FE · 10-Q · 2026Q1 · Full report

Guarantees and Collateral Obligations

FIRSTENERGY CORP · 2026-04-28 · Importance 70 · Surprise 24

FirstEnergy explains that various contracts for capacity, energy, fuel and emission allowances require the posting of collateral, with thresholds contingent on subsidiaries’ credit ratings, and that collateral may be cash or credit support. As of March 31, 2026, FE or its subsidiaries had posted $238 million of collateral in the form of letters of credit and were holding $47 million of net cash collateral from certain generation suppliers. The company discloses that rating downgrades or loss of investment grade status could trigger additional collateral requirements and provides a table (as of March 31, 2026) disclosing potential additional credit-rating-contingent contractual collateral obligations.

Key facts

FirstEnergy had outstanding guarantees and other assurances aggregating approximately $1.1 billion as of March 31, 2026, consisting of parental guarantees of $618 million and other assurances of $491 million.
As of March 31, 2026, $238 million of collateral in the form of letters of credit had been posted by FE or its subsidiaries.
FirstEnergy may be required to post additional collateral if a subsidiary were to be downgraded or lose its investment grade credit rating based on senior unsecured debt rating, per credit-risk-related contingent features.
Surety bonds’ contractual impact assumes 100% of face amount except for $22 million of surety bond obligations capped at 60% of face amount, and typical obligations require 30 days to cure.
As of March 31, 2026, the maximum exposure of FET’s support obligations relating to the Valley Link credit facility was $102 million.
As of March 31, 2026, FE or its subsidiaries were holding $47 million of net cash collateral from certain generation suppliers.
As of March 31, 2026, the maximum potential amount of future payments JCP&L could be required to make under guarantees was $48 million.
As of March 31, 2026, JCP&L had posted $28 million of collateral in the form of letters of credit.

Impact estimates

metric	direction	stage	expected	basis
liability	negative	realized	-1.9%	FirstEnergy had outstanding guarantees and other assurances aggregating approximately $1.1 billion as of March 31, 2026, consisting of…
assets	negative	realized	-0.4%	As of March 31, 2026, $238 million of collateral in the form of letters of credit had been posted by FE or its subsidiaries.