FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission File Number 1-2578
OHIO EDISON COMPANY
(Exact name of Registrant as specified in its charter)
Ohio 34-0437786
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
76 South Main Street, Akron, Ohio 44308
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 1-800-736-3402
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
152,569,437 shares of common stock, $9 par value, outstanding
as of November 13, 1996.
OHIO EDISON COMPANY
TABLE OF CONTENTS
Pages
-----
Part I. Financial Information
Consolidated Statements of Income 1
Consolidated Balance Sheets 2-3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5-6
Report of Independent Public Accountants 7
Management's Discussion and Analysis of
Results of Operations and Financial Condition 8-9
Part II. Other Information
<TABLE>
PART I. FINANCIAL INFORMATION
- ------------------------------
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES $646,902 $667,013 $1,857,855 $1,848,585
OPERATING EXPENSES AND TAXES:
Fuel and purchased power 114,301 126,589 345,748 346,690
Nuclear operating costs 65,207 73,083 187,477 225,049
Other operating costs 105,080 116,648 303,423 324,546
--------- --------- ---------- ----------
Total operation and maintenance expenses 284,588 316,320 836,648 896,285
Provision for depreciation 92,472 61,473 265,201 174,238
Amortization of net regulatory assets 7,421 6,382 20,241 13,009
General taxes 59,711 63,436 184,810 183,745
Income taxes 55,842 60,413 145,969 149,092
--------- --------- ---------- ----------
Total operating expenses and taxes 500,034 508,024 1,452,869 1,416,369
--------- --------- ---------- ----------
OPERATING INCOME 146,868 158,989 404,986 432,216
OTHER INCOME 7,169 1,190 24,861 8,016
--------- --------- ---------- ----------
TOTAL INCOME 154,037 160,179 429,847 440,232
--------- --------- ---------- ----------
NET INTEREST AND OTHER CHARGES:
Interest on long-term debt 51,388 61,619 160,726 185,355
Deferred nuclear unit interest - - - (4,250)
Allowance for borrowed funds used during
construction and capitalized interest (476) (1,595) (2,544) (3,898)
Other interest expense 6,763 5,946 17,588 17,708
Subsidiaries' preferred stock dividend requirements 3,857 1,157 11,570 3,618
--------- --------- ---------- ----------
Net interest and other charges 61,532 67,127 187,340 198,533
--------- --------- ---------- ----------
NET INCOME 92,505 93,052 242,507 241,699
PREFERRED STOCK DIVIDEND REQUIREMENTS 3,124 5,349 9,373 16,245
--------- --------- ---------- ----------
EARNINGS ON COMMON STOCK $ 89,381 $ 87,703 $ 233,134 $ 225,454
========= ========= ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 144,143 143,750 144,039 143,636
========= ========= ========== ==========
EARNINGS PER SHARE OF COMMON STOCK $ .62 $ .61 $ 1.62 $ 1.57
===== ===== ====== ======
DIVIDENDS DECLARED PER SHARE OF
COMMON STOCK $.375 $.375 $1.125 $1.125
===== ===== ====== ======
<FN>
The accompanying Notes to Consolidated Financial
Statements are an integral part of these statements.
</TABLE>
- 1 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(In thousands)
ASSETS
------
<S> <C> <C>
UTILITY PLANT:
In service, at original cost $8,619,144 $8,556,722
Less--Accumulated provision for
depreciation 3,249,574 3,051,148
---------- ----------
5,369,570 5,505,574
---------- ----------
Construction work in progress-
Electric plant 103,344 150,262
Nuclear fuel 14,022 39,613
---------- ----------
117,366 189,875
---------- ----------
5,486,936 5,695,449
---------- ----------
OTHER PROPERTY AND INVESTMENTS:
PNBV Capital Trust (Note 3) 464,325 -
Letter of credit collateralization 277,763 277,763
Other 286,973 252,005
---------- ----------
1,029,061 529,768
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents 12,598 29,830
Receivables-
Customers (less accumulated provisions of $2,337,000
and $2,528,000, respectively, for uncollectible accounts) 247,494 274,692
Other 53,080 54,988
Materials and supplies, at average cost-
Owned 59,271 68,829
Under Consignment 48,150 41,080
Prepayments 68,006 82,257
---------- ----------
488,599 551,676
---------- ----------
DEFERRED CHARGES:
Regulatory assets 1,729,137 1,786,543
Unamortized sale and leaseback costs 101,033 103,091
Property taxes 104,071 104,071
Other 57,038 53,336
---------- ----------
1,991,279 2,047,041
---------- ----------
$8,995,875 $8,823,934
========== ==========
</TABLE>
- 2 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(In thousands)
CAPITALIZATION AND LIABILITIES
------------------------------
<S> <C> <C>
CAPITALIZATION:
Common stockholders' equity-
Common stock, $9 par value, authorized 175,000,000 shares-
152,569,437 shares outstanding $1,373,125 $1,373,125
Other paid-in capital 727,294 726,307
Retained earnings 542,199 471,095
Unallocated employee stock ownership plan common
stock - 8,376,103 and 8,663,575 shares, respectively (156,996) (162,656)
---------- ----------
Total common stockholders' equity 2,485,622 2,407,871
Preferred stock-
Not subject to mandatory redemption 160,965 160,965
Subject to mandatory redemption 20,000 25,000
Preferred stock of consolidated subsidiary-
Not subject to mandatory redemption 50,905 50,905
Subject to mandatory redemption 15,000 15,000
Company obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely Company
subordinated debentures 120,000 120,000
Long-term debt 2,595,408 2,786,256
---------- ----------
5,447,900 5,565,997
---------- ----------
CURRENT LIABILITIES:
Currently payable long-term debt and preferred stock 283,261 376,716
Short-term borrowings 573,063 119,965
Accounts payable 76,200 100,536
Accrued taxes 159,266 131,432
Accrued interest 47,297 57,462
Other 166,021 196,482
---------- ----------
1,305,108 982,593
---------- ----------
DEFERRED CREDITS:
Accumulated deferred income taxes 1,755,917 1,772,434
Accumulated deferred investment tax credits 203,385 213,876
Other 283,565 289,034
---------- ----------
2,242,867 2,275,344
---------- ----------
COMMITMENTS, GUARANTEES AND
CONTINGENCIES (Note 2) ---------- ----------
$8,995,875 $8,823,934
========== ==========
<FN>
The accompanying Notes to Consolidated Financial
Statements are an integral part of these balance sheets.
</TABLE>
- 3 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1996 1995 1996 1995
-------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 92,505 $ 93,052 $242,507 $241,699
Adjustments to reconcile net income to net
cash from operating activities-
Provision for depreciation 92,472 61,473 265,201 174,238
Nuclear fuel and lease amortization 13,859 19,569 39,370 51,769
Deferred income taxes, net (1,269) 7,185 10,286 17,893
Investment tax credits, net (3,636) (2,287) (10,491) (6,299)
Allowance for equity funds used during
construction - 1,315 - -
Deferred fuel costs, net 603 65 (4,516) 6,082
Receivables (487) (6,434) 29,106 957
Materials and supplies 8,647 12,527 2,488 16,253
Accounts payable (37,238) (5,577) (12,215) (5,491)
Other 76,173 98,151 26,599 81,174
-------- -------- -------- --------
Net cash provided from operating activities 241,629 279,039 588,335 578,275
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt - 126,397 40,621 253,620
Short-term borrowings, net 326,098 - 453,098 -
Redemptions and Repayments-
Preferred stock 122 - 969 -
Long-term debt 142 121,860 339,962 329,155
Short-term borrowings, net - 141,215 - 84,907
Dividend Payments-
Common stock 55,333 47,882 164,254 163,267
Preferred stock 3,169 5,329 9,404 16,063
-------- -------- -------- --------
Net cash used for (provided from) financing
activities (267,332) 189,889 20,870 339,772
-------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions 30,346 35,055 106,578 128,991
PNBV Capital Trust investment 464,325 - 464,325 -
Other 6,784 1,896 13,794 20,237
-------- -------- -------- --------
Net cash used for investing activities 501,455 36,951 584,697 149,228
-------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents 7,506 52,199 (17,232) 89,275
Cash and cash equivalents at beginning of period 5,092 60,367 29,830 23,291
-------- -------- -------- --------
Cash and cash equivalents at end of period $ 12,598 $112,566 $ 12,598 $112,566
======== ======== ======== ========
<FN>
The accompanying Notes to Consolidated Financial
Statements are an integral part of these statements.
</TABLE>
- 4 -
OHIO EDISON COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1 - FINANCIAL STATEMENTS:
The condensed consolidated financial statements reflect
all normal recurring adjustments that, in the opinion of
management, are necessary to fairly present results of operations
for the interim periods. These statements should be read in
conjunction with the consolidated financial statements and notes
included in Ohio Edison Company's (Company) 1995 Annual Report to
Stockholders. The results of operations are not intended to be
indicative of results of operations for any future period.
The sole assets of the subsidiary trust that is the
obligor on the preferred securities included in the Company's
capitalization are $123,711,350 principal amount of 9% Junior
Subordinated Debentures of the Company due December 31, 2025.
2 - COMMITMENTS, GUARANTEES AND CONTINGENCIES:
Construction Program --
The Company and its wholly owned subsidiary, Pennsylvania
Power Company (Companies), currently forecast expenditures of
approximately $650,000,000 for property additions and improvements
from 1996-2000, of which approximately $130,000,000 is applicable
to 1996. The Companies' nuclear fuel investments are expected to be
approximately $160,000,000 during the 1996-2000 period, of which
approximately $18,000,000 is applicable to 1996.
Guarantees --
The Companies, together with the other Central Area Power
Coordination Group companies, have each severally guaranteed
certain debt and lease obligations in connection with a coal supply
contract for the Bruce Mansfield Plant. As of September 30, 1996,
the Companies' share of the guarantees were $58,287,000. The price
under the coal supply contract, which includes certain minimum
payments, has been determined to be sufficient to satisfy the debt
and lease obligations.
Environmental Matters --
Various federal, state and local authorities regulate the
Companies with regard to air and water quality and other
environmental matters. The Companies have estimated additional
capital expenditures for environmental compliance of approximately
$17,000,000 for the period 1996 through 2000, which is included in
the construction forecast under "Construction Program."
- 5 -
The Companies are in compliance with the sulfur dioxide
(SO2) and nitrogen oxides (NOx) reduction requirements under the
Clean Air Act Amendments of 1990. SO2 reductions through the year
1999 are being achieved by burning lower-sulfur fuel, generating
more electricity from lower-emitting plants and/or purchasing
emission allowances. Plans for complying with reductions required
for the year 2000 and thereafter have not been finalized. The
Environmental Protection Agency (EPA) is conducting additional
studies which could indicate the need for additional NOx reductions
from the Companies' Pennsylvania facilities by the year 2003. The
cost of such reductions, if required, may be substantial. The
Companies continue to evaluate their compliance plans and other
compliance options.
The Companies are required to meet federally approved SO2
regulations. Violations of such regulations can result in shutdown
of the generating unit involved, and/or civil or criminal penalties
of up to $25,000 for each day the unit is in violation. The EPA has
an interim enforcement policy for SO2 regulations in Ohio that
allows for compliance based on a 30-day averaging period. The EPA
has proposed regulations that could change the interim enforcement
policy, including the method of determining compliance with
emission limits. The Companies cannot predict what action the EPA
may take in the future with respect to the proposed regulations or
the interim enforcement policy.
Legislative, administrative and judicial actions will
continue to change the way that the Companies must operate in order
to comply with environmental laws and regulations. With respect to
any such changes and to the environmental matters described above,
the Companies expect that any resulting additional capital costs
which may be required, as well as any required increase in
operating costs, would ultimately be recovered from their
customers.
Merger Agreement --
On September 13, 1996, the Company and Centerior Energy
Corporation, an Ohio corporation, entered into an Agreement and
Plan of Merger. Under the Merger Agreement, the Company and
Centerior will form FirstEnergy Corp., a holding company which
would directly hold all of the issued and outstanding common stock
of the Company and all of the issued and outstanding common stock
of Centerior's direct subsidiaries, which include among others, The
Cleveland Electric Illuminating Company (CEI) and The Toledo Edison
Company (Toledo). Penn Power would remain a wholly-owned subsidiary
of the Company. As a result of the Merger, the respective common
stock shareholders of the Company and Centerior would own all of
the outstanding shares of FirstEnergy Common Stock. All other
classes of capital stock of the Company and its subsidiaries and of
the subsidiaries of Centerior would be unaffected by the Merger and
would remain outstanding.
- 6 -
The Merger has been approved by the respective Boards of
Directors of the Company and Centerior and is expected to close
promptly after all of the conditions to the consummation of the
Merger, including the receipt of all necessary regulatory
approvals, are fulfilled or waived. The conditions include approval
by the Public Utilities Commission of Ohio of a regulatory plan for
CEI and Toledo acceptable to the Company and Centerior. Shareholder
meetings to vote upon the Merger are expected to be held in
February 1997. The receipt of all necessary regulatory approvals,
including approvals from the Federal Energy Regulatory Commission,
the Securities and Exchange Commission (SEC) and the Nuclear
Regulatory Commission, are expected to take approximately twelve to
eighteen months. The Merger is also subject to receipt of opinions
of counsel that the Merger, as to the Company, will qualify as a
tax-free transfer and, as to Centerior, will qualify as a tax-free
reorganization. In addition, the Merger is conditioned upon the
effectiveness of the registration statement containing a joint
proxy statement/prospectus with respect to the FirstEnergy Common
Stock to be issued in the Merger and the approval for listing of
such shares on the New York Stock Exchange.
3 - PNBV CAPITAL TRUST:
The Company invested approximately $464,000,000 in the
PNBV Capital Trust during the third quarter of 1996. The Trust was
established to purchase a portion of the lease obligation bonds
issued on behalf of lessors in the Company's Perry Unit 1 and
Beaver Valley Unit 2 sale and leaseback transactions. The economic
benefit resulting from the trust investment will effectively reduce
the related lease costs to the Company.
- 7 -
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Ohio Edison Company:
We have reviewed the accompanying consolidated balance
sheet of Ohio Edison Company (an Ohio corporation) and subsidiaries
as of September 30, 1996, and the related consolidated statements
of income and cash flows for the three-month and nine-month periods
ended September 30, 1996 and 1995. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet and
consolidated statement of capitalization of Ohio Edison Company and
subsidiaries as of December 31, 1995, and the related consolidated
statements of income, retained earnings, capital stock and other
paid-in capital, cash flows and taxes for the year then ended (not
presented separately herein). In our opinion, the information set
forth in the accompanying consolidated balance sheet as of
December 31, 1995, is fairly stated, in all material respects, in
relation to the balance sheet from which it has been derived.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
November 12, 1996
- 8 -
OHIO EDISON COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Earnings on common stock increased to $1.62 per share for
the nine month period ended September 30, 1996, from $1.57 per
share in the same period of 1995. Earnings increased to $.62 per
share in the third quarter of 1996 compared to $.61 per share for
the same period last year. The improved earnings were due to record
retail sales for the nine-month period and the Companies'
continuing cost control efforts. The 1996 nine-month results
reflect accelerated depreciation and amortization of nuclear and
regulatory assets totaling approximately $132,000,000 under the
Company's Rate Reduction and Economic Development Plan and Penn
Power's Rate Stability and Economic Development Plan. For the
quarter ended September 30, 1996, the accelerated amounts were
approximately $49,000,000.
During the first nine months of 1996, retail kilowatt-
hour sales increased 3.4% over last year, producing a new sales
record for that period. Residential and commercial sales were up
2.5% and 1.4%, respectively, compared to sales during the first
nine months of 1995. A 5.6% increase in industrial sales reflects
the restart of operations by two major customers in the second half
of 1995. Excluding sales to those customers, industrial sales rose
1.8% during the period. Sales to other utilities increased 7.9%
during the nine months ended September 30, 1996, compared to last
year. This increase, coupled with the higher level of retail sales,
contributed to a 4.2% increase in total kilowatt-hour sales during
the period.
Total kilowatt-hour sales were down 3.3% in the third
quarter of 1996, with retail kilowatt-hour sales decreasing 1.6%
compared to the same period last year. Residential and commercial
sales dropped 5.7% and 2.6%, respectively, during the period.
Industrial sales increased 2.7% during the third quarter of 1996,
compared to the third quarter of 1995, while sales to other
utilities were down 9.3%.
Fuel and purchased power costs were lower during the
three months ended September 30, 1996 due primarily to the lower
sales. Reduced nuclear expenses during the three and nine month
periods principally reflect lower refueling outage cost levels in
1996. The comparative decreases in other operating costs reflect
the Companies' continuing cost reduction efforts. The changes in
depreciation and regulatory asset amortization reflect
accelerations under the regulatory plans discussed above.
- 9 -
The comparative increases in other income for the nine
month period are principally due to higher investment income in
1996. Interest costs continued to drop during the third quarter and
first nine months of 1996 compared to last year. Interest on long-
term debt decreased due to redemptions and refinancing of higher-
cost debt that occurred subsequent to September 30, 1995. The
Companies' total debt (excluding short-term borrowings to fund the
PNBV Capital Trust investment described in Note 3) was reduced by
approximately $415,000,000 during the twelve months ended September
30, 1996. Total Company and subsidiaries' preferred stock dividend
requirements were relatively unchanged from last year's level,
taking into account the preferred stock refinancing that occurred
in the fourth quarter of 1995.
Capital Resources and Liquidity
The Companies have continuing cash requirements for
planned capital expenditures and debt maturities. During the fourth
quarter of 1996, capital requirements for property additions and
capital leases are expected to be about $41,000,000, including
$3,000,000 for nuclear fuel. The Companies have additional cash
requirements of approximately $55,000,000 for maturing long-term
debt during the fourth quarter of 1996. These requirements are
expected to be satisfied with internal cash and/or short-term
credit arrangements.
As of September 30, 1996, the Companies had about
$13,000,000 of cash and temporary investments. The Companies also
had $573,000,000 of short-term indebtedness. The Company had the
capability to borrow approximately $137,000,000 as of September 30,
1996 through OES Fuel credit facilities. In addition, the Companies
had $12,000,000 of unused short-term bank lines of credit, and
$46,500,000 of bank facilities that provide for borrowings on a
short-term basis at the banks' discretion. The Company expects to
refinance a major portion of the short-term borrowings outstanding
as of September 30, 1996, through the issuance of long-term debt
during the fourth quarter of 1996 and/or in 1997.
The Company invested approximately $464,000,000 in the
PNBV Capital Trust during the third quarter of 1996. The trust was
established to purchase a portion of the lease obligation bonds
issued on behalf of lessors in the Company's Perry Unit 1 and
Beaver Valley Unit 2 sale and leaseback transactions. The economic
benefit resulting from the trust investment will effectively reduce
the related lease costs to the Company.
As part of the Companies' continuing efforts to enhance
customer service, improve productivity and reduce costs, their
division operations areas were restructured during the third
quarter of 1996. This reorganization resulted in a work force
reduction totaling 173 positions. The Companies expect to save
approximately $10,000,000 per year as a result of these actions.
- 10 -
On September 13, 1996, the Company entered into an
agreement to merge with Centerior Energy Corporation under a new
holding company called FirstEnergy Corp. The merger is expected to
produce at least $1 billion in savings during the first ten years
of joint operations through the elimination of duplicative
activities, improved operating efficiencies, lower capital
expenditures, accelerated debt reduction, the coordination of the
companies' work forces and enhanced purchasing power. A
Registration Statement containing a joint proxy
statement/prospectus will be filed with the Securities and Exchange
Commission and shareholders' meetings for the respective companies
are expected to take place in February 1997. Following shareholder
approval, the Company hopes to have received all necessary
regulatory approvals by the end of 1997. An important condition to
consummation of the merger is approval by the Public Utilities
Commission of Ohio of an acceptable regulatory plan for the
Centerior utility subsidiaries.
- 11 -
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit
Number
-------
15 Letter from independent public accountants.
Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of
Regulation S-K, the Company has not filed as an exhibit to
this Form 10-Q any instrument with respect to long-term debt
if the total amount of securities authorized thereunder does
not exceed 10% of the total assets of the Company and its
subsidiaries on a consolidated basis, but hereby agrees to
furnish to the Commission on request any such documents.
(b) Reports on Form 8-K
The Company filed one report on Form 8-K since June 30,
1996. A report dated September 17, 1996, reported that the
Company and Centerior Energy Corporation entered into a
merger agreement.
- 12 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
November 13, 1996
OHIO EDISON COMPANY
-------------------
Registrant
/s/ H. P. Burg
-------------------------------
H. P. Burg
President and Chief Operating Officer
Chief Financial Officer
- 13 -
EXHIBIT 15
Ohio Edison Company
76 South Main Street
Akron, Ohio 44308
Gentlemen:
We are aware that Ohio Edison Company has incorporated by reference
in previously filed Registration Statements No. 33-49135, No. 33-
49259, No. 33-49413, No. 33-51139, No. 333-01489, and 333-05277,
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, which includes our report dated November 12,
1996, covering the unaudited interim consolidated financial
statements contained therein. Pursuant to Rule 436(c) of Regulation
C of the Securities Act of 1933, such report is not considered a
part of the Registration Statements prepared or certified by our
firm or a report prepared or certified by our firm within the
meaning of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
Cleveland, Ohio
November 12, 1996
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
(Amounts in 1,000's, except earnings per share)
Income tax expense includes $8,977,000 related to other income.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,486,936
<OTHER-PROPERTY-AND-INVEST> 1,029,061
<TOTAL-CURRENT-ASSETS> 488,599
<TOTAL-DEFERRED-CHARGES> 1,991,279
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 8,995,875
<COMMON> 1,373,125
<CAPITAL-SURPLUS-PAID-IN> 570,298
<RETAINED-EARNINGS> 542,199
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,485,622
155,000
211,870
<LONG-TERM-DEBT-NET> 2,595,408
<SHORT-TERM-NOTES> 453,096
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 119,967
<LONG-TERM-DEBT-CURRENT-PORT> 272,768
5,000
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 5,493
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,691,651
<TOT-CAPITALIZATION-AND-LIAB> 8,995,875
<GROSS-OPERATING-REVENUE> 1,857,855
<INCOME-TAX-EXPENSE> 154,946
<OTHER-OPERATING-EXPENSES> 1,306,900
<TOTAL-OPERATING-EXPENSES> 1,452,869
<OPERATING-INCOME-LOSS> 404,986
<OTHER-INCOME-NET> 24,861
<INCOME-BEFORE-INTEREST-EXPEN> 429,847
<TOTAL-INTEREST-EXPENSE> 187,340
<NET-INCOME> 242,507
9,373
<EARNINGS-AVAILABLE-FOR-COMM> 233,134
<COMMON-STOCK-DIVIDENDS> 162,030
<TOTAL-INTEREST-ON-BONDS> 160,726
<CASH-FLOW-OPERATIONS> 588,335
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
</TABLE>
