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TABLE OF CONTENTS

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

Form 10-Q

(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2010
For the Quarterly Period Ended March 31, 2011
or
o		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 333-59348

MIDWEST GENERATION, LLC
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		33-0868558 (I.R.S. Employer Identification No.)
235 Remington Boulevard, Suite A Bolingbrook, Illinois (Address of principal executive offices)		60440 (Zip Code)

Registrant's telephone number, including area code: (630) 771-7800

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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ~~YES~~Yes o NONo o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO ý

Number of units outstanding of the registrant's Membership Interests as of ~~October~~May 292, ~~2010~~2011: 100 units (all units held by an affiliate of the registrant).

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TABLE OF CONTENTS

GLOSSARY					iv
PART I – FINANCIAL INFORMATION					1
ITEM 1. FINANCIAL STATEMENTS					1
	CONSOLIDATED STATEMENTS OF INCOME				1
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME				2
	CONSOLIDATED BALANCE SHEETS				3
	CONSOLIDATED STATEMENTS OF CASH FLOWS				4
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS				5
	Note 1. Summary of Significant Accounting Policies				5
		Basis of Presentation			5
		Cash Equivalents			5
		Related Party			5
		Restricted Deposits			5
		New Accounting Guidance			6
			Accounting Guidance Adopted in 2010		6
			Accounting Guidance Adopted in 2011		6
				Fair Value Measurements and Disclosures	6
			Accounting Guidance Not Yet Adopted		6
	Note 2. Fair Value Measurements				6
	Note 3. Derivative Instruments and Risk Management				9
		Valuation Techniques used to Determine Fair Value			8
			Level 1		8
			Level 2		8
			Level 3		8
	Note 3. Derivative Instruments and Hedging Activities				9
		Notional Volumes of Derivative Instruments			10
		Fair Value of Derivative Instruments			11
		Income Statement Impact of Derivative Instruments			11
		Contingent Features/Credit Related Exposure			12
		Contingent Features			12
		Collateral Deposits			12
	Note 4. Income Taxes				12
	Note 4. Accumulated Other Comprehensive Income				13
	Note 5. Compensation and Benefit Plans				13
		Pension Plans and Postretirement Benefits Other Than Pensions			13
			Pension Plans		13
			Postretirement Benefits Other Than Pensions		13
	Note 6. Income Taxes				14
	Note 6. Commitments and Contingencies				13
	Note 7. Commitments and Contingencies				14
		Commitments			13
		Commitments			14
			Fuel Supply Contracts		13
			Capital Improvements		14
			Capital Expenditures		14
			Fuel Supply and Transportation Contracts		14
		Guarantees and Indemnities			14
		Interconnection Agreement			14
			Environmental Indemnities Related to the Midwest Generation Plants		14
		Guarantees and Indemnities			15
			Indemnities Provided under Sale-Leaseback Agreements		15
			Tax Indemnity Agreements		15
		Contingencies			15
			Environmental Indemnities Related to the Midwest Generation Plants		15
			Environmental Remediation		15
		Contingencies			16
			New Source Review Lawsuit		15
			New Source Review Lawsuit		16
	Note 7. Environmental Developments				16
				Recent Developments	16
	Note 8. Accumulated Other Comprehensive Income (Loss)				17
				Background	16
			Environmental Remediation		17

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			Environmental Developments			17
	Note 9. Supplemental Cash Flows Information				17
				Environmental Compliance Plans and Costs		17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS					18
				Climate Change		18
	MANAGEMENT'S OVERVIEW				19
				Transport Rule		18
	Highlights of Operating Results				19
				National Ambient Air Quality Standard for Sulfur Dioxide		19
	Environmental Compliance Plans and Costs				20
				Hazardous Substances and Hazardous Waste Laws		19
	US EPA Developments				20
	Note 8. Supplemental Cash Flows Information					19
	Liquidity				20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS						20
	RESULTS OF OPERATIONS				21
	MANAGEMENT'S OVERVIEW					21
	Summary				21
	Introduction					21
		Reconciliation of Non-GAAP Disclosures and Statistical Definitions			21
	Highlights of Operating Results					22
			Average Realized Energy Price		21
	Environmental Developments					22
			Average Realized Fuel Costs		22
		Environmental Compliance Plans and Costs				22
			Statistical Definitions		22
		US EPA Developments				23
		Seasonality			23
	RESULTS OF OPERATIONS					24
	Operating Income				23
	Summary					24
	Other Income (Expense)				23
		Statistical Definitions and Non-GAAP Disclosures				24
	Income Taxes				24
		Seasonal Disclosure				26
	New Accounting Guidance				24
	Operating Revenues					26
	LIQUIDITY AND CAPITAL RESOURCES				25
	Operating Expenses					27
	Available Liquidity				25
	Other Income (Expense)					27
		Bonus Depreciation Impact			25
	Provision for Income Taxes					28
	Capital Investment Plan				25
	New Accounting Guidance					28
	Consolidated Cash Flow				26
	Derivative Instruments					28
	Credit Ratings				26
		Unrealized Gains and Losses				28
		Overview			26
		Fair Value Disclosures				28
		Credit Rating of EMMT			27
	LIQUIDITY AND CAPITAL RESOURCES					29
	Equity Distributions and Tax Payments				27
	Available Liquidity					29
		Key Ratio Affecting Distributions			27
		Lien-backed Hedge Contracts				29
	Powerton-Joliet Lease Payments				27
		Small Business Jobs Act of 2010				29
	Contractual Obligations and Contingencies				28
	Consolidated Cash Flow					30
		Fuel Supply Contracts			28
	Capital Expenditures					30
		New Source Review Lawsuit			28
	Credit Facility and Other Covenants					30
	Off-Balance Sheet Transactions				28
	Equity Distributions and Tax Payments					31
	Environmental Matters and Regulations				28
	Powerton-Joliet Lease Payments					31
	MARKET RISK EXPOSURES				29
	Credit Ratings					32
	Derivative Instruments				29
		Overview				32
		Unrealized Gains and Losses			29
		Credit Rating of EMMT				32
		Fair Value Disclosures			29

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	Contractual Obligations and Contingencies		32
	Commodity Price Risk		29
		Fuel Supply and Transportation Contracts	32
		Energy Price Risk	29
		New Source Review Lawsuit	32
		Capacity Price Risk	31
	Off-Balance Sheet Transactions		32
		Basis Risk	31
	Environmental Matters and Regulations		33
		Coal and Transportation Price Risk	32
	MARKET RISK EXPOSURES		34
		Emission Allowances Price Risk	32
	Commodity Price Risk		34
	Credit Risk		32
		Energy Price Risk	34
	Interest Rate Risk		33
		Capacity Price Risk	35
	CRITICAL ACCOUNTING ESTIMATES AND POLICIES		33
		Basis Risk	36
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			33
		Coal and Transportation Price Risk	36
ITEM 4. CONTROLS AND PROCEDURES			33
		Emission Allowances Price Risk	36
	Disclosure Controls and Procedures		33
	Credit Risk		37
	Internal Control Over Financial Reporting		33
	Interest Rate Risk		37
PART II – OTHER INFORMATION			34
	CRITICAL ACCOUNTING ESTIMATES AND POLICIES		37
ITEM 1. LEGAL PROCEEDINGS			34
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			37
	New Source Review Lawsuit		34
ITEM 4T. CONTROLS AND PROCEDURES			37
ITEM 1A. RISK FACTORS			34
	Disclosure Controls and Procedures		37
ITEM 6. EXHIBITS			34
	Internal Control Over Financial Reporting		37
SIGNATURES			35
PART II – OTHER INFORMATION			38
ITEM 1. LEGAL PROCEEDINGS			38
	New Source Review Lawsuit		38
		Recent Developments	38
ITEM 1A. RISK FACTORS			38
ITEM 6. EXHIBITS			39
SIGNATURES			40

iii

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GLOSSARY

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below.

bcf		billion cubic feet
Btu		British thermal units
CAA		Clean Air Act
Commonwealth Edison		Commonwealth Edison Company
CPS		Combined Pollutant Standard
EME		Edison Mission Energy
EMMT		Edison Mission Marketing & Trading, Inc.
GAAP		United States generally accepted accounting principles
GHG		greenhouse gas
GWh		gigawatt-hours
Illinois EPA		Illinois Environmental Protection Agency
HAP(s)		hazardous air pollutant(s)
LIBOR		London Interbank Offered Rate
MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations
Midwest Generation		Midwest Generation, LLC
MMBtu		million British thermal units
Moody's		Moody's Investors Service, Inc.
MW		megawatts
MWh		megawatt-hours
NAAQS		National Ambient Air Quality Standards
NOV		Notice of Violation
NOX		nitrogen oxide
PJM		PJM Interconnection, LLC
PRB		Powder River Basin
PSD		Prevention of Significant Deterioration
RPM		Reliability Pricing Model
S&P		Standard & Poor's Ratings Services
SNCR		selective non-catalytic reduction
SO2		sulfur dioxide
US EPA		United States Environmental Protection Agency

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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (in millions, unaudited)
			Three Months Ended September 30,						Nine Months Ended September 30,
			Three Months Ended March 31,
			2010			2009			2010			2009
			2011			2010
Operating Revenues from Marketing Affiliate			$	~~444~~351		$	~~372~~379		$	~~1,104~~		$	~~1,096~~
Operating Expenses
	Fuel			~~151~~126			~~164~~141			~~390~~			~~397~~
	Plant operations			92118			8999			~~354~~			~~291~~
	Depreciation and amortization			39			3738			~~115~~			~~112~~
	Loss on disposal of assets			7			1			10			1
	Administrative and general			6			5
	Administrative and general			3			5			15			15
		Total operating expenses		289			283
		Total operating expenses		292			296			884			816
	Operating income			62			96
	Operating income			152			76			220			280
Other Income (Expense)
Other Income (Expense)
	Interest and other income			29			27
	Interest and other income			29			28			84			87
	Interest expense			(11	)		(12	)
	Interest expense			(12	)		(14	)		(36	)		(47	)
		Total other income		18			15
		Total other income		17			14			48			40
Income before income taxes				80			111
Income before income taxes				169			90			268			320
Provision for income taxes				32			42
Provision for income taxes				61			36			100			123
Net Income			$	48		$	69
Net Income			$	108		$	54		$	168		$	197

The accompanying notes are an integral part of these consolidated financial statements.

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MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions, unaudited)
			Three Months Ended September 30,						Nine Months Ended September 30,
			Three Months Ended March 31,
			2010			2009			2010			2009
			2011			2010
Net Income			$	~~108~~48		$	5469		$	~~168~~		$	~~197~~
Other comprehensive income (loss), net of tax
Other comprehensive income, net of tax
	Pension and postretirement benefits other than pensions:
	Pension and postretirement benefits other than pensions
		Amortization of net loss included in expense, net of tax		—			—			—			1
		Amortization of net loss and prior service adjustment included in expenses, net of tax		1			—
	Unrealized gains (losses) on derivatives qualified as cash flow hedges:
	Unrealized gains (losses) on derivatives qualified as cash flow hedges
		Unrealized holding gains arising during period, net of income tax expense of $25 and $1 for the three months and $36 and $37 for the nine months ended September 30, 2010 and 2009, respectively		39			3			56			54
		Unrealized holding gains arising during period, net of income tax expense of $1 and $45 for the three months ended March 31, 2011 and 2010, respectively		1			70
		Reclassification adjustments included in net income, net of income tax expense (benefit) of $1 and $(33) for the three months and $(29) and $(55) for the nine months ended September 30, 2010 and 2009, respectively		1			(48	)		(45	)		(83	)
		Reclassification adjustments included in net income, net of income tax benefit of $4 and $6 for the three months ended March 31, 2011 and 2010, respectively		(7	)		(9	)
Other comprehensive income (loss)				40(5	)		~~(45~~61	)		11			~~(28~~	)
Comprehensive Income			$	~~148~~43		$	9130		$	~~179~~		$	~~169~~

The accompanying notes are an integral part of these consolidated financial statements.

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MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in millions, unaudited)
CONSOLIDATED BALANCE SHEETS (in millions, except unit amounts, unaudited)
			September 30, 2010			December 31, 2009
			March 31, 2011			December 31, 2010
Assets
Current Assets
	Cash and cash equivalents		$	~~293~~363		$	~~237~~295
	Due from affiliates			~~113~~115			~~137~~124
	Fuel inventory			7899			7485
	Spare parts inventory			3639			3438
	Interest receivable from affiliate			2827			5556
	Derivative assets			~~116~~32			9847
	Intangible assets			5			11
	Deferred taxes			2			—
	Other current assets			31			31
	Intangible assets			—			2
		Total current assets		700			677
	Other current assets			19			33
Property, Plant and Equipment				4,456			4,394
		Total current assets		696			680
	Less accumulated depreciation and amortization			1,502			1,392
Property, plant and equipment, less accumulated depreciation of $1,580 and $1,541 at respective dates				2,898			2,905
		Net property, plant and equipment		2,954			3,002
Notes receivable from affiliate				1,329			1,343
Notes receivable from affiliate				1,343			1,348
Long-term derivative assets				8			3
Long-term derivative assets				24			24
Other assets				11			11
Other assets				11			12
Total Assets			$	4,942		$	4,942
Total Assets			$	5,032		$	5,063
Liabilities and Member's Equity
Current Liabilities
	Accounts payable		$	3654		$	3943
	Accrued liabilities			4554			6660
	Due to affiliates			9943			2016
	Interest payable			1110			2622
	Derivative liabilities			54			193
	Deferred taxes			39—			4310
	Current portion of lease financing			~~109~~113			~~120~~109
		Total current liabilities		~~344~~278			~~333~~263
Lease financing, net of current portion				~~556~~499			~~665~~556
Deferred taxes				~~174~~146			~~167~~129
Long-term derivative liabilities				31			42
Benefit plans and other long-term liabilities				~~156~~222			~~149~~214
Total Liabilities				1,~~233~~146			1,~~318~~164
Commitments and Contingencies (Note 7)
Commitments and Contingencies (Notes 3, 6 and 7)
Member's Equity
	Membership interests, no par value; 100 units authorized, issued and outstanding			—			—
	Additional paid-in capital			3,511			3,511
	Accumulated earnings			~~223~~293			~~180~~270
	Accumulated other comprehensive income			65			54
	Accumulated other comprehensive loss			(8	)		(3	)
Total Member's Equity				3,~~799~~796			3,~~745~~778
Total Liabilities and Member's Equity			$	54,~~032~~942		$	54,~~063~~942

The accompanying notes are an integral part of these consolidated financial statements.

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MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited)
			Nine Months Ended September 30,
			Three Months Ended March 31,
			2010			2009
			2011			2010
Cash Flows From Operating Activities
	Net income		$	~~168~~48		$	~~197~~69
	Adjustments to reconcile income to net cash provided by operating activities:
		Depreciation and amortization		~~116~~39			~~114~~38
		Loss on disposal of assets		10			1
		Deferred taxes		8			7
		Deferred taxes		(3	)		62
	Decrease in due to/from affiliates			36			68
		Other non-cash items		(3	)		—
	(Increase) decrease in inventory			(15	)		7
	Decrease in due to/from affiliates			103			48
	Decrease in interest receivable from affiliate			29			27
	Increase in inventory			(6	)		(15	)
	Decrease in other assets			14			5
	Decrease in interest receivable from affiliate			27			28
	Decrease in intangible assets			2			1
	Increase in other assets			—			(11	)
	Increase (decrease) in accounts payable and other current liabilities			5			(11	)
	Decrease in intangible assets			6			29
	Decrease in interest payable			(12	)		(15	)
	Decrease in accounts payable and other current liabilities			(24	)		(42	)
	Increase in other liabilities			8			6
	Decrease in interest payable			(15	)		(18	)
	Decrease in derivative assets and liabilities			1			5
	Increase (decrease) in other liabilities			7			(4	)
		Net cash provided by operating activities		163			207
	Increase in derivative assets and liabilities			(16	)		(30	)
		Net cash provided by operating activities		370			359
Cash Flows From Financing Activities
	Repayments of long-term debt			—			(200	)
	Cash distributions to parent			(25	)		(30	)
	Cash distributions to parent			(125	)		(160	)
	Repayment of capital lease obligation			(53	)		(62	)
	Repayment of capital lease obligation			(121	)		(126	)
		Net cash used in financing activities		(78	)		(92	)
		Net cash used in financing activities		(246	)		(486	)
Cash Flows From Investing Activities
	Capital expenditures			(7631	)		(5622	)
	Proceeds from sale of emission allowances			3			—
	Repayment of loan to affiliate			14			2
	Decrease in restricted deposits			—			1
		Net cash used in investing activities		(17	)		(20	)
	Repayment of loan to affiliate			5			5
Net increase in cash and cash equivalents				68			95
		Net cash used in investing activities		(68	)		(50	)
Cash and cash equivalents at beginning of period				295			237
Net increase (decrease) in cash and cash equivalents				56			(177	)
Cash and cash equivalents at end of period			$	363		$	332
Cash and cash equivalents at beginning of period				237			650
Cash and cash equivalents at end of period			$	293		$	473

The accompanying notes are an integral part of these consolidated financial statements.

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MIDWEST GENERATION, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 (Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

Midwest Generation, LLC's (Midwest Generation's) significant accounting policies were described in "Note 1—Summary of Significant Accounting Policies" on page 7759 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010. Midwest Generation follows the same accounting policies for interim reporting purposes, with the exception of accounting principles adopted as of January 1, ~~2010~~2011 as discussed below in "—New Accounting Guidance." This quarterly report should be read in conjunction with such financial statements.

In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to fairly state the consolidated financial position and results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form 10-Q. The results of operations for the three months ~~and nine months~~ ended ~~September~~March 3031, ~~2010~~2011 are not necessarily indicative of the operating results for the full year.

Certain prior year reclassifications have been made to conform to the current year financial statement presentation pertaining to immaterial items.

The December 31, 2010 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

Cash Equivalents

Cash equivalents ~~include~~included money market funds totaling $~~281~~357 million and $~~237~~270 million at ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010, respectively. The carrying value of cash equivalents equals the fair value as all investments have maturities of less than three months. ~~For further discussion of money market funds, see Note 2—Fair Value Measurements.~~

Related Party

Interest income from affiliates, included in interest and other income on Midwest Generation's consolidated statements of income, was $28 million ~~for~~during ~~both~~each ~~the third quarters~~ of ~~2010 and 2009 and $84 million for both~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010.

Restricted Deposits

~~The~~Restricted ~~total restricted~~ deposits of $3 million at both ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010 were included in other assets on ~~Midwest~~ Midwest Generation's consolidated balance sheet. These cash balances are restricted to provide collateral for fuel suppliers.

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New Accounting Guidance

Accounting Guidance Adopted in ~~2010~~2011

Fair Value Measurements and Disclosures

The Financial Accounting Standards Board (FASB) issued an accounting standards update ~~that~~modifying ~~provides~~the ~~for new~~ disclosure requirements related to fair value measurements. ~~Requirements,~~ ~~effective~~Under ~~January 1,~~these ~~2010~~requirements, ~~include~~purchases ~~separate disclosure of significant transfers in~~ and ~~out of Levels 1 and 2 and the reasons for the transfers. The update also clarified~~ ~~existing~~settlements ~~disclosure requirements~~ for ~~the level of disaggregation, inputs and valuation techniques. In addition, effective January 1, 2011, the~~ Level 3 ~~reconciliation of~~ fair value measurements ~~using~~are ~~significant~~presented ~~unobservable~~on ~~inputs~~a ~~should include~~ gross basis, rather than net. ~~information~~Midwest ~~about~~Generation ~~purchases,~~adopted ~~sales,~~this ~~issuances and settlements. The~~ guidance ~~impacts~~effective ~~disclosures only. For further discussion~~January 1, ~~see Note 2—Fair Value Measurements~~2011.

Accounting Guidance Not Yet Adopted

Recently issued accounting standards updates by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the Securities and Exchange Commission that were effective after September 30, 2010 are not expected to have a material effect on Midwest Generation's consolidated results of operations or financial position.

Note 2. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value ~~for~~of an asset or a liability should ~~reflect~~consider ~~the~~assumptions ~~entity's~~that ~~nonperformance~~market ~~risk.~~participants ~~Fair~~would ~~value~~use isin ~~determined~~pricing ~~using~~the aasset ~~hierarchy~~or toliability, ~~prioritize~~including ~~inputs~~assumptions toabout ~~valuation models~~nonperformance risk. The ~~hierarchy~~fair ~~gives the~~value ~~highest~~of ~~priority~~derivative toassets' ~~unadjusted~~nonperformance ~~quoted~~risk ~~market~~was ~~prices~~not inmaterial ~~active~~as ~~markets~~of ~~for identical assets and liabilities (Level~~March 131, ~~measurements)~~2011 and ~~the lowest priority to unobservable inputs (Level~~December 331, ~~measurements)~~2010. ~~The three levels of the fair value hierarchy are:~~

Midwest Generation's categorizes financial assets and liabilities ~~carried~~into ata fair value ~~primarily~~hierarchy ~~consist~~based ofon ~~derivative~~valuation ~~contracts~~inputs ~~and~~used ~~money~~to ~~market~~derive ~~funds~~fair value. ~~Derivative~~The ~~contracts~~hierarchy ~~are~~gives ~~primarily~~the ~~commodity~~highest ~~contracts~~priority ~~for~~to ~~the~~unadjusted ~~purchase~~quoted ~~and~~market ~~sale~~prices ofin ~~power~~active ~~and~~markets ~~include contracts~~ for ~~forward~~identical ~~physical~~assets ~~sales~~ and ~~purchases,~~liabilities ~~options~~(Level 1 measurements) and ~~forward~~the ~~price~~lowest ~~swaps~~priority ~~which~~to ~~settle~~unobservable ~~only~~inputs ~~on a financial basis~~ (~~including~~Level 3 ~~futures contracts~~measurements). ~~Derivative~~ ~~contracts can be exchange or over-the-counter traded.~~

The fair value of derivative contracts takes into account quoted market prices, time value of money, volatility of the underlying commodities and other factors. Derivatives that are exchange traded in active markets for identical assets or liabilities are classified as Level 1. Investments in money market

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~~funds~~The ~~are~~following ~~generally~~table ~~classified~~sets asforth ~~Level 1~~Midwest asGeneration's ~~fair~~assets ~~value~~and isliabilities ~~determined~~that were accounted for at fair value by ~~observable~~level ~~market~~within ~~prices~~the infair ~~active~~value ~~markets.~~hierarchy:

Derivative contracts, valued based on forward market prices in active markets (Northern Illinois Hub peak and AEP/Dayton) adjusted for nonperformance risks, are classified as Level 2. EMMT obtains forward market prices from traded exchanges (Intercontinental Exchange Futures U.S. or New York Mercantile Exchange) and available broker quotes. Then, EMMT selects a primary source that best represents traded activity for each market to develop observable forward market prices in determining the fair value of these positions. Broker quotes or prices from exchanges are used to validate and corroborate the primary source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources that EMMT believes to provide the most liquid market for the commodity. EMMT considers broker quotes to be observable when corroborated with other information which may include a combination of prices from exchanges, other brokers, and comparison to executed trades.

				March 31, 2011

(in millions)				Level 1		Level 2		Level 3		Netting¹			Total

Assets at Fair Value
	Money market funds²			$	357	$	—	$	—	$	—		$	357

	Derivative contracts
		Electricity		$	—	$	34	$	—	$	(1	)	$	33
		Fuel oil			7		—		—		—			7

		Total commodity contracts			7		34		—		(1	)		40

	Total assets			$	364	$	34	$	—	$	(1	)	$	397

	Liabilities at Fair Value
		Derivative contracts
			Electricity	$	—	$	5	$	1	$	(1	)	$	5

	Total liabilities			$	—	$	5	$	1	$	(1	)	$	5

Financial transmission rights and over-the-counter derivatives that trade infrequently at illiquid locations are classified as Level 3. For illiquid financial transmission rights, EMMT reviews objective criteria related to system congestion on a quarterly basis and other underlying drivers and adjusts fair value when EMMT concludes a change in objective criteria would result in a new valuation that better reflects fair value. Changes in fair values are based on the hypothetical sale of illiquid positions. In circumstances where EMMT cannot verify fair value with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. As markets continue to develop and more pricing information becomes available, EMMT continues to assess valuation methodologies used to determine fair value. Derivative contracts with counterparties that have significant nonperformance risks are classified as Level 3.

				December 31, 2010


Assets at Fair Value
	Money market funds²			$	270	$	—	$	—	$	—		$	270

	Derivative contracts
		Electricity		$	—	$	42	$	—	$	8		$	50
		Fuel oil			8		—		—		(8	)		—

		Total commodity contracts			8		42		—		—			50

	Total assets			$	278	$	42	$	—	$	—		$	320

	Liabilities at Fair Value
		Derivative contracts
			Electricity	$	—	$	5	$	—	$	—		$	5

	Total liabilities			$	—	$	5	$	—	$	—		$	5

In ~~assessing~~ ~~nonperformance~~ 1Represents the ~~risks,~~impact ~~EMMT reviews credit ratings~~ of ~~counterparties~~netting ~~(and~~across ~~related~~the ~~default~~levels ~~rates based on such credit ratings) and prices~~ of ~~credit default swaps. The market price (or premium) for credit default swaps represents~~ the ~~price~~fair ~~that~~value ahierarchy. ~~counterparty~~Netting ~~would~~among ~~pay~~positions toclassified ~~transfer~~within the ~~risk~~same level ofis ~~default,~~included ~~typically~~in ~~bankruptcy,~~that ~~to another party~~level. ~~A credit default swap is not directly~~ ~~comparable~~2Money market tofunds ~~the~~are ~~credit~~included ~~risks~~in ofcash ~~derivative~~and ~~contracts,~~cash ~~but~~equivalents ~~provides~~on ~~market~~Midwest ~~information~~Generation's ofconsolidated ~~the~~balance ~~related risk of nonperformance~~sheets. ~~The fair value of derivative assets nonperformance risk was~~ ~~$1 million~~ ~~at September 30, 2010.~~

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The following table sets forth ~~Midwest~~a ~~Generation's~~summary ~~assets~~of ~~and~~changes ~~liabilities~~in ~~that~~the ~~were accounted for at~~ fair value byof ~~level~~assets ~~within~~and ~~the~~liabilities, ~~fair~~net ~~value~~categorized ~~hierarchy~~as Level 3:

				As of September 30, 2010
			Three Months Ended March 31,
(in millions)			2011	~~Level 1~~		2010	~~Level 2~~			~~Level 3~~		~~Netting and Collateral2~~			~~Total~~
Assets at Fair Value
Fair value, net assets (liabilities) at beginning of period			$	—		$	3
	Money market funds1			$	281		$	—		$	—	$	—		$	281
Total realized/unrealized gains (losses)
	Derivatives
	Included in earnings1			—			2
		Electricity		$	—		$	125		$	—	$	15		$	140
	Included in accumulated other comprehensive income (loss)			—			2
		Natural gas			1			—			—		(1	)		—
Settlements				(1	)		(1	)
		Fuel oil			10			—			—		(10	)		—
Transfers in or out of Level 3				—			(3	)
	Total derivatives			$	11		$	125		$	—	$	4		$	140
Fair value, net assets (liabilities) at end of period			$	(1	)	$	3
Liabilities at Fair Value
Change during the period in unrealized gains (losses) related to assets and liabilities, net held at end of period1			$	(1	)	$	3
	Derivatives
		Electricity		$	—		$	(4	)	$	—	$	(4	)	$	(8	)
	Total derivatives			$	—		$	(4	)	$	—	$	(4	)	$	(8	)

			As of December 31, 2009
(in millions)			Level 1		Level 2			Level 3		Netting and Collateral2			Total
Assets at Fair Value
	Money market funds1		$	237	$	—		$	—	$	—		$	237
	Derivatives
		Electricity	$	—	$	134		$	3	$	(33	)	$	104
		Natural gas		2		—			—		—			2
		Fuel oil		16		—			—		—			16
	Total derivatives		$	18	$	134		$	3	$	(33	)	$	122
Liabilities at Fair Value
	Derivatives
		Electricity	$	—	$	(22	)	$	—	$	(1	)	$	(23	)
	Total derivatives		$	—	$	(22	)	$	—	$	(1	)	$	(23	)

¹: Reported in operating revenues on Midwest Generation's consolidated statements of income.

Midwest ~~1Included in~~Generation ~~cash~~determines ~~and~~the ~~cash~~fair ~~equivalents~~value onof ~~Midwest~~transfers ~~Generation's~~in ~~consolidated balance sheets. 2Represents cash collateral~~ and ~~the~~out ~~impact~~ of ~~netting~~each ~~across~~level at the ~~levels~~end of ~~the~~each ~~fair~~reporting ~~value hierarchy~~period. ~~Netting~~There ~~among~~were ~~positions~~no significant transfers ~~classified~~between ~~within~~levels during the ~~same~~first ~~level~~quarters isof ~~included~~2011 inand ~~that level~~2010.

Valuation Techniques used to Determine Fair Value

Level 1

Level 1 includes assets and liabilities where unadjusted quoted prices in active markets are available at the measurement date for identical assets and liabilities. Financial assets and liabilities classified as Level 1 include exchange-traded derivatives and money market funds.

Level 2

Level 2 pricing inputs include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the derivative instrument. Financial assets and liabilities utilizing Level 2 inputs include over-the-counter derivatives.

Derivative contracts that are over-the-counter traded are valued using pricing models and are generally classified as Level 2. Inputs to the pricing models include forward published or posted clearing prices from exchanges (New York Mercantile Exchange and Intercontinental Exchange) for similar instruments and discount rates. Forward market prices are developed based on the source that best represents trade activity in each market. Broker quotes or prices from exchanges are used to validate and corroborate the primary source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity. Broker quotes are incorporated when corroborated with other information which may include a combination of prices from exchanges, other brokers, and comparison to executed trades.

Level 3

Level 3 includes financial assets and liabilities where fair value is determined using techniques that require significant unobservable inputs. Over-the-counter options, bilateral contracts, capacity contracts,

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~~The~~qualifying facilities ~~following~~contracts, ~~table~~derivative ~~sets~~contracts ~~forth~~that atrade ~~summary~~infrequently of(such ~~changes~~as infinancial transmission rights and over-the-counter ~~fair~~derivatives ~~value~~at ofilliquid ~~Midwest~~locations), long-term ~~Generation's~~power agreements, and derivative contracts with counterparties that have significant nonperformance risks are classified as Level 3. ~~derivative~~In ~~contracts~~circumstances where Edison Mission Marketing & Trading, Inc. ~~net:~~(EMMT) cannot verify fair value with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. As markets continue to develop and more pricing information becomes available, EMMT continues to assess valuation methodologies used to determine fair value.

		Three Months Ended September 30,					Nine Months Ended September 30,
(in millions)		2010		2009			2010			2009
Fair value at beginning of periods		$	—	$	2		$	3		$	1
Total realized/unrealized gains (losses)
	Included in earnings1		—		1			2			27
	Included in accumulated other comprehensive income		—		—			2			—
Purchases and settlements, net			—		(1	)		(3	)		(21	)
Transfers in or out of Level 3			—		—			(4	)		(5	)
Fair value at September 30		$	—	$	2		$	—		$	2
Change during the periods in unrealized gains (losses) related to derivative contracts, net held at September 301		$	—	$	1		$	(5	)	$	(3	)

For derivative contracts that trade infrequently (illiquid financial transmission rights), changes in fair value are based on the hypothetical sale of illiquid positions. Objective criteria are reviewed, including system congestion and other underlying drivers and fair value is adjusted when it is concluded that a change in objective criteria would result in a new valuation that better reflects fair value. For illiquid long-term power agreements, fair value is based upon a discounting of future electricity and natural gas prices derived from a proprietary model using the risk free discount rate for a similar duration contract, adjusted for credit risk and market liquidity. Changes in fair value are based on changes to forward market prices, including forecasted prices for illiquid forward periods. The fair value of the majority of Midwest Generation's derivatives that are classified as Level 3 is determined using uncorroborated non-binding broker quotes and models that may require EMMT to extrapolate short-term observable inputs in order to calculate fair value. Broker quotes are obtained from several brokers and compared against each other for reasonableness.

The carrying ~~1Reported in~~amount ~~operating~~of ~~revenues~~trade onreceivables ~~Midwest~~and ~~Generation's~~payables ~~consolidated~~approximates ~~statements~~fair ~~of income~~value.

~~Midwest~~ ~~Generation~~ ~~determines the fair value of transfers in and transfers out of each level at the end of each reporting period. Transfers in and out of~~ ~~Levels~~ Note ~~1, 2 and~~ 3. ~~were~~Derivative ~~not~~Instruments ~~significant during the third quarters~~ and ~~nine~~Hedging ~~months ended September 30, 2010 and 2009.~~ Activities

Midwest Generation uses derivative instruments to reduce its exposure to market risks that arise from price fluctuations of electricity, capacity, fuel, emission allowances, and transmission rights. ~~Note 3~~The derivative financial instruments vary in duration, ranging from a few days to several years, depending upon the instrument. ~~Derivative~~To ~~Instruments~~the extent that Midwest Generation does not use derivative instruments to hedge these market risks, the unhedged portions will be subject to the risks and ~~Risk~~benefits ~~Management~~ of spot market price movements.

Risk ~~Midwest~~management ~~Generation~~positions ~~uses~~may ~~derivative~~be ~~instruments~~designated toas ~~reduce~~cash ~~its~~flow ~~exposure~~hedges toor ~~market~~economic ~~risks~~hedges, ~~that~~which ~~arise~~are ~~from~~derivatives ~~fluctuations~~that inare ~~prices~~not ofdesignated ~~electricity,~~as ~~capacity,~~cash ~~fuel,~~flow ~~emission~~hedges. ~~allowances,~~Economic ~~and~~hedges ~~transmission rights.~~are Toaccounted ~~the~~for ~~extent~~at ~~that~~fair value on Midwest Generation's ~~does~~consolidated ~~not~~balance ~~use~~sheets with offsetting changes recorded on the consolidated statements of income. For derivative instruments tothat qualify for hedge ~~these~~accounting ~~market~~treatment, the ~~risks~~fair value is recognized, to the ~~unhedged~~extent ~~portions~~effective, ~~will~~on beMidwest ~~subject~~Generation's toconsolidated balance sheets with offsetting changes in fair value recognized in accumulated other comprehensive loss until the ~~risks~~related ~~and~~forecasted ~~benefits~~transaction occurs. The results of ~~spot~~derivative ~~market~~activities ~~price movements~~are recorded in cash flows from operating activities on the consolidated statements of cash flows.

~~Risk~~Where ~~management positions may be designated as cash flow hedges or economic hedges, which are derivatives that are not designated as cash flow hedges. Economic hedges are accounted for at fair value on~~ Midwest Generation's ~~consolidated~~derivative ~~balance~~instruments ~~sheets~~are ~~with~~subject ~~offsetting~~to ~~changes~~a ~~recorded~~master innetting ~~the~~agreement ~~consolidated~~and ~~statements~~the criteria of ~~income.~~authoritative ~~For~~guidance ~~transactions~~are ~~that~~met, ~~qualify~~Midwest ~~for~~Generation ~~accounting~~presents ~~hedge~~its ~~treatment,~~derivative ~~the~~assets ~~fair~~and ~~value~~liabilities ison ~~recognized,~~a tonet ~~the~~basis ~~extent effective,~~ on ~~Midwest~~its ~~Generation's~~ consolidated balance sheets ~~with offsetting changes in fair value recognized in accumulated other comprehensive income until the related forecasted transaction occurs~~.

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Notional Volumes of Derivative Instruments

The following table summarizes the notional volumes of derivatives used for hedging activities:

September 30, 2010
March 31, 2011
Commodity	Instrument	Classification	Unit of Measure	Cash Flow Hedges			Economic Hedges
Electricity	Forwards/Futures	Sales	GWh		2013,~~391~~735	1		13,~~685~~392	3
Electricity	Forwards/Futures	Purchases	GWh		~~408~~306	1		1413,~~567~~808	3
Electricity	Capacity	Sales	MW-Day (in thousands)		146	2		—
Electricity	Congestion	Purchases	GWh		—			~~289~~116	4
Natural gas	Forwards/Futures	Sales	bcf		—			0.6
Fuel oil	Forwards/Futures	Purchases	barrels		—			240,000
Fuel oil	Forwards/Futures	Sales	barrels		—			150,000
Fuel oil	Forwards/Futures	Purchases	barrels		—			495,000
December 31, 2009
Electricity	Forwards/Futures	Sales	GWh		20,653	1		19,004	3
Electricity	Forwards/Futures	Purchases	GWh		106	1		18,406	3
Electricity	Capacity	Sales	MW-Day (in thousands)		254	2		—
Electricity	Capacity	Purchases	MW-Day (in thousands)		11	2		2	2
Natural gas	Forwards/Futures	Sales	bcf		—			3.3
Fuel oil	Forwards/Futures	Sales	barrels		—			250,000
Fuel oil	Forwards/Futures	Purchases	barrels		—			625,000

1Includes forward and futures contracts that qualify for hedge accounting. This category excludes power contracts for the Midwest Generation plants which meet the normal sales and purchase exception and are accounted for on the accrual method. 2Midwest Generation's hedge transactions for capacity result from bilateral trades. Capacity sold in the PJM RPM auction is not accounted for as a derivative. 3Midwest Generation also entered into transactions that adjust financial and physical positions, or day-ahead and real-time positions to reduce costs or increase gross margin. These positions largely offset each other. The net sales positions of these categories are primarily related to hedge transactions that are not designated as cash flow hedges. 4Congestion contracts include financial transmission rights, transmission congestion contracts or congestion revenue rights. These positions are similar to a swap, where the buyer is entitled to receive a stream of revenues (or charges) based on the hourly day-ahead price differences between two locations.

December 31, 2010

Commodity	Instrument	Classification	Unit of Measure	Cash Flow Hedges			Economic Hedges

Electricity	Forwards/Futures	Sales	GWh		12,961	¹		13,437	³
Electricity	Forwards/Futures	Purchases	GWh		408	¹		14,066	³
Electricity	Capacity	Sales	MW-Day (in thousands)		146	²		—
Electricity	Congestion	Purchases	GWh		—			144	⁴
Fuel oil	Forwards/Futures	Sales	barrels		—			250,000
Fuel oil	Forwards/Futures	Purchases	barrels		—			490,000

¹: Midwest Generation's hedge products include forward and futures contracts that qualify for hedge accounting. This category excludes power contracts for the Midwest Generation plants which meet the normal purchases and sales exception and are accounted for on the accrual method.
²: Midwest Generation's hedge transactions for capacity result from bilateral trades. Capacity sold in the PJM Reliability Pricing Model (RPM) auction is not accounted for as a derivative.
³: Midwest Generation also entered into transactions that adjust financial and physical positions, or day-ahead and real-time positions to reduce costs or increase gross margin. These positions largely offset each other. The net sales positions of these categories are primarily related to hedge transactions that are not designated as cash flow hedges.
⁴: Congestion contracts include financial transmission rights, transmission congestion contracts or congestion revenue rights. These positions are similar to a swap, where the buyer is entitled to receive a stream of revenues (or charges) based on the hourly day-ahead price differences between two locations.

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Fair Value of Derivative Instruments

The following table summarizes the fair value of commodity derivative instruments for non-trading purposes reflected on Midwest Generation's consolidated balance sheets:

September 30, 2010
March 31, 2011
	Derivative Assets									Derivative Liabilities
(in millions)	Short-term			Long-term			Subtotal			Short-term			Long-term			Subtotal			Net Assets
																			Net Assets
Cash flow hedges	$	109		$	25		$	134		$	3		$	3		$	6		$	128
(in millions)	Short-term			Long-term			Subtotal			Short-term			Long-term			Subtotal
Economic hedges		87			6			93			82			6			88			5
Cash flow hedges	$	33		$	6		$	39		$	6		$	4		$	10		$	29
		196			31			227			85			9			94			133
Economic hedges		21			5			26			20			—			20			6
Netting and collateral received1		(80	)		(7	)		(87	)		(80	)		(6	)		(86	)		(1	)
		54			11			65			26			4			30			35
Total	$	116		$	24		$	140		$	5		$	3		$	8		$	132
Netting1		(22	)		(3	)		(25	)		(22	)		(3	)		(25	)		—
December 31, 2009
Total	$	32		$	8		$	40		$	4		$	1		$	5		$	35
Cash flow hedges	$	152		$	17		$	169		$	61		$	4		$	65		$	104
December 31, 2010
Economic hedges		176			7			183			154			—			154			29
Cash flow hedges	$	41		$	2		$	43		$	3		$	2		$	5		$	38
		328			24			352			215			4			219			133
Economic hedges		26			1			27			20			—			20			7
Netting and collateral received1		(230	)		—			(230	)		(196	)		—			(196	)		(34	)
		67			3			70			23			2			25			45
Total	$	98		$	24		$	122		$	19		$	4		$	23		$	99
Netting1		(20	)		—			(20	)		(20	)		—			(20	)		—
Total	$	47		$	3		$	50		$	3		$	2		$	5		$	45

1Netting of derivative receivables and derivative payables ~~and the related cash collateral received and paid~~ is permitted when a legally enforceable master netting agreement exists with a derivative counterparty.

Income Statement Impact of Derivative Instruments

The following table provides the activity of accumulated other comprehensive income, containing ~~the~~ information about the changes in the fair value of of cash flow hedges, to the extent effective, and reclassification from accumulated other comprehensive income into results of operations:

	Cash Flow Hedge Activity1 Nine Months Ended September 30,
	Cash Flow Hedge Activity1 Three Months Ended March 31,
							Income Statement Location
(in millions)	~~2010~~2011			~~2009~~2010
Accumulated other comprehensive income derivative gain at January 1	$	~~111~~37		$	~~268~~111
Effective portion of changes in fair value		922			91115
Reclassification from accumulated other comprehensive income to net income		(7411	)		(~~138~~15	)	Operating revenues	~~Operating revenues~~
Accumulated other comprehensive income derivative gain at September 30	$	129		$	221
Accumulated other comprehensive income derivative gain at March 31	$	28		$	211

1Unrealized derivative gains are before income taxes. The after-tax amounts recorded in accumulated other comprehensive income at ~~September~~ March 3031, ~~2010~~2011 and ~~2009~~2010 were $7917 million and $~~135~~129 million, respectively.

~~The~~For ~~portion~~additional ofinformation arelated ~~cash flow hedge that does not offset the change in the value of the transaction being hedged, which is commonly referred~~ to asaccumulated ~~the~~other ~~ineffective portion,~~comprehensive ~~is immediately recognized in earnings. Midwest Generation recorded net gains of $1 million and $4 million during the third quarters of 2010 and 2009~~income, ~~and~~see $9Note ~~million~~8—Accumulated ~~and $4 million~~Other ~~during~~Comprehensive ~~the~~Income ~~nine~~(Loss). ~~months ended September 30, 2010 and 2009,~~

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~~respectively~~The portion of a cash flow hedge that does not offset the change in the value of the transaction being hedged, which is commonly referred to as the ineffective portion, is immediately recognized in earnings. Midwest Generation recorded net gains of none and $7 million during the first quarters of 2011 and 2010, respectively, representing the amount of cash flow hedge ineffectiveness and are reflected in operating revenues on the consolidated statements of income.

The effect of realized and unrealized gains (losses) from derivative instruments used for non-trading purposes on the consolidated statements of income is presented below:

		Three Months Ended September 30,					Nine Months Ended September 30,
		Three Months Ended March 31,
	Income Statement Location
(in millions)		~~2010~~2011		~~2009~~2010			~~2010~~		~~2009~~
Economic hedges	Operating revenues	$	41	$	20(2	)	$	—	$	39
	Fuel costs		26		(21	)		—		12

Contingent Features~~/Credit Related Exposure~~

Midwest Generation sells merchant energy and capacity ~~and purchases its natural gas~~ through EMMT, which has a below investment grade credit rating. Midwest Generation has cash on hand to provide credit support as needed for hedging contracts entered into by EMMT related to the Midwest Generation plants. EMMT borrows under its revolving credit agreement with Midwest Generation to provide credit support for futures and forward contracts. Loans provided under this revolving credit agreement are repaid by EMMT upon the return of the funds under the terms of the related forward contracts. The amount repaid includes interest earned, if any, under margin agreements supporting such contracts. As of ~~September~~March 3031, ~~2010~~2011, EMMT had no borrowings outstanding under this revolving credit agreement.

Midwest Generation has entered into derivative contracts directly with third parties that do not require margin, but contain provisions that require Midwest Generation to comply with the terms and conditions of its credit facility. The credit facility contains financial covenants. Some hedge contracts include provisions related to a change in control or material adverse effect resulting from amendments or modifications to the related credit facility. Failure by Midwest Generation to comply with these provisions may result in a termination event under the hedge contracts, enabling the counterparties to terminate and liquidate all outstanding transactions and demand immediate payment of amounts owed to them. The aggregate fair value of all derivative instruments with credit-risk-related contingent features was in an asset position at March 31, 2011 and, accordingly, the contingent features described below do not currently have liquidity exposure. EMMT has hedge contracts that do not require margin, but provide that each party can request additional credit support in the form of adequate assurance of performance in the case of an adverse development affecting the other party. The aggregate fair value of all derivative instruments with credit-risk-related contingent features is in an asset position at September 30, 2010 and, accordingly, the contingent features described above do not currently have a liquidity exposure. Future increases in power prices could expose Midwest Generation to termination payments or additional collateral postings under the contingent features described above.

~~Collateral~~ Note 4. ~~Deposits~~Income Taxes

~~Collateral~~ Midwest ~~deposits~~Generation ~~include~~had ~~cash~~an ~~collateral~~effective ~~received~~income ~~from~~tax ~~counterparties~~rate ~~and brokers as credit support under derivative contracts. The amount~~ of ~~collateral~~ ~~deposits~~40% ~~generally~~and ~~varies~~38% ~~based~~for onthe ~~changes~~first inquarters ~~fair value~~ of ~~the~~2011 ~~related~~and ~~positions~~2010, respectively. Midwest Generation's ~~nets~~effective ~~counterparty~~income ~~receivables~~tax ~~and~~rate ~~payables~~varies ~~where~~from ~~balances~~the ~~exist under master netting~~federal ~~arrangements.~~statutory ~~Midwest~~rate ~~Generation presents the portion~~ of ~~its~~35% ~~cash~~primarily ~~collateral~~due ~~deposits~~to ~~netted~~state ~~with~~income ~~its~~taxes, ~~derivative~~and ~~positions~~estimated onbenefits ~~its consolidated balance sheets. Cash collateral received~~ from ~~others~~a ~~that was~~federal ~~offset~~deduction ~~against~~related ~~derivative~~to ~~assets~~qualified ~~totaled~~domestic ~~none~~production ~~and~~activities ~~$34 million~~under ~~at September~~Section ~~30,~~199 ~~2010~~of ~~and~~the ~~December 31,~~Internal Revenue ~~2009, respectively~~Code.

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Note 4. Accumulated Other Comprehensive Income

Accumulated other comprehensive income consisted of the following:

(in millions)		Unrealized Gains on Cash Flow Hedges, Net		Unrecognized Losses and Prior Service Adjustments, Net1			Accumulated Other Comprehensive Income
Balance at December 31, 2009		$	68	$	(14	)	$	54
	Current period change		11		—			11
Balance at September 30, 2010		$	79	$	(14	)	$	65

1For further detail, see Note 5—Compensation and Benefit Plans.

Unrealized gains on cash flow hedges, net of tax, at September 30, 2010, consist of futures and forward electricity contracts that qualify for hedge accounting. These gains arise because current forecasts of future electricity prices are lower than the contract prices. Approximately $66 million of unrealized gains on cash flow hedges, net of tax, are expected to be reclassified into earnings during the next 12 months. Management expects that reclassification of net unrealized gains will increase energy revenues recognized at market prices. Actual amounts ultimately reclassified into earnings over the next 12 months could vary materially from this estimated amount as a result of changes in market conditions. The maximum period over which a commodity cash flow hedge is designated is through December 31, 2012.

Note 5. Compensation and Benefit Plans

Pension Plans and Postretirement Benefits Other Than Pensions

Pension Plans

Contributions to Midwest Generation's pension plans were $~~15.~~2 million ~~for~~during the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2010~~2011, and ~~are~~Midwest ~~estimated~~Generation atestimates $~~1.9~~12 million in contributions for the ~~last~~remainder ~~three months~~ of ~~2010~~2011.

The following ~~are~~were components of pension expense:

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	~~2010~~2011			~~2009~~2010			~~2010~~			~~2009~~
Service cost	$	23.54		$	23.81		$	~~8.7~~		$	~~8.2~~
Interest cost		12.91			12.70			~~5.9~~			~~5.0~~
Expected return on plan assets		(12.62	)		(1.26	)		~~(4.8~~	)		~~(3.4~~	)
Amortization of prior service costs		0.1			0.1			0.2			0.2
Net amortization		0.2			0.1
Amortization of net loss		(0.1	)		0.3			—			0.8
Total expense	$	3.5		$	3.6
Total expense	$	2.8		$	3.7		$	10.0		$	10.8

Postretirement Benefits Other Than Pensions

Contributions to Midwest Generation's postretirement benefits other than pensions were $0.42 million ~~for~~during the ~~nine~~quarter ~~months~~ ended ~~September~~ March 3031, 2011, ~~2010~~ and ~~are~~Midwest ~~estimated~~Generation atestimates $0.25 million in contributions for the ~~last~~remainder ~~three months~~ of ~~2010~~2011.

The following were components of postretirement benefits expense:

	Three Months Ended March 31,

(in millions)	2011		2010

Service cost	$	0.4	$	0.2
Interest cost		0.7		0.5
Amortization of prior service cost (credit)		0.1		(0.1	)
Amortization of net loss		0.1		0.1

Total expense	$	1.3	$	0.7

Note 6. Commitments and Contingencies

Commitments

Fuel Supply Contracts

At March 31, 2011, Midwest Generation had commitments to purchase coal from third-party suppliers at fixed prices, subject to adjustment clauses. These commitments are estimated to aggregate $287 million, summarized as follows: $153 million for the remainder of 2011 and $134 million in 2012.

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~~The~~ ~~following~~ ~~are~~ Capital ~~components of postretirement benefits expense:~~ Expenditures

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2010			2009			2010			2009
Service cost	$	0.2		$	0.2		$	0.6		$	0.7
Interest cost		0.5			0.6			1.6			1.8
Amortization of prior service credit		(0.2	)		(0.1	)		(0.4	)		(0.2	)
Amortization of net loss		0.2			0.2			0.3			0.5
Total expense	$	0.7		$	0.9		$	2.1		$	2.8

At March 31, 2011, Midwest Generation had firm commitments to spend approximately $100 million during the remainder of 2011 on capital expenditures primarily related to selective non-catalytic reduction (SNCR) equipment and non-environmental improvements. Midwest Generation intends to fund these expenditures through cash on hand, cash generated from operations or by drawing on its working capital facility.

Note 6. Income Taxes

Midwest Generation had an effective income tax provision rate of 37% and 38% for the nine months ended September 30, 2010 and 2009, respectively. Midwest Generation's effective income tax rate varies from the federal statutory rate of 35% primarily due to state income taxes and estimated benefits from a federal deduction related to qualified domestic production activities under Section 199 of the Internal Revenue Code.

Note 7. Commitments and Contingencies

Commitments

Capital Improvements

At September 30, 2010, Midwest Generation had firm commitments to spend approximately $8 million during the remainder of 2010 on capital expenditures related to both environmental and non-environmental improvements. Midwest Generation intends to fund these expenditures through cash on hand and cash generated from operations.

Fuel Supply and Transportation Contracts

At September 30, 2010, Midwest Generation had fuel purchase commitments with various third-party suppliers for the purchase of coal. Based on the contract provisions, which consist of fixed prices, subject to adjustment clauses, these commitments are estimated to aggregate $382 million, summarized as follows: $55 million for the remainder of 2010, $193 million in 2011, and $134 million in 2012.

At September 30, 2010, Midwest Generation had contracts for the transport of coal to its facilities. The primary contract is with Union Pacific Railroad (and various short-haul carriers), which extends through 2011. Midwest Generation commitments under this agreement are based on actual coal purchases from the PRB. Accordingly, Midwest Generation's contractual obligations for transportation are based on committed coal volumes set forth in its fuel supply contracts. The minimum commitments under these contracts are estimated to aggregate $284 million, summarized as follows: $71 million for the remainder of 2010 and $213 million in 2011.

Interconnection Agreement

Midwest Generation has entered into interconnection agreements with Commonwealth Edison to provide interconnection services necessary to connect the Midwest Generation plants with its transmission systems. Unless terminated earlier in accordance with their terms, the interconnection agreements will terminate on a date mutually agreed to by both parties. Midwest Generation is

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required to compensate Commonwealth Edison for all reasonable costs associated with any modifications, additions or replacements made to the interconnection facilities or transmission systems in connection with any modification, addition or upgrade to the Midwest Generation plants.

Guarantees and Indemnities

Tax Indemnity Agreements

In connection with the sale-leaseback transactions related to the Powerton and Joliet Stations and, previously, the Collins Station, EME, Midwest Generation and another wholly owned subsidiary of EME entered into tax indemnity agreements. Although the Collins Station lease terminated in April 2004, Midwest Generation's tax indemnity agreement with the former lease equity investor is still in effect. Under these tax indemnity agreements, these entities agreed to indemnify the lessors in the sale-leaseback transactions for specified adverse tax consequences that could result in certain situations set forth in the tax indemnity agreement, including specified defaults under the respective leases. The potential indemnity obligation under these tax indemnity agreements could be significant. Due to the nature of these potential obligations, Midwest Generation cannot determine a maximum potential liability which would be triggered by a valid claim from the lessors. Midwest Generation has not recorded a liability related to these indemnities.

Environmental Indemnities Related to the Midwest Generation Plants

In connection with the acquisition of the Midwest Generation plants, Midwest Generation agreed to indemnify Commonwealth Edison Company (Commonwealth Edison) with respect to specified environmental liabilities before and after December 15, 1999, the date of sale. The indemnification claims are reduced by any insurance proceeds and tax benefits related to such claims and are subject to a requirement that Commonwealth Edison takes all reasonable steps to mitigate losses related to any such indemnification claim. This indemnification for environmental liabilities is not limited in term and would be triggered by a valid claim from Commonwealth Edison. Also, in connection with the sale-leaseback transaction related to the Powerton and Joliet Stations in Illinois, EME agreed to indemnify the lessors for specified environmental liabilities. Due to the nature of the obligations under these indemnities, a maximum potential liability cannot be determined. Commonwealth Edison has advised Midwest Generation that Commonwealth Edison believes it is entitled to indemnification for all liabilities, costs, and expenses that it may be required to bear as a result of the litigation discussed below under "—Contingencies—New Source Review Lawsuit." ~~The sale-leaseback participants have requested similar indemnification.~~ Except as discussed below, Midwest Generation has not recorded a liability related to these environmental indemnities.

Midwest Generation entered into a supplemental agreement with Commonwealth Edison and Exelon Generation Company LLC on February 20, 2003 to resolve a dispute regarding interpretation of its reimbursement obligation for asbestos claims under the environmental indemnities set forth in the Asset Sale Agreement. Under this supplemental agreement, Midwest Generation agreed to reimburse Commonwealth Edison and Exelon Generation for 50% of specific asbestos claims pending as of February 2003 and related expenses less recovery of insurance costs, and agreed to a sharing arrangement for liabilities and expenses associated with future asbestos-related claims as specified in the agreement. As a general matter, Commonwealth Edison and Midwest Generation apportion responsibility for future asbestos-related claims based upon the number of exposure sites that are Commonwealth Edison locations or Midwest Generation locations. The obligations under this agreement are not subject to a maximum liability. The supplemental agreement had an initial five-year term with an automatic renewal provision for subsequent one-year terms (subject to the right of either party to terminate); pursuant to the automatic renewal provision, it has been extended until February ~~2011~~2012. There were approximately ~~220~~228 cases for which Midwest Generation was potentially liable and that had not been settled and dismissed at March 31, 2011. Midwest Generation had recorded a liability of $56 million at March 31, 2011 related to this contract indemnity, included in benefit plans and other long-term liabilities on its consolidated balance sheets.

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had not been settled and dismissed at September 30, 2010. Midwest Generation had recorded a $57 million liability at September 30, 2010 for previous, pending and future claims.

The amounts recorded by Midwest Generation for the asbestos-related liability are based upon a number of assumptions. Future events, such as the number of new claims to be filed each year, the average cost of disposing of claims, as well as the numerous uncertainties surrounding asbestos litigation in the United States, could cause the actual costs to be higher or lower than projected.

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Indemnities Provided under Sale-Leaseback Agreements

In connection with the sale-leaseback transactions related to the Powerton and Joliet Stations and, previously, the Collins Station, Edison Mission Energy (EME), Midwest Generation and another wholly owned subsidiary of EME entered into tax indemnity agreements. Although the Collins Station lease terminated in April 2004, Midwest Generation's tax indemnity agreement with the former lease equity investor is still in effect. Under these tax indemnity agreements, these entities agreed to indemnify the lessors in the sale-leaseback transactions for specified adverse tax consequences that could result in certain situations set forth in the tax indemnity agreement, including specified defaults under the respective leases. The potential indemnity obligation under these tax indemnity agreements could be significant. Due to the nature of these potential obligations, Midwest Generation cannot determine a maximum potential liability which would be triggered by a valid claim from the lessors. Midwest Generation has not recorded a liability related to these indemnities.

Contingencies

Environmental Remediation

With respect to potential liabilities arising under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, commonly referred to as CERCLA, or similar laws for the investigation and remediation of contaminated property, Midwest Generation accrues a liability to the extent the costs are probable and can be reasonably estimated. Midwest Generation had accrued approximately $7 million at March 31, 2011 for estimated environmental investigation and remediation costs for the Midwest Generation plants. This estimate is based upon the number of sites, the scope of work and the estimated costs for investigation and/or remediation where such expenditures can be reasonably estimated. Future estimated costs may vary based on changes in regulations or requirements of federal, state or local governmental agencies, changes in technology, and actual costs of disposal. In addition, future remediation costs will be affected by the nature and extent of contamination discovered at the sites that requires remediation. Given the prior history of the operations at its facilities, Midwest Generation cannot be certain that the existence or extent of all contamination at its sites has been fully identified.

New Source Review Lawsuit

In August 2009, the United States Environmental Protection Agency (US EPA) and the State of Illinois filed a complaint in the Northern District of Illinois against Midwest Generation, but not Commonwealth Edison, alleging that Midwest Generation or Commonwealth Edison performed repair or replacement projects at six Illinois ~~Recent~~coal-fired ~~Developments~~ electric generating stations in violation of the Prevention of Significant Deterioration (PSD) requirements and of the New Source Performance Standards of the Clean Air Act (CAA), including alleged requirements to obtain a construction permit and to install controls sufficient to meet best available control technology (BACT) emissions rates. The US EPA also alleged that Midwest Generation and Commonwealth Edison violated certain operating permit requirements under Title V of the CAA. Finally, the US EPA alleged violations of certain opacity and particulate matter standards at the Midwest Generation plants. In addition to seeking penalties ranging from $25,000 to $37,500 per violation, per day, the complaint calls for an injunction ordering Midwest Generation to install controls sufficient to meet BACT emissions rates at all units subject to the complaint; to obtain new PSD or New Source Review permits for those units; to amend its applications under Title V of the CAA; to conduct audits of its operations to determine whether any additional modifications have occurred; and to offset and mitigate the harm to public health and the environment caused by the alleged CAA violations. The remedies sought by the plaintiffs in the lawsuit

In March 2010, the Federal District Court for the Northern District of Illinois dismissed nine of the ten counts related to PSD requirements in the complaint filed by the US EPA and the State of Illinois against Midwest Generation, holding that, as a subsequent owner, Midwest Generation could not be held liable under the PSD provisions for modifications allegedly made by Commonwealth Edison, the prior owner of the Midwest Generation plants. The Court also dismissed the tenth count to the extent it sought civil penalties under the CAA, as barred by the applicable statute of limitations. The decision did not address (i) other counts in the complaint that allege violations of opacity and particulate matter limitations under the Illinois State Implementation Plan and Title V of the CAA, or (ii) the complaint in intervention filed by a group of Chicago-based environmental action groups, which also alleges opacity and particulate matter violations. 15

~~In April~~Table ~~2010, the US EPA formally issued to EME the same NOV that was issued to Midwest Generation in 2007. The transmittal letter stated that the action was based on a review~~ of ~~the asset purchase agreement for the Midwest Generation plants and that the NOV was being issued to EME as a successor in interest to Commonwealth Edison.~~ Contents

Incould ~~June~~go ~~2010,~~well ~~the~~beyond ~~US EPA,~~ the ~~State~~requirements of ~~Illinois, and several environmental groups filed amended complaints in~~ the ~~New~~Combined ~~Source~~Pollutant ~~Review~~Standard ~~litigation~~(CPS). ~~The~~Several ~~amended~~Chicago-based ~~complaints~~environmental ~~are~~action ~~similar~~groups ~~to the prior complaints, but seek to add Commonwealth Edison and EME as defendants and introduce new legal theories to impose liability on Midwest Generation and EME. Midwest Generation and EME~~ have ~~filed~~intervened ain ~~motion to dismiss~~ the ~~amended complaints, and a status hearing has been scheduled for February 2011~~case.

In March 2010, nine of the ten counts related to PSD requirements in the complaint were dismissed, and the tenth count was also dismissed to the extent it sought civil penalties under the CAA, as barred by the applicable statute of limitations. Following those dismissals, the government plaintiffs filed an amended complaint, with claims that attempted to add Commonwealth Edison and EME as ~~Background~~ defendants and introduce new legal theories to impose liability on Midwest Generation and EME. In March 2011, the court again dismissed the nine PSD claims previously dismissed in 2010, along with claims related to alleged violations of Title V of the CAA to the extent based on the dismissed PSD claims. The court also dismissed all claims asserted against Commonwealth Edison and EME. The court denied a motion to dismiss a claim by the Chicago-based environmental action groups for civil penalties in the remaining PSD claim, but noted that the plaintiffs will be required to convince the court that the statute of limitations should be equitably tolled. The court did not address other counts in the complaint that allege violations of opacity and particulate matter limitations under the Illinois State Implementation Plan and Title V of the CAA. Trial of the liability portion of the case is scheduled to commence June 3, 2013.

InAn ~~August~~adverse ~~2007,~~decision ~~Midwest~~could ~~Generation~~involve ~~received~~penalties anand ~~NOV~~remedial ~~from~~actions ~~the US EPA alleging~~ that, ~~beginning~~could inhave ~~the~~a ~~early~~material ~~1990s~~adverse ~~and~~impact ~~into~~on ~~2003, Midwest Generation or Commonwealth Edison performed repair or replacement projects at six Illinois coal-fired electric generating stations in violation of~~ the ~~PSD~~financial ~~requirements~~condition and results of ~~the~~operations ~~New Source Performance Standards~~ of ~~the~~ ~~CAA, including alleged requirements to obtain a construction permit and to install controls sufficient to meet best available control technology (BACT) emissions rates. The US EPA also alleged that~~ Midwest Generation ~~and Commonwealth Edison violated certain operating permit requirements under Title V of the CAA~~. ~~Finally, the US EPA alleged violations of certain opacity and particulate matter standards at the~~ Midwest Generation ~~plants.~~cannot Atpredict ~~approximately~~ the ~~same~~outcome ~~time,~~of ~~Commonwealth~~these ~~Edison~~matters ~~received~~or anestimate ~~NOV substantially similar to~~ the ~~Midwest~~impact ~~Generation~~on ~~NOV.~~its ~~Midwest Generation~~facilities, ~~Commonwealth~~ ~~Edison,~~its ~~the~~results ~~US EPA, and the U.S. Department~~ of ~~Justice~~operations, ~~along~~financial ~~with~~position ~~several~~or ~~Chicago-based~~cash ~~environmental action groups, had discussions designed to explore the possibility of a settlement but no settlement resulted~~flows.

Note 7. Environmental Developments

In March 2011, the US EPA issued draft "National Emission Standards for Hazardous Air Pollutants," limiting emissions of hazardous air pollutants (HAPs) from coal- and oil-fired electrical generating units. The regulations are expected to be finalized by November 2011. Based on its continuing review, Midwest Generation does not expect these standards, if adopted, would require Midwest Generation to make material changes to the approach to compliance with state and federal environmental regulations that it contemplates for CPS compliance. Midwest Generation expects to continue to develop and implement a compliance program that includes the use of activated carbon injection, upgrades to particulate removal systems and dry sorbent injection, combined with its use of low sulfur Powder River Basin (PRB) coal, to meet emissions limits for criteria pollutants, such as nitrogen oxide (NO_x) and sulfur dioxide (SO₂) as well as for HAPs, such as mercury, acid gas and non-mercury metals.

In March 2011, the US EPA issued draft standards under the federal Clean Water Act which would affect cooling water intake structures at generating facilities. The standards are intended to protect aquatic organisms by reducing capture in screens attached to cooling water intake structures (impingement) and in the water volume brought into the facilities (entrainment). The regulations are expected to be finalized by July 2012. Midwest Generation is still evaluating the proposed standards but believes, from a preliminary review, that compliance with the proposed standards regarding impingement will be achievable without incurring material additional capital expenditures or operating costs. The required measures to comply with the proposed standards regarding entrainment are subject to the discretion of the permitting authority, and Midwest Generation is unable at this time to assess potential costs of compliance, which could be significant for the Midwest Generation plants.

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~~In August~~ ~~2009, the US EPA and the State of Illinois filed a complaint in the Northern District of Illinois against Midwest Generation, but not Commonwealth Edison, alleging claims substantially~~ ~~similar~~ ~~to those in the NOV. In addition to seeking penalties ranging from $25,000 to $37,500 per violation, per day, the complaint calls for an injunction ordering Midwest Generation to install~~ controls sufficient to meet BACT emissions rates at all units subject to the complaint; to obtain new PSD or New Source Review permits for those units; to amend its applications under Title V of the CAA; to conduct audits of its operations to determine whether any additional modifications have occurred; and to offset and mitigate the harm to public health and the environment caused by the alleged CAA violations Note 8. ~~The~~Accumulated ~~remedies~~Other ~~sought~~Comprehensive byIncome the plaintiffs in the lawsuit could go well beyond those required under the CPS. By order dated January 19, 2010, the Court allowed a group of Chicago-based environmental action groups to intervene in the case. (Loss)

~~The~~ ~~owner~~Accumulated ~~participants~~other ofcomprehensive ~~the~~income ~~Powerton~~(loss) ~~and~~consisted Joliet Stations have sought indemnification and defense from Midwest Generation and/or EME for costs and liabilities associated with these matters. EME responded by recognizing its indemnity obligation and defense of the ~~claims~~following: ~~on terms consistent with its contractual obligations.~~

An adverse decision could involve penalties and remedial actions that could have a material adverse impact on the financial condition and results of operations of Midwest Generation at such time. Midwest Generation cannot predict the outcome of these matters or estimate the impact on its facilities, its results of operations, financial position or cash flows.

(in millions)		Unrealized Gains (Losses) on Cash Flow Hedges, Net			Unrecognized Gains (Losses) and Prior Service Adjustments, Net¹			Accumulated Other Comprehensive Loss


Balance at December 31, 2010		$	23		$	(26	)	$	(3	)
	Current period change		(6	)		1			(5	)

Balance at March 31, 2011		$	17		$	(25	)	$	(8	)

1For further detail, see Note 5—Compensation and Benefit Plans. ~~Environmental~~ ~~Remediation~~

~~With~~Unrealized ~~respect~~gains toon ~~potential~~cash ~~liabilities~~flow ~~arising under the Comprehensive Environmental Response~~hedges, ~~Compensation~~net ~~and Liability Act~~ of ~~1980~~tax, ~~commonly referred~~at toMarch 31, ~~as CERCLA~~2011, orconsist ~~similar laws for the investigation and remediation~~ of ~~contaminated~~futures ~~property, Midwest Generation accrues a liability to the extent the costs are probable~~ and ~~can~~forward beelectricity ~~reasonably estimated.~~contracts ~~Midwest~~that ~~Generation~~qualify ~~had accrued approximately $4 million at September 30, 2010~~ for ~~estimated environmental investigation and remediation costs for the Midwest Generation~~hedge ~~plants~~accounting. ~~This~~These ~~estimate~~gains isarise ~~based~~because ~~upon~~current ~~the~~forecasts ~~number~~ of ~~sites,~~future ~~the~~electricity ~~scope~~prices ofare ~~work~~lower ~~and~~than the ~~estimated~~contract ~~costs for investigation and/or remediation where such expenditures can be reasonably estimated~~prices. ~~Future estimated~~Approximately ~~costs~~$15 million ~~may~~of ~~vary~~unrealized ~~based~~ gains on ~~changes~~cash inflow ~~regulations or requirements of federal~~hedges, ~~state,~~net ~~or local governmental agencies, changes in technology, and actual costs~~ of ~~disposal. In addition~~tax, ~~future remediation~~are ~~costs~~expected ~~will~~to be ~~affected~~reclassified byinto ~~the~~earnings ~~nature~~during ~~and extent of contamination discovered at~~ the ~~sites~~next ~~that requires remediation~~12 months. ~~Given~~Management ~~the~~expects ~~prior~~that ~~history~~reclassification of ~~the~~net ~~operations~~unrealized atgains ~~its~~will ~~facilities,~~increase ~~Midwest~~energy ~~Generation~~revenues ~~cannot~~recognized beat ~~certain~~market ~~that~~prices. ~~the~~Actual ~~existence~~amounts orultimately ~~extent~~reclassified ofinto ~~all~~earnings ~~contamination~~over atthe ~~its~~next ~~sites~~12 months ~~has~~could ~~been~~vary ~~fully~~materially ~~identified.~~from ~~However,~~this ~~based~~estimated onamount ~~available~~as ~~information,~~a ~~management~~result ~~believes~~of ~~that~~changes ~~future~~in ~~remediation~~market ~~costs~~conditions. inThe ~~excess~~maximum ofperiod ~~the~~over ~~amounts~~which ~~disclosed~~a oncommodity ~~all~~cash ~~known~~flow ~~and~~hedge ~~quantifiable~~is ~~environmental~~designated ~~contingencies~~is ~~will~~December 31, ~~not be material to Midwest Generation's financial position~~2013.

~~Environmental~~ Note 9. ~~Developments~~Supplemental Cash Flows Information

Environmental Compliance Plans and Costs

		Three Months Ended March 31,

(in millions)		2011		2010

Cash paid
	Interest	$	23	$	27

During the third quarter of 2010, Midwest Generation continued its permitting and planning activities for NOx and SO2 controls to meet the requirements of the CPS. Midwest Generation has received all necessary permits from the Illinois EPA allowing the installation of SNCR technology on multiple units to meet the NOx portion of the CPS, and is engaged with the Illinois EPA with respect to permitting the installation of equipment to meet required reductions for SO2.

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~~Work continued~~ ~~on the possible use of flue gas desulfurization (FGD) technology using dry scrubbing with sodium-based sorbents as a method to comply with the SO2 portion of the CPS.~~ ~~Testing~~ ITEM ~~of this technology demonstrated significant reductions in SO2 emissions when using the type of coal used by Midwest Generation~~2. Use of this technology in combination with the type of coal employed by Midwest Generation is expected to require substantially less capital and installation time than the spray dryer absorber technology originally contemplated, but would likely result in higher ongoing operating costs and may consequently result in lower dispatch rates and competitiveness of Midwest Generation MANAGEMENT'sS ~~plants,~~DISCUSSION ~~depending~~AND onANALYSIS ~~competitors'~~OF ~~costs.~~FINANCIAL ~~Also,~~CONDITION ~~the~~AND ~~use~~RESULTS ofOF ~~dry scrubbing with sodium-based sorbents to meet environmental regulations will likely require Midwest Generation to incur the costs of upgrading its particulate removal systems.~~ OPERATIONS

~~Based~~ This quarterly report on Form 10-Q contains "forward-looking statements" within the ~~work~~meaning toof ~~date,~~the Private Securities Litigation Reform Act of 1995. These statements reflect Midwest Generation's ~~estimates~~current ~~the~~expectations ~~cost~~and projections about future events based on Midwest Generation's knowledge of ~~retrofitting~~present ~~all~~facts ~~units,~~and ~~using~~circumstances and ~~dry~~assumptions ~~scrubbing~~about ~~with~~future ~~sodium-based~~events ~~sorbents~~and include any statement that does not directly relate to ~~comply~~a ~~with~~historical ~~CPS~~or ~~requirements~~current ~~for~~fact. ~~SO2~~Other information distributed by Midwest Generation that is incorporated in ~~emissions~~this report, ~~and~~or ~~associated~~that ~~upgrading~~refers ofto ~~particulate~~or ~~removal~~incorporates ~~systems~~this report, ~~would~~may bealso ~~approximately~~contain $1forward-looking statements.2 In this quarterly report on Form ~~billion~~10-Q, inthe ~~2010~~words ~~dollars.~~"expects," If"believes," "anticipates," ~~completed~~"estimates," ~~these~~"projects," ~~expenditures~~"intends," "plans," "probable," "may," "will," "could," "would," be"should," ~~incurred~~and ~~over~~variations ~~multiple~~of ~~years~~such words and similar expressions, or discussions of strategy or plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Midwest Generation or its subsidiaries, include but are not limited to:

•: Midwest Generation's ability to borrow funds and access the capital markets on reasonable terms;
•: environmental laws and regulations, at both state and federal levels, or changes in the application of those laws, that could require additional expenditures or otherwise affect Midwest Generation's cost and manner of doing business;
•: supply and demand for electric capacity and energy, and the resulting prices and dispatch volumes, in the wholesale markets to which Midwest Generation's generating units have access;
•: the cost and availability of fuel, sorbents, and other commodities used for power generation and emission controls, and of related transportation services;
•: the cost and availability of emission credits or allowances;
•: transmission congestion in and to each market area and the resulting differences in prices between delivery points;
•: the difficulty of predicting wholesale prices, transmission congestion, energy demand, and other aspects of the complex and volatile markets in which Midwest Generation participates;
•: the availability and creditworthiness of counterparties, and the resulting effects on liquidity in the power and fuel markets in which Midwest Generation operates and/or the ability of counterparties to pay amounts owed in excess of collateral provided in support of their obligations;
•: governmental, statutory, regulatory or administrative changes or initiatives affecting Midwest Generation or the electricity industry generally, including market structure rules and price mitigation strategies adopted by independent system operators and regional transmission organizations;
•: market volatility and other market conditions that could increase Midwest Generation's obligations to post collateral beyond the amounts currently expected, and the potential effect of such conditions on the ability of Midwest Generation to provide sufficient collateral in support of its hedging activities and purchases of fuel;
•: weather conditions, natural disasters and other unforeseen events;

Decisions regarding whether or not to proceed with the above projects or other approaches to compliance remain subject to a number of factors, such as market conditions, regulatory and legislative developments, and forecasted commodity prices and capital and operating costs applicable at the time decisions are required or made. Midwest Generation could also elect to shut down units, instead of installing controls, to be in compliance with the CPS. Therefore, decisions about any particular combination of retrofits and shutdowns it may ultimately employ also remain subject to conditions applicable at the time decisions are required or made. Due to existing uncertainties about these factors, Midwest Generation may defer final decisions about particular units for the maximum time available. Accordingly, final decisions on whether to install controls, to install particular kinds of controls, and to actually expend capital that is budgeted may not occur until 2012 for some of the units and potentially later for others.

Climate Change

In June 2010, the US EPA finalized the PSD and Title V GHG tailoring rule. The effective date of the final rule is August 2, 2010. The emissions thresholds for carbon dioxide equivalents in the final rule are as follows:

January – June 2011		75,000 tons per year for new and modified sources already subject to PSD for pollutants other than GHGs
July 2011 – June 2013		100,000 tons per year for new sources, and 75,000 tons per year for modified sources

Numerous legal challenges to the GHG tailoring rule have been filed. As written, the rule applies to all sources meeting the thresholds that are built or modified after January 1, 2011. If controls are required to be installed at the Midwest Generation plants in the future in order to reduce GHG emissions pursuant to regulations issued by the US EPA or others, the potential impact will depend on the nature of the controls applied, which remains uncertain.

Transport Rule

In July 2010, the US EPA issued a Notice of Proposed Rulemaking for a proposed rule, known as the Transport Rule, which would require 31 eastern states (including Illinois) and the District of Columbia to reduce power plant emissions of NOx and SO2 substantially, starting in 2012, with additional

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•: the extent of additional supplies of capacity, energy and ancillary services from current competitors or new market entrants, including the development of new generation facilities, and technologies that may be able to produce electricity at a lower cost than Midwest Generation's generating facilities and/or increased access by competitors to Midwest Generation's markets as a result of transmission upgrades;
•: operating risks, including equipment failure, availability, heat rate, output, costs of repairs and retrofits, and availability and cost of spare parts;
•: creditworthiness of suppliers and their ability to deliver goods and services under their contractual obligations to Midwest Generation or to pay damages if they fail to fulfill those obligations;
•: effects of legal proceedings changes in or interpretations of tax laws, rates or policies, and changes in accounting standards; and
•: general political, economic and business conditions.

~~reductions~~Additional information about risks and uncertainties, including more detail about the factors described above, is contained throughout this MD&A and in ~~2014~~"Item 1A. ~~The~~Risk ~~Transport~~Factors" ~~Rule~~on ~~would~~page 18 of ~~replace~~Midwest ~~the~~Generation's ~~Clean~~annual ~~Air~~report ~~Interstate~~on ~~Rule~~Form 10-K for the year ended December 31, ~~which~~2010. ~~had~~Readers ~~been~~are ~~remanded~~urged to read this entire quarterly report on Form 10-Q and the USannual ~~EPA~~report inon ~~2008~~Form 10-K for ~~revision~~the year ended December 31, 2010, including the information incorporated by reference, and to carefully consider the risks, uncertainties and other factors that affect Midwest Generation's business. Forward-looking statements speak only as of the date they are made, and Midwest Generation is not obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Midwest Generation with the Securities and Exchange Commission.

~~The~~This USMD&A ~~EPA~~discusses ~~has~~material ~~proposed~~changes ~~three~~in ~~possible~~the ~~approaches~~results toof ~~emissions allowance trading. Under its preferred approach~~operations, afinancial ~~pollution~~condition ~~limit~~and ~~would~~other bedevelopments ~~set~~of ~~for~~Midwest ~~each~~Generation ~~state~~since December 31, ~~intrastate trading would be permitted among power plants~~2010, and ~~limited~~as ~~interstate~~compared ~~trading~~to ~~would also be permitted consistent with~~ the ~~requirement that each state meet its own pollution control obligations. Under the~~ first ~~alternative, a~~quarter ~~pollution~~ended ~~limit~~March 31, ~~would~~2010. beThis ~~set~~discussion ~~for~~presumes ~~each~~that ~~state,~~the ~~and~~reader ~~only~~has ~~intrastate~~read ~~trading~~or ofhas ~~allowances~~access ~~would~~to ~~be permitted. Under~~ the ~~second~~MD&A ~~alternative,~~included ain ~~pollution~~Item 7 ~~limit~~of ~~would~~Midwest beGeneration's ~~set~~annual ~~for~~report ~~each~~on ~~state, an emissions~~Form 10-K ~~limit would be set~~ for ~~each~~the ~~power~~year ~~plant~~ended December 31, ~~and limited emissions averaging would be permitted among affected units~~2010.

Under the Transport Rule, each covered state would initially be subject to a federal implementation plan designed to reduce pollution that significantly contributed to nonattainment of, or interferes with the maintenance of, NAAQS in other states. States would be able to choose to develop state implementation plans to replace the federal implementation plans.

The Transport Rule is scheduled to be finalized in 2011. The Clean Air Interstate Rule will remain in place until that time. Midwest Generation believes that the US EPA's preferred approach to emissions allowance trading would provide allowance allocations which are adequate for the Midwest Generation plants based on projected emissions using the Illinois CPS allowable emission rates.

National Ambient Air Quality Standard for Sulfur Dioxide

In June 2010, the US EPA finalized the primary NAAQS for SO2 by establishing a new one-hour standard at a level of 75 parts per billion. The final standard is in line with Midwest Generation's expectations and is being taken into account in Midwest Generation's environmental compliance strategy. Revisions to state implementation plans to achieve compliance with the new standard are due to be submitted to the US EPA by February 2014. The US EPA anticipates that the deadline for attainment with the SO2 NAAQS will be August 2017 (five years after the US EPA intends to finalize initial determinations as to the areas of the country that are and are not in attainment with the primary SO2 NAAQS).

Hazardous Substances and Hazardous Waste Laws

In June 2010, the US EPA published proposed regulations relating to coal combustion wastes. Two different proposed approaches are under consideration. The first approach, under which the US EPA would list these wastes as special wastes subject to regulation under Subtitle C of the Resource Conservation and Recovery Act (the section for hazardous wastes), could require Midwest Generation to incur additional capital and operating costs. The second approach, under which the US EPA would regulate these wastes under Subtitle D of the Resource Conservation and Recovery Act (the section for nonhazardous wastes), is substantially similar to the requirements of existing regulations. Comments on the proposed regulations are due November 19, 2010.

Note 8. Supplemental Cash Flows Information

		Nine Months Ended September 30,
(in millions)		2010		2009
Cash paid
	Interest	$	51	$	64
	Income taxes		19		61

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This MD&A contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect Midwest Generation's current expectations and projections about future events based on Midwest Generation's knowledge of present facts and circumstances and assumptions about future events and include any statement that does not directly relate to a historical or current fact. Other information distributed by Midwest Generation that is incorporated in this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this quarterly report on Form 10-Q, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may," "will," "could," "would," "should," and variations of such words and similar expressions, or discussions of strategy or plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Midwest Generation or its subsidiaries, include but are not limited to:

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Additional information about risks and uncertainties, including more detail about the factors described above, is contained throughout this MD&A and in "Item 1A. Risk Factors" on page 23 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009. Readers are urged to read this entire quarterly report on Form 10-Q and carefully consider the risks, uncertainties and other factors that affect Midwest Generation's business. Forward-looking statements speak only as of the date they are made, and Midwest Generation is not obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Midwest Generation with the Securities and Exchange Commission.

This MD&A discusses material changes in the results of operations, financial condition and other developments of Midwest Generation since December 31, 2009, and as compared to the third quarter of 2009 and nine months ended September 30, 2009. This discussion presumes that the reader has read or has access to the MD&A included in Item 7 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009.

MANAGEMENT'S OVERVIEW

Midwest Generation is a limited liability company engaged in the business of operating and selling energy and capacity from its 5,172 MW of ~~Introduction~~ coal-fired generating plants and 305 MW of oil-fired peaking plants. The profitability of Midwest Generation is expected to be significantly lower in 2011 as a result of lower realized energy prices driven by the expiration of hedge contracts and higher fuel costs. In addition, the profitability of the Midwest Generation plants is expected to be adversely affected in 2012 by a decline in capacity prices (projected to begin in June 2012) and higher rail transportation costs (due to the expiration at the end of 2011 of a favorable long-term rail contract). For discussion of energy and fuel price risks, see "Market Risk Exposures—Commodity Price Risk" and refer to "Item 1A. Risk Factors—Market Risks" on page 20 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010.

Midwest Generation is a limited liability company engaged in the business of operating and selling energy and capacity from its six coal-fired electric generating plants and two peaker plants. Hedging activities in power markets are arranged by EMMT, on behalf of Midwest Generation.

This overview is presented in two sections:

The overview is presented as an update to the overview presented in Midwest Generation's 2009 annual report on Form 10-K. For additional information on these topics, refer to "Management's Overview" on page 36 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009.

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Highlights of Operating Results

Midwest Generation's ~~net~~first ~~income for the third~~ quarter ~~ended~~2011 ~~September 30,~~net ~~2010~~income ~~increased~~was $5448 million, compared to $69 million in the ~~corresponding period~~first quarter of ~~2009~~2010. The ~~third quarter increase~~ decrease in earnings ~~was~~of ~~primarily~~$21 million ~~attributable~~was due to anlower ~~increase~~generation, inlower average realized energy prices, ~~a gain from the sale of bankruptcy claims against Lehman Brothers Commodity Services, Inc.~~ and ~~Lehman Brothers Holdings Inc., collectively referred to as Lehman, and~~ higher ~~capacity~~operating ~~revenues~~expenses, partially offset by ~~unrealized~~higher ~~losses~~capacity ~~in 2010~~revenue. ~~Energy and fuel related unrealized losses during the third quarter of 2010 were $14 million compared to none during the same period last year.~~

Midwest Generation's net income for the nine months ended September 30, 2010 decreased $29 million, compared to the corresponding period of 2009. The 2010 decrease in earnings was primarily attributable to an increase in plant maintenance costs during the first half of 2010, lower realized energy prices and unrealized losses in 2010 compared to unrealized gains in 2009, partially offset by higher capacity revenues, a gain from the sale of the bankruptcy claims discussed above, and lower emission allowance costs. Plant maintenance and overhaul related expenses were higher in 2010 due to the deferral of plant outages in 2009. Energy and fuel related unrealized losses during the nine months ended September 30, 2010 were $17 million compared to unrealized gains of $34 million during the same period last year. Results for the nine months ended September 30, 2010 included the benefit of power hedge contracts entered into during earlier periods at higher prices than current energy prices. For additional information about market conditions, see "Market Risk Exposures." 19

Environmental Developments

Environmental Compliance Plans and Costs

Work continued on the possible use of flue gas desulfurization (FGD) technology using dry scrubbing with sodium-based sorbents as a method to comply with the SO2 portion of the CPS. Testing of this technology demonstrated significant reductions in SO2 emissions when using the type of coal used by Midwest Generation. Use of this technology in combination with the type of coal employed by Midwest Generation is expected to require substantially less capital and installation time than the spray dryer absorber technology originally contemplated, but would likely result in higher ongoing operating costs and may consequently result in lower dispatch rates and competitiveness of Midwest Generation's plants, depending on competitors' costs. Also, the use of dry scrubbing with sodium-based sorbents to meet environmental regulations will likely require Midwest Generation to incur the costs of upgrading its particulate removal systems.

Based on the work to date, Midwest Generation estimates the cost of retrofitting all units, using dry scrubbing with sodium-based sorbents to comply with CPS requirements for SO2 emissions, and associated upgrading of particulate removal systems, would be approximately $1.2 billion in 2010 dollars. If completed, these expenditures would be incurred over multiple years.

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~~decisions are~~ ~~required or made. Midwest Generation could also elect to shut down units, instead of installing controls, to be in compliance with the CPS. Therefore, decisions about any particular~~ ~~combination~~ ~~of retrofits and shutdowns it may ultimately employ also remain subject to conditions applicable at the time decisions are required or made. Due to existing uncertainties about these~~ ~~factors,~~ Environmental ~~Midwest~~Compliance ~~Generation~~Plans ~~may defer final decisions about particular units for the maximum time available. Accordingly, final decisions on whether to install controls, to install particular kinds of controls,~~ and ~~to actually expend capital that is budgeted may not occur until 2012 for some of the units and potentially later for others.~~ Costs

During the first quarter of 2011, Midwest Generation continued its permitting and planning activities for NO_x and SO₂ controls to meet the requirements of the CPS. In February 2011, the Illinois Environmental Protection Agency issued construction permits authorizing Midwest Generation to install a dry sorbent injection system using Trona or other sodium-based sorbents at the Powerton Station's Units 5 and 6.

Decisions regarding whether or not to proceed with retrofitting units to comply with CPS requirements for SO₂ emissions remain subject to a number of factors, such as market conditions, regulatory and legislative developments, and forecasted commodity prices and capital and operating costs applicable at the time decisions are required or made. Midwest Generation could also elect to temporarily or permanently shut down units, instead of installing controls, to be in compliance with the CPS.

Therefore, decisions about any particular combination of retrofits and shutdowns it may ultimately employ also remain subject to conditions applicable at the time decisions are required or made. Due to existing uncertainties about these factors, Midwest Generation intends to defer final decisions about particular units for the maximum time available. Accordingly, final decisions on whether to install controls, to install particular kinds of controls, and to actually expend capital that is budgeted may not occur until 2012 for some of the units and potentially later for others.

In March 2011, the US EPA issued draft "National Emission Standards for Hazardous Air Pollutants," limiting emissions of HAPs from coal- and oil-fired electrical generating units. The regulations are expected to be finalized by November 2011. Based on its continuing review, Midwest Generation does not expect these standards, if adopted, would require Midwest Generation to make material changes to the approach to compliance with state and federal environmental regulations that it contemplates for CPS compliance. Midwest Generation expects to continue to develop and implement a compliance program that includes the use of activated carbon injection, upgrades to particulate removal systems and dry sorbent injection, combined with its use of low sulfur PRB coal, to meet emissions limits for criteria pollutants, such as NO_x and SO₂ as well as for HAPs, such as mercury, acid gas and non-mercury metals.

US EPA Developments

For information regarding recent developments in environmental regulations, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 7. ~~Commitments and Contingencies—Contingencies—~~Environmental Developments."

23 Liquidity

At March 31, 2011, Midwest Generation had cash and cash equivalents of $363 million and a total of $497 million of available borrowing capacity under its $500 million working capital facility. Midwest Generation's liquidity is also composed of cash flow generated from operations and payments by EME under the intercompany notes issued in connection with the Powerton-Joliet facilities sale-leaseback.

Midwest Generation has not yet committed to the completion of environmental compliance activities for all of its plants. Additional expenditures for NO_x and SO₂ controls through 2013 are estimated at $567 million based on an assumption that Midwest Generation would retrofit all units over the compliance period, which extends to 2018. Depending upon the facilities selected to be retrofitted, the cost of such retrofitting, and the timing of funding requirements beyond the near term, Midwest Generation may utilize operating cash flow, draw on its credit facility, when available, or seek debt financing to fund capital expenditures.

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RESULTS OF OPERATIONS

Summary

The table below summarizes total revenues as well as key performance measures related to coal-fired generation, which represents the majority of Midwest Generation's operations.

			Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
			2010		2009		2010		2009
			2011		2010
Operating Revenues (in millions)			$	~~444~~351	$	~~372~~379	$	~~1,104~~	$	~~1,096~~
Statistics
	Generation (in GWh)			7,470		8,212
		Energy contracts		8,449		8,272		22,091		20,389
	Aggregate plant performance
		Load requirements services contract		—		—		—		1,333
		Equivalent availability		87.0%		85.9%
	Total			8,449		8,272		22,091		21,722
		Capacity factor		67.0%		69.6%
	Aggregate plant performance
		Load factor		77.0%		81.1%
		Equivalent availability		91.7%		90.1%		79.4%		83.8%
		Forced outage rate		5.1%		6.7%
		Capacity factor		70.0%		68.6%		61.7%		60.7%
	Average realized price/MWh		$	36.65	$	39.52
		Load factor		76.4%		76.1%		77.8%		72.4%
	Capacity revenues only (in millions)		$	77	$	47
		Forced outage rate		5.4%		5.3%		6.9%		6.0%
	Average realized fuel costs/MWh		$	16.73	$	16.63
	Average realized price/MWh
		Energy contracts	$	42.09	$	38.74	$	40.99	$	42.11
		Load requirements services contract	$	—	$	—	$	—	$	62.52
	Capacity revenues only (in millions)		$	79	$	49	$	184	$	130
	Average realized fuel costs/MWh		$	18.08	$	19.57	$	17.41	$	18.82

~~Statistical~~Reconciliation ~~Definitions~~of ~~and~~ Non-GAAP Disclosures and Statistical Definitions

24 Average Realized Energy Price

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The average realized energy price reflects the average price at which energy is sold into the market including the effects of hedges, real-time and day-ahead sales and PJM fees and ancillary services. It is determined by dividing (i) operating revenues less unrealized gains (losses) and other non-energy related revenues by (ii) generation as shown in the table below. Revenues related to capacity sales are excluded from the calculation of average realized energy price.

		Three Months Ended September 30,						Nine Months Ended September 30,
		Three Months Ended March 31,
(in millions)		~~2010~~2011			~~2009~~2010			~~2010~~			~~2009~~
Operating revenues		$	~~444~~351		$	~~372~~379		$	~~1,104~~		$	~~1,096~~
Less:
	Load requirements services contract		—			—			—			(83	)
	Unrealized gains		—			(7	)
	Unrealized (gains) losses		16			(2	)		12			(22	)
	Capacity and other revenues		(77	)	$	(48	)
	Capacity and other revenues1		(104	)		(49	)		(210	)		(132	)
Realized revenues		$	274		$	324
Realized revenues		$	356		$	321		$	906		$	859
Generation (in GWh)			7,470			8,212
Generation – energy contracts (in GWh)			8,449			8,272			22,091			20,389
Average realized energy price/MWh		$	36.65		$	39.52
Average realized energy price/MWh		$	42.09		$	38.74		$	40.99		$	42.11

The ~~1A gain~~average ~~from~~realized energy price is presented as an aid in understanding the ~~sale~~operating results of the ~~bankruptcy~~Midwest ~~claims~~Generation ~~against~~plants. ~~Lehman~~Average realized energy price is ~~included~~a innon-GAAP ~~the~~performance ~~three~~measure ~~and~~since ~~nine~~such ~~months~~statistical ~~ended~~measure ~~September 30, 2010~~excludes unrealized gains or losses recorded as operating revenues. Management believes that the average realized energy price is meaningful for investors as this

2521

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~~The~~information ~~average~~reflects ~~realized fuel costs reflect~~ the ~~average~~impact ~~cost~~of ~~per~~hedge ~~MWh~~contracts at ~~which fuel is consumed for generation sold into~~ the ~~market,~~time ~~including the effects~~ of ~~hedges.~~actual Itgeneration isin ~~determined~~period-over-period bycomparisons ~~dividing (i) fuel~~or ~~costs adjusted for unrealized gains (losses) by (ii) generation~~ as ~~shown~~compared into ~~the~~real-time ~~table~~market ~~below:~~prices.

		Three Months Ended September 30,					Nine Months Ended September 30,
(in millions)		2010		2009			2010			2009
Fuel costs		$	151	$	164		$	390		$	397
Add back:
	Unrealized gains (losses)		2		(2	)		(5	)		12
Realized fuel costs		$	153	$	162		$	385		$	409
Total generation (in GWh)			8,449		8,272			22,091			21,722
Average realized fuel costs/MWh		$	18.08	$	19.57		$	17.41		$	18.82

Average Realized Fuel Costs

The average realized fuel costs reflect the average cost per MWh at which fuel is consumed for generation sold into the market, including emission ~~Seasonal~~allowance ~~Disclosure~~ costs and the effects of hedges. It is determined by dividing (i) fuel costs adjusted for unrealized gains (losses) by (ii) generation as shown in the table below:

Due to fluctuations in electric demand resulting from warmer weather during the summer months and cold weather during the winter months, electric revenues from the Midwest Generation plants normally vary substantially on a seasonal basis. In addition, maintenance outages generally are scheduled during periods of lower projected electric demand (spring and fall), further reducing generation and increasing major maintenance costs which are recorded as an expense when incurred. Accordingly, earnings from the Midwest Generation plants are seasonal and have significant variability from quarter to quarter. Seasonal fluctuations may also be affected by changes in market prices. For further discussion regarding market prices, see "Market Risk Exposures—Commodity Price Risk—Energy Price Risk."

		Three Months Ended March 31,

(in millions)		2011			2010

Fuel costs		$	126		$	141
Less:
	Unrealized losses		(1	)		(5	)

Realized fuel costs		$	125		$	136

Generation (in GWh)			7,470			8,212
Average realized fuel costs/MWh		$	16.73		$	16.63

The average realized fuel costs are presented as an aid in understanding the operating results of the Midwest Generation plants. Average realized fuel costs are a non-GAAP performance measure since such statistical measure excludes unrealized gains or losses recorded as fuel costs. Management believes that average realized fuel costs are ~~Operating~~meaningful ~~Revenues~~ for investors as this information reflects the impact of hedge contracts at the time of actual generation in period-over-period comparisons.

~~Operating~~ ~~revenues increased $72 million for the third quarter and $8 million for the nine months ended September 30, 2010,~~ ~~compared~~ ~~to the corresponding periods of 2009. The third quarter increase was primarily attributable to an increase in realized energy prices, a gain from the sale of the bankruptcy claims against~~ ~~Lehman,~~ Statistical ~~and higher capacity revenues, partially offset by unrealized losses in the third quarter of 2010 compared to unrealized gains in the same period of 2009.~~ Definitions

•: Equivalent availability reflects the impact of the unit's inability to achieve full load, referred to as derating, as well as outages which result in a complete unit shutdown. The coal plants are not available during periods of planned and unplanned maintenance. The equivalent availability factor is defined as the number of MWh the coal plants are available to generate electricity divided by the product of the capacity of the coal plants (in MW) and the number of hours in the period.
•: The capacity factor indicates how much power a unit generated compared to the maximum amount of power that could be generated according to its rating. It is defined as the actual number of MWh generated by the coal plants divided by the product of the capacity of the coal plants (in MW) and the number of hours in the period.
•: The load factor indicates how much power a unit generated compared to the maximum amount of power that a unit was available to generate electricity. It is determined by dividing capacity factor by the equivalent availability factor.
•: The forced outage rate refers to forced outages and deratings excluding events outside of management's control as defined by NERC. Examples include floods, tornado damage and transmission outages.

During the third quarter of 2010, Midwest Generation sold its claims against Lehman and recorded a gain of $24 million. The claims originated from power contracts that were terminated in 2008 due to the bankruptcy of Lehman. During 2008, Midwest Generation dedesignated the contracts as cash flow hedges due to nonperformance risks and recorded unrealized losses of $24 million. 22

The year-to-date increase in operating revenues was primarily attributable to higher capacity revenues and a gain from the sale of the bankruptcy claims discussed above, partially offset by lower energy revenues and unrealized losses in 2010 compared to unrealized gains in 2009. The decline in energy revenues was primarily due to lower average realized energy prices during the nine months ended September 30, 2010.

Included in operating revenues were unrealized gains (losses) of $(16) million and $2 million for the third quarters of 2010 and 2009, respectively, and $(12) million and $22 million for the nine months ended September 30, 2010 and 2009, respectively. Unrealized gains (losses) in 2010 and 2009 were primarily due to economic hedge contracts that are accounted for on a mark-to-market basis. For more

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~~information regarding~~ ~~forward market prices and unrealized gains (losses), see "Market Risk Exposures—Commodity Price Risk" and "Results of Operations—Derivative Instruments,"~~ ~~respectively.~~ Seasonality

Due to fluctuations in electric demand resulting from warm weather during the summer months and cold weather during the winter months, electric revenues from the Midwest Generation plants normally vary substantially on a seasonal basis. In addition, maintenance outages generally are scheduled during periods of lower projected electric demand ~~Operating~~(spring ~~Expenses~~ and fall), further reducing generation and increasing major maintenance costs which are recorded as an expense when incurred. Accordingly, earnings from the Midwest Generation plants are seasonal and have significant variability from quarter to quarter. Seasonal fluctuations may also be affected by changes in market prices. For further discussion regarding market prices, see "Market Risk Exposures—Commodity Price Risk—Energy Price Risk."

~~Operating~~ ~~expenses decreased $4 million for the third quarter and increased $68 million for the nine months ended September 30,~~ ~~2010,~~ ~~compared to the corresponding periods of 2009. Fuel costs decreased $13 million for the third quarter and $7 million for the nine months ended September 30, 2010, compared~~ to Operating the corresponding periods of 2009. The third quarter decrease was primarily attributable to lower annual NOx emission allowance costs, partially offset by higher coal consumption due to higher generation. The year-to-date decrease was primarily attributable to lower annual NOx emission allowance costs, partially offset by realized and unrealized losses from oil futures contracts and higher costs related to activated carbon, which is used to reduce mercury emissions. Income

~~Included in~~Operating ~~fuel~~income ~~costs~~from ~~were~~the ~~annual~~Midwest ~~NOx~~Generation ~~emission~~plants ~~allowance~~decreased ~~costs of~~ $434 million ~~and $16 million~~ for the ~~third~~first ~~quarters~~quarter of ~~2010 and 2009~~2011, ~~respectively,~~compared ~~and~~to ~~$9 million and $47 million for~~ the ~~nine~~first ~~months~~quarter ~~ended September 30,~~ of 2010 ~~and 2009, respectively~~. ~~Also~~The ~~included~~2011 decrease in ~~fuel~~operating ~~costs~~income ~~were~~was ~~unrealized~~attributable ~~gains~~to ~~(losses)~~lower ofenergy ~~$2 million~~revenues and ~~$(2)~~higher ~~million~~plant ~~for~~operations ~~the third~~costs, ~~quarters~~partially ofoffset ~~2010~~by ~~and~~higher ~~2009,~~capacity ~~respectively,~~revenues. ~~and~~The ~~$(5)~~decline ~~million~~in ~~and~~energy ~~$12 million~~revenues was ~~for~~due ~~the~~to ~~nine~~lower ~~months~~average ~~ended~~realized ~~September 30,~~energy ~~2010~~prices and ~~2009,~~lower ~~respectively,~~generation ~~due~~primarily related to ~~oil~~the ~~futures~~permanent ~~contracts~~shutdown ~~which were~~of ~~accounted~~Will ~~for~~County asUnits ~~economic~~1 ~~hedges~~and ~~related~~2 toat athe ~~fuel~~end ~~adjustment~~of ~~mechanism~~2010 ofin aaccordance ~~rail~~with ~~transportation~~the ~~contract~~CPS.

~~Plant~~Included ~~operations~~in ~~expenses~~operating ~~increased~~revenues ~~$3 million~~were ~~for~~unrealized ~~the~~gains ~~third~~of ~~quarter~~none and $637 million for the ~~nine~~first ~~months~~quarters ~~ended~~of ~~September 30,~~2011 and 2010, ~~compared~~respectively. Unrealized gains in 2010 were attributable to both economic hedge contracts that are accounted for at fair value with offsetting changes recorded on the ~~corresponding~~consolidated ~~periods~~statements of ~~2009.~~income and the ineffective portion of forward and futures contracts which are derivatives that qualify as cash flow hedges. The ~~year-to-date~~ineffective ~~increase~~portion of hedge contracts at the Midwest Generation plants was attributable to ~~higher~~changes ~~scheduled~~in ~~plant~~the difference between energy prices at the ~~maintenance~~Northern Illinois Hub (the settlement point under forward contracts) and ~~overhaul~~the ~~related~~energy ~~expenses~~prices inat the ~~first~~Midwest ~~half~~Generation ofplants' ~~2010~~busbars ~~due~~(the todelivery point where power generated by the ~~deferral~~Midwest ofGeneration plants ~~plant~~is ~~outages~~delivered ininto ~~2009~~the transmission system).

~~Loss~~Included onin ~~disposal~~fuel ofcosts ~~assets~~were unrealized losses of $71 million ~~for~~and $5 million during the ~~third~~first ~~quarter~~quarters of 2011 and ~~$10 million~~2010, respectively, due to oil futures contracts that were accounted for as ~~the~~economic ~~nine~~hedges. ~~months~~These ~~ended~~contracts ~~September 30,~~were entered into in 2010 ~~primarily~~and ~~relates~~2009 to hedge variable fuel oil components of rail transportation costs. Also included in fuel costs were $2 million and $4 million related to the ~~retirement~~net cost of ~~assets~~emission atallowances during the ~~Powerton~~ ~~Station~~first ~~due~~quarters toof ~~plant~~2011 ~~maintenance~~and ~~activities~~2010, respectively.

Other Income (Expense)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	~~2010~~2011			~~2009~~2010			~~2010~~			~~2009~~
Interest and other income	$	1		$	—		$	—		$	3
Interest and other income (expense)	$	1		$	(1	)
Interest income from affiliates		28			28			84			84
Interest expense		(1211	)		(1412	)		~~(36~~	)		~~(47~~	)
Total other income	$	1718		$	1415		$	48		$	40

Interest expense decreased $2 million and $11 million for the third quarter and nine months ended September 30, 2010, respectively, compared to the corresponding periods of 2009. The decreases were due to lower interest related to the Powerton-Joliet lease financing and lower borrowings outstanding during 2010 on Midwest Generation's working capital facility. 23

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~~Provision for~~ Income Taxes

Midwest Generation had an effective income tax ~~provision~~ rate of 3740% and 38% for the ~~nine~~first ~~months~~quarters ~~ended~~of ~~September 30,~~2011 ~~2010~~ and ~~2009~~2010, respectively. Midwest Generation's effective income tax rate varies from the federal statutory rate of 35% primarily due to state income taxes, and estimated benefits from a federal deduction related to qualified domestic production activities under Section 199 of the Internal Revenue Code.

New Accounting Guidance

For a discussion of new accounting guidance affecting Midwest Generation, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—New Accounting Guidance."

~~Derivative Instruments~~ 24

Unrealized Gains and Losses

Midwest Generation classifies unrealized gains and losses from derivative instruments (other than the effective portion of derivatives that qualify for hedge accounting) as part of operating revenues or fuel costs. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. The following table summarizes unrealized gains (losses):

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2010			2009			2010			2009
Non-qualifying hedges	$	(12	)	$	(4	)	$	(18	)	$	30
Ineffective portion of cash flow hedges		(2	)		4			1			4
Total unrealized gains (losses)	$	(14	)	$	—		$	(17	)	$	34

At September 30, 2010, cumulative unrealized gains of $10 million were recognized from non-qualifying hedge contracts or the ineffective portion of cash flow hedges related to subsequent periods ($3 million for the remainder of 2010, $6 million for 2011, and $1 million for 2012).

Fair Value Disclosures

In determining the fair value of Midwest Generation's derivative positions, Midwest Generation uses third-party market pricing where available. For further explanation of the fair value hierarchy and a discussion of Midwest Generation's derivative instruments, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 2. Fair Value Measurements" and "—Note 3. Derivative Instruments and Risk Management," respectively, and refer to "Fair Value of Derivative Instruments" in Item 7 on page 48 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009.

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LIQUIDITY AND CAPITAL RESOURCES

Available Liquidity

At ~~September~~March 3031, ~~2010~~2011, Midwest Generation had cash and cash equivalents of $~~293~~363 million and a total of $497 million of available borrowing capacity under its $500 million working capital facility. Midwest Generation's liquidity is also ~~comprised~~composed of cash flow generated from operations and payments by EME under the intercompany notes issued in connection with the Powerton-Joliet facilities sale-leaseback.

The following table summarizes the status of Midwest Generation's working capital facility at ~~September~~March 3031, ~~2010~~2011, which matures in June 2012:

(in millions)
Commitment	$	500
Outstanding borrowings		—
Outstanding letters of credit		(3	)
Amount available	$	497

~~Expenditures for NOx and SO2 controls through 2012 (estimated at $315 million), are anticipated to be funded through operating cash flow and available credit facilities.~~ Midwest Generation ~~has~~may ~~not~~seek ~~yet committed~~ to ~~the~~extend ~~completion~~or ofreplace ~~environmental~~its ~~compliance~~credit ~~activities~~facility ~~for~~or ~~all~~retire ~~the~~it ~~Midwest~~by ~~Generation~~other ~~plants~~means. ~~Depending~~The ~~upon~~terms ~~the facilities selected to be retrofit~~ and ~~the~~conditions ~~timing~~ of ~~funding~~any ~~requirements~~refinancing ~~beyond~~could ~~the~~be substantially ~~near~~different ~~term,~~than ~~Midwest~~those ~~Generation~~in ~~may~~the ~~utilize~~current ~~operating~~credit ~~cash flow or seek debt financing to fund capital expenditures~~facility.

For additional ~~Lien-backed~~discussion ~~Hedge~~of ~~Contracts~~ liquidity, see "Management's Overview—Liquidity."

~~Midwest~~ ~~Generation has entered into hedge contracts directly with third parties that provide a lien on Midwest Generation's assets in lieu of margin.~~ ~~The~~ ~~hedge contracts require Midwest Generation to comply with the terms and conditions of its credit facility, including financial covenants that are described further in "—Credit Facility~~ ~~and~~ Bonus ~~Other~~Depreciation Covenants." Furthermore, the hedge contracts include provisions relating to a change in control or material adverse effect resulting from amendments or modifications to the related credit facility. Failure of Midwest Generation to comply with these provisions would result in a termination event under the hedge contracts, enabling the counterparties to terminate and liquidate all outstanding transactions and demand immediate payment of amounts owed to them. The aggregate fair value of hedge contracts with credit-risk related contingent features is in an asset position at September 30, 2010 and, accordingly, the contingent features described above do not currently have a liquidity exposure. Future increases in power prices could expose Midwest Generation to termination payments or additional collateral postings under the contingent features described above. Midwest Generation has not received any collateral deposits from counterparties under these contracts at September 30, 2010. Impact

The Small Business Jobs Act of 2010 and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) extended 50% bonus depreciation for qualifying property through 2012 and created a new 100% bonus depreciation for qualifying property placed in service between September 9, 2010 and December 31, 2011. Subject to updated Internal Revenue Service regulations clarifying the definitions of capital expenditures that qualify for 100% bonus depreciation, Midwest Generation's capital expenditures are expected to qualify, accelerating federal tax deductions in 2010 and 2011.

In ~~September 2010, the Small Business Jobs Act of 2010 extended the 50% bonus depreciation provision for an additional year to include property~~ ~~purchased~~ ~~and placed into service by December 31, 2010. Midwest Generation expects that certain capital expenditures incurred during 2010 will qualify for the accelerated bonus depreciation,~~ ~~which~~ Capital ~~would~~Investment ~~provide additional cash flow benefits, primarily in 2011, estimated to be approximately $11 million.~~ Plan

29At March 31, 2011, forecasted capital expenditures through 2013 by Midwest Generation were as follows:

(in millions)	April through December 2011		2012		2013


Plant capital expenditures	$	23	$	21	$	28
Environmental expenditures		82		172		317

Total	$	105	$	193	$	345

Plant capital expenditures relate to non-environmental projects such as boiler components, generator stator rewinds, condenser re-tubing, and main power transformer replacement.

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Environmental expenditures include $64 million for remaining expenditures in 2011 related to selective non-catalytic reduction (SNCR) equipment and $503 million for expenditures for the remainder of 2011 to 2013 to begin to retrofit initial units using dry scrubbing with sodium-based sorbents to comply with CPS requirements for SO₂ emissions. Midwest Generation could elect to shut down units instead of installing controls to be in compliance with the CPS, and, therefore, decisions about any particular combination of retrofits and shutdowns it may ultimately employ to comply remain subject to conditions applicable at the time decisions are required or made. Accordingly, the environmental expenditures for Midwest Generation in the preceding table represent current projects only and are subject to change based upon a number of considerations. Actual expenditures could be higher or lower. Preconstruction engineering and initial construction work for a project may occur in 2011 in advance of a final decision to continue or complete the project. For additional discussion, see "Management's Overview—Environmental Compliance Plans and Costs" and refer to "Environmental Matters and Regulations" in Item 1 on page 10 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010.

Consolidated Cash Flow

At ~~September~~March 3031, ~~2010~~2011, Midwest Generation had cash and cash equivalents of $~~293~~363 million, compared to $~~237~~295 million at December 31, ~~2009~~2010. Net cash provided by operating activities ~~increased~~decreased $1144 million in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011, compared to the first ~~nine~~quarter ~~months~~ of ~~2009~~2010. ~~Lower~~The ~~net~~2011 ~~income~~decrease inwas ~~2010~~primarily ~~was~~attributable ~~offset~~to bylower net income and the timing of cash receipts and disbursements related to working capital items.

Net cash used in financing activities decreased $~~240~~14 million in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011, compared to the first ~~nine~~quarter ~~months~~ of ~~2009~~2010. The ~~2010~~2011 decrease was due to ~~$125 million~~lower ~~of distributions~~capital tolease ~~its~~payments ~~parent in 2010, as compared to $160 million in 2009,~~ and lower ~~$200 million~~distributions ofby ~~repayments on~~ Midwest Generation's ~~working~~to ~~capital~~its ~~facility in 2009~~parent.

Net cash used in investing activities ~~increased~~decreased $183 million in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011, compared to the first ~~nine~~quarter ~~months~~ of ~~2009~~2010. ~~The~~Midwest ~~2010~~Generation ~~increase~~had higher capital expenditures in 2011 of $9 million which was ~~due~~offset toby anhigher ~~increase~~receipts inof ~~capital expenditures~~principal from EME on intercompany notes receivable of $12 million.

Capital Expenditures

At September 30, 2010, forecasted capital expenditures through 2012 by Midwest Generation were as follows:

(in millions)	October through December 2010		2011		2012
Plant capital expenditures	$	18	$	38	$	22
Environmental expenditures		32		151		132
Total	$	50	$	189	$	154

Estimated plant capital expenditures relate to non-environmental projects such as boiler components, generator stator rewinds, 4Kv switchgear, and main power transformer replacement.

Estimated environmental expenditures include primarily expenditures related to SNCR equipment and $174 million for expenditures during the remainder of 2010 to 2012 to begin to retrofit initial units using dry scrubbing with sodium-based sorbents to comply with CPS requirements for SO2 emissions. Midwest Generation could elect to shut down units instead of installing controls to be in compliance with the CPS, and, therefore, decisions about any particular combination of retrofits and shutdowns it may ultimately employ to comply remain subject to conditions applicable at the time decisions are required or made. Expenditures, in addition to those included on the preceding table, are anticipated and could be material; however, the amounts and timing have not been determined. For more information on Midwest Generation's current status of environmental improvements, see "Management's Overview—Environmental Developments." For further discussion of environmental regulations, refer to "Environmental Matters and Regulations" in Item 1 on page 13 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009.

Credit Facility and Other Covenants

Midwest Generation maintains a $500 million working capital facility that matures in June 2012, with an option to extend for up to two years. As a result of credit ratings actions in 2010, the margins applicable to the working capital facility increased 27.5 basis points. The interest rate on borrowings outstanding under this credit facility is currently LIBOR plus 1.15%, unless average utilized commitments during a period exceed $250 million. As of September 30, 2010, Midwest Generation had

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no borrowings outstanding and $3 million of letters of credit had been utilized under this working capital facility.

Midwest Generation is bound by the covenants in its credit agreement and certain covenants under the Powerton-Joliet lease documents. These covenants include restrictions on the ability to, among other things, incur debt, create liens on its property, merge or consolidate, sell assets, make investments, engage in transactions with affiliates, make distributions, make capital expenditures, enter into agreements restricting its ability to make distributions, engage in other lines of business, enter into swap agreements, or engage in transactions for any speculative purpose. In order for Midwest Generation to make a distribution, it must be in compliance with the covenants specified under its credit agreement, including maintaining a debt to capitalization ratio of no greater than 0.60 to 1. At September 30, 2010, the debt to capitalization ratio was 0.15 to 1.

Midwest Generation is permitted to use its working capital facility and cash on hand to provide credit support for hedging transactions related to the Midwest Generation plants entered into by EMMT. Utilization of this credit facility in support of these hedging transactions provides additional liquidity support for implementation of Midwest Generation's contracting strategy for the Midwest Generation plants. In addition, Midwest Generation may grant liens on its property in support of hedging transactions associated with the Midwest Generation plants. For additional discussion, refer to "Credit Risk" in Item 7 on page 61 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009.

Equity Distributions and Tax Payments

The following table summarizes payments made by Midwest Generation as equity distributions through Edison Mission Midwest Holdings and payments made pursuant to tax-allocation agreements:

	Nine Months Ended September 30,
(in millions)	2010		2009
Equity distributions	$	125	$	160
Tax payments under tax-allocation agreements		19		61
Total payments	$	144	$	221

Powerton-Joliet Lease Payments

As part of the sale-leaseback of the Powerton Station and Units 7 and 8 of the Joliet Station, Midwest Generation loaned the proceeds to EME in exchange for promissory notes. EME's obligations under the promissory notes payable to Midwest Generation are general corporate obligations of EME and are not contingent upon receiving distributions from its subsidiaries. There is no assurance that EME will have sufficient cash flow to meet these obligations. Furthermore, EME has guaranteed Midwest Generation's lease obligations under these leases. If EME fails to pay under its guarantee, including payments due under the Powerton-Joliet leases in the event that Midwest Generation could not make such payments, this would result in an event of default under the Powerton and Joliet leases. This event would have a material adverse effect on Midwest Generation.

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Credit Ratings

Overview

Credit ratings for Midwest Generation, EME and EMMT as of ~~September~~March 3031, ~~2010~~2011 ~~are~~were as follows:

	Moody's Rating		Fitch Rating
Midwest Generation1	Ba2	B+	BB
EME2	B3	B-	B-
EMMT	Not Rated	B-	Not Rated

¹: First priority senior secured rating.
²: Senior unsecured rating.

All the above ratings are on negative outlook. Midwest Generation cannot provide assurance that its current credit ratings or the credit ratings of its subsidiaries ~~affiliates~~ will remain in effect for any given period of time or that one or more of these ratings will not be lowered. Midwest Generation notes that these credit ratings are not recommendations to buy, sell or hold its securities and may be revised at any time by a rating agency.

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Midwest Generation's coal contracts include provisions that provide the right to request additional collateral to support payment obligations for delivered coal and may vary based on Midwest Generation's credit ratings.

Credit Rating of EMMT

For a discussion of EMMT's credit rating and the credit support arrangements related to EMMT's forward sales of power from the Midwest Generation plants, refer to "Credit Rating of EMMT" in Item 7 on page 5438 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010.

Equity Distributions and Tax Payments

The following table summarizes payments made by Midwest Generation as equity distributions through Edison Mission Midwest Holdings and payments made pursuant to tax-allocation agreements:

	Three Months Ended March 31,

(in millions)	2011		2010

Equity distributions	$	25	$	30
Tax payments under tax-allocation agreements		—		—

Total payments	$	25	$	30

Key Ratio Affecting Distributions

Set forth below is the key ratio required under the covenants contained in Midwest Generation's credit agreement at March 31, 2011:

Financial Ratio	Covenant


Debt to Capitalization Ratio	Less than or equal to 0.60 to 1	0.14 to 1

For a more detailed description of the covenants binding Midwest Generation refer to "Credit Facility and Other Covenants" in Item 7 on page 36 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010.

Powerton-Joliet Lease Payments

As part of the sale-leaseback of the Powerton Station and Units 7 and 8 of the Joliet Station, Midwest Generation loaned the proceeds (in the original amount of $1.367 billion) to EME in exchange for promissory notes in the same aggregate amount. EME's obligations under the promissory notes payable to Midwest Generation are general corporate obligations of EME and are not contingent upon receiving distributions from its subsidiaries. There is no assurance that EME will have sufficient cash flow to meet these obligations. Furthermore, EME has guaranteed Midwest Generation's lease obligations under these leases. If EME fails to pay under its guarantee, including payments due under the Powerton-Joliet leases in the event that Midwest Generation could not make such payments, this would result in an event of default under the Powerton and Joliet leases. This event would have a material adverse effect on Midwest Generation.

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Contractual Obligations and Contingencies

Fuel Supply ~~and Transportation~~ Contracts

For a discussion of fuel supply contracts ~~and coal transportation agreements~~, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 76. Commitments and Contingencies—Commitments—Fuel Supply ~~and Transportation~~ Contracts."

New Source Review Lawsuit

For a discussion of the New Source Review Lawsuit, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 76. Commitments and Contingencies—Contingencies—New Source Review Lawsuit."

Off-Balance Sheet Transactions

For a discussion of Midwest Generation's off-balance sheet transactions, refer to "Off-Balance Sheet Transactions" in Item 7 on page 55 39 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010. There have been no significant developments with respect to Midwest Generation's off-balance sheet transactions that affect disclosures presented in Midwest Generation's annual report.

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Environmental Matters and Regulations

For a discussion of Midwest Generation's environmental matters, refer to "Environmental Matters and Regulations" in Item 1 on page 1310 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010. There have been no significant developments with respect to environmental matters specifically affecting Midwest Generation since the filing of Midwest Generation's annual report, except as set forth in "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 7. ~~Commitments and Contingencies—Contingencies—~~ Environmental Developments."

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MARKET RISK EXPOSURES

For a detailed discussion of Midwest Generation's market risk exposures, including commodity price risk, credit risk and interest rate risk, refer to "Market Risk Exposures" in Item 7 on page 5640 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010.

Derivative Instruments

Unrealized Gains and Losses

	Three Months Ended March 31,

(in millions)	2011			2010

Non-qualifying hedges	$	(1	)	$	(2	)
Ineffective portion of cash flow hedges		—			4

Total unrealized gains (losses)	$	(1	)	$	2

At March 31, 2011, cumulative unrealized gains of $7 million were recognized from non-qualifying hedge contracts or the ineffective portion of cash flow hedges related to 2012.

Fair Value Disclosures

Commodity Price Risk

Energy Price Risk

Energy and capacity from the Midwest Generation plants are sold under terms, including price, duration and quantity, arranged by EMMT with customers through a combination of bilateral agreements (resulting from negotiations or from auctions), forward energy sales and spot market sales. Power is sold into PJM at spot prices based upon locational marginal pricing. Hedging transactions related to generation are generally entered into at the Northern Illinois Hub, orand to a lesser extent, the AEP/Dayton Hub, both in PJM. ~~These trading hubs have been the most liquid locations for hedging purposes.~~

~~The following table depicts the average historical market prices for energy per megawatt-hour for the first nine months of 2010 and 2009:~~ 29

		24-Hour Average Historical Market Prices1
		2010			2009
Northern Illinois Hub		$	35.02		$	28.62

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The following ~~1Energy prices~~table ~~were~~depicts ~~calculated at~~ the ~~Northern~~quarterly ~~Illinois~~average ~~Hub delivery point using~~ historical ~~hourly~~market ~~real-time~~ prices ~~as published~~for byenergy ~~PJM~~per ormegawatt-hour ~~provided~~for on the ~~PJM~~first ~~web~~quarters ~~site.~~of 2011 and 2010:

The following table sets forth the forward market prices for energy per megawatt-hour as quoted for sales into the Northern Illinois Hub at September 30, 2010:

	24-Hour Average Historical Market Prices¹

	2011		2010

Northern Illinois Hub	$	34.09	$	34.53

		24-Hour Forward Energy Prices1 Northern Illinois Hub
2010
	October	$	23.93
	November		25.76
	December		28.84
2011 calendar "strip"2		$	29.86
2012 calendar "strip"2		$	31.89

¹: Energy prices were calculated at the Northern Illinois Hub delivery point using historical hourly real-time prices as published by PJM or provided on the PJM web-site.

The following table sets forth the forward market prices for energy per megawatt-hour as quoted for sales into the Northern Illinois Hub at March 31, 2011:

		24-Hour Forward Energy Prices¹ Northern Illinois Hub


2011
	April	$	29.53
	May		28.15
	June		30.92
	July		35.17
	August		37.29
	September		28.63
	October		25.17
	November		28.56
	December		30.14
2012 calendar "strip"²		$	31.30

¹: Energy prices were determined by obtaining broker quotes and information from other public sources relating to the Northern Illinois Hub delivery point.
²: Market price for energy purchases for the entire calendar year.

Forward ~~prices for the 2011 calendar strip indicated on the preceding table have decreased from December 31, 2009 prices of $34.73 for the Northern Illinois Hub. Forward~~ market prices at the Northern Illinois Hub fluctuate as a result of a number of factors, including natural gas prices, transmission congestion, changes in market rules, electricity demand (which in turn is affected by weather, economic growth, and other factors), plant outages in the region, and the amount of existing and planned power plant capacity. The actual spot prices for electricity delivered by the Midwest Generation plants into these markets may vary materially from the forward market prices set forth in the preceding table.

34EMMT engages in hedging activities for the Midwest Generation plants to hedge the risk of future change in the price of electricity. The following table summarizes Midwest Generation's hedge positions for contracts entered into at both the Northern Illinois Hub and AEP/Dayton Hub (including forward

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~~and~~contracts ~~planned~~accounted ~~power~~for ~~plant~~on ~~capacity.~~the ~~The~~accrual ~~actual~~basis) ~~spot~~at ~~prices~~March 31, 2011 for electricity ~~delivered~~expected byto ~~the~~be ~~Midwest~~generated ~~Generation~~during ~~plants into these markets may vary materially from~~ the ~~forward~~remainder ~~market~~of ~~prices~~2011 ~~set~~and ~~forth~~ in ~~the~~ ~~preceding~~2012 ~~table.~~and 2013:

EMMT engages in hedging activities for the Midwest Generation plants to hedge the risk of future change in the price of electricity. The following table summarizes Midwest Generation's hedge positions for contracts entered into at both the Northern Illinois Hub and AEP/Dayton Hub (including forward contracts accounted for on the accrual basis) as of September 30, 2010 for electricity expected to be generated during the remainder of 2010 and in 2011 and 2012:

	2011		2012		2013


MWh (in thousands)		7,664		5,350		1,020
Average price/MWh¹	$	37.78	$	35.25	$	39.11

		2010			2011			2012
MWh (in thousands)			5,341			13,318			2,746
Average price/MWh1		$	41.94		$	37.66		$	37.29

¹: The above hedge positions include forward contracts for the sale of power and futures contracts during different periods of the year and the day. Market prices tend to be higher during on-peak periods and during summer months, although there is significant variability of power prices during different periods of time. Accordingly, the above hedge positions are not directly comparable to the 24-hour Northern Illinois Hub prices set forth above.

In addition, as of September 30, 2010, EMMT had entered into 0.6 bcf of natural gas futures contracts (equivalent to approximately 102 GWh of energy contracts using a ratio of 6 MMBtu to 1 MWh) for the Midwest Generation plants to economically hedge energy price risks during 2010 at an equivalent average energy price of approximately $38.40/MWh.

The decline in 2010 market prices will impact realized energy and hedge prices in 2011 and 2012 and could have a material impact on 2011 and 2012 results.

Through October 25, 2010, offsetting positions were entered into to reduce the hedge position of Midwest Generation's operations. The reduction in the hedge position was 2,448 MWh (in thousands) with an average price of $37.12/MWh.

Capacity Price Risk

The following table summarizes the status of capacity sales for Midwest Generation at ~~September~~March 3031, ~~2010~~2011:

								RPM Capacity Sold in Base Residual Auction				Other Capacity Sales, Net of Purchases2
	Installed Capacity MW		Unsold Capacity1 MW			Capacity Sold MW		MW		Price per MW-day		MW		Average Price per MW-day		Aggregate Average Price per MW-day
October 1, 2010 to May 31, 2011		5,477		(548	)		4,929		4,929	$	174.29		—	$	—	$	174.29
April 1, 2011 to May 31, 2011		5,477		(548	)		4,929		4,929	$	174.29		—		—	$	174.29
June 1, 2011 to May 31, 2012		5,477		(495	)		4,982		4,582		110.00		400	$	85.00		107.99
June 1, 2012 to May 31 , 2013		5,477		(773	)		4,704		4,704		16.46		—		—		16.46
June 1, 2012 to May 31, 2013		5,477		(773	)		4,704		4,704		16.46		—		—		16.46
June 1, 2013 to May 31 , 2014		5,477		(827	)		4,650		4,650		27.73		—		—		27.73
June 1, 2013 to May 31, 2014		5,477		(827	)		4,650		4,650		27.73		—		—		27.73

¹: Capacity not sold arises from: (i) capacity retained to meet forced outages under the RPM auction guidelines, and (ii) capacity that PJM does not purchase at the clearing price resulting from the RPM auction.
²: Other capacity sales and purchases, net includes contracts executed in advance of the RPM base residual auction to hedge the price risk related to such auction, participation in RPM incremental auctions and other capacity transactions entered into to manage capacity risks.

35The RPM auction capacity prices for the delivery period of June 1, 2012 to May 31, 2013 and June 1, 2013 to May 31, 2014 varied between different areas of PJM. In the western portion of PJM, affecting Midwest Generation, the prices of $16.46 per MW-day and $27.73 per MW-day were substantially lower than other areas' capacity prices. The impact of lower capacity prices for these periods compared to previous years will have an adverse effect on Midwest Generation's revenues unless such lower capacity prices are offset by an unavailability of competing resources and increased energy prices.

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The RPM auction capacity prices for the delivery periods of June 1, 2012 to May 31, 2013 and June 1, 2013 to May 31, 2014 varied between different areas of PJM. In the western portion of PJM, affecting Midwest Generation, the prices of $16.46 and $27.73 per MW-day were substantially lower than other areas' capacity prices. The impact of lower capacity prices for these periods compared to previous years will have an adverse effect on Midwest Generation's revenues unless such lower capacity prices are offset by an unavailability of competing resources and increased energy prices, which is uncertain.

Basis Risk

During the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011, ~~transmission congestion in PJM has resulted in~~ prices at the individual busbars of the Midwest Generation plants ~~being~~were lower than ~~those at~~ the AEP/Dayton Hub and Northern Illinois Hub by an average of 10% and 1%, respectively, compared to 1511% and ~~less than~~ 1%, respectively, during the ~~nine~~ three months ended ~~September~~March 3031, ~~2009~~2010, due to transmission congestion in PJM.

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Coal and Transportation Price Risk

The Midwest Generation plants purchase coal primarily from the Southern PRB of Wyoming. Coal purchases are made under a variety of supply agreements. The following table summarizes the amount of coal under contract at ~~September~~March 3031, ~~2010~~2011 for the remainder of ~~2010~~2011 and the following ~~two years~~year:

		October through December 2010			2011			2012
		April through December 2011			2012
Amount of Coal Under Contract in Millions of Equivalent Tons1			512.4			159.68			~~9.8~~

1The amount of coal under contract in equivalent tons is calculated based on contracted tons and applying an 8,800 Btu equivalent.

Midwest Generation is subject to price risk for purchases of coal that are not under contract. Prices of PRB coal (with 8,800 Btu per pound heat content and 0.8 pounds of SO2 per MMBtu sulfur content) purchased for the Midwest Generation plants ~~increased~~fluctuated between $13.25 per ton and $14.75 per ton during ~~2010~~the ~~from~~first ~~2009 year-end~~quarter ~~prices~~of 2011. The market price of PRB coal ~~increased~~ decreased to a price of $1413.7525 per ton at ~~October~~April 1, ~~2010~~2011, compared to a price of $913.2560 per ton at December 31, ~~2009~~2010, as reported by the Energy Information Administration.

Midwest Generation has contracts for the transport of coal to its facilities. The primary contract is with Union Pacific Railroad (and various short-haul carriers), which extends through December 31, 2011. Midwest Generation is exposed to price risk related to transportation rates after the expiration of its existing transportation contracts. Current market transportation rates for PRB coal are higher than the existing rates under contract. Transportation costs are approximately half of the delivered cost of PRB coal to the Midwest Generation plants.

Emission Allowances Price Risk

~~Midwest~~The ~~Generation~~federal ~~purchases~~Acid ~~(or~~Rain ~~sells)~~Program ~~emission~~requires ~~allowances~~electric ~~for~~generating ~~the~~stations ~~Midwest Generation plants based on the amounts required for actual generation in excess of (or less than) the amounts allocated~~ to ~~the~~hold ~~plants~~SO2 ~~under applicable programs. In the event that actual emission~~ allowances ~~required~~sufficient ~~are~~to ~~greater~~cover ~~than~~their ~~allowances~~annual ~~held, Midwest Generation is~~emissions. ~~subject~~Pursuant to ~~price~~Illinois' ~~risk~~implementation ~~for purchases~~ of ~~emission allowances. The market price for emission allowances may vary significantly. The average purchase price of annual NOx allowances decreased to $987 per ton during~~ the ~~nine~~Clean ~~months~~Air ~~ended~~Interstate ~~September 30,~~Rule ~~2010 from $1~~(CAIR),~~431~~ ~~per~~coal ~~ton~~plants inare ~~2009.~~required ~~Based~~to onhold ~~broker's~~seasonal ~~quotes~~ and ~~information from public sources, the spot price for~~ annual NOx allowances ~~was $335 per ton at September 30, 2010~~.

36In the event that actual emissions required are greater than allowances held, Midwest Generation is subject to price risk for purchases of emission allowances. The market price for emission allowances may vary significantly. The average purchase price of annual NOx allowances decreased to $335 per ton during the first quarter of 2011 from $987 per ton in 2010. Based on broker's quotes and information from public sources, the spot price for annual NOx allowances was $227.50 per ton at March 31, 2011.

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For a discussion of environmental regulations related to emissions, refer to "Environmental Matters and Regulations" in Item 1 on page 13 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2009.

Credit Risk

Midwest Generation derives a significant source of its operating revenues from electric power sold into the PJM market by EMMT. Sales into PJM accounted for approximately 8376% of Midwest Generation's consolidated operating revenues for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011. ~~Moody's~~For ~~rates~~the ~~PJM's~~three ~~debt~~months ~~Aa3.~~ended ~~PJM~~March 31, ~~a regional transmission organization (RTO) with over 300 member companies~~2011, ~~maintains its own credit risk policies and does not extend unsecured credit to non-investment grade companies. Losses resulting from~~ a second ~~PJM~~customer ~~member~~accounted ~~default~~for ~~are~~12% ~~shared~~of byMidwest ~~all~~Generation's ~~other~~consolidated ~~members~~operating ~~using a predetermined formula~~revenues.

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Interest Rate Risk

Interest rate changes can affect earnings and the cost of capital for capital improvements. Midwest Generation has a $500 million working capital facility, maturing in 2012, which exposes Midwest Generation to the risk of earnings loss resulting from changes in interest rates from any borrowings outstanding. At ~~September~~March 3031, ~~2010~~ 2011, Midwest Generation had no borrowings outstanding.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

For a discussion of Midwest Generation's critical accounting policies, refer to "Critical Accounting ~~Policies~~Estimates and ~~Estimates~~Policies" in Item 7 on page 6346 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of market risk sensitive instruments, refer to "~~Fair Value of Derivative Instruments" on page 48 and "~~Market Risk Exposures" on page 5640 in Item 7 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010. For an update to that disclosure, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—~~Results of Operations—Derivative Instruments—Fair Value Disclosures" and "—~~Market Risk Exposures."

ITEM 4T4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Midwest Generation's management, under the supervision and with the participation of the company's ~~Chief~~President ~~Executive Officer~~ and Chief Financial Officer, has evaluated the effectiveness of Midwest Generation's disclosure controls and procedures (as ~~that~~such term is defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this report. Based on that evaluation, the ~~Chief~~President ~~Executive Officer~~ and Chief Financial Officer ~~have~~ concluded that, as of the end of the period, Midwest Generation's disclosure controls and procedures ~~are~~were effective.

Internal Control Over Financial Reporting

There were no changes in Midwest Generation's internal control over financial reporting (as that term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, Midwest Generation's internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a discussion of Midwest Generation's legal proceedings, refer to "~~Item 3. Legal Proceedings~~Contingencies" on page 3390 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010. There have been no significant developments with respect to legal proceedings specifically affecting Midwest Generation since the filing of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010, except as follows:

New Source Review Lawsuit

In March 2011, the U.S. District Court for the Northern District of Illinois dismissed nine of the ten PSD claims asserted against Midwest Generation ~~Recent~~and ~~Developments~~ EME by the State of Illinois and the Department of Justice, along with claims related to alleged violations of Title V of the CAA to the extent based on the dismissed PSD claims. The Court also dismissed all claims asserted against Commonwealth Edison Company and EME. The Court denied a motion to dismiss a claim by intervenor citizens groups for civil penalties in the remaining PSD claim, but noted that the plaintiffs will be required to convince the Court that the statute of limitations should be equitably tolled. The Court did not address other counts in the complaint that allege violations of opacity and particulate matter limitations under the Illinois State Implementation Plan and Title V of the CAA. Trial of the liability portion of the case is scheduled to commence June 3, 2013.

In April 2010, the US EPA formally issued to EME the same NOV that was issued to Midwest Generation in 2007. The transmittal letter stated that the action was based on a review of the asset purchase agreement for the Midwest Generation plants and that the NOV was being issued to EME as a successor in interest to Commonwealth Edison.

In June 2010, the US EPA, the State of Illinois, and several environmental groups filed amended complaints in the New Source Review litigation. The amended complaints are similar to the prior complaints, but seek to add Commonwealth Edison and EME as defendants and introduce new legal theories to impose liability on Midwest Generation and EME. Midwest Generation and EME have filed a motion to dismiss the amended complaints, and a status hearing has been scheduled for February 2011.

ITEM 1A. RISK FACTORS

For a discussion of the risks, uncertainties, and other important factors which could materially affect Midwest Generation's business, financial condition, or future results, refer to "Item 1A. Risk Factors" on page 2318 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2009~~2010. The risks described in Midwest Generation's annual report on Form 10-K and in this report are not the only risks facing Midwest Generation. Additional risks and uncertainties that are not currently known, or that are currently deemed to be immaterial, also may materially adversely affect Midwest Generation's business, financial condition or future results.

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ITEM 6. EXHIBITS

Exhibit No.			Description
	4.15.1		First Amended and Restated Collateral Trust Agreement, dated as of June 29, 2007, among Midwest Generation, LLC, the Obligors from time to time party hereto, JPMorgan Chase Bank, N.A., as Administrative Agent under the Credit Agreement, and Wilmington Trust Company, as Collateral Trustee.
	31.1		Certification of the President pursuant to Section 302 of the Sarbanes-Oxley Act.
	31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
	31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
	32		Statement Pursuant to 18 U.S.C. Section 1350.
	101		Financial statements from the quarterly report on Form 10-Q of Midwest Generation, LLC for the quarter ended ~~September~~March 3031, ~~2010~~2011, filed on ~~October~~May 292, ~~2010~~2011, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements tagged as blocks of text.

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SIGNATURES

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.

		MIDWEST GENERATION, LLC
		By:		/s/ ~~John~~Maria P.Rigatti ~~Finneran,~~Maria ~~Jr.~~Rigatti ~~John P. Finneran, Jr.~~ Manager and Vice President (Duly Authorized Officer and Principal Financial Officer)
		Date:		~~October~~May 292, ~~2010~~2011

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