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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 March 31, 2011
For the Quarterly Period Ended June 30, 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 ~~May~~August 24, 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 OPERATIONS				1
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME				2
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)				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 2011		6
				Fair Value Measurements and Disclosures	6
			Accounting Guidance Not Yet Adopted		6
				Fair Value Measurement	6
				Presentation of Comprehensive Income	6
	Note 2. Fair Value Measurements				6
		Recurring Fair Value Measurements			6
		Valuation Techniques used to Determine Fair Value			8
			Level 1		8
			Level 2		8
			Level 3		89
	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			12
	Note 4. Income Taxes				12
		Bonus Depreciation Impact			12
	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. Commitments and Contingencies				13
		Commitments			13
			Fuel Supply Contracts		13
			Capital Expenditures		14
		Guarantees and Indemnities			14
			Environmental Indemnities Related to the Midwest Generation Plants		14
			Indemnities Provided under Sale-Leaseback Agreements		15
		Contingencies			15
			Other Indemnities		15
			Environmental Remediation		15
			New Source Review Lawsuit		15
	Note 7. Environmental Developments				16
	Note 8. Accumulated Other Comprehensive Income (Loss)				17

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	Note 9. Supplemental Cash Flows Information			17
		Contingencies		15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				18
			New Source Review and Other Litigation	15
	MANAGEMENT'S OVERVIEW			19
			Environmental Remediation	16
	Highlights of Operating Results			19
	Note 7. Environmental Developments			16
	Environmental Compliance Plans and Costs			20
		Cross-State Air Pollution Rule		16
	US EPA Developments			20
		Proposed Hazardous Air Pollutant Regulations		17
	Liquidity			20
		Water Quality—Clean Water Act		17
	RESULTS OF OPERATIONS			21
		Greenhouse Gas Litigation Developments		17
	Summary			21
	Note 8. Accumulated Other Comprehensive Loss			18
		Reconciliation of Non-GAAP Disclosures and Statistical Definitions		21
	Note 9. Supplemental Cash Flows Information			18
			Average Realized Energy Price	21
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				19
			Average Realized Fuel Costs	22
	MANAGEMENT'S OVERVIEW			20
			Statistical Definitions	22
	Highlights of Operating Results			21
		Seasonality		23
	Cross-State Air Pollution Rule			21
	Operating Income			23
	Environmental Compliance Plans and Costs			21
	Other Income (Expense)			23
	Liquidity			22
	Income Taxes			24
	RESULTS OF OPERATIONS			23
	New Accounting Guidance			24
	Summary			23
	LIQUIDITY AND CAPITAL RESOURCES			25
		Reconciliation of Non-GAAP Disclosures and Statistical Definitions		23
	Available Liquidity			25
			Average Realized Energy Price	23
		Bonus Depreciation Impact		25
			Average Realized Fuel Costs	24
	Capital Investment Plan			25
			Statistical Definitions	24
	Consolidated Cash Flow			26
		Seasonality		25
	Credit Ratings			26
	Operating Income (Loss)			25
		Overview		26
	Other Income (Expense)			26
		Credit Rating of EMMT		27
	Income Taxes			26
	Equity Distributions and Tax Payments			27
	New Accounting Guidance			26
		Key Ratio Affecting Distributions		27
	LIQUIDITY AND CAPITAL RESOURCES			27
	Powerton-Joliet Lease Payments			27
	Available Liquidity			27
	Contractual Obligations and Contingencies			28
	Bonus Depreciation Impact			27
		Fuel Supply Contracts		28
	Capital Investment Plan			27
		New Source Review Lawsuit		28
	Consolidated Cash Flow			28
	Off-Balance Sheet Transactions			28
	Credit Ratings			28
	Environmental Matters and Regulations			28
		Overview		28
	MARKET RISK EXPOSURES			29
		Credit Rating of EMMT		29
	Derivative Instruments			29
	Equity Distributions and Tax Payments			29
		Unrealized Gains and Losses		29
		Key Ratio Affecting Distributions		29
		Fair Value Disclosures		29
	Powerton-Joliet Lease Payments			29

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	Commodity Price Risk		29
	Contractual Obligations and Contingencies		30
		Energy Price Risk	29
		Fuel Supply Contracts	30
		Capacity Price Risk	31
		New Source Review and Other Litigation	30
		Basis Risk	31
	Off-Balance Sheet Transactions		30
		Coal and Transportation Price Risk	32
	Environmental Matters and Regulations		30
		Emission Allowances Price Risk	32
	MARKET RISK EXPOSURES		31
	Credit Risk		32
	Derivative Instruments		31
	Interest Rate Risk		33
		Unrealized Gains and Losses	31
	CRITICAL ACCOUNTING ESTIMATES AND POLICIES		33
		Fair Value Disclosures	31
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			33
	Commodity Price Risk		31
ITEM 4. CONTROLS AND PROCEDURES			33
		Energy Price Risk	31
	Disclosure Controls and Procedures		33
		Capacity Price Risk	33
	Internal Control Over Financial Reporting		33
		Basis Risk	33
PART II – OTHER INFORMATION			34
		Coal and Transportation Price Risk	33
ITEM 1. LEGAL PROCEEDINGS			34
		Emission Allowances Price Risk	34
	New Source Review Lawsuit		34
	Credit Risk		34
ITEM 1A. RISK FACTORS			34
	Interest Rate Risk		34
ITEM 6. EXHIBITS			34
	CRITICAL ACCOUNTING ESTIMATES AND POLICIES		35
SIGNATURES			35
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			35
ITEM 4. CONTROLS AND PROCEDURES			35
	Disclosure Controls and Procedures		35
	Internal Control Over Financial Reporting		35
PART II – OTHER INFORMATION			36
ITEM 1. LEGAL PROCEEDINGS			36
	New Source Review and Other Litigation		36
ITEM 1A. RISK FACTORS			36
ITEM 6. EXHIBITS			36
SIGNATURES			37

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.

Btu		British thermal units
CAA		Clean Air Act
CAIR		Clean Air Interstate Rule
Commonwealth Edison		Commonwealth Edison Company
CPS		Combined Pollutant Standard
CSAPR		Cross-State Air Pollution Rule
EME		Edison Mission Energy
EMMT		Edison Mission Marketing & Trading, Inc.
GAAP		~~United~~accounting ~~States~~principles generally accepted ~~accounting~~in ~~principles~~the United States of America
GWh		gigawatt-hours
HAP(s)		hazardous air pollutant(s)
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
NOX		nitrogen oxide
PJM		PJM Interconnection, LLC
PRB		Powder River Basin
PSD		Prevention of Significant Deterioration
RPM		Reliability Pricing Model
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)
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, unaudited)
			Three Months Ended March 31,
			Three Months Ended June 30,						Six Months Ended June 30,
			2011			2010			2011			2010
Operating Revenues from Marketing Affiliate			$	~~351~~280		$	~~379~~281		$	631		$	660
Operating Expenses
	Fuel			~~126~~107			~~141~~98			233			239
	Plant operations			~~118~~164			99164			282			262
	Depreciation and amortization			3940			38			79			76
	Administrative and general			6			5
	Asset retirements			11			2			11			3
		Total operating expenses		289			283
	Administrative and general			5			7			11			12
	Operating income			62			96
		Total operating expenses		327			309			616			592
Other Income (Expense)
	Operating income (loss)			(47	)		(28	)		15			68
	Interest and other income			29			27
Other Income (Expense)
	Interest expense			(11	)		(12	)
	Interest and other income			29			28			58			55
		Total other income		18			15
	Interest expense			(11	)		(12	)		(22	)		(24	)
Income before income taxes				80			111
		Total other income		18			16			36			31
Provision for income taxes				32			42
Income (loss) before income taxes				(29	)		(12	)		51			99
Net Income			$	48		$	69
Provision (benefit) for income taxes				(11	)		(3	)		21			39
Net Income (Loss)			$	(18	)	$	(9	)	$	30		$	60

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)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions, unaudited)
			Three Months Ended March 31,
			Three Months Ended June 30,						Six Months Ended June 30,
			2011			2010			2011			2010
Net Income			$	48		$	69
Net Income (Loss)			$	(18	)	$	(9	)	$	30		$	60
Other comprehensive income, net of tax
Other comprehensive loss, net of tax
	Pension and postretirement benefits other than pensions
		Amortization of net loss and prior service adjustment included in expenses, net of tax		1			—
		Amortization of net loss and prior service adjustment included in expense, net of tax		—			—			1			—
	Unrealized gains (losses) on derivatives qualified as cash flow hedges
		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
		Unrealized holding gains (losses) arising during period, net of income tax expense (benefit) of $(6) and $(34) for the three months and $(5) and $11 for the six months ended June 30, 2011 and 2010, respectively		(9	)		(53	)		(8	)		17
		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	)
		Reclassification adjustments included in net income (loss), net of income tax benefit of $3 and $24 for the three months and $7 and $30 for the six months ended June 30, 2011 and 2010, respectively		(5	)		(37	)		(12	)		(46	)
Other comprehensive income (loss)				(5	)		61
Other comprehensive loss				(14	)		(90	)		(19	)		(29	)
Comprehensive Income			$	43		$	130
Comprehensive Income (Loss)			$	(32	)	$	(99	)	$	11		$	31

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, except unit amounts, unaudited)
			March 31, 2011			December 31, 2010
			June 30, 2011			December 31, 2010
Assets
Current Assets
	Cash and cash equivalents		$	~~363~~254		$	295
	Due from affiliates			~~115~~147			124
	Fuel inventory			99			85
	Spare parts inventory			39			38
	Interest receivable from affiliate			2756			56
	Derivative assets			3219			47
	Deferred taxes			2			—
	Emission allowances			—			2
	Intangible assets			—			2
	Other current assets			35			33
	Other current assets			19			33
		Total current assets		649			680
		Total current assets		696			680
Property, plant and equipment, less accumulated depreciation of $1,614 and $1,541 at respective dates				2,869			2,905
Property, plant and equipment, less accumulated depreciation of $1,580 and $1,541 at respective dates				2,898			2,905
Notes receivable from affiliate				1,329			1,343
Long-term derivative assets				8—			3
Other assets				1110			11
Total Assets			$	4,~~942~~857		$	4,942
Liabilities and Member's Equity
Current Liabilities
	Accounts payable		$	5462		$	43
	Accrued liabilities			5456			60
	Due to affiliates			435			16
	Interest payable			1020			22
	Derivative liabilities			4			3
	Deferred taxes			—9			10
	Current portion of lease financing			~~113~~112			109
		Total current liabilities		~~278~~268			263
Lease financing, net of current portion				499			556
Deferred taxes				~~146~~162			129
Long-term derivative liabilities				1			2
Benefit plans and other long-term liabilities				~~222~~223			214
Total Liabilities				1,~~146~~153			1,164
Commitments and Contingencies (Notes 3, 6 and 7)
Member's Equity
	Membership interests, no par value; 100 units authorized, issued and outstanding			—			—
	Membership interests, no par value (100 units authorized, issued and outstanding at each date)			—			—
	Additional paid-in capital			3,511			3,511
	Accumulated earnings			~~293~~215			270
	Accumulated other comprehensive loss			(822	)		(3	)
Total Member's Equity				3,~~796~~704			3,778
Total Liabilities and Member's Equity			$	4,~~942~~857		$	4,942

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)
			Three Months Ended March 31,
			Six Months Ended June 30,
			2011			2010
Cash Flows From Operating Activities
	Net income		$	4830		$	6960
	Adjustments to reconcile income to net cash provided by operating activities:
		Depreciation and amortization		3980			3877
		Deferred taxes		8			7
		Asset retirements and other non-cash items		11			—
	Decrease in due to/from affiliates			36			68
		Deferred taxes		43			6
	(Increase) decrease in inventory			(15	)		7
	(Increase) decrease in due to/from affiliates			(23	)		42
	Decrease in interest receivable from affiliate			29			27
	Increase in inventory			(15	)		(12	)
	Decrease in other assets			1416			518
	Decrease in intangible assets			2			1
	Decrease in emission allowances			2			1
	Increase (decrease) in accounts payable and other current liabilities			5			(11	)
	Increase in accounts payable and other current liabilities			15			11
	Decrease in interest payable			(122	)		(152	)
	Increase in other liabilities			89			68
	Decrease in derivative assets and liabilities			1			5
	Increase in derivative assets and liabilities			—			(22	)
		Net cash provided by operating activities		~~163~~166			~~207~~187
Cash Flows From Financing Activities
	Cash distributions to parent			(2585	)		(3055	)
	Repayment of capital lease obligation			(53	)		(6263	)
		Net cash used in financing activities		(78138	)		(92118	)
Cash Flows From Investing Activities
	Capital expenditures			(3155	)		(2266	)
	Repayment of loan to affiliate			14			2
	Investments in other assets			(18	)		—
		Net cash used in investing activities		(17	)		(20	)
	Proceeds from sale of emission allowances			—			3
Net increase in cash and cash equivalents				68			95
	Repayment of loan to affiliate			4			2
		Net cash used in investing activities		(69	)		(61	)
Net increase (decrease) in cash and cash equivalents				(41	)		8
Cash and cash equivalents at beginning of period				295			237
Cash and cash equivalents at end of period			$	~~363~~254		$	~~332~~245

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 ~~MARCH 31~~JUNE 30, 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 59 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010. Midwest Generation follows the same accounting policies for interim reporting purposes, with the exception of accounting principles adopted as of January 1, 2011, as discussed below in "—New Accounting Guidance." This quarterly report should be read in conjunction with such financial statements and notes.

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 (GAAP) for the periods covered by this quarterly report on Form 10-Q. The results of of operations for the three- ~~months~~and six-month periods ended ~~March~~June 3130, 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~~GAAP.

Cash Equivalents

Cash equivalents included money market funds totaling $~~357~~249 million and $270 million at ~~March~~June 3130, 2011 and December 31, 2010, respectively. The carrying value of cash equivalents equals the fair value as all investments have maturities of less than three months.

Related Party

Interest income from affiliates, included in interest and other income on Midwest Generation's consolidated statements of ~~income~~operations, was $28 million during each of the ~~three~~second quarters ended June 30, 2011 and 2010 and $56 million during each of the six months ended ~~March~~June 3130, 2011 and 2010.

Restricted Deposits

Restricted deposits of $3 million at both ~~March~~June 3130, 2011 and December 31, 2010 were included in other assets on 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 2011

Fair Value Measurements and Disclosures

The Financial Accounting Standards Board (FASB) issued an accounting standards update modifying the disclosure requirements related to fair value measurements. Under these requirements, purchases and settlements for Level 3 fair value measurements are presented on a gross basis, rather than net. Midwest Generation adopted this guidance effective January 1, 2011.

Accounting Guidance Not Yet Adopted

Fair Value Measurement

In May 2011, the FASB issued an accounting standards update modifying the fair value measurement and disclosure guidance. This guidance prohibits grouping of financial instruments for purposes of fair value measurement and requires the value be based on the individual security. This amendment also results in new disclosures primarily related to Level 3 measurements including quantitative disclosure about unobservable inputs and assumptions, a description of the valuation processes and a narrative description of the sensitivity of the fair value to changes in unobservable inputs. Midwest Generation will adopt this guidance effective January 1, 2012 and does not expect the adoption of this standard will have a material impact on Midwest Generation's consolidated results of operations, financial position or cash flows.

Presentation of Comprehensive Income

In June 2011, the FASB issued an accounting standards update on the presentation of comprehensive income. An entity can elect to present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. Midwest Generation will adopt this guidance effective January 1, 2012. Midwest Generation currently presents the statement of comprehensive income immediately following the statement of income and expects to continue to do so. The adoption of this accounting standards update does not change the items that constitute net income and other comprehensive income.

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 Recurring ~~"exit price").~~ Fair ~~value~~Value of an asset or a liability should consider assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. The fair value of derivative assets' nonperformance risk was not material as of March 31, 2011 and December 31, 2010. 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 of an asset or a liability should consider assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. The fair value of derivative assets' nonperformance risk was not material as of June 30, 2011 and December 31, 2010.

Midwest Generation categorizes financial assets and liabilities into a fair value hierarchy based on valuation inputs used to derive fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

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The following table sets forth Midwest Generation's assets and liabilities that were accounted for at fair value by level within the fair value hierarchy:

					March 31, 2011
				June 30, 2011
(in millions)				Level 1	~~Level 1~~		Level 2	~~Level 2~~		Level 3	~~Level 3~~		Netting1	~~Netting1~~		Total	~~Total~~
Assets at Fair Value
	Money market funds2			$	$249	~~357~~	$	$—	—	$	$—	—	$	$—	—	$	$249	~~357~~
	Derivative contracts
		Electricity		$	$—	—	$	$13	34	$	$—	—	$	$—	(1	)$	$13	33
		Fuel oil			6	7		—	—		—	—		—	—		6	7
		Total commodity contracts			6	7		13	34		—	—		—	(1	)	19	40
	Total assets			$	$255	~~364~~	$	$13	34	$	$—	—	$	$—	(1	)$	$268	~~397~~
Liabilities at Fair Value	~~Liabilities at Fair Value~~
	Derivative contracts	~~Derivative contracts~~
		Electricity	~~Electricity~~	$	$—	—	$	$4	5	$	$1	1	$	$—	(1	)$	$5	5
	Total liabilities			$	$—	—	$	$4	5	$	$1	1	$	$—	(1	)$	$5	5
				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

				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

¹: Represents the impact of netting across the levels of the fair value hierarchy. Netting among positions classified within the same level is included in that level.
²: Money market funds are included in cash and cash equivalents on Midwest Generation's consolidated balance sheets.

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The following table sets forth a summary of changes in the fair value of assets and liabilities, net categorized as Level 3:

		Three Months Ended March 31,
		Three Months Ended June 30,						Six Months Ended June 30,
(in millions)		2011			2010			2011			2010
Fair value, net assets (liabilities) at beginning of period		$	—(1	)	$	3		$	—		$	3
Total realized/unrealized gains (losses)
	Included in earnings1		—			2—			—			2
	Included in accumulated other comprehensive income (loss)		—			2
	Included in accumulated other comprehensive loss		—			—			—			2
Settlements			(1—	)		(12	)		(1	)		(3	)
Transfers in or out of Level 3			—			(31	)		—			(4	)
Fair value, net assets (liabilities) at end of period		$	(1	)	$	3—		$	(1	)	$	—
Change during the period in unrealized gains (losses) related to assets and liabilities, net held at end of period1		$	(1—	)	$	3(2	)	$	(1	)	$	(5	)

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

Midwest Generation determines the fair value of transfers in and out of each level at the end of each reporting period. There were no significant transfers between levels during the ~~first~~second quarters ofand six months ended June 30, 2011 and 2010.

Valuation Techniques used to Determine Fair Value

Level 1

Level 1 includes financial assets and liabilities where unadjusted quoted prices in active markets are available at the measurement date for ~~identical~~ 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

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~~qualifying facilities~~ ~~contracts, derivative contracts that trade infrequently (such as financial transmission rights and over-the-counter derivatives at illiquid locations),~~ ~~long-term~~ ~~power agreements, and derivative contracts with counterparties that have significant nonperformance risks are classified as~~ Level 3. In circumstances where Edison Mission Marketing & Trading, Inc. (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.

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, qualifying facilities contracts, derivative contracts that trade infrequently (such as financial transmission rights), and derivative contracts with counterparties that have significant nonperformance risks are classified as Level 3. In circumstances where Edison Mission Marketing & Trading, Inc. (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.

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 amount of trade receivables and payables approximates fair value.

Note 3. Derivative Instruments and Hedging 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. The derivative financial instruments vary in duration, ranging from a few days to several years, depending upon the instrument. To 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 benefits of spot market price movements.

Risk 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 balance sheets with offsetting changes recorded on the consolidated statements of ~~income~~operations. For derivative instruments that qualify for hedge accounting treatment, the fair value is recognized, to the extent effective, on Midwest Generation's consolidated balance sheets with offsetting changes in fair value recognized in accumulated other comprehensive loss until the related forecasted transaction occurs. The results of derivative activities are recorded in cash flows from operating activities on the consolidated statements of cash flows.

Where Midwest Generation's derivative instruments are subject to a master netting agreement and the criteria of authoritative guidance are met, Midwest Generation presents its derivative assets and liabilities on a net basis on its consolidated balance sheets.

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Notional Volumes of Derivative Instruments

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

March 31, 2011
June 30, 2011
Commodity	Instrument	Classification	Unit of Measure	Cash Flow Hedges			Economic Hedges
Electricity	Forwards/Futures	Sales	GWh		1315,~~735~~394	1		1312,~~392~~893	3
Electricity	Forwards/Futures	Purchases	GWh		~~306~~203	1		13,~~808~~172	3
Electricity	Capacity	Sales	MW-Day (in thousands)		~~146~~134	2		—
Electricity	Congestion	Purchases	GWh		—			~~116~~1,308	4
Fuel oil	Forwards/Futures	Purchases	barrels		—			240,000

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:

March 31, 2011
June 30, 2011
	Derivative Assets									Derivative Liabilities
																			Net Assets
(in millions)	Short-term			Long-term			Subtotal			Short-term			Long-term			Subtotal			Net Assets
(in millions)	Short-term			Long-term			Subtotal			Short-term			Long-term			Subtotal
Cash flow hedges	$	20		$	2		$	22		$	11		$	5		$	16		$	6
Cash flow hedges	$	33		$	6		$	39		$	6		$	4		$	10		$	29
Economic hedges		29			3			32			23			1			24			8
Economic hedges		21			5			26			20			—			20			6
		49			5			54			34			6			40			14
		54			11			65			26			4			30			35
Netting1		(30	)		(5	)		(35	)		(30	)		(5	)		(35	)		—
Netting1		(22	)		(3	)		(25	)		(22	)		(3	)		(25	)		—
Total	$	19		$	—		$	19		$	4		$	1		$	5		$	14
Total	$	32		$	8		$	40		$	4		$	1		$	5		$	35
December 31, 2010
Cash flow hedges	$	41		$	2		$	43		$	3		$	2		$	5		$	38
Economic hedges		26			1			27			20			—			20			7
		67			3			70			23			2			25			45
Netting1		(20	)		—			(20	)		(20	)		—			(20	)		—
Total	$	47		$	3		$	50		$	3		$	2		$	5		$	45

¹: Netting of derivative receivables and derivative payables 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 information about the changes in the fair value of~~ cash flow ~~hedges,~~hedge toactivity ~~the~~as ~~extent~~part ~~effective,~~of ~~and reclassification from~~ accumulated other comprehensive ~~income into results of operations~~loss:

	Cash Flow Hedge Activity1 Three Months Ended March 31,
	Cash Flow Hedge Activity1 Six Months Ended June 30,
							Income Statement Location
(in millions)	2011			2010
Accumulated other comprehensive income derivative gain at January 1	$	37		$	111
Beginning of period derivative gains	$	37		$	111
Effective portion of changes in fair value		2(13	)		~~115~~28
Reclassification from accumulated other comprehensive income to net income		(11	)		(15	)	Operating revenues
Reclassification to net income		(19	)		(76	)	Operating revenues
Accumulated other comprehensive income derivative gain at March 31	$	28		$	211
End of period derivative gains	$	5		$	63

1Unrealized derivative gains are before income taxes. The after-tax amounts recorded in accumulated other comprehensive loss ~~income~~ at ~~March~~ June 3130, 2011 and 2010 were $173 million and $~~129~~39 million, respectively.

For additional information ~~related to accumulated other comprehensive income~~, see Note 8—Accumulated Other Comprehensive ~~Income (~~Loss).

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 (losses) of $(1) million and $1 million during the second quarters of 2011 and 2010, respectively, and $(1) million and $8 million during the six months ended June 30, 2011 and 2010, respectively, in operating revenues on the consolidated statements of operations representing the amount of cash flow hedge ineffectiveness.

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The ~~portion~~effect of arealized ~~cash~~and ~~flow~~unrealized 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(losses) ~~none~~from ~~and~~derivative ~~$7 million~~instruments ~~during~~used ~~the~~for ~~first~~non-trading ~~quarters~~purposes ~~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.~~operations is presented below:

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 June 30,						Six Months Ended June 30,

	Income Statement Location	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	Income Statement Location	2011			2010			2011		2010

Economic hedges	Operating revenues	$	6		$	(2	)	$	7	$	(4	)
	Fuel		(2	)		(2	)		4		(1	)

		Three Months Ended March 31,
	Income Statement Location
(in millions)		2011		2010
Economic hedges	Operating revenues	$	1	$	(2	)
	Fuel costs		6		1

Contingent Features

Midwest Generation sells merchant energy and capacity through EMMT, which has a below investment grade credit rating. Midwest Generation has cash on hand and availability under its working capital facility 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 ~~March~~June 3130, 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~~Midwest ~~related~~Generation's 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~~June 3130, 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. Future increases in power prices could expose Midwest Generation to termination payments or additional collateral postings ~~under the contingent features described above~~.

Note 4. Income Taxes

Midwest Generation had an effective income tax rate of 4041% and 3839% for the ~~first~~six ~~quarters~~months ofended June 30, 2011 and 2010, respectively. Midwest Generation's effective income tax rate varies from the ~~federal~~ 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~~ Internal Revenue Code.

Bonus Depreciation 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.

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Note 5. Compensation and Benefit Plans

Pension Plans and Postretirement Benefits Other Than Pensions

Pension Plans

~~Contributions~~During tothe six months ended June 30, 2011, Midwest Generation's ~~pension~~made ~~plans~~contributions ~~were~~of $25 million, and during the ~~quarter~~remainder ~~ended~~of ~~March 31,~~ 2011, expects ~~and~~to ~~Midwest~~make ~~Generation estimates~~ $129 million ~~in contributions for the remainder~~ of ~~2011~~additional contributions.

The following were components of pension expense:

	Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Service cost	$	3.40		$	3.1		$	6.4		$	6.2
Interest cost		2.1			2.0			4.2			4.0
Expected return on plan assets		(2.20	)		(1.6	)		(4.2	)		(3.2	)
Net amortization		0.2			0.1
Amortization of prior service costs		—			0.1			0.1			0.1
Total expense	$	3.5		$	3.6
Amortization of net loss		—			—			0.1			0.1
Total expense	$	3.1		$	3.6		$	6.6		$	7.2

Postretirement Benefits Other Than Pensions

~~Contributions~~During tothe ~~Midwest~~six ~~Generation's~~months ~~postretirement~~ended ~~benefits~~June 30, ~~other~~2011, ~~than~~Midwest ~~pensions~~Generation ~~were~~made contributions of $0.23 million, and during the ~~quarter~~remainder ~~ended~~of ~~March 31,~~ 2011, expects ~~and~~to ~~Midwest~~make ~~Generation estimates~~ $0.53 million ~~in contributions for the remainder~~ of ~~2011~~additional contributions.

The following were components of postretirement benefits expense:

	Three Months Ended March 31,
	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2011		2010			2011		2010
Service cost	$	0.4	$	0.2		$	0.8	$	0.4
Interest cost		0.78		0.56			1.5		1.1
Amortization of prior service cost (credit)		0.1		(0.1	)
Amortization of prior service credit		—		(0.1	)		0.1		(0.2	)
Amortization of net loss		0.12		~~0.1~~—			0.3		0.1
Total expense	$	1.34	$	0.7		$	2.7	$	1.4

Note 6. Commitments and Contingencies

Commitments

Fuel Supply Contracts

At ~~March~~June 3130, 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~~270 million, summarized as follows: $~~153~~110 million for the remainder of 2011 and $~~134~~160 million in 2012. In July 2011, Midwest Generation entered into additional contractual agreements for the purchase of coal. These

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commitments are estimated to be $6 million for the remainder of 2011, $28 million for 2012, $145 million for 2013, and $150 million for 2014.

Capital Expenditures

At ~~March~~June 3130, 2011, Midwest Generation had firm commitments to spend approximately $~~100~~60 million during the remainder of 2011 and $11 million in 2012 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, if available.

Guarantees and 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~~obligations are reduced by any insurance proceeds and tax benefits related to such indemnified 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, Edison Mission Energy (EME) agreed to indemnify the lessors for specified environmental liabilities. These indemnities are not limited in term or amount. 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~~and Other Litigation." 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~~Midwest Generation's 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~~ 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 2012. There were approximately ~~228~~222 cases for which Midwest Generation was potentially liable ~~and~~ that had not been settled and dismissed at ~~March~~June 3130, 2011. Midwest Generation had recorded a liability of $5655 million at ~~March~~June 3130, 2011 related to this ~~contract~~contractual indemnity, included in benefit plans and other long-term liabilities on its consolidated balance sheets.

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~~ and has not recorded a liability related to these indemnities.

Other Indemnities

Midwest Generation provides other indemnifications through contracts entered into in the normal course of business. Midwest Generation's obligations under these agreements may or may not be limited in terms of time and/or amount, and in some instances Midwest Generation may have recourse against third parties. Midwest Generation has not recorded a liability related to these indemnities. The overall maximum amount of the obligations under these indemnifications cannot be reasonably estimated.

Contingencies

In addition to the matters disclosed in these notes, Midwest Generation is involved in other legal, tax and regulatory proceedings before various ~~Environmental~~courts ~~Remediation~~ and governmental agencies regarding matters arising in the ordinary course of business. Midwest Generation believes the outcome of these other proceedings will not materially affect its results of operations or liquidity.

~~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.~~ New ~~Midwest~~Source ~~Generation~~Review ~~had accrued approximately $7 million at March 31, 2011 for estimated environmental investigation~~ and ~~remediation~~Other 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. Litigation

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 alleging that Midwest Generation or Commonwealth Edison performed repair or replacement projects at six Illinois coal-fired 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) emission 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 emission rates at all units subject to the complaint; to obtain new PSD or New Source Review ~~Lawsuit~~ 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 could go well beyond the requirements of the Combined Pollutant Standard (CPS). Several Chicago-based environmental action groups have intervened in the case.

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 coal-fired 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

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~~could~~Nine goof ~~well~~ten ~~beyond~~PSD ~~the~~claims ~~requirements~~have been dismissed, along with claims related to alleged violations of Title V of the ~~Combined~~CAA ~~Pollutant~~to ~~Standard~~the ~~(CPS)~~extent based on the dismissed PSD claims. ~~Several~~The court has 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 ~~have~~for ~~intervened~~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 ~~March~~May ~~2010~~2011, ~~nine~~two ofcomplaints ~~the~~were ~~ten~~filed ~~counts~~against ~~related~~Midwest toGeneration ~~PSD requirements~~ in the ~~complaint~~Northern ~~were~~District ~~dismissed,~~of ~~and~~Illinois ~~the~~by ~~tenth~~residents ~~count~~living ~~was~~near ~~also dismissed to~~ the ~~extent~~Crawford itand ~~sought~~Fisk ~~civil~~facilities ~~penalties~~on ~~under~~behalf ~~the CAA, as barred by the applicable statute~~ of ~~limitations.~~themselves ~~Following those dismissals, the government plaintiffs filed an amended complaint, with claims that attempted to add Commonwealth Edison~~ and ~~EME~~all asothers ~~defendants~~similarly ~~and introduce new legal theories to impose liability on Midwest Generation and EME. In March 2011~~situated, ~~the~~each ~~court~~asserting ~~again dismissed the nine PSD~~ claims ~~previously~~of ~~dismissed~~nuisance, innegligence, ~~2010~~trespass, ~~along~~and ~~with claims~~strict ~~related to alleged violations of Title V of the CAA to the extent based on the dismissed PSD claims~~liability. The ~~court~~plaintiffs ~~also~~seek ~~dismissed~~to ~~all~~have ~~claims~~their ~~asserted~~suits ~~against~~certified ~~Commonwealth~~as ~~Edison and EME. The court denied~~ a ~~motion~~class ~~to dismiss a claim by the Chicago-based environmental~~ action ~~groups~~and ~~for~~request ~~civil~~injunctive ~~penalties in the remaining PSD claim~~relief, ~~but noted that the plaintiffs will be required to convince the court~~as ~~that~~well ~~the~~as ~~statute~~compensatory ~~of limitations should be equitably tolled. The court did not address other counts in the complaint that allege violations of opacity~~ and ~~particulate~~punitive ~~matter limitations under the Illinois State Implementation Plan and Title V of the CAA~~damages. ~~Trial of the liability portion of the case is scheduled to commence June 3, 2013.~~

AnAdverse ~~adverse~~decisions ~~decision~~in these cases could involve penalties and remedial actions that could have a material ~~adverse~~ impact on the financial condition and results of operations of Midwest Generation. 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.

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 June 30, 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.

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~~ Cross-~~fired~~State ~~electrical~~Air ~~generating~~Pollution 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 (NOx) and sulfur dioxide (SO2) as well as for HAPs, such as mercury, acid gas and non-mercury metals. Rule

~~In March~~On July 6, 2011, the US EPA ~~issued~~adopted ~~draft~~its ~~standards~~final ~~under~~Cross-State ~~the~~Air ~~federal~~Pollution ~~Clean~~Rule 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~~CSAPR) ~~and~~which inwill replace the ~~water~~Clean ~~volume~~Air ~~brought~~Interstate ~~into~~Rule ~~the facilities~~ (~~entrainment~~CAIR)~~. The regulations are~~ ~~expected~~beginning toon beJanuary 1, ~~finalized by July~~ 2012. ~~Midwest~~CSAPR ~~Generation~~ is ~~still~~the ~~evaluating~~final ~~the~~form ~~proposed~~of ~~standards~~a ~~but~~previously ~~believes,~~proposed ~~from~~replacement afor ~~preliminary~~the ~~review~~CAIR, ~~that~~called ~~compliance with~~ the ~~proposed~~Clean ~~standards~~Air ~~regarding impingement~~Transport ~~will~~Rule bethat ~~achievable~~was ~~without~~released ~~incurring~~in ~~material~~2010. ~~additional~~CSAPR ~~capital~~establishes emissions ~~expenditures~~reductions orfor ~~operating~~annual ~~costs.~~sulfur ~~The~~dioxide ~~required~~(SO2) ~~measures~~emissions toand ~~comply~~annual ~~with~~and ~~the~~ozone ~~proposed~~season ~~standards~~nitrogen ~~regarding~~oxide ~~entrainment~~(NOx) ~~are subject~~emissions toin ~~the~~two ~~discretion~~phases: ofa ~~the~~first ~~permitting~~phase ~~authority~~effective January 1, 2012 and, ~~Midwest~~in ~~Generation~~most isstates ~~unable~~subject atto ~~this~~the ~~time~~program to(including ~~assess~~Illinois), ~~potential~~a ~~costs~~second ofphase ~~compliance~~effective January 1, ~~which~~2014 ~~could~~that berequires ~~significant~~additional ~~for~~reductions ~~the~~in ~~Midwest~~annual ~~Generation~~SO2 ~~plants~~emissions.

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In connection with CSAPR, the US EPA has, for each phase, established SO2 and NOx allowance allocations for each state and each generating unit subject to the regulation, and at the close of the annual compliance period, units must surrender allowances for each ton of SO2 and NOx emitted or face penalties. While trading of allowances is permitted ~~Note 8~~within designated groups of states, the rule provides for enhanced penalties against a unit that surrenders allowances in excess of certain predefined limits for itself and for the state in which it is located. ~~Accumulated~~The ~~Other~~installation ~~Comprehensive~~of ~~Income~~SO2 ~~(Loss)~~ controls will require capital commitments for the Midwest Generation plants well in advance of the 2014 effective date, some of which will be expended in 2011, in order to meet regulatory deadlines. Midwest Generation believes its current environmental remediation plan, including allocated allowances and capital expenditures, required to meet the CPS will also comply with the requirements of CSAPR.

~~Accumulated~~ ~~other~~ Proposed ~~comprehensive~~Hazardous ~~income~~Air ~~(loss)~~Pollutant ~~consisted of the following:~~ Regulations

(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	)

In March 2011, the US EPA issued proposed National Emission Standards for Hazardous Air Pollutants, limiting emissions of hazardous air pollutants from coal- and oil-fired electrical generating units. This regulation is expected to be finalized by November 2011. Based on its continuing review, Midwest Generation does not expect that these standards, if adopted as proposed, would require it to make material changes to the approach to compliance with state and federal environmental regulations that it contemplates for CPS compliance.

Water Quality—Clean Water Act

In March 2011, the US EPA issued proposed 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 evaluating the proposed standards and 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.

Greenhouse Gas Litigation Developments

In June 2011, the U.S. Supreme Court dismissed public nuisance claims against five power companies, ruling that the CAA and the US EPA actions it authorizes displace federal common law nuisance claims that might arise from of the emission of greenhouse gases. The court also affirmed the Second Circuit's determination that at least some of the plaintiffs had standing to bring the case. The court did not address whether the CAA also preempts state law claims arising from the same circumstances.

Parties to the Kivalina case, the appeal of which was deferred before the Ninth Circuit Court of Appeals pending the Supreme Court's ruling described above, have requested that the appeal recommence and have asked for permission to file additional briefs on the impact of the Supreme Court's ruling. The Kivalina case was brought by the Alaskan Native Village of Kivalina seeking damages of up to $400 million for the cost of relocating the village because the plaintiffs claim that the Arctic ice that has protected the village is melting as a result of climate change. The federal district court dismissed the case against Edison International and the other defendants in October 2009. Due to the nature of these potential obligations, Midwest Generation is unable to estimate the potential liability, if any.

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On May 27, 2011, private citizens filed a purported class action complaint in the United States District Court for the Southern District of Mississippi, naming a large number of defendants, including Edison International and several of its subsidiaries. Midwest Generation was not named. Plaintiffs allege that the defendants' activities resulted in emissions of substantial quantities of greenhouse gases that have contributed to climate change and sea level rise, which in turn are alleged to have increased the destructive force of Hurricane Katrina. The lawsuit alleges causes of action for negligence, public and private nuisance, and trespass, and seeks unspecified compensatory and punitive damages. The claims in this lawsuit are nearly identical to a subset of the claims that were raised against many of the same defendants in a previous lawsuit that was filed in, and dismissed by, the same federal district court where the current case has been filed.

Note 8. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following:

(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		(20	)		1			(19	)

Balance at June 30, 2011		$	3		$	(25	)	$	(22	)

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

Unrealized gains on cash flow hedges, net of tax, at ~~March~~June 3130, 2011, 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 $155 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~~ 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~~ market conditions. The maximum period over which a commodity cash flow hedge is designated is December 31, 2013.

Note 9. Supplemental Cash Flows Information

		Three Months Ended March 31,
		Six Months Ended June 30,
(in millions)		2011		2010
Cash paid
	Interest	$	23	$	27
	Income taxes		8		5

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

This quarterly report on Form 10-Q 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:

•: 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, including compliance with the CPS and CSAPR and the proposed National Emission Standards for Hazardous Air Pollutants;
•: 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

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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;
•: 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.

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 18 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010. Readers are urged to read this entire quarterly report on Form 10-Q and the annual report on Form 10-K for 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.

This MD&A discusses material changes in the results of operations, financial condition and other developments of Midwest Generation since December 31, 2010, and as compared to the ~~first quarter~~second quarter of 2010 and the six months ended ~~March~~June 3130, 2010. 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, 2010.

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 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 compared to 2010 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 beginning 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" in Item 1A on page 20 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010. As a result, Midwest Generation may incur net losses in subsequent years unless energy and capacity prices increase or its costs decline.

~~Highlights of Operating Results~~ 20

Midwest Generation's first quarter 2011 net income was $48 million, compared to $69 million in the first quarter of 2010. The decrease in earnings of $21 million was due to lower generation, lower average realized energy prices and higher operating expenses, partially offset by higher capacity revenue.

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Highlights of Operating Results

Midwest Generation's net income for the second quarter and six months ended June 30, 2011 decreased $9 million and $30 million, respectively, compared to the corresponding periods of 2010. The second quarter decrease in earnings was due to lower average realized energy prices and higher operating expenses due primarily to planned plant outages, partially offset by higher capacity revenues. The year-to-date decrease in earnings was due to lower average realized energy prices, lower generation and higher operating expenses, partially offset by higher capacity revenues.

Cross-State Air Pollution Rule

On July 6, 2011, the US EPA adopted its final Cross-State Air Pollution Rule (CSAPR) which will replace the CAIR beginning on January 1, 2012. CSAPR is the final form of a previously proposed replacement for the CAIR, called the Clean Air Transport Rule that was released in 2010. CSAPR establishes emissions reductions for annual SO₂ emissions and annual and ozone season NO_x emissions in two phases: a first phase effective January 1, 2012 and, in most states subject to the program (including Illinois), a second phase effective January 1, 2014 that requires additional reductions in annual SO₂ emissions.

CSAPR, like the CAIR, is an allowance-based regulation that provides for emissions trading. Under CSAPR, the amount of actual SO₂ or NO_x emissions from operations will need to be matched by a sufficient amount of SO₂ or NO_x allowances that are either allocated or purchased in the open market. In connection with CSAPR, the US EPA has, for each phase, established SO₂ and NO_x allowance allocations for each state and each generating unit subject to the regulation, and at the close of the annual compliance period, units must surrender allowances for each ton of SO₂ and NO_x emitted or face penalties. While trading of allowances is permitted within designated groups of states, the rule provides for enhanced penalties against a unit that surrenders allowances in excess of certain predefined limits for itself and for the state in which it is located. The installation of SO₂ controls will require capital commitments for the Midwest Generation plants well in advance of the 2014 effective date, some of which will be expended in 2011, in order to meet regulatory deadlines. Midwest Generation believes its current environmental remediation plan, including allocated allowances and capital expenditures, required to meet the CPS will also comply with the requirements of CSAPR.

Environmental Compliance Plans and Costs

During ~~the first quarter of~~ 2011, Midwest Generation continued its permitting and planning activities for NOx and SO2 controls to meet the requirements of the CPS. InBased ~~February~~on ~~2011~~its continuing review, ~~the~~Midwest ~~Illinois~~Generation ~~Environmental~~also ~~Protection~~does ~~Agency~~not expect the US EPA issued ~~construction~~proposed ~~permits~~National ~~authorizing~~Emission Standards for Hazardous Air Pollutants, if adopted, would require it 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 ~~install~~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, ~~system~~combined ~~using~~with ~~Trona~~its oruse ~~other~~of ~~sodium~~low sulfur PRB coal, to meet emissions limits for criteria pollutants, such as NOx and SO2 as well as for hazardous air pollutants, such as mercury, acid gas and non-~~based~~mercury metals. ~~sorbents~~Based on stack tests performed at various Midwest Generation plants, Midwest Generation believes that currently installed activated carbon injection and particulate removal equipment is sufficient to achieve or exceed the ~~Powerton~~mercury ~~Station~~standards outlined in the US EPA's ~~Units~~existing 5 and 6proposed rules. Midwest Generation does not anticipate a material change to its current approach in order to comply with CSAPR.

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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. Midwest Generation had previously received construction permits for dry sorbent injection installation at Waukegan Station's Unit 7.

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 itMidwest Generation may ultimately employ also remain subject to conditions applicable at the time decisions are required or made. ~~Due to~~Final ~~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, subject to the requirements of the CPS and other applicable regulations.

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 NOx 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. Environmental Developments."

Liquidity

At ~~March~~June 3130, 2011, Midwest Generation had cash and cash equivalents of $~~363~~254 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 NOx and SO2 controls through 2013 are estimated at $~~567~~535 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~~to the extent these are available at the time funds are required, 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 March 31,
			Three Months Ended June 30,				Six Months Ended June 30,
			2011		2010		2011		2010
Operating Revenues (in millions)			$	~~351~~280	$	~~379~~281	$	631	$	660
Statistics
	Generation (in GWh)			75,~~470~~560		85,~~212~~430		13,030		13,642
	Aggregate plant performance
		Equivalent availability		8763.07%		8559.98%		75.3%		72.7%
		Capacity factor		6749.03%		6945.65%		58.1%		57.5%
		Load factor		77.04%		8176.12%		77.2%		79.1%
		Forced outage rate		5.10%		610.74%		5.1%		8.2%
	Average realized price/MWh		$	3637.6559	$	3941.5250	$	37.05	$	40.31
	Capacity revenues only (in millions)		$	7768	$	4758	$	145	$	105
	Average realized fuel costs/MWh		$	1618.7388	$	1617.6355	$	17.65	$	16.99

Reconciliation of Non-GAAP Disclosures and Statistical Definitions

Average Realized Energy Price

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 March 31,
		Three Months Ended June 30,						Six Months Ended June 30,
(in millions)		2011			2010			2011			2010
Operating revenues		$	~~351~~280		$	~~379~~281		$	631		$	660
Less:
	Unrealized gains		—			(7	)
	Unrealized (gains) losses		(2	)		3			(2	)		(4	)
	Capacity and other revenues		(7769	)	$	(4858	)		(146	)		(106	)
Realized revenues		$	~~274~~209		$	~~324~~226		$	483		$	550
Generation (in GWh)			75,~~470~~560			85,~~212~~430			13,030			13,642
Average realized energy price/MWh		$	3637.6559		$	3941.5250		$	37.05		$	40.31

The average realized energy price is presented as an aid in understanding the operating results of the Midwest Generation plants. Average realized energy price is a non-GAAP performance measure since such statistical measure excludes unrealized gains or losses recorded as operating revenues. Management believes that the average realized energy price is meaningful for investors as this

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information reflects the impact of hedge contracts at the time of actual generation in period-over-period comparisons or as compared to real-time market prices.

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 allowance 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:

		Three Months Ended March 31,
		Three Months Ended June 30,						Six Months Ended June 30,
(in millions)		2011			2010			2011			2010
Fuel costs		$	~~126~~107		$	~~141~~98		$	233		$	239
Less:
	Unrealized losses		(1	)		(52	)		(2	)		(7	)
Realized fuel costs		$	~~125~~106		$	~~136~~96		$	231		$	232
Generation (in GWh)			75,~~470~~560			85,~~212~~430			13,030			13,642
Average realized fuel costs/MWh		$	1618.7388		$	1617.6355		$	17.65		$	16.99

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 meaningful for investors as this information reflects the impact of hedge contracts at the time of actual generation in period-over-period comparisons.

Statistical 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.

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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 (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."

Operating Income (Loss)

Operating ~~income~~loss from the Midwest Generation plants ~~decreased~~increased $3419 million for the ~~first~~second quarter ofended June 30, 2011, compared to the corresponding ~~first~~period ~~quarter~~ of 2010. The ~~2011~~second ~~decrease~~quarter increase in operating ~~income~~loss was attributable to lower energy revenues, higher fuel costs and higher ~~plant~~operating ~~operations costs~~expenses, partially offset by higher capacity revenues. The decline in energy revenues was due to lower average realized energy prices, ~~and~~partially ~~lower~~offset by higher generation. ~~primarily~~The ~~related~~increase in fuel costs was due to ~~the~~higher ~~permanent~~generation ~~shutdown~~and higher ofcoal ~~Will~~costs. ~~County~~The ~~Units~~increase 1in operating expenses was due to higher maintenance and 2overhauls, atincluding the ~~end~~retirement of ~~2010~~equipment inthat ~~accordance~~was ~~with~~replaced ~~the~~as ~~CPS~~part of overhauls.

~~Included~~Operating inincome ~~operating~~from ~~revenues~~the ~~were~~Midwest ~~unrealized~~Generation ~~gains~~plants ofdecreased ~~none and~~ $753 million for ~~the~~six ~~first~~months ~~quarters~~ended ofJune 30, 2011 ~~and 2010~~, ~~respectively.~~compared ~~Unrealized gains in 2010 were attributable~~ to ~~both~~the ~~economic hedge~~corresponding ~~contracts~~period ~~that~~of ~~are~~2010. ~~accounted~~The ~~for~~2011 atdecrease ~~fair~~in ~~value with offsetting changes recorded on the consolidated statements of~~ operating income ~~and~~was ~~the~~attributable ~~ineffective~~to ~~portion~~lower ofenergy ~~forward~~revenues and ~~futures~~higher ~~contracts~~plant ~~which~~operations ~~are derivatives~~costs, ~~that~~partially ~~qualify~~offset asby ~~cash~~higher ~~flow~~capacity ~~hedges~~revenues. The ~~ineffective~~decline ~~portion~~in ofenergy ~~hedge~~revenues ~~contracts at the Midwest Generation plants~~ was ~~attributable~~due to ~~changes~~lower inaverage ~~the difference between~~ realized energy prices ~~at the~~and ~~Northern~~lower ~~Illinois~~generation ~~Hub~~due (to the ~~settlement~~permanent ~~point~~shutdown ~~under~~of ~~forward~~Will ~~contracts)~~County ~~and~~Units ~~the~~1 ~~energy~~and ~~prices~~2 at the ~~Midwest~~end ~~Generation~~of ~~plants'~~2010 ~~busbars~~in ~~(the~~accordance ~~delivery~~with ~~point where power generated by~~ the ~~Midwest Generation plants is delivered into the transmission system)~~CPS.

Included in ~~fuel~~operating ~~costs~~revenues were unrealized gains (losses) from hedge activities of $12 million and $5 (3) million ~~during~~for the ~~first~~second quarters of 2011 and 2010, respectively, ~~due~~and $2 million and $4 million for the six months ended June 30, 2011 and 2010, respectively. Unrealized gains (losses) in 2011 and 2010 were attributable to ~~oil~~both ~~futures~~economic hedge contracts that ~~were~~ are accounted for at fair value with offsetting changes recorded on the consolidated statements of operations and the ineffective portion of forward and futures contracts which are derivatives that qualify as ~~economic~~cash flow hedges. ~~These~~The ineffective portion of hedge contracts ~~were~~at ~~entered~~the ~~into~~Midwest inGeneration ~~2010~~plants ~~and~~was ~~2009~~attributable to ~~hedge~~changes ~~variable~~in ~~fuel~~the ~~oil~~difference ~~components~~between ofenergy ~~rail~~prices ~~transportation~~at ~~costs.~~the ~~Also~~Northern ~~included~~Illinois Hub in(the ~~fuel~~settlement ~~costs~~point ~~were~~under ~~$2 million~~forward contracts) and ~~$4 million~~ ~~related~~the toenergy prices at the ~~net~~Midwest ~~cost~~Generation ofplants' ~~emission~~busbars ~~allowances~~(the ~~during~~delivery point where power generated by the ~~first~~Midwest ~~quarters~~Generation ofplants ~~2011~~is delivered ~~and~~into ~~2010,~~the ~~respectively~~transmission system).

Included in fuel costs were unrealized losses of $1 million and $2 million during the second quarters of 2011 and 2010, respectively, and $2 million and $7 million during the six months ended June 30, 2011 and 2010, respectively. Unrealized losses were due to oil futures contracts that were accounted for as economic hedges. These contracts were entered into in ~~Other~~2010 ~~Income~~and ~~(Expense)~~ 2009 to hedge variable fuel oil components of rail transportation costs. Also included in fuel costs were net costs of emission allowances of $0.4 million and $1 million during the second quarters of 2011 and 2010, respectively, and $2 million and $5 million during the six months ended June 30, 2011 and 2010, respectively.

	Three Months Ended March 31,
(in millions)	2011			2010
Interest and other income (expense)	$	1		$	(1	)
Interest income from affiliates		28			28
Interest expense		(11	)		(12	)
Total other income	$	18		$	15

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Other Income (Expense)

	Three Months Ended June 30,						Six Months Ended June 30,

(in millions)	2011			2010			2011			2010

Interest and other income (expense)	$	1		$	—		$	2		$	(1	)
Interest income from affiliates		28			28			56			56
Interest expense		(11	)		(12	)		(22	)		(24	)

Total other income	$	18		$	16		$	36		$	31

Income Taxes

Midwest Generation had an effective income tax rate of 4041% and 3839% for the ~~first~~six ~~quarters~~months ofended June 30, 2011 and 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."

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LIQUIDITY AND CAPITAL RESOURCES

Available Liquidity

The following table summarizes the status of Midwest Generation's working capital facility at ~~March~~June 3130, 2011, which matures in June 2012:

(in millions)


Commitment	$	500
Outstanding borrowings		—
Outstanding letters of credit		(3	)

Amount available	$	497

Midwest Generation may seek to extend or replace its credit facility or retire it by other means. The terms and conditions of any refinancing could be substantially different than those in the current credit facility.

For additional discussion of liquidity, see "Management's Overview—Liquidity."

Bonus Depreciation Impact

Capital Investment Plan

At ~~March~~June 3130, 2011, forecasted capital expenditures through 2013 ~~by Midwest Generation~~ were as follows:

(in millions)	~~April~~July through December 2011		2012		2013
Plant capital expenditures	$	23	$	21	$	28
Environmental1	$	49	$	172	$	317
Environmental expenditures		82		172		317
Plant capital		11		21		28
Total	$	~~105~~60	$	193	$	345

~~Plant~~ ~~capital~~ 1For additional ~~expenditures relate to non-environmental projects such as boiler components~~information, ~~generator~~see ~~stator~~"Management's ~~rewinds, condenser re~~Overview—Cross-~~tubing,~~State ~~and~~Air ~~main~~Pollution ~~power transformer replacement~~Rule."

25Environmental capital expenditures include $34 million for remaining expenditures in 2011 related to selective non-catalytic reduction (SNCR) equipment and $501 million for expenditures for the remainder of 2011 to 2013 to begin to retrofit initial units using dry scrubbing with sodium-based

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~~Environmental~~sorbents ~~expenditures~~to ~~include~~comply ~~$64 million~~with ~~for~~CPS ~~remaining~~requirements ~~expenditures~~for inSO2 ~~2011~~emissions. ~~related~~Midwest toGeneration ~~selective~~believes ~~non-catalytic~~its ~~reduction~~current ~~(SNCR)~~environmental ~~equipment~~remediation ~~and~~plan, ~~$503 million~~including ~~for expenditures~~allocated ~~for~~allowances ~~the~~and ~~remainder~~capital ofexpenditures, required ~~2011~~ to meet ~~2013~~the toCPS ~~begin~~will toalso ~~retrofit~~comply ~~initial~~with ~~units~~the ~~using~~requirements ~~dry~~of ~~scrubbing~~CSAPR ~~with~~and ~~sodium-based~~the ~~sorbents~~proposed toNational ~~comply~~Emission ~~with~~Standards ~~CPS requirements~~ for ~~SO2~~Hazardous ~~emissions~~Air Pollutants. Midwest Generation could elect to shut down units instead of installing controls to be in compliance with the CPS and other requirements, 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.

Plant capital expenditures relate to non-environmental projects such as upgrades to boiler and turbine controls, replacement of major boiler components and generator stator rewinds.

Consolidated Cash Flow

At ~~March~~June 3130, 2011, Midwest Generation had cash and cash equivalents of $~~363~~254 million, compared to $295 million at December 31, 2010. Net cash provided by operating activities decreased $4421 million in the first ~~quarter~~six months of 2011, compared to the first ~~quarter~~six months of 2010. The 2011 decrease was ~~primarily~~ primarily attributable to lower net income and the timing of cash receipts and disbursements related to working capital items, partially offset by higher payments for settlements of derivative contracts in 2010.

Net cash used in financing activities ~~decreased~~increased $1420 million in the first ~~quarter~~six months of 2011, compared to the first ~~quarter~~six months of 2010. The 2011 ~~decrease~~increase was due to ~~lower~~$30 million ~~capital~~of ~~lease payments and~~higher ~~lower~~ distributions by Midwest Generation to its parent, partially offset by lower capital lease payments of $10 million.

Net cash used in investing activities ~~decreased~~increased $38 million in the first ~~quarter~~six months of 2011, compared to the first ~~quarter~~six months of 2010. Midwest Generation had ~~higher~~$18 million ~~capital~~of expenditures in 2011 ~~of $9 million~~for ~~which~~investments ~~was~~in ~~offset~~future byplant ~~higher~~improvements, ~~receipts~~which ofwere ~~principal~~partially ~~from~~offset ~~EME~~by onlower ~~intercompany~~capital ~~notes~~expenditures ~~receivable~~in 2011 of $1211 million.

Credit Ratings

Overview

Credit ratings for Midwest Generation, EME and EMMT as of ~~March~~June 3130, 2011 were as follows:

	Moody's Rating	Standard & Poor's Rating		Fitch Rating	~~Fitch Rating~~
Midwest Generation1	~~Ba2~~Ba3	B+	B+	BB-	BB
EME2	B3Caa1	B-	B-	CCC	B-
EMMT	Not Rated	B-	B-	Not Rated	~~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 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. 28

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On June 29, 2011, Moody's lowered the credit ratings of Midwest Generation to Ba3 from Ba2 and EME to Caa1 from B3. On June 30, 2011, Fitch lowered the credit ratings of Midwest Generation to BB- from BB and EME to CCC from B-. 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 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.

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 38 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 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,
	Six Months Ended June 30,
(in millions)	2011		2010
Equity distributions	$	2585	$	3055
Tax payments under tax-allocation agreements		—8		—5
Total payments	$	2593	$	3060

Key Ratio Affecting Distributions

Set forth below is the key ratio required under the covenants contained in Midwest Generation's credit agreement at ~~March~~June 3130, 2011:

Financial Ratio	Covenant	Actual


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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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.

Contractual Obligations and Contingencies

Fuel Supply Contracts

For a discussion of fuel supply contracts, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 6. Commitments and Contingencies—Commitments—Fuel Supply Contracts."

New Source Review ~~Lawsuit~~and Other Litigation

For a discussion of the New Source Review ~~Lawsuit~~lawsuit, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 6. Commitments and Contingencies—Contingencies—New Source Review ~~Lawsuit~~and Other Litigation."

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 39 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 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.

Environmental Matters and Regulations

For a discussion of Midwest Generation's environmental matters, 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. 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. 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 40 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010.

Derivative Instruments

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 following table summarizes unrealized gains (losses):

	Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2011			2010			2011			2010
Non-qualifying hedges	$	(12	)	$	(24	)	$	1		$	(6	)
Ineffective portion of cash flow hedges		—(1	)		4(1	)		(1	)		3
Total unrealized gains (losses)	$	(1	)	$	2(5	)	$	—		$	(3	)

At ~~March~~June 3130, 2011, cumulative unrealized gains of $78 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 2011 and $5 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 Hedging Activities," respectively.

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, and to a lesser extent, the AEP/Dayton ~~Hub~~and Cinergy Hubs, ~~both~~all in PJM.

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The following table depicts the quarterly average historical market prices for energy per megawatt-hour for the first ~~quarters~~six months of 2011 and 2010:

		24-Hour Average Historical Market Prices1
		2011			2010
Northern Illinois Hub		$	34.0950		$	3433.5344

1Energy 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~~June 3130, 2011:

		24-Hour Forward Energy Prices1 Northern Illinois Hub
2011
	April	$	29.53
	July	$	36.43
	May		28.15
	August		38.60
	June		30.92
	September		29.83
	July		35.17
	October		26.21
	August		37.29
	November		29.67
	September		28.63
	December		31.33
	October		25.17
2012 calendar "strip"2		$	33.08
	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 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.

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 primarily entered into at ~~both~~ the Northern Illinois ~~Hub~~ and to a lesser extent the AEP/Dayton ~~Hub~~and Cinergy Hubs (including forward contracts accounted for on the accrual basis) at June 30, 2011 for electricity expected to be generated during the remainder of 2011 and in 2012 and 2013:

	2011		2012		2013


MWh (in thousands)		6,892		7,798		1,020
Average price/MWh¹	$	38.70	$	37.38	$	39.11

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

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~~contracts~~ ~~accounted~~time. ~~for~~Accordingly, on the ~~accrual~~above ~~basis)~~hedge atpositions ~~March 31,~~are ~~2011~~not ~~for~~directly ~~electricity~~comparable ~~expected~~ to ~~be generated during~~ the ~~remainder~~24-hour ofNorthern ~~2011~~Illinois ~~and~~Hub inprices ~~2012~~set ~~and~~forth ~~2013:~~above.

		2011			2012			2013
MWh (in thousands)			7,664			5,350			1,020
Average price/MWh1		$	37.78		$	35.25		$	39.11

1The 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.

Capacity Price Risk

The following table summarizes the status of capacity sales for Midwest Generation at ~~March~~June 3130, 2011:

								RPM Capacity Sold in Base Residual Auction				Other Capacity Sales, Net of Purchases2
												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
								RPM Capacity Sold in Base Residual Auction
April 1, 2011 to May 31, 2011		5,477		(548	)		4,929		4,929	$	174.29		—		—	$	174.29
	Installed Capacity MW		Unsold Capacity1 MW			Capacity Sold MW								Average Price per MW-day		Aggregate Average Price per MW-day
June 1, 2011 to May 31, 2012		5,477		(495	)		4,982		4,582		110.00		400	$	85.00		107.99
								MW		Price per MW-day		MW
June 1, 2012 to May 31, 2013		5,477		(773	)		4,704		4,704		16.46		—		—		16.46
July 1, 2011 to May 31, 2012		5,477		(495	)		4,982		4,582	$	110.00		400	$	85.00	$	107.99
June 1, 2013 to May 31, 2014		5,477		(827	)		4,650		4,650		27.73		—		—		27.73
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, 2014 to May 31 , 2015		5,477		(852	)		4,625		4,625		125.99		—		—		125.99

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.

The 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.

Basis Risk

During the ~~three~~six months ended ~~March~~June 3130, 2011, prices at the individual busbars of the Midwest Generation plants were lower than the AEP/Dayton Hub, Cinergy Hub and Northern Illinois Hub by an average of 1013%, 2% and 1%, respectively, compared to 11%, 2% and 1%, respectively, during the ~~three~~six months ended ~~March~~June 3130, 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 ~~March~~June 3130, 2011 for the remainder of 2011 and the following year:

	April through December 2011		2012
	July through December 2011		2012
Amount of Coal Under Contract in Millions of Equivalent Tons1		12.4		9.8
Amount of Coal Under Contract in Millions of Equivalent Tons1,2		8.9		11.7

¹: The 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 fluctuated between $13.25 per ton and $14.75 per ton during the first quarter of 2011. The market price of PRB coal decreased to a price of $13.25 per ton at April 1, 2011, compared to a price of $13.60 per ton at December 31, 2010, as reported by the Energy Information Administration. 33

~~Midwest Generation~~Table ~~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. Contents

²: In July 2011, Midwest Generation entered into additional contractual agreements for the purchase of coal of 0.5 million tons for the remainder of 2011, 2.0 million tons for 2012, 9.8 million tons for 2013, and 9.8 million tons for 2014.

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 fluctuated between $12.35 per ton and $14.75 per ton during the first six months of 2011. The market price of PRB coal decreased to a price of $13.25 per ton at July 1, 2011, compared to a price of $13.60 per ton at December 31, 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 materially 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

The federal Acid Rain Program requires electric generating stations to hold SO2 allowances sufficient to cover their annual emissions. Pursuant to Illinois' implementation of the ~~Clean~~CAIR, ~~Air~~which ~~Interstate~~expires ~~Rule~~on ~~(CAIR)~~December 31, 2011, coal plants are required to hold seasonal and annual NOx allowances.

In 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~~244 per ton during the first ~~quarter~~six ofmonths ended June 30, 2011 from $987 per ton in 2010. The average purchase price of SO2 allowances was $4 per ton during the six months ended June 30, 2011. Based on broker's quotes and information from public sources, the spot price for SO2 allowances and annual NOx allowances was $~~227~~4 per ton and $147.50 per ton, respectively, at ~~March~~June 3130, 2011.

Under CSAPR, beginning January 1, 2012, the amount of SO₂ that a plant emits in its operation will need to be matched by a sufficient amount of SO₂ allowances designated under this program (CSAPR SO₂ allowances) that are either allocated to the plant under the CSAPR program or purchased in the open market. SO₂ allowances under the federal Acid Rain Program cannot be used to satisfy the requirements under CSAPR. Midwest Generation will be impacted by market prices for additional CSAPR SO₂ allowances required, but availability and market prices are uncertain. For additional information on CSAPR, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 7. Environmental Developments—Cross-State Air Pollution Rule."

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 7680% of Midwest Generation's consolidated operating revenues for the ~~three~~six months ended ~~March~~June 3130, 2011. ~~For the three months ended March 31, 2011, a second customer accounted for 12% of Midwest Generation's consolidated operating 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 March 31, 2011, Midwest Generation had no borrowings outstanding.~~

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Generation to the risk of earnings loss resulting from changes in interest rates from any borrowings outstanding. At June 30, 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 Estimates and Policies" in Item 7 on page 46 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of market risk sensitive instruments, refer to "Market Risk Exposures" ~~on page 40~~ in Item 7 on page 40 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2010. For an update to that disclosure, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Risk Exposures."

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Midwest Generation's management, under the supervision and with the participation of the company's President and Chief Financial Officer, has evaluated the effectiveness of Midwest Generation's disclosure controls and procedures (as 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 President and Chief Financial Officer concluded that, as of the end of the period, Midwest Generation's disclosure controls and procedures 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 "Contingencies" in Item 8 on page 90 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 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, 2010, except as follows:

New Source Review ~~Lawsuit~~and Other Litigation

InNine ~~March 2011, the U.S. District Court for the Northern District~~ of ~~Illinois dismissed nine of the~~ ten PSD claims ~~asserted~~have ~~against~~been ~~Midwest Generation and EME by the State of Illinois and the Department of Justice~~dismissed, along with claims related to alleged violations of Title V of the CAA to the extent based on the dismissed PSD claims. The ~~Court~~ court has also dismissed all claims asserted against Commonwealth Edison Company and EME. The ~~Court~~court denied a motion to dismiss a claim by ~~intervenor~~the ~~citizens~~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~~court that the statute of limitations should be equitably tolled. The ~~Court~~ 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 May 2011, two complaints were filed against Midwest Generation in the Northern District of Illinois by residents living near the Crawford and Fisk facilities on behalf of themselves and all others similarly situated, each asserting claims of nuisance, negligence, trespass, and strict liability. The plaintiffs seek to have their suits certified as a class action and request injunctive relief, as well as compensatory and punitive damages.

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 18 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 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.

ITEM 6. EXHIBITS

Exhibit No.			Description
	31.1		Certification of the President 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 ~~March~~June 3130, 2011, filed on ~~May~~August 24, 2011, formatted in XBRL: (i) the Consolidated Statements of ~~Income~~Operations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (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/ Maria Rigatti Maria Rigatti Manager and Vice President (Duly Authorized Officer and Principal Financial Officer)
		Date:		~~May~~August 24, 2011

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