v3.26.1
TRANSACTIONS WITH AFFILIATED COMPANIES
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
TRANSACTIONS WITH AFFILIATED COMPANIES TRANSACTIONS WITH AFFILIATED COMPANIES
In addition to the intercompany income tax allocation and the short-term borrowing arrangement, FET and its subsidiaries have revenues, operating expense and interest expense transactions with affiliated companies, primarily FESC and the Electric Companies. The affiliated company transactions during the three months ended March 31, 2026 and 2025, are as follows:
For the Three Months Ended March 31,
20262025
(In millions)
Revenues$7 $4 
Other operating expenses:
Ground lease expense6 6 
FESC support services(1)
61 65 
Other affiliate support services(1)
28 33 
Interest income2 2 
Interest expense— 1 
(1) Includes amounts capitalized of $51 million and $52 million for the three months ended March 31, 2026 and 2025, respectively.

FE does not bill directly or allocate any of its costs to any subsidiary company. FESC provides corporate support and other services, including executive administration, accounting and finance, risk management, human resources, corporate affairs, communications, information technology, legal services and other similar services at cost, in accordance with its cost allocation manual, to affiliated FirstEnergy companies under FESC agreements. Allocated costs are for services that are provided on behalf of more than one company, or costs that cannot be precisely identified and are allocated using formulas developed by FESC. Intercompany transactions are generally settled under commercial terms within thirty days.

As FET and its subsidiaries do not have employees, employees from the Electric Companies perform maintenance and project work in support of FET and its subsidiaries. Labor and overhead costs associated with these activities are charged by the affiliates to FET's subsidiaries at cost.

As regulated money pool participants, the FET Subsidiaries have the ability to borrow from each other, regulated affiliates and the FE holding company to meet their short-term working capital requirements. Affiliated company notes receivables and payables related to the money pool are reported as "Notes receivable from affiliated companies" or "Short-term borrowings - affiliated companies" on the Consolidated Balance Sheets. Affiliate accounts receivable and accounts payable balances relate to intercompany transactions that have not yet settled through the money pool.

For federal income tax purposes, FET files as a consolidated group with its subsidiaries and maintains an intercompany income tax allocation agreement for the allocation of consolidated tax liability, including corporate AMT. Prior to the closing of the FET Equity Interest Sale, FET and its subsidiaries were included in the FirstEnergy consolidated group for federal income tax
purposes and were parties to the FirstEnergy intercompany income tax allocation agreement. See Note 3., "Income Taxes," of the Notes to Consolidated Financial Statements for additional information.
In addition to service costs, interest on obligations, expected return on plan assets, and prior service costs, FirstEnergy recognizes in net periodic benefit costs a pension and OPEB mark-to-market adjustment for the change in the fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for a remeasurement. FET's subsidiaries are allocated a portion of net periodic benefit costs from affiliates. These amounts are expected to be refunded or recovered through formula transmission rates. Additionally, other pension and OPEB net periodic costs (credits) allocated to FET's subsidiaries from affiliates were approximately $2 million and $3 million for the three months ended March 31, 2026 and 2025, respectively.
FET presents FE’s ownership of FET’s special purpose membership interest net assets and net income as NCI, which is included as a component of equity on FET’s Consolidated Balance Sheets.
ATSI has a ground lease with the Ohio Companies and FE PA under an operating lease agreement. Land use is rented to ATSI under the terms and conditions of a ground lease. ATSI, the Ohio Companies and FE PA reserve the right to use (and to permit authorized others to use) the land for any purpose that does not cause a violation of electrical safety code or applicable law, or does not impair ATSI's ability to satisfy its service obligations. Additional uses of such land for ATSI's facilities require prior written approval from the applicable operating companies. ATSI purchases directly any new property acquired for transmission use. ATSI makes fixed quarterly lease payments for the ground lease through December 31, 2049, unless terminated prior to maturity, or extended by ATSI for up to 10 additional successive periods of 50 years each.
MAIT has a ground lease with FE PA under an operating lease agreement. FE PA reserves the right to use (and to permit authorized others to use) the land for any purpose that does not cause a violation of electrical safety code or applicable law, or does not impair MAIT's ability to satisfy its service obligations. Additional uses of such land for MAIT's facilities require prior written approval from the applicable operating company. MAIT purchases directly any new property acquired for transmission use. MAIT makes variable quarterly lease payments through January 1, 2043, unless terminated prior to maturity, or extended by MAIT for up to two additional successive periods of 25 years each and one successive term of 24 years.