                        
mortgage bonds of Penn Power will take place at transfer of the                 
Transmission Assets to ATSI.  Fee land, easements and rights-of-                
way have                                                                        
been excluded from the asset transfer and will remain the                       
property of the                                                                 
Operating Companies. ATSI will acquire the right to use land                    
through 50-                                                                     
year ground leases with the Operating Companies.                                

C.  REASONS FOR AND ANTICIPATED EFFECTS OF THE PROPOSED                         
TRANSACTION                                                                     

1.  Context of the Transaction-Creation of a Larger RTO.          
---------------------------------------------------       
The transfer of the Transmission Assets to ATSI will            
facilitate                                                                      
implementation of the subsequent transfer of these facilities                   
to a transco-based RTO.  FirstEnergy's formation of ATSI and                    
the transfer of the Transmission Assets to ATSI is not the                      
ultimate goal.  Rather, this is a step towards the subsequent                   
transfer of these facilities to a transco-based RTO.                            
FirstEnergy's ultimate goal is to divest ownership, operation                   
and control of its transmission facilities from its other                       
assets.  Accordingly, if ATSI does not file a Section 203                       
application under the Federal Power Act to transfer ownership                   
or control of its transmission facilities to a transco-based                    
RTO within two years of the date of approval of the joint                       
application with the FERC (a copy of which is attached hereto                   
as Exhibit D-1), ATSI will file a Section 203 application to                    
divest its transmission facilities to an unaffiliated entity.                   
FirstEnergy intends to continue its efforts with other                          
transmission owners in the development of a transmission                        
alliance that would own, operate and aggregate regional                         
transmission assets and could, in turn, operate transmission                    
facilities of other companies (the "Transmission Alliance").                    
At present, the four utility systems currently committed to                     
participating with FirstEnergy in the Transmission Alliance                     
(AEP, Consumers Energy, Detroit Edison and Virginia Power)                      
would stretch from Michigan to Virginia and would provide open                  
access transmission service over approximately 43,500 miles of                  
transmission lines serving a population of 23 million.  It will                 
strive to better align the interests of transmission  customers                 
with the interests of transmission owners and operators.                        
Whatever the regional entity, ATSI's existence as a                             
separate corporate entity and single provider of transmission                   
services                                                                        
will facilitate the process.  Moreover, ATSI will have the                      
opportunity to                                                                  
gain some experience in the operation of the transmission                       
system as a                                                                     
stand alone entity - experience that will be valuable to the                    
effectuation                                                                    
of the next step.                                                               

2.  Anticipated Effects.  The                                     
<RR>proposed</RR>   formation    of the new                                     
-------------------                                       
transmission company is intended to provide the following                       
benefits to                                                                     
FirstEnergy and its Operating Companies' customers:  (i)                        
greater corporate                                                               
and organizational separation of transmission from generation;                  
and (ii) by                                                                     
tying together control, planning, maintenance and financial                     
responsibilities of the Operating Companies' transmission                       
facilities into                                                                 
a single company having an independent, streamlined and cost-                   
efficient                                                                       
operation, (a) creating synergies that result in better service                 
in the                                                                          
region, (b) assuring non-discriminatory access for all                          
transmission users                                                              
and (c) maximizing the value of the Transmission Assets for                     
shareholders.                                                                   

ATSI will not be engaged in the electric power                    
generation business,                                                            
and will contract with the Operating Companies and others on                    
the open                                                                        
market to provide ancillary services on a                                       
least cost basis.  ATSI will not own distribution facilities,                   
and will use distribution facilities only to the extent                         
required to provide transmission services to wholesale                          
customers served at voltages below 69 kV under the ATSI Tariff.                 
Instead,                                                                        
ATSI will focus solely on efficiently and effectively operating                 
and                                                                             
maintaining, and where necessary expanding, its transmission                    
system, and                                                                     
will be well-situated to respond quickly to customer needs.                     

D.  ADDITIONAL INFORMATION                                                      

No associate company or affiliate of FirstEnergy or any           
affiliate                                                                       
of any such associate company has any direct or indirect                        
material interest                                                               
in the proposed transaction except as stated herein.                            

ITEM 2.  FEES, COMMISSIONS AND EXPENSES                                         
------------------------------                                

The fees, commissions and expenses to be paid or                  
incurred, directly                                                              
or indirectly, in connection with the transactions contemplated                 
herein,                                                                         
including other related matters, are estimated as follows:                      

Legal fees                                                                      
Winthrop, Stimson, Putnam & Roberts                                   
$250,000                                                                        
Fees relating to appraisal of the Transmission                        
Assets                                                                
89,000    <RR>*</RR>                                                      
<RR>Miscellaneous                                                               
*</RR>                                                                          

TOTAL                                              $339,000                     
<RR>*</RR>                                                            

<RR> *  To be filed by amendment. </RR>                                         

ITEM 3.  APPLICABLE STATUTORY PROVISIONS                                        
-------------------------------                               

It is believed that Sections 9(a)(2) and 10 of the Act            
are                                                                             
applicable to     the acquisition by FirstEnergy of the voting                  
securities of ATSI in the context of      the proposed                          
transactions.  To the extent that the proposed transactions are                 
considered by the Commission to require authorization, approval                 
or exemption under any section of the Act or provision of the                   
rules or regulations thereunder other than those specifically                   
referred to herein, request for such authorization, approval or                 
exemption is hereby made.                                                       

Upon consummation of the transfer of the Transmission             
Assets from                                                                     
the Operating Companies to ATSI, ATSI will become an "electric                  
utility                                                                         
company" as defined in Section 2(a)(3) of the Act as well as a                  
"public-                                                                        
utility company" as defined in Section 2(a)(5) of the Act.                      
Because                                                                         
FirstEnergy will <RR>, as a result of the transactions                          
contemplated herein, </RR> be directly acquiring five per                       
centum or more of the outstanding voting securities of ATSI in                  
addition to those of each of the Operating Companies (which are                 
public-utility companies), such acquisition will be subject to                  
Section 9(a)(2) of the Act. Thus FirstEnergy believes that the                  
acquisition of the voting securities of ATSI in the context             
of the      proposed transactions cannot proceed without the                    
Commission's approval pursuant to Section 10 of the Act.  The                   
relevant statutory standards to be satisfied are set forth in                   
Sections 10(b), 10(c), and 10(f) of the Act.                                    

A.  SECTION 10(b)                                                               

Section 10(b) of the 1935 Act provides that, if the               
requirements of                                                                 
Section 10(f) are satisfied, the Commission shall approve an                    
acquisition                                                                     
under Section 9(a) unless the Commission finds that:                            

(1)   such acquisition will tend towards                  
interlocking                                                                    
relations or the concentration of control of public               
utility                                                                         
companies, of a kind or to an extent detrimental to the           
public                                                                          
interest or the interest of investors or consumers;               

(2)   in case of the acquisition of securities or         
utility                                                                         
assets, the consideration, including all fees,                    
commissions, and                                                                
other remuneration, to whomsoever paid, to be given,              
directly or                                                                     
indirectly, in connection with such acquisition is not            
reasonable                                                                      
or does not bear a fair relation to the sums invested in          
or the                                                                          
earning capacity of the utility assets to be acquired or          
the                                                                             
utility assets underlying the securities to be acquired;          
or                                                                              

(3)   such acquisition will unduly complicate the         
capital                                                                         
structure of the holding company system of the applicant          
or                                                                              
will be detrimental to the public interest of consumers           
or the                                                                          
proper functioning of such holding company system.                

1.  Section 10(b)(1).  The proposed transactions will             
not tend                                                                        
----------------                                          
towards interlocking relations or the concentration of control                  
of public                                                                       
utility companies, of a kind or to an extent detrimental to the                 
public                                                                          
interest or the interest of investors or consumers.                             

Notwithstanding the above, as in the case of virtually            
every                                                                           
transaction subject to Section 9(a)(2), there may exist among                   
FirstEnergy                                                                     
and its public utility subsidiaries (including ATSI)                            
interlocking                                                                    
directors and officers only of such nature and to such extent                   
as normally                                                                     
exist in public utility holding company systems among                           
affiliated and                                                                  
associated companies.  See CIPSCO, Inc., Holding Co.  Act.                      
Release No.                                                                     
25152, 47 S.E.C.  Docket 174, 178 (1990).                                       

Similarly, the <RR> proposed transactions </RR>                   
acquisition by FirstEnergy of the voting securities of ATSI                     
will not tend toward any                                              
"concentration of control of public-utility companies" that is                  
detrimental                                                                     
to the public interest, consumers or investors.  The <RR>                       
proposed transactions </RR>     acquisition by FirstEnergy of                   
the voting securities of ATSI      will not involve the                         
acquisition of any utility assets that are not already owned,                   
either directly or indirectly, by FirstEnergy and "will                         
therefore have no effect on the concentration of control of                     
public-utility companies."  Wisconsin Energy Corp., Holding Co.                 
Act Release No. 24267, 37 SEC Docket 296, 300 (1986).                           

In this Application/Declaration, FirstEnergy seeks only           
to more                                                                         
definitively separate its generation from its transmission                      
facilities in                                                                   
order to pave the way for complete divestiture of the                           
transmission                                                                    
facilities to an RTO.  As proposed herein, the Transmission                     
Assets that                                                                     
are now owned by the Operating Companies will be divested to,                   
and acquired                                                                    
by, ATSI, a corporate subsidiary of FirstEnergy.  None of                       
FirstEnergy, the                                                                
Operating Companies and ATSI proposes to merge with any other                   
entity in                                                                       
the instant Application/Declaration.  ATSI does not currently                   
own any                                                                         
generation, distribution or transmission facilities, and will                   
not own or                                                                      
control any generation.  Upon completion of the proposed                        
transfer   s    , the Operating Companies will no longer own                    
transmission facilities.                                                        

2.  Section 10(b)(2)-Fairness of Consideration and Fees.          
(a)                                                                             
---------------------------------------------------       
Fairness of Consideration.  Section 10(b)(2) of the 1935 Act                    
requires the                                                                    
-------------------------                                                       
Commission to determine whether the consideration in connection                 
with a                                                                          
proposed acquisition of securities is reasonable and whether it                 
bears a                                                                         
fair relation to the investment in and the earning capacity of                  
the utility                                                                     
assets underlying the securities being acquired. The                            
consideration in                                                                
connection with security acquisitions under the transactions                    
contemplated                                                                    
herein will be as follows:  (i) approximately $300 million will                 
be paid by                                                                      
FirstEnergy for all of the outstanding voting securities of                     
ATSI and                                                                        
(ii) the Transmission Assets will be transferred to ATSI for                    
the                                                                             
promissory notes and a cash payment equal to the difference                     
between the                                                                     
aggregate principal amount of the promissory notes and the net                  
book value                                                                      
of the Transmission Assets.  FirstEnergy believes that the                      
consideration                                                                   
to be paid by it for the voting securities of ATSI is                           
reasonable because                                                              
the amount of such consideration plus the total amount of debt                  
that ATSI                                                                       
will incur in acquiring the Transmission Assets is equal to the                 
approximate actual value of those assets.  FirstEnergy further                  
believes                                                                        
that such consideration bears a fair relation to the investment                 
in and the                                                                      
earning capacity of the Transmission Assets because it is based                 
on the net                                                                      
book value those assets had in the hands of the Operating                       
Companies.  The                                                                 
rates set by FERC in connection with those facilities when they                 
were owned                                                                      
by the Operating Companies permitted them to achieve a fair                     
return on                                                                       
those assets.  Since ATSI's rates will also be subject to FERC                  
approval,                                                                       
it can be expected that those rates (which should be based on                   
the same                                                                        
book value) will permit ATSI to achieve a fair return on them                   
as well.                                                                        
This being the case, FirstEnergy, being the sole equity owner                   
of ATSI, can                                                                    
expect to earn a fair return on its investment.  FirstEnergy                    
believes that                                                                   
the consideration paid by the Operating Companies for the                       
promissory notes                                                                
is reasonable because the principal amount of the notes, when                   
added to the                                                                    
cash that the Operating Companies will receive for the                          
Transmission                                                                    
Assets, will be equal to the net book value of those assets on                  
the books                                                                       
of the Operating Companies.  The consideration paid by the                      
Operating                                                                       
Companies bears a fair relation to the investment in and the                    
earning                                                                         
capacity of the Transmission Assets because the interest rate                   
borne by the                                                                    
promissory notes will be equal to the embedded cost of debt of                  
the                                                                             
Operating Companies on a consolidated basis and this amount is                  
not any                                                                         
greater than the cost of debt (on a consolidated basis) that                    
FERC                                                                            
considered when it approved the transmission rates currently                    
applicable to                                                                   
the Transmission Assets.  In any event, the proposed                            
transaction is not in                                                           
a real sense an acquisition of securities; it is merely a                       
corporate                                                                       
reorganization.                                                                 

(b)  Reasonableness of Fees.  An estimate of the fees       
and                                                                             
----------------------                            
expenses to be paid in connection with the proposed                             
transactions is set                                                             
forth in Item 2 hereof.  The estimated amounts to be paid are                   
fees                                                                            
for necessary professional services, and other expenses                         
incurred or to be incurred in connection with carrying out the                  
proposed transactions.  FirstEnergy believes that such fees and                 
expenses are reasonable and customary for a transaction of this                 
kind, and the standards of Section 10(b)(2) are thus satisfied.                 

3.  Section 10(b)(3)-Capital Structure.  Section                  
10(b)(3) requires                                                               
----------------------------------                        
the Commission to determine whether the proposed transactions                   
will unduly                                                                     
complicate FirstEnergy's capital structure or will be                           
detrimental to the                                                              
public interest, the interests of investors or consumers or the                 
proper                                                                          
functioning of FirstEnergy's system.  The corporate capital                     
structure of                                                                    
FirstEnergy after the consummation of the proposed                              
<RR>transactions</RR>    acquisition     will not be unduly                     
complicated.  FirstEnergy will directly acquire all of the                      
issued and outstanding voting securities of ATSI, in addition                   
to continuing to own directly or indirectly all of the issued                   
and outstanding voting securities of each of the Operating                      
Companies, and thus there will be no minority equity interest                   
in any of such companies.  The Operating Companies will own all                 
of ATSI's debt securities.  No change will be effected in the                   
capital structure of Penn Power, which will continue to be a                    
wholly-owned subsidiary of Ohio Edison.                                         

In any event, as set forth more fully in Item 3.B.2 and           
elsewhere                                                                       
in this Application/Declaration, the proposed formation of the                  
new                                                                             
transmission company is expected to result in certain benefits                  
to the                                                                          
public and to consumers and investors of the FirstEnergy                        
holding-company                                                                 
system.  FirstEnergy's plan to participate in an RTO, with the                  
creation of ATSI as a significant step toward that end, will                    
maximize the value of the Transmission Assets to shareholders.                  

B.  SECTION 10(C)                                                               

Section 10(c) of the 1935 Act provides that:                      

Notwithstanding the provisions of subsection (b), the             
Commission                                                                      
shall not approve:                                                              

(1)  an acquisition of securities or utility assets,      
or of                                                                           
any other interest, which is unlawful under the                   
provisions of                                                                   
Section 8 or is detrimental to the carrying out of the            
provisions                                                                      
of Section 11; or                                                 

(2)  the acquisition of securities or utility assets      
of a                                                                            
public utility or holding company unless the Commission           
finds                                                                           
that such acquisition will serve the public interest by           
tending                                                                         
towards the economical and the efficient development of           
an                                                                              
integrated public utility system . . . .                          

1.  Section 10(c)(1).  Consistent with the standards set          
forth in                                                                        
---------------                                           
Section 10(c)(1) of the Act, the proposed acquisition of                        
securities will                                                                 
not be unlawful under the provisions of Section 8 of the Act                    
(inasmuch as                                                                    
Section 8 applies only to registered holding companies), or                     
detrimental to                                                                  
the carrying out of the provisions of Section 11 of the 1935                    
Act, which                                                                      
also applies, by its terms, only to registered holding                          
companies, because                                                              
FirstEnergy believes that following the consummation of the                     
proposed                                                                        
transactions it will continue to be a public-utility holding                    
company                                                                         
entitled to an exemption under Section 3(a)(1) of the 1935 Act                  
from all of                                                                     
the provisions of the 1935 Act (except for Section 9(a)(2)                      
thereof),                                                                       
including provisions relating to registration.  See FirstEnergy                 
Form U-3A-                                                                      
2, "Statement by Holding Company Claiming Exemption Under Rule                  
U-2 from                                                                        
the Provisions of the Public Holding Company Act of 1935,"                      
dated                                                                           
February 30, 2000, attached hereto as Exhibit G-1.                              

Section 8 prohibits a registered holding company or any           
of its                                                                          
subsidiaries from acquiring, owning interests in or operating                   
both a gas                                                                      
utility company and an electric utility company serving                         
substantially the                                                               
same area if prohibited by state law.  Because none of                          
FirstEnergy and any                                                             
of its subsidiary companies owns or has any financial interest                  
in any gas                                                                      
utility company and because ATSI will not own or have any                       
financial                                                                       
interest in any gas utility company, following the proposed                     
transactions,                                                                   
FirstEnergy will not have acquired, and will not own or operate                 
a gas                                                                           
utility company.                                                                

Section 11(a) of the Act requires the Commission to               
examine the                                                                     
corporate structure of registered holding companies to ensure,                  
among                                                                           
others, that unnecessary complexities are eliminated and voting                 
powers are fairly and equitably distributed.  The proposed                      
<RR>transactions</RR>     acquisition      meet   s     the                     
standards of Section 11(a) of the Act.  As discussed above with                 
respect to the requirements of Section 10(b)(3) of the Act,                     
FirstEnergy will directly acquire all of the issued and                         
outstanding voting securities of ATSI, in addition to                           
continuing to own directly or indirectly all of the issued and                  
outstanding voting securities of each of the Operating                          
Companies, thus leaving no minority interests outstanding.  The                 
Operating Companies will own all of ATSI's debt securities.                     
Penn Power will continue to be a wholly-owned subsidiary of                     
Ohio Edison.  After the consummation of the proposed                            
transactions, no person will be a holding company with respect                  
to FirstEnergy.                                                                 

2.  Section 10(c)(2).  As the following discussion will           
----------------                                          
demonstrate, the proposed transactions will serve the public                    
interest by                                                                     
tending towards the economical and efficient development of an                  
integrated                                                                      
public-utility system, as required by Section 10(c)(2) of the                   
Act.                                                                            

(a) Efficiencies and Economies.  As described more        
fully in                                                                        
--------------------------                        
Item 1.B.2 above, the proposed transactions tend towards the                    
following efficiencies and economies:  (i) greater corporate                    
and organizational separation of transmission from generation;                  
and (ii) by tying together control, planning, maintenance and                   
financial responsibilities of the Operating Companies'                          
transmission facilities into a single company having an                         
independent, streamlined and cost-efficient operation,                          
synergies will be created that result in better service in the                  
region and non-discriminatory access for all transmission users                 
will be assured.  FirstEnergy's plan to participate in an RTO,                  
with the creation of ATSI as a significant step toward that                     
end, will maximize the value of the Transmission Assets to                      
shareholders.                                                                   

(b)  Integrated Public Utility System.  As applied        
to electric                                                                     
--------------------------------                
utility companies, the term "integrated public utility system"                  
is defined                                                                      
in Section 2(a)(29)(A) of the Act as:                                           

a system consisting of one or more units of generating            
plants                                                                          
and/or transmission lines and/or distributing                     
facilities, whose                                                               
utility assets, whether owned by one or more electric             
utility                                                                         
companies, are physically interconnected or capable of            
physical                                                                        
interconnection and which under normal conditions may be          
economically operated as a single interconnected and              
coordinated                                                                     
system confined in its operation to a single area or              
region,                                                                         
in one or more states, not so large as to impair                  
(considering                                                                    
the state of the art and the area or region affected)             
the                                                                             
advantages of localized management, efficient operation,          
and the                                                                         
effectiveness of regulation.                                      

The Commission has previously taken notice of                     
developments that                                                               
have occurred in the gas and electric industries in recent                      
years, and has                                                                  
interpreted the Act and analyzed proposed transactions in light                 
of these                                                                        
changed and changing circumstances.  See, e.g., New Century                     
Energies,                                                                       
Inc., Holding Co. Act Release No. 26748 (Aug. 1, 1997)                          
(approving                                                                      
transactions relating to combination of a Colorado gas and                      
electric                                                                        
public-utility company and intrastate exempt holding company                    
and a New                                                                       
Mexico electric public-utility company), citing Hearing on                      
Regulation of                                                                   
Public Utility Holding Companies Before Subcomm, on                             
Telecommunications and                                                          
Finance and Subcomm. on Energy and Power of the House of                        
Representatives                                                                 
Comm, on Commerce, 104th Cong., 1st Sess. (Aug. 4, 1995)                        
(testimony of                                                                   
Arthur Levitt, Chairman, SEC); "The Regulation of Public-                       
Utility Holding                                                                 
Companies," report of the Division of Investment                                
Management (June 1995) ("1995 Report") at 29-31; and                            
Consolidated                                                                    
Natural Gas Co., Holding Co. Act Release No. 26512                              
(Apr. 30, 1996).  See also Rust v. Sullivan, 500 U.S. 173, 186-                 
87 (1991) ("an agency is not required to" establish rules of                    
conduct to last forever, "but rather must be given ample                        
latitude to "adapt [its] rules and policies to the demands of                   
changing circumstances.") (citations omitted); Shawmut Assn. v.                 
SEC, 146 F.2d 791, 796-97 (1st Cir. 1945) (an agency "is                        
expected to treat experience not as a jailer but as a                           
teacher").                                                                      

On the basis of the statutory definition above, the               
Commission has                                                                  
established four standards that must be met before the                          
Commission will                                                                 
find that an integrated public-utility system will result from                  
a proposed                                                                      
acquisition of securities:                                                      

(1)  the utility assets of the system are physically      
interconnected or capable of physical interconnection;            

(2)  the utility assets, under normal conditions,         
may be                                                                          
economically operated as a single interconnected and              
coordinated                                                                     
system;                                                           

(3)  the system must be confined in its operations        
to a single                                                                     
area or region; and                                               

(4)  the system must not be so large as to impair         
(considering                                                                    
the state of the art and the area or region affected)             
the                                                                             
advantages of localized management, efficient operation,          
and the                                                                         
effectiveness of regulation.                                      

Environmental Action, Inc. v. SEC, 895 F.2d 1255, 1263 (9th                     
Cir. 1990),                                                                     
quoting In re Electric Energy, Inc., 38 S.E.C. 658, 668 (1958).                 

The proposed transactions satisfy all four of these               
requirements.                                                                   
It should be noted that in the 1995 Report, the Division                        
recommended that                                                                
the Commission "respond realistically to the changes in the                     
utility                                                                         
industry and interpret more flexibly each piece of the                          
integration                                                                     
equation."  1995 Report at 71.                                                  

CAPABLE OF PHYSICAL INTERCONNECTION.  Upon consummation           
of the                                                                          
proposed transactions, Ohio Edison, Penn Power, Cleveland                       
Electric and                                                                    
Toledo Edison, along with the new transmission company, ATSI,                   
will                                                                            
continue to be "physically interconnected or capable of                         
physical                                                                        
interconnection" within the meaning of Section 2(a)(29)(A).                     
The electric                                                                    
service areas of the Operating Companies are adjacent, with                     
Ohio Edison                                                                     
separating Cleveland Electric and Toledo Edison.  The proposed                  
transactions will maintain a continuous, geographically compact                 
transmission system across northern Ohio and western                            
Pennsylvania.                                                                   

Moreover, the service areas served by the Operating               
Companies are                                                                   
already highly interconnected.                                                  

Ohio Edison and Penn Power have three 345kV and four              
138kV                                                                           
interconnections.  Ohio Edison and Cleveland Electric have five                 
345 kV and                                                                      
four 138 kV interconnections, and Ohio Edison and Toledo Edison                 
have one                                                                        
345 kV and one 138 kV interconnection.  After the transfer of                   
the                                                                             
Transmission Assets to ATSI contemplated by the proposed                        
transactions, the                                                               
same physical interconnections will be maintained in the                        
FirstEnergy                                                                     
holding company system.                                                         

In view of the above, the facts presented clearly                 
support a finding                                                               
that the utility assets of the FirstEnergy system are                           
"physically                                                                     
interconnected or capable of physical interconnection" within                   
the meaning                                                                     
of Section 2(a)(29)(A) of the Act.                                              

SINGLE INTERCONNECTED AND COORDINATED SYSTEM.  Section            
2(a)(29)(A)                                                                     
of the Act requires that the utility assets, under normal                       
circumstances,                                                                  
may be "economically operated as a single interconnected and                    
coordinated                                                                     
system."  The Commission has interpreted this language to refer                 
to the                                                                          
physical operation of utility assets as a system in which,                      
among other                                                                     
things, the generation and/or flow of current within the system                 
may be                                                                          
centrally controlled and allocated as need or economy directs.                  
See UNITIL                                                                      
Corp., Holding Co. Act Release No. 25524 (Apr. 24, 1992).  The                  
electric                                                                        
generation, transmission and distribution system of FirstEnergy                 
are                                                                             
operated in a manner that satisfies the standard of economic                    
and                                                                             
coordinated operations in Section 2(a)(29)(A) of the Act.                       
Moreover, as                                                                    
more fully described in Item 1.C.2 above, the proposed                          
transactions are                                                                
expected to result in greater coordination and more efficient                   
allocation                                                                      
of provision of transmission services within the region served                  
by the                                                                          
FirstEnergy holding company system.                                             

SINGLE AREA OR REGION.  The "single integrated system"            
of                                                                              
FirstEnergy and its subsidiaries are currently confined in its                  
operations                                                                      
to a single area or region, namely, northern and central Ohio                   
and western                                                                     
Pennsylvania.  This will not change as a result of the                          
consummation of the                                                             
proposed transactions, including the introduction of ATSI into                  
the                                                                             
existing system.                                                                

LOCALIZED MANAGEMENT, EFFICIENT OPERATION AND EFFECTIVE           
REGULATION.                                                                     
The FirstEnergy utility system will not be enlarged at all as a                 
result of the proposed transactions; thus, they will not impair                 
the                                                                             
advantages of localized management, efficient operations and                    
the                                                                             
effectiveness of regulation.  Moreover, the Commission's past                   
decisions on                                                                    
"localized management" show that the proposed transactions                      
fully preserve                                                                  
the advantages of localized management.  In such cases, the                     
Commission has                                                                  
evaluated localized management in terms of:  (i) responsiveness                 
to local                                                                        
needs, see American Electric Power Co., Holding Co.  Act                        
Release No. 20633                                                               
(July 21, 1978)(advantages of localized management evaluated in                 
terms of                                                                        
whether an enlarged system could be "responsive to local                        
needs"); General                                                                
Public Utilities Corp., 37 S.E.C. 28, 36 (1956)(localized                       
management                                                                      
evaluated in terms of "local problems and matters involving                     
relations with                                                                  
consumers"); (ii) whether management and directors were drawn                   
from local                                                                      
utilities, see Centerior Energy Corp., Holding Co.  Act Release                 
No. 24073                                                                       
(April 29, 1986)(advantages of localized management would not                   
be                                                                              
compromised by the affiliation of two electric utilities under                  
a new                                                                           
holding company because the new holding company's "management                   
[would be]                                                                      
drawn from the present management" of the two utilities); (iii)                 
the                                                                             
preservation of corporate identities, See Northeast Utilities,                  
Holding Co.                                                                     
Act Release No. 25221 (December 21, 1990) (utilities "will be                   
maintained                                                                      
as separate New Hampshire corporations . . .  [t]herefore the                   
advantages                                                                      
of localized management will be preserved"); Columbia Gas                       
System, Inc.,                                                                   
Holding Co.  Act Release No. 24599 (March 15, 1988)(benefits of                 
local                                                                           
management maintained where the utility to be added would be a                  
separate                                                                        
subsidiary); and (iv) the ease of communications, see American                  
Electric                                                                        
Power Co., Holding Co.  Act Release No. 20633 (July 21,                         
1978)(distance of                                                               
corporate headquarters from local management was a "less                        
important factor                                                                
in determining what is in the public interest" given the                        
"present-day ease                                                               
of communications and transportation").                                         

The effectiveness of regulation will not be diminished            
as a result                                                                     
of the proposed transactions; Ohio Edison, Cleveland Electric                   
and Toledo                                                                      
Edison will remain subject to regulation by the PUCO, and Penn                  
Power will                                                                      
remain subject to regulation by the PPUC.  Moreover, the                        
respective                                                                      
interstate activities of Ohio Edison, Penn Power, Cleveland                     
Electric and                                                                    
Toledo Edison will continue to be regulated by the FERC.  ATSI                  
will also                                                                       
be subject to regulation of the FERC with respect to rates and                  
other                                                                           
matters.                                                                        

C.  SECTION 10(f)                                                               

Section 10(f) provides that                                       

The Commission shall not approve any acquisition as to            
which an                                                                        
application is made under this section unless it appears          
to the                                                                          
satisfaction of the Commission that such State laws as            
may apply                                                                       
in respect of such acquisition have been complied with,           
except                                                                          
where the Commission finds that compliance with such              
State laws                                                                      
would be detrimental to the carrying out of the                   
provisions of                                                                   
section 11.                                                       

Ohio Edison, Cleveland Electric and Toledo Edison are             
currently                                                                       
subject to the jurisdiction of the PUCO.  An application <RR>(a                 
copy of which is attached hereto as Exhibit D-3)</RR> was filed                 
for approval of the PUCO with respect to the proposed transfer                  
of the relevant Transmission Assets from each of the three                      
Operating Companies to ATSI.  Approval from the PUCO was                        
received on February 17, 2000 and a copy of the Order is                        
attached as Exhibit D-4. Penn Power is currently subject to the                 
jurisdiction of the PPUC.  An                                                   
application with the PPUC <RR>(a copy of which is attached                      
hereto as Exhibit D-5)</RR> has been filed for approval of the                  
PPUC with respect to the proposed transfer of the relevant                      
Transmission Assets from Penn Power to ATSI and the operation                   
of Penn Power's transmission lines by ATSI.     Approval from                   
the PPUC was received on July 13, 2000 and a copy of the Order                  
is attached as Exhibit D-6.                                                     

ITEM 4.  REGULATORY APPROVALS                                                   
--------------------                                          

Set forth below is a summary of the regulatory approvals          
that the                                                                        
applicants have obtained or expect to obtain in connection with                 
the                                                                             
proposed transactions.  Except as set forth below, no other                     
state or local                                                                  
regulatory body or agency and no other federal commission or                    
agency has                                                                      
jurisdiction over the transactions proposed herein.                             

A.  FEDERAL POWER ACT                                                           

Under Section 203 of the Federal Power Act, the FERC has          
jurisdiction over the proposed transactions.  The Operating                     
Companies have                                                                  
filed a joint application with the FERC <RR>(a copy of which is                 
attached                                                                        
hereto as Exhibit D-1)</RR> for authority to consummate the                     
proposed                                                                        
transactions. This application was approved by the FERC on                      
October 27,                                                                     
1999.  On March 16, 2000, FERC also approved an initial Open                    
Access                                                                          
Transmission for ATSI, and the Ground Lease between ATSI and                    
the Operating                                                                   
Companies.  <RR>(A copy of the FERC order is attached hereto as                 
Exhibit D-                                                                      
2).</RR>                                                                        

B.  STATE PUBLIC UTILITY REGULATION                                             

An application with the PUCO <RR>(a copy of which is              
attached hereto as Exhibit D-3)</RR> has been filed for                         
approval of the PUCO with respect to the proposed transfer of                   
the relevant Transmission Assets from each of the three                         
Operating Companies to ATSI. Approval from the PUCO was                         
received                                                                        
on February 17, 2000 <RR>and a copy of the Order is attached as                 
Exhibit D-4.</RR> An application with the PPUC <RR>(a copy of                   
which is attached hereto as Exhibit D-5) has been</RR>                          
was     filed for approval of the PPUC with respect to the                
proposed transfer of the relevant Transmission Assets from Penn                 
Power to ATSI and the operation of Penn Power's transmission                    
lines by ATSI. Approval of the PPUC was received on July 13,                    
2000 and a copy of the Order is attached as Exhibit D-6.                        

C.  OTHER                                                                       

FirstEnergy may file other applications for, or request,          
certain                                                                         
other consents or authorizations by federal, state or municipal                 
agencies                                                                        
in connection with the issuance of securities, system                           
operations and                                                                  
franchises or any other activities subject to regulatory                        
approval.                                                                       

ITEM 5.  PROCEDURE                                                              
---------                                                     

The Applicant requests that there be no 30-day waiting            
period                                                                          
between the issuance of the Commission's order and the date on                  
which it is                                                                     
to become effective.  The Applicant submits that a recommended                  
decision by                                                                     
a hearing or other responsible officer of the Commission is not                 
needed                                                                          
with respect to the proposed transaction and that the Division                  
may assist                                                                      
with the preparation of the Commission's decision and/or order                  
in this                                                                         
matter unless such Division opposes the matters covered hereby.                 

ITEM 6.  EXHIBITS AND FINANCIAL STATEMENTS                                      
---------------------------------                             
A.  EXHIBITS                                                                    

EXHIBIT                                                                         

A-1       Articles of Incorporation of ATSI. (previously filed)                 
A-2       Amended Articles of Incorporation of FirstEnergy                      
(Incorporated                                                                   
by reference to the Form S-4 Registration Statement         
filed on                                                                        
February 3, 1997, File No. 333-21011, as Exhibit (3)-       
1).                                                                             

A-3       Amended Articles of Incorporation of Ohio Edison,                     
effective                                                                       
June 21, 1994 (Incorporated by reference to the Form        
10-K Annual                                                                     
Report of Ohio Edison for the year ended December 31,       
1994, File                                                                      
No. 1-2578, as Exhibit 3-1).                                

A-4       Amended Articles of Incorporation of Cleveland                        
Electric,                                                                       
effective May 28, 1993 (Incorporated by reference to        
the Form                                                                        
10-K Annual Report of Cleveland Electric for the year       
ended                                                                           
December 31, 1993, File No. 1-2323, as Exhibit 3a).         

A-5       Amended Articles of Incorporation of Toledo Edison,                   
effective                                                                       
October 2, 1992 (Incorporated by reference to the           
Form 10-K                                                                       
Annual Report of Toledo Edison for the year ended           
December 31,                                                                    
1992, File No. 1-3583, as Exhibit 3a).                      

A-6       Agreement of Merger and Consolidation dated April 1,                  
1929, among                                                                     
Pennsylvania Power Company (Penn), Harmony Electric         
Company and                                                                     
Peoples Power Company (consummated May 31, 1930),           
copies of                                                                       
Letters Patent issued thereon, together with the            
Election Return                                                                 
and Treasurer's Return, relative to decrease of             
capital stock;                                                                  
Election Return authorizing change of capital stock         
and increase                                                                    
of indebtedness; Election Return authorizing change         
of capital                                                                      
stock; Election Return authorizing increase of              
capital stock;                                                                  
Election Return establishing 4.24% Preferred Stock;         
Certificate                                                                     
with respect to the establishment of the 4.64%              
Preferred Stock;                                                                
Election Returns and Certificates of Actual Sale in         
connection                                                                      
with the purchase by Penn Power of all the property         
of Pine-                                                                        
Mercer Electric Company, Industry Borough Electric          
Company, Ohio                                                                   
Township Electric Company, and Shippingport Borough         
Electric                                                                        
Company; Certificate of Change of Location of Penn          
Power's                                                                         
principal office; Certificate of Consent authorizing        
increase                                                                        
in authorized Common Stock; Certificate of Consent          
with respect                                                                    
to the removal of limitations on the authorized             
amount of                                                                       
indebtedness of Penn Power; Election Returns and            
Certificates                                                                    
of Actual Sale in connection with the purchase by           
Penn Power of                                                                   
all the property of Borolak Public Service Company,         
Eastfax                                                                         
Public Service Company, Norango Public Service              
Company, Sadwick                                                                
Public Service Company, Sosango Public Service              
Company, Surrick                                                                
Public Service Company, Wesango Public Service              
Company, and                                                                    
Westfax Public Service Company; Certificate of Change       
of                                                                              
Location of Penn Power's principal office; Amendment        
to the                                                                          
Charter extending the territory in which Penn Power         
may operate                                                                     
in the Borough of Shippingport, Beaver County,              
Pennsylvania;                                                                   
Certificate of Consent authorizing increase in              
authorized Common                                                               
Stock; Certificate with respect to the establishment        
of the 8%                                                                       
Preferred Stock; Certificate accepting Business             
Corporation Law                                                                 
of Pennsylvania for government and regulation of            
affairs of Penn                                                                 
Power; Articles of Amendment incorporating certain          
protective                                                                      
provisions relating to Preferred Stock, increasing          
amount of                                                                       
authorized Preferred Stock and authorizing future           
increases in                                                                    
amounts of authorized Preferred Stock without a vote        
of the                                                                          
holders of Preferred Stock; Articles of Amendment           
increasing the                                                                  
authorized number of shares of Common Stock;                
Statement Affecting                                                             
Class or Series of Shares with respect to the               
establishment of                                                                
the 7.64% Preferred Stock; Articles of Amendment            
increasing the                                                                  
authorized number of shares of Common Stock; Articles       
of                                                                              
Amendment increasing the number of authorized shares        
of                                                                              
Preferred Stock; Statement Affecting Class or Series        
of Shares                                                                       
with respect to the establishment of the 8.48%              
Preferred Stock;                                                                
Articles of Amendment authorizing sinking fund              
requirements for                                                                
Preferred Stock; Statement Affecting Class or Series        
of Shares                                                                       
with respect to the establishment of the 11%                
Preferred Stock;                                                                
Articles of Amendment increasing the authorized             
number of shares                                                                
of Common Stock; Statement Affecting Class or Series        
of Shares                                                                       
with respect to the establishment of the 9.16%              
Preferred Stock;                                                                
Articles of Amendment increasing authorized number of       
shares of                                                                       
Common Stock; Articles of Amendment increasing              
authorized number                                                               
of shares of Preferred Stock; Statement Affecting           
Class or                                                                        
Series of Shares with respect to the establishment of       
the 8.24%                                                                       
Preferred Stock; Statement Affecting Class or Series        
of Shares                                                                       
with respect to the establishment of the 10.50%             
Preferred Stock;                                                                
Articles of Amendment increasing authorized number of       
shares of                                                                       
Common Stock; Articles of Amendment increasing              
authorized number                                                               
of shares of Preferred Stock; Statement                     

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EXHIBIT                                                                         
Affecting Class or Series of Shares with respect to         
the                                                                             
establishment of the 15.00% Preferred Stock;                
Statement                                                                       
Affecting Class or Series of Shares with respect to         
the establishment of the 11.50% Preferred Stock;            
Articles of Amendment increasing authorized number of       
shares of                                                                       
Preferred Stock; Statement Affecting Class or Series        
of Shares                                                                       
with respect to the establishment of the 13.00%             
Preferred Stock;                                                                
Statement Affecting Class or Series of Shares with          
respect to                                                                      
the establishment of the 11.50% Preferred Stock,            
Series B;                                                                       
Articles of Amendment effective April 2, 1987, adding       
a standard                                                                      
of care for, and limiting the personal liability of,        
officers                                                                        
and directors; Articles of Amendment effective April        
1, 1992,                                                                        
setting forth corporate purposes of the Company;            
Statement with                                                                  
Respect to Shares with respect to the establishment         
of the                                                                          
7.625% Preferred Stock and Statement with Respect to        
Shares with                                                                     
respect to the establishment of the 7.75% Preferred         
Stock.                                                                          
(Physically filed and designated respectively, as           
follows:  in                                                                    
Form A-2, Registration No. 2-3889, as Exhibit A-1; in       
Form 1-MD                                                                       
for 1938, File No.2-3889, as Exhibit (a)-1; in Form 1-      
MD for                                                                          
1945, File No. 2-3889, as Exhibit A; in Form U-1,           
File No. 70-                                                                    
2310, as Exhibit A-3 (d); in Form 8-K for March 1951,       
File No.                                                                        
1-3491, as Exhibit B; in Form 8-K for June 1958, File       
No. 1-                                                                          
3491B, as Exhibit 1; in Form 10-K for 1959 as               
Exhibits 1, 2, 3                                                                
and 4; in Form 8-K for March 1960, File No. 1-3491B         
as Exhibit                                                                      
A; in Form U-1, File No. 70-3971, as Exhibit A-2; in        
Form U-1,                                                                       
File No. 70-4055, as Exhibit A-2; as Exhibits 1             
through 8 in                                                                    
Form 8-K for January 1962, File No. 1-3491; as              
Exhibit A in Form                                                               
8-K for August 1963, File No. 1-3491; as Exhibits A         
and B in                                                                        
Form 8-K for September 1969, File No. 1-3491; as            
Exhibit B in                                                                    
Form 8-K for April 1971, File No. 1-3491; as Exhibit        
B in Form                                                                       
8-K for September 1971, File No. 1-3491; in Form 8-K        
for                                                                             
September 1972, File No. 1-3491; as Exhibit A in Form       
8-K for                                                                         
December 1972, File No. 1-3491; as Exhibit A in Form        
8-K for                                                                         
March 1973, File No. 1-3491; as Exhibit A in Form 8-K       
for                                                                             
December 1973, File No. 1-3491; as Exhibits A and C         
in Form 8-K                                                                     
for February 1974, File No. 1-3491; as Exhibits A and       
B in Form                                                                       
8-K for January 1975, File No. 1-3491; as Exhibit F         
in Form 8-K                                                                     
for May 1975, File No. 1-3491; as Exhibit A in Form 8-      
K for                                                                           
April 1976, File No. 1-3491; as Exhibit G in Form 10-       
Q for                                                                           
quarter ended June 30, 1977, File No. 1-3491; as            
Exhibit C in                                                                    
Form 10-K for 1977, File No. 1-3491; as Exhibit A in        
Form 10-K                                                                       
for 1977, File No. 1-3491; as Exhibit D in Form 10-Q        
for quarter                                                                     
ended June 30, 1980, File No. 1-3491; as Exhibit (4)        
in Form 10-                                                                     
Q for quarter ended June 30, 1981, File No. 1-3491;         
as Exhibit 4                                                                    
in Form 10-Q for quarter ended June 30, 1982, File          
No. 1-3491;                                                                     
as Exhibit 4 in Form 10-Q for quarter ended September       
30, 1982,                                                                       
File No. 1-3491; as Exhibit 4 in Form 10-Q for              
quarter ended                                                                   
September 30, 1983, File No. 1-3491; as Exhibit 4 in        
Form 10-Q                                                                       
for quarter ended March 31, 1984, File No. 1-3491; as       
Exhibit 4                                                                       
in Form 10-Q for quarter ended June 30, 1984, File          
No. 1-3491;                                                                     
as Exhibit 4 in Form 10-Q for quarter ended September       
30, 1985,                                                                       
File No. 1-3491; as Exhibit 3-2 in Form 10-K for 1987       
File No.                                                                        
1-3491; as Exhibit 3-2 in Form 10-K for 1992 File No.       
1-3491; as                                                                      
Exhibit 19-2 in Form 10-K for 1992 File No. 1-3491;         
and as                                                                          
Exhibit 3-2 in Form 10-K for 1993 File No. 1-3491.)         

B-1       Form of Operating Agreement between the Operating                     
Companies and                                                                   
ATSI.                                                       

D-1       Joint Application of Ohio Edison, Penn Power,                         
Cleveland Electric                                                              
and Toledo Edison to FERC.                                  

D-2       Order of FERC.                                                        

D-3       Application to the PUCO.                                              

D-4       Order of the PUCO.                                                    

D-5       Application to the PPUC.                                              

D-6       Order of the PPUC.  <RR>(To be filed by                               
amendment.)</RR>                                                                

F-1       Preliminary Opinion of Counsel.  <RR>(To be filed by                  
amendment.)</RR>                                                                

F-2       Past Tense Opinion of Counsel.  (To be filed with                     
certificate of                                                                  
notification.)                                              

G-1       FirstEnergy Form U-3A-2, "Statement                                   
by Holding Company Claiming Exemption under Rule U-2        
from the                                                                        
Provisions of the Public Utility Holding Company Act        
of 1935,"                                                                       
dated February 29, 2000                                     
(Incorporated by reference to such filing, File No.         
69-423).                                                                        

G-2       Form 10-K Annual Report of FirstEnergy for the year                   
ended                                                                           
December 31, 1999  Incorporated by                          
reference to such filing, File No. 333-21011).              

G-3       Form 10-K Annual Report of Ohio Edison for the year                   
ended                                                                           
December 31, 1999 (Incorporated by                          
reference to such filing, File No. 1-2578).                 

G-4       Form 10-K Annual Report of Penn Power for the year                    
ended                                                                           
December 31, 1999 (Incorporated by                          
reference to such filing, File No. 1-3491).                 

G-5       Form 10-K Annual Report of Cleveland Electric for the                 
year ended                                                                      
December 31,    1999       <RR> 1998                        
</RR>(Incorporated by                                                           
reference to such filing, File No. 1-2323).                 

G-6       Form 10-K Annual Report of Toledo Edison for the year                 
ended                                                                           
December 31, 1999 (Incorporated by                          
reference to such filing, File No. 1-3583).                 

H-1       Form of Notice of Application.                                        

B.  FINANCIAL STATEMENTS                                                        

EXHIBIT                                                                         

FS-1       FirstEnergy Consolidated Balance Sheet as of                         
December 31,                                                                    
1999 (see Annual Report of FirstEnergy on                 
Form 10-K for the year ended December 31, 1999            
(Exhibit G-2 hereto)).                                    

FS-2       FirstEnergy Consolidated Statements of Income for                    
its last                                                                        
three fiscal years (see Annual Report of Ohio Edison      
on Form                                                                         
10-K for the year ended December 31, 1999 (Exhibit G-     
2 hereto)).                                                                     

FS-3       Ohio Edison Consolidated Balance Sheet as of                         
December 31,                                                                    
1999  (see Annual Report of Ohio Edison on                
Form 10-K for the year ended December 31, 1999            
(Exhibit G-3 hereto)).                                    

FS-4       Ohio Edison Consolidated Statements of Income for                    
its last                                                                        
three fiscal years (see Annual Report of Ohio Edison      
on Form                                                                         
10-K for the year ended December 31, 1999                 
(Exhibit G-3 hereto)).                                    

FS-5       Penn Power Balance Sheet as of December 31, 1999                     
(see Annual Report of Penn Power on Form 10-K for         
the year ended December 31, 1998 (Exhibit G-4             
hereto)).                                                                       

FS-6       Penn Power Statements of Income for its last three                   
fiscal years                                                                    
(see Annual Report of Penn Power on Form 10-K for         
the year                                                                        
ended December 31, 1999 (Exhibit G-4 hereto)).            

FS-7       Cleveland Electric Consolidated Balance Sheet as of                  
December 31, 1999 (see Annual Report of                   
Cleveland Electric on Form 10-K for the year ended        
December 31,                                                                    
1999 (Exhibit G-5 hereto)).                               

FS-8       Cleveland Electric Consolidated Statements of Income                 
for its                                                                         
last three fiscal years (see Annual Report of             
Cleveland                                                                       
Electric on Form 10-K for the year ended December         
31, 1999                                                                        
(Exhibit G-5 hereto)).                                    

FS-9       Toledo Edison Balance Sheet as of December 31, 1999                  
(see Annual Report of Toledo Edison on Form 10-           
K for the year ended December 31, 1999 (Exhibit G-6       
hereto)).                                                                       

FS-10      Toledo Edison Statements of Income for its last                      
three fiscal                                                                    
years (see Annual Report of Toledo Edison on Form 10-     
K for the                                                                       
year ended December 31, 1999 (Exhibit G-6 hereto)).       

Financial Statements of ATSI are not included herein              
because it has                                                                  
no assets and has not engaged in any business operations.                       

ITEM 7.  INFORMATION AS TO ENVIRONMENTAL EFFECTS                                
---------------------------------------                       

The proposed transactions neither involve a "major                
federal action"                                                                 
nor "significantly affect the quality of the human environment"                 
as those                                                                        
terms are used in Section 102(2)(C) of the National                             
Environmental Policy                                                            
Act, 42 U.S.C.  Sec. 4321 et seq.  Consummation of the proposed                 
transactions will not result in changes in the operations of                    
FirstEnergy,                                                                    
Ohio Edison, Toledo Edison or Penn Power that would have any                    
impact on the                                                                   
environment.  No federal agency is preparing an environmental                   
impact                                                                          
statement with respect to this matter.                                          

SIGNATURE   

Pursuant to the requirements of the Public Utility                
Holding Company                                                                 
Act of 1935, the undersigned company has duly caused this                       
Amendment No.                                                                   
<RR>1</RR>    2     to Application/Declaration to be signed on                  
its behalf by the                                                               
undersigned thereunto duly authorized.                                          

Date:  <RR>April __, 2000 </RR>      July 25, 2000                              

FIRSTENERGY CORP.   

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By: /s/H. PETER BURG
        --------------------
       H. Peter Burg
                Chairman and Chief Executive
Officer     

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This U-1/A Filing		Date		First		Last			Other Filings
		4/1/92		3
		4/24/92		2
		10/2/92		2
		12/31/92		2
		5/28/93		2
		12/31/93		2
		6/21/94		2
		12/31/94		2
		8/4/95		2
		4/30/96		2
		5/10/96		2
		2/3/97		2					S-4
		8/1/97		2
		10/8/98		2					8-K
		11/30/98		2
		12/31/98		3					11-K, U-3A-2, 10-K
		10/27/99		2
		12/31/99		2		3			U-3A-2, 10-K, 11-K, 10-K/A
		2/17/00		2
		2/29/00		2		3			U-3A-2
		3/1/00		2
		3/16/00		2					DEF 14A
		5/4/00		1
		7/13/00		2
Filed On / Filed As Of		7/25/00		1		3
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