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

~~Form 10-Q~~ SECURITIES AND EXCHANGE COMMISSION

(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 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

Washington, D.C. 20549

~~Commission file number 333-59348~~ _______________________

~~MIDWEST~~FORM ~~GENERATION, LLC (Exact name of registrant as specified in its charter)~~ 10-Q

Delaware (State or other jurisdiction of incorporation or organization)		33-0868558 (I.R.S. Employer Identification No.)
(Mark one)
235 Remington Boulevard, Suite A Bolingbrook, Illinois (Address of principal executive offices)		60440 (Zip Code)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2012
	or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________

Commission File Number 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 (1) has ~~submitted~~filed ~~electronically~~all ~~and~~reports ~~posted on its corporate Web site, if any, every Interactive Data File~~ required to be ~~submitted~~filed ~~and~~by ~~posted~~Section 13 ~~pursuant~~or to15(d) ~~Rule 405~~ of ~~Regulation S-T~~the ~~(§232.405~~Securities ofExchange ~~this~~Act ~~chapter)~~of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ~~submit~~file such reports), and ~~post~~(2) has been subject to such ~~files)~~filing requirements for the past 90 days. YES o 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 ý NO 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 ýx Smaller reporting company o (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 ~~November~~May 2, ~~2011~~2012: 100 units (all units held by an affiliate of the registrant).

Table of Contents

TABLE OF CONTENTS

~~GLOSSARY~~	GLOSSARY	iii			iv
PART I – FINANCIAL INFORMATION					1
PART I - FINANCIAL INFORMATION		1
~~ITEM 1. FINANCIAL STATEMENTS~~	ITEM 1. FINANCIAL STATEMENTS	1			1
	CONSOLIDATED STATEMENTS OF INCOME				1
	CONSOLIDATED STATEMENTS OF OPERATIONS	1
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	2			2
	CONSOLIDATED BALANCE SHEETS	3			3
	CONSOLIDATED STATEMENTS OF CASH FLOWS	4			4
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	5			5
	Note 1. Summary of Significant Accounting Policies	5			5
		Basis of Presentation			5
	Note 2. Fair Value Measurements	6
		Cash Equivalents			5
	Note 3. Derivative Instruments and Hedging Activities	8
		Related Party			5
	Note 4. Income Taxes	11
		Restricted Deposits			5
	Note 5. Compensation and Benefit Plans	11
		New Accounting Guidance			6
	Note 6. Commitments and Contingencies	12
			Accounting Guidance Adopted in 2011		6
	Note 7. Environmental Developments	13
				Fair Value Measurements and Disclosures	6
	Note 8. Accumulated Other Comprehensive Loss	14
			Accounting Guidance Not Yet Adopted		6
	Note 9. Supplemental Cash Flows Information	14
				Fair Value Measurement	6
	ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
				Presentation of Comprehensive Income	6
	MANAGEMENT'S OVERVIEW	16
	Note 2. Fair Value Measurements				6
	Environmental Compliance Plans and Costs	16
		Recurring Fair Value Measurements			6
	Environmental Regulation Developments	17
		Valuation Techniques used to Determine Fair Value			8
	RESULTS OF OPERATIONS	18
			Level 1		8
	Summary	18
			Level 2		8
	Reconciliation of Non-GAAP Disclosures and Statistical Definitions	18
			Level 3		9
	Average Realized Energy Price	18
	Note 3. Derivative Instruments and Hedging Activities				9
	Average Realized Fuel Costs	19
		Notional Volumes of Derivative Instruments			10
	Statistical Definitions	19
		Fair Value of Derivative Instruments			11
	Seasonality	19
		Income Statement Impact of Derivative Instruments			11
	Operating Income (Loss)	19
		Contingent Features			12
	Other Income (Expense)	20
	Note 4. Income Taxes				12
	Income Taxes	20
		Bonus Depreciation Impact			12
	New Accounting Guidance	20
	Note 5. Compensation and Benefit Plans				12
	LIQUIDITY AND CAPITAL RESOURCES	21
		Pension Plans and Postretirement Benefits Other Than Pensions			12
	Available Liquidity	21
			Pension Plans		12
	Capital Investment Plan	21
			Postretirement Benefits Other Than Pensions		13
	Consolidated Cash Flow	21
	Note 6. Commitments and Contingencies				13
	Credit Ratings	22
		Commitments			13
	Overview	22
			Fuel Supply Contracts and Coal Transportation Agreements		13
	Credit Rating of EMMT	22
			Capital Commitments		13
	Key Ratio Affecting Distributions	22
		Guarantees and Indemnities			14
			Environmental Indemnities Related to the Midwest Generation Plants		14
			Indemnities Provided under Sale-Leaseback Agreements		14
			Other Indemnities		15

Table of Contents

		Contingencies		15
	Powerton-Joliet Lease Payments	22
			New Source Review and Other Litigation	15
	Contractual Obligations and Contingencies	22
			Environmental Remediation	16
	Contingencies	22
	Note 7. Environmental Developments			16
	Off-Balance Sheet Transactions	23
		Cross-State Air Pollution Rule		16
	Environmental Matters and Regulations	23
		Proposed Hazardous Air Pollutant Regulations		17
	MARKET RISK EXPOSURES	24
		Ozone and Particulates		17
	Derivative Instruments	24
		Water Quality—Clean Water Act		17
	Unrealized Gains and Losses	24
		Greenhouse Gas Litigation Developments		17
	Fair Value Disclosures	24
	Note 8. Accumulated Other Comprehensive Loss			18
	Commodity Price Risk	24
	Note 9. Supplemental Cash Flows Information			19
	Energy Price Risk	24
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				20
	Capacity Price Risk	26
	MANAGEMENT'S OVERVIEW			21
	Basis Risk	26
	Highlights of Operating Results			22
	Credit Risk	26
	Cross-State Air Pollution Rule			22
	Interest Rate Risk	26
	Environmental Compliance Plans and Costs			22
	CRITICAL ACCOUNTING ESTIMATES AND POLICIES	26
	Liquidity			23
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
	RESULTS OF OPERATIONS			24
	ITEM 4. CONTROLS AND PROCEDURES	27
	Summary			24
	Disclosure Controls and Procedures	27
		Reconciliation of Non-GAAP Disclosures and Statistical Definitions		24
	Internal Control over Financial Reporting	27
			Average Realized Energy Price	24
PART II - OTHER INFORMATION		28
			Average Realized Fuel Costs	25
	ITEM 1. LEGAL PROCEEDINGS	28
			Statistical Definitions	25
	ITEM 1A. RISK FACTORS	28
		Seasonality		26
	ITEM 6. EXHIBITS	28
	Operating Income			26
	SIGNATURES	29
	Other Income (Expense)			27
	Income Taxes			27
	New Accounting Guidance			27
	LIQUIDITY AND CAPITAL RESOURCES			28
	Available Liquidity			28
	Capital Investment Plan			28
	Consolidated Cash Flow			29
	Credit Ratings			29
		Overview		29
		Credit Rating of EMMT		30
	Equity Distributions and Tax Payments			30
		Key Ratio Affecting Distributions		30
	Powerton-Joliet Lease Payments			30
	Contractual Obligations and Contingencies			31

Table of Contents

		Fuel Supply Contracts and Coal Transportation Agreements	31
		New Source Review and Other Litigation	31
	Off-Balance Sheet Transactions		31
	Environmental Matters and Regulations		31
	MARKET RISK EXPOSURES		32
	Derivative Instruments		32
		Unrealized Gains and Losses	32
		Fair Value Disclosures	32
	Commodity Price Risk		32
		Energy Price Risk	32
		Capacity Price Risk	34
		Basis Risk	34
		Coal and Transportation Price Risk	34
		Emission Allowances Price Risk	35
	Credit Risk		35
	Interest Rate Risk		35
	Regulatory Matters		35
		Dodd-Frank Act	35
	CRITICAL ACCOUNTING ESTIMATES AND POLICIES		36
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			36
ITEM 4. CONTROLS AND PROCEDURES			36
	Disclosure Controls and Procedures		36
	Internal Control Over Financial Reporting		36
PART II – OTHER INFORMATION			37
ITEM 1. LEGAL PROCEEDINGS			37
	New Source Review and Other Litigation		37
ITEM 1A. RISK FACTORS			37
ITEM 4. REMOVED AND RESERVED			37
ITEM 6. EXHIBITS			37
SIGNATURES			38

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
ACI	activated carbon injection
CAA		Clean Air Act
ARO(s)	asset retirement obligation(s)
CAIR		Clean Air Interstate Rule
BART	best available retrofit technology
Commonwealth Edison		Commonwealth Edison Company
bcf	billion cubic feet
CPS		Combined Pollutant Standard
Btu	British thermal units
CSAPR		Cross-State Air Pollution Rule
CAA	Clean Air Act
EME		Edison Mission Energy
CAIR	Clean Air Interstate Rule
EMMT		Edison Mission Marketing & Trading, Inc.
CAMR	Clean Air Mercury Rule
GAAP		accounting principles generally accepted in the United States of America
CO2	carbon dioxide
GWh		gigawatt-hours
Commonwealth Edison	Commonwealth Edison Company
HAP(s)		hazardous air pollutant(s)
CPS	Combined Pollutant Standard
Lehman		Lehman Brothers Commodity Services, Inc. and Lehman Brothers Holdings, Inc.
CSAPR	Cross-State Air Pollution Rule
MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations
EIA	Energy Information Administration
Midwest Generation		Midwest Generation, LLC
EME	Edison Mission Energy
MMBtu		million British thermal units
EMMT	Edison Mission Marketing & Trading, Inc.
Moody's		Moody's Investors Service, Inc.
FASB	Financial Accounting Standards Board
MW		megawatts
FERC	Federal Energy Regulatory Commission
MWh		megawatt-hours
GAAP	United States generally accepted accounting principles
NOX		nitrogen oxide
GHG	greenhouse gas
PJM		PJM Interconnection, LLC
GWh	gigawatt-hours
PRB		Powder River Basin
Illinois EPA	Illinois Environmental Protection Agency
PSD		Prevention of Significant Deterioration
ISO(s)	independent system operator(s)
RPM		Reliability Pricing Model
kV	kilovolt
SO2		sulfur dioxide
Lehman	Lehman Brothers Commodity Services, Inc. and Lehman Brothers Holdings, Inc.
US EPA		United States Environmental Protection Agency
LIBOR	London Interbank Offered Rate
MATS	Mercury and Air Toxics Standards
Midwest Generation	Midwest Generation, LLC
MISO	Midwest Independent Transmission System Operator
MMBtu	million British thermal units
Moody's	Moody's Investors Service, Inc.
MW	megawatts
MWh	megawatt-hours
NAAQS	National Ambient Air Quality Standard(s)
NERC	North American Electric Reliability Corporation
NOX	nitrogen oxide
NSR	New Source Review
PJM	PJM Interconnection, LLC
PRB	Powder River Basin
PSD	Prevention of Significant Deterioration
RPM	Reliability Pricing Model
RTO(s)	regional transmission organization(s)
S&P	Standard & Poor's Ratings Services

iii

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SIP(s)	state implementation plan(s)
SNCR	selective non-catalytic reduction
SO₂	sulfur dioxide
US EPA	United States Environmental Protection Agency

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PART I – ~~FINANCIAL~~- ~~INFORMATION ITEM 1.~~ FINANCIAL ~~STATEMENTS~~ INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (in millions, unaudited)
			Three Months Ended September 30,						Nine Months Ended September 30,
			2011			2010			2011			2010
Operating Revenues from Marketing Affiliate			$	366		$	444		$	997		$	1,104
Operating Expenses
	Fuel			157			151			390			390
	Plant operations			86			92			368			354
	Depreciation and amortization			39			39			118			115
	Asset retirements			1			7			12			10
	Administrative and general			7			3			18			15
		Total operating expenses		290			292			906			884
	Operating income			76			152			91			220
Other Income (Expense)
	Interest and other income			27			29			85			84
	Interest expense			(8	)		(12	)		(30	)		(36	)
		Total other income		19			17			55			48
Income before income taxes				95			169			146			268
Provision for income taxes				38			61			59			100
Net Income			$	57		$	108		$	87		$	168

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, unaudited)



	Three Months Ended March 31,
	2012			2011
Operating Revenues from Marketing Affiliate	$	233		$	351
Operating Expenses
Fuel	117			126
Plant operations	109			118
Depreciation and amortization	32			39
Loss on disposal and asset retirements	3			—
Administrative and general	5			6
Total operating expenses	266			289
Operating income (loss)	(33		)	62
Other Income (Expense)
Interest and other income	28			29
Interest expense	(9		)	(11		)
Total other income	19			18
Income (loss) before income taxes	(14		)	80
Provision (benefit) for income taxes	(5		)	32
Net Income (Loss)	$	(9	)	$	48

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

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MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions, unaudited)
			Three Months Ended September 30,				Nine Months Ended September 30,
			2011		2010		2011			2010
Net Income			$	57	$	108	$	87		$	168
Other comprehensive income (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			—
	Unrealized gains (losses) on derivatives qualified as cash flow hedges
		Unrealized holding gains (losses) arising during period, net of income tax expense (benefit) of $2 and $25 for the three months and $(3) and $36 for the nine months ended September 30, 2011 and 2010, respectively		3		39		(5	)		56
		Reclassification adjustments included in net income, net of income tax expense (benefit) of $1 and $1 for the three months and $(6) and $(29) for the nine months ended September 30, 2011 and 2010, respectively		2		1		(10	)		(45	)
Other comprehensive income (loss)				5		40		(14	)		11
Comprehensive Income			$	62	$	148	$	73		$	179

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions, unaudited)



	Three Months Ended March 31,
	2012			2011
Net Income (Loss)	$	(9	)	$	48
Other comprehensive income (loss), net of tax
Pension and postretirement benefits other than pensions
Amortization of net loss and prior service adjustment included in expense, net of tax	1			1
Unrealized gains (losses) on derivatives qualified as cash flow hedges
Unrealized holding gains arising during period, net of income tax expense of $11 and $1 for the three months ended March 31, 2012 and 2011, respectively	18			1
Reclassification adjustments included in net income, net of income tax benefit of $6 and $4 for the three months ended March 31, 2012 and 2011, respectively	(10		)	(7		)
Other comprehensive income (loss), net of tax	9			(5		)
Comprehensive Income	$	—		$	43

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)
			September 30, 2011			December 31, 2010
Assets
Current Assets
	Cash and cash equivalents		$	333		$	295
	Due from affiliates			109			124
	Fuel inventory			97			85
	Spare parts inventory			42			38
	Interest receivable from affiliate			27			56
	Derivative assets			15			47
	Deferred taxes			2			—
	Emission allowances			—			2
	Other current assets			19			33
		Total current assets		644			680
Property, Plant and Equipment, less accumulated depreciation of $1,653 and $1,541 at respective dates				2,852			2,905
Notes receivable from affiliate				1,323			1,343
Long-term derivative assets				3			3
Other assets				28			11
Total Assets			$	4,850		$	4,942
Liabilities and Member's Equity
Current Liabilities
	Accounts payable		$	45		$	43
	Accrued liabilities			40			60
	Due to affiliates			46			16
	Interest payable			9			22
	Derivative liabilities			3			3
	Deferred taxes			—			10
	Current portion of lease financing			116			109
		Total current liabilities		259			263
Lease financing, net of current portion				439			556
Deferred taxes				165			129
Long-term derivative liabilities				—			2
Benefit plans and other long-term liabilities				222			214
Total Liabilities				1,085			1,164
Commitments and Contingencies (Notes 3, 6 and 7)
Member's Equity
	Membership interests, no par value (100 units authorized, issued and outstanding at each date)			—			—
	Additional paid-in capital			3,511			3,511
	Accumulated earnings			271			270
	Accumulated other comprehensive loss			(17	)		(3	)
Total Member's Equity				3,765			3,778
Total Liabilities and Member's Equity			$	4,850		$	4,942

CONSOLIDATED BALANCE SHEETS

(in millions, except unit amounts, unaudited)



	March 31, 2012			December 31, 2011
Assets
Current Assets
Cash and cash equivalents	$	230		$	213
Due from affiliates	69			109
Inventory	168			159
Interest receivable from affiliate	27			55
Derivative assets	60			43
Deferred taxes	14			14
Other current assets	12			17
Total current assets	580			610
Property, Plant and Equipment, less accumulated depreciation of $1,184 and $1,152 at respective dates	2,160			2,185
Notes receivable from affiliate	1,317			1,323
Long-term derivative assets	3			1
Deferred taxes	42			42
Other long-term assets	27			29
Total Assets	$	4,129		$	4,190
Liabilities and Member's Equity
Current Liabilities
Accounts payable	$	45		$	35
Accrued liabilities	38			49
Due to affiliates	22			18
Interest payable	8			19
Derivative liabilities	1			2
Current portion of lease financing	120			116
Total current liabilities	234			239
Lease financing, net of current portion	378			439
Benefit plans and other long-term liabilities	248			243
Total Liabilities	860			921
Commitments and Contingencies (Notes 3, 6 and 7)
Member's Equity
Membership interests, no par value (100 units authorized, issued and outstanding at each date)	—			—
Additional paid-in capital	3,511			3,511
Accumulated deficit	(234		)	(225		)
Accumulated other comprehensive loss	(8		)	(17		)
Total Member's Equity	3,269			3,269
Total Liabilities and Member's Equity	$	4,129		$	4,190

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

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MIDWEST GENERATION, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited)
			Nine Months Ended September 30,
			2011			2010
Cash Flows From Operating Activities
	Net income		$	87		$	168
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization		120			116
		Asset retirements and other non-cash items		12			7
		Deferred taxes		32			(3	)
	Decrease in due to/from affiliates			56			103
	Increase in inventory			(16	)		(6	)
	Decrease in interest receivable from affiliate			29			27
	Decrease in other assets			14			—
	Decrease in emission allowances			2			6
	Decrease in accounts payable and other current liabilities			(18	)		(24	)
	Decrease in interest payable			(13	)		(15	)
	Increase in other liabilities			7			7
	Decrease (increase) in derivative assets and liabilities			7			(16	)
		Net cash provided by operating activities		319			370
Cash Flows From Financing Activities
	Cash distributions to parent			(85	)		(125	)
	Repayments of lease financing			(109	)		(121	)
		Net cash used in financing activities		(194	)		(246	)
Cash Flows From Investing Activities
	Capital expenditures			(78	)		(76	)
	Investments in other assets			(18	)		—
	Proceeds from sale of emission allowances			—			3
	Repayment of loan to affiliate			9			5
		Net cash used in investing activities		(87	)		(68	)
Net increase in cash and cash equivalents				38			56
Cash and cash equivalents at beginning of period				295			237
Cash and cash equivalents at end of period			$	333		$	293

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)



	Three Months Ended March 31,
	2012			2011
Cash Flows From Operating Activities
Net income (loss)	$	(9	)	$	48
Adjustments to reconcile income (loss) to net cash provided by operating activities:
Depreciation and amortization	32			39
Loss on disposal and asset retirements	3			—
Deferred taxes	—			8
Decrease in due from affiliates	44			36
Increase in inventory	(9		)	(15		)
Decrease in interest receivable from affiliate	28			29
Decrease in other assets	3			14
Decrease in emission allowances	—			2
(Decrease) increase in accounts payable and other current liabilities	(1		)	5
Decrease in interest payable	(11		)	(12		)
Increase in other liabilities	5			8
Decrease (increase) in derivative assets and liabilities	(6		)	1
Net cash provided by operating activities	79			163
Cash Flows From Financing Activities
Cash distributions to parent	—			(25		)
Repayments of lease financing	(57		)	(53		)
Net cash used in financing activities	(57		)	(78		)
Cash Flows From Investing Activities
Capital expenditures	(10		)	(31		)
Increase in restricted deposits	(1		)	—
Repayment of loan to affiliate	6			14
Net cash used in investing activities	(5		)	(17		)
Net increase in cash and cash equivalents	17			68
Cash and cash equivalents at beginning of period	213			295
Cash and cash equivalents at end of period	$	230		$	363

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

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MIDWEST GENERATION, LLC AND SUBSIDIARIES ~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2011 (Unaudited)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2012

(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 5944 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011. Midwest Generation follows the same accounting policies for interim reporting purposes, with the exception of accounting principles adopted as of January 1, ~~2011~~2012, 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~~consisting of 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 operations for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2011~~2012 are not necessarily indicative of the operating results for the full year.

The December 31, ~~2010~~2011 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

Liquidity and Capital Needs

At March 31, 2012, Midwest Generation had cash and cash equivalents of $230 million. Unless energy and capacity prices increase substantially, Midwest Generation expects that it will incur an operating cash flow deficit and operating losses in 2012 and subsequent years. A continuation of these adverse trends coupled with the need to retrofit its plants to comply with governmental regulations will strain Midwest Generation's liquidity. In order to retrofit its coal-fired plants, Midwest Generation will need to borrow additional funds or receive additional contributions from Edison Mission Energy (EME). Midwest Generation plans to fund operating cash flow deficits through a combination of cash on hand, management of fuel inventories, deferral of operations and maintenance expenses and acceleration of the timing of collections from affiliates. There is no assurance that there will be sufficient liquidity without additional equity contributions from EME.

Cash Equivalents

Cash equivalents included money market funds totaling $~~309~~213 million and $~~270~~195 million at ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011, 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 ~~$27 million~~ ~~and~~ $28 million during ~~the third~~each ~~quarters~~of ~~ended September 30, 2011 and 2010, respectively, and $83 million and $84 million during~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010, respectively~~2011.

~~Restricted Deposits~~ Inventory

~~Restricted~~Inventory ~~deposits~~is ofstated ~~$3 million~~ at ~~both~~the ~~September 30,~~lower ~~2011~~of ~~and~~weighted-average ~~December 31,~~cost ~~2010~~or ~~were~~market. ~~included~~Inventory inis ~~other~~recorded ~~assets~~at onactual ~~Midwest Generation's~~cost ~~consolidated~~when ~~balance~~purchased ~~sheet.~~and ~~These~~then ~~cash~~expensed ~~balances~~at ~~are~~weighted-average ~~restricted~~cost toas ~~provide~~used. ~~collateral~~Inventory ~~for~~consisted ~~fuel~~of ~~suppliers.~~the following:



(in millions)	March 31, 2012		December 31, 2011
Coal, fuel oil and other raw materials	$	125	$	117
Spare parts, materials and supplies	43		42
Total inventory	$	168	$	159

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New Accounting Guidance

Accounting Guidance Adopted in ~~2011~~ 2012

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 Financial Accounting Standards Board (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~~adopted ~~adopt~~ this guidance effective January 1, 2012. ~~and~~For ~~does~~further ~~not expect the adoption of this standard will have a material impact on Midwest Generation's consolidated results of operations~~information, ~~financial~~see ~~position~~Note or2—Fair ~~cash~~Value ~~flows~~Measurements.

Presentation of Comprehensive Income

In June 2011 and December 2011, the FASB issued an accounting standards ~~update~~updates 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~~adopted ~~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~~these accounting standards ~~update~~updates ~~does~~did not change the items that constitute net income and other comprehensive income.

Accounting Guidance Not Yet Adopted

Offsetting Assets and Liabilities

In December 2011, the FASB issued an accounting standards update modifying the disclosure requirements about the nature of an entity's rights of offsetting assets and liabilities in the statement of financial position under master netting agreements and related arrangements associated with financial and derivative instruments. The guidance requires increased disclosure of the gross and net recognized assets and liabilities, collateral positions and narrative descriptions of setoff rights. Midwest Generation will adopt this guidance effective January 1, 2013.

Note 2. Fair Value Measurements

Recurring Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value of an asset or a liability ~~should~~considers ~~consider~~ assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk., ~~The~~which ~~fair value of derivative assets' nonperformance risk~~ was not material as of ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011.

~~Midwest Generation~~Assets ~~categorizes financial assets~~ and liabilities are categorized into a three-level 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:

			September 30, 2011
	March 31, 2012
(in millions)	Level 1		~~Level 1~~	Level 2		~~Level 2~~		Level 3	~~Level 3~~		Netting1			~~Total~~	Total
Assets at Fair Value
Money market funds2	~~Money market funds2~~$	213	$	~~309~~$	—	$	—	$	$—	—	$	—		$	~~309~~$	213
Derivative contracts	~~Derivative contracts~~
Electricity	$	~~Electricity~~—	$	—$	54	$	18	$	$1	—	$	—8		$	18$	63
		Fuel oil		2			—			—		(2	)		—
Natural Gas	2			—				—			(2		)		—
		Total commodity contracts		2			18			—		(2	)		18
Fuel oil	7			—				—			(7		)		—
	Total assets		$	311		$	18		$	—	$	(2	)	$	327
Total commodity contracts	$	9		$	54			$	1		$	(1	)		$	63
Liabilities at Fair Value
Total assets	$	222		$	54			$	1		$	(1	)		$	276
	Derivative contracts
Liabilities at Fair Value
		Electricity	$	—		$	3		$	2	$	(2	)	$	3
Derivative contracts
	Total liabilities		$	—		$	3		$	2	$	(2	)	$	3
Electricity	$	—		$	3			$	—		$	(2	)		$	1
			December 31, 2010
Total liabilities	$	—		$	3			$	—		$	(2	)		$	1
Assets at Fair Value
	December 31, 2011
	Money market funds2		$	270		$	—		$	—	$	—		$	270
(in millions)	Level 1			Level 2				Level 3			Netting1				Total
	Derivative contracts
Assets at Fair Value
		Electricity	$	—		$	42		$	—	$	8		$	50
Money market funds2	$	195		$	—			$	—		$	—			$	195
		Fuel oil		8			—			—		(8	)		—
Derivative contracts
		Total commodity contracts		8			42			—		—			50
Electricity	$	—		$	40			$	—		$	4			$	44
	Total assets		$	278		$	42		$	—	$	—		$	320
Fuel oil	4			—				—			(4		)		—
Liabilities at Fair Value
Total commodity contracts	$	4		$	40			$	—		$	—			$	44
	Derivative contracts
Total assets	$	199		$	40			$	—		$	—			$	239
		Electricity	$	—		$	5		$	—	$	—		$	5
Liabilities at Fair Value
	Total liabilities		$	—		$	5		$	—	$	—		$	5
Derivative contracts
Electricity	$	—		$	2			$	—		$	—			$	2
Total liabilities	$	—		$	2			$	—		$	—			$	2

1 ~~1Represents~~ 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. ~~2Money market funds are included in cash and cash equivalents on Midwest Generation's consolidated balance sheets.~~

72 Money market funds are included in cash and cash equivalents on Midwest Generation's consolidated balance sheets.

~~Table~~The fair value of ~~Contents~~transfers in and out of each level is determined at the end of each reporting period. There were no transfers between Levels 1 and 2 during the three months ended March 31, 2012 and 2011.

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

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

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 three months and nine months ended September 30, 2011 and 2010.

Valuation Techniques used to Determine Fair Value

Level 1

~~Level 1~~The ~~includes~~fair ~~financial~~value of Level 1 assets and liabilities ~~where~~is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. ~~Financial~~This ~~assets~~level ~~and~~includes ~~liabilities classified as Level 1 include~~ exchange-traded derivatives and money market funds.

~~Level 2~~ 7

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.

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Level 2

The fair value of Level 2 assets and liabilities is determined using quoted prices for similar assets and liabilities in active markets and inputs that are observable either directly or indirectly for substantially the full term of the instrument. This level includes over-the-counter derivatives.

Over-the-counter derivative contracts are valued using standard pricing models to determine the net present value of estimated future cash flows. 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. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price 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.

Level 3

The fair value of Level 3 ~~includes financial~~ assets and liabilities ~~where fair value~~ is determined using models and techniques that require significant unobservable inputs. ~~Over~~This level includes over-the-counter options, ~~bilateral~~and ~~contracts, capacity contracts, qualifying facilities contracts,~~ derivative contracts that trade infrequently, (such as ~~financial transmission~~congestion revenue rights), and ~~derivative~~long-term ~~contracts~~power ~~with counterparties that have significant nonperformance risks are classified as Level 3~~agreements. 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~~Assumptions ~~contracts~~are ~~that~~made ~~trade~~in ~~infrequently~~order ~~(illiquid~~to ~~financial~~value ~~transmission~~derivative ~~rights),~~contracts ~~changes~~ in ~~fair~~which ~~value~~observable inputs are ~~based~~not ~~on the hypothetical sale of illiquid positions~~available. ~~Objective~~Changes ~~criteria~~in ~~are reviewed, including system congestion and other underlying drivers and~~ fair value isare ~~adjusted~~based ~~when~~on itchanges isto ~~concluded~~forward ~~that~~market aprices, ~~change~~including inextrapolation ~~objective~~of ~~criteria~~short-term ~~would~~observable ~~result~~inputs ininto aforecasted ~~new~~prices ~~valuation~~for ~~that~~illiquid ~~better reflects~~forward ~~fair value~~periods. ~~For~~In ~~illiquid~~circumstances ~~long-term~~where ~~power agreements,~~ fair value iscannot ~~based~~be ~~upon~~verified awith ~~discounting~~observable ofmarket ~~future~~transactions, ~~electricity~~it ~~and~~is ~~natural~~possible ~~gas~~that ~~prices derived from~~ a ~~proprietary~~different valuation model ~~using~~could ~~the risk~~produce ~~free~~a ~~discount~~materially ~~rate~~different ~~for~~estimate aof ~~similar~~fair ~~duration~~value. ~~contract~~Modeling methodologies, ~~adjusted~~inputs ~~for credit risk~~ and ~~market~~techniques ~~liquidity.~~are ~~Changes~~reviewed inand ~~fair~~assessed ~~value~~as ~~are~~markets ~~based~~continue ~~on changes~~ to ~~forward~~develop ~~market~~and ~~prices,~~more ~~including~~pricing ~~forecasted~~information ~~prices for~~becomes ~~illiquid~~available ~~forward~~and ~~periods.~~the ~~The~~ fair value ofis ~~the~~adjusted ~~majority~~when ofit ~~Midwest~~is ~~Generation's~~concluded ~~derivatives~~ that ~~are~~a ~~classified~~change asin ~~Level 3~~inputs isor ~~determined~~techniques ~~using~~would ~~uncorroborated~~result ~~non-binding~~in ~~broker quotes~~a ~~and~~new ~~models~~valuation that ~~may~~better ~~require~~reflects ~~EMMT~~the ~~to extrapolate short-term observable inputs in order to calculate~~ fair value. ~~Broker~~of ~~quotes~~those ~~are~~derivative ~~obtained from several brokers and compared against each other for reasonableness~~contracts.

The following table sets forth the valuation techniques and significant unobservable inputs used to derive fair value for Level 3 assets and liabilities:



March 31, 2012
			Quantitative Information About Level 3 Fair Value Measurements
	Fair Value
	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Electricity	(in millions)
Power contracts	$	1	$	—	Discounted cash flows	Power prices	$26.32 - $26.32 ($26.32)
Netting	—		—
Total	$	1	$	—

Level 3 Fair Value Sensitivity

For power contracts, generally, an increase (decrease) in long-term forward power prices at illiquid locations relative to the contract price will increase (decrease) 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~~as ~~offsetting changes recorded on the consolidated statements of income. For~~ derivative ~~instruments~~assets ~~that~~or ~~qualify~~liabilities ~~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~~operations.

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. 8

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For derivative instruments that qualify for hedge accounting treatment, the fair value is recognized on Midwest Generation's consolidated balance sheets as derivative assets or liabilities with offsetting changes in fair value, to the extent effective, recognized in accumulated other comprehensive loss until reclassified into earnings when the related forecasted transaction occurs. The portion of a cash flow hedge that does not offset the change in the fair value of the transaction being hedged, which is commonly referred to as the ineffective portion, is immediately recognized in earnings. The results of derivative activities are recorded in cash flows from operating activities on the consolidated statements of cash flows.

Notional Volumes of Derivative Instruments

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

September 30, 2011
March 31, 2012
Commodity	Instrument	~~Instrument~~Classification	Unit of Measure	~~Classification~~Cash FlowHedges	~~Unit of Measure~~	EconomicHedges	~~Cash Flow Hedges~~			~~Economic Hedges~~
Electricity	Forwards/Futures	~~Forwards/Futures~~Sales, net	GWh	~~Sales~~5,739	~~GWh~~1	1		~~13,242~~3	1		~~10,619~~	3
Electricity	Capacity	~~Forwards/Futures~~Sales	MW-Day(in thousands)	~~Purchases~~24	~~GWh~~2	—		~~101~~	1		~~10,615~~	3
Electricity	Congestion	~~Capacity~~Purchases	GWh	~~Sales~~—	~~MW-Day (in thousands)~~	186		984	2		—
Electricity		Congestion		Purchases	GWh			—			968	4
Fuel oil	Forwards/Futures	Purchases	barrels	—		360,000
Fuel oil		Forwards/Futures		Purchases	barrels			—			240,000
December 31, 2011
Electricity	Forwards/Futures	Sales, net	GWh	7,978	1	227		3
Electricity	Capacity	Sales	MW-Day(in thousands)	61	2	—
Electricity	Congestion	Purchases	GWh	—		608		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.

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

103 These positions adjust financial and physical positions, or day-ahead and real-time positions, to reduce costs or increase gross margin. The net sales positions of these categories are primarily related to hedge transactions that are not designated as cash flow hedges.


⁴	Congestion contracts include financial transmission rights, transmission congestion contracts or congestion revenue rights. These positions are similar to a swap, where the buyer is entitled to receive a stream of revenues (or charges) based on the hourly day-ahead price differences between two locations.

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Fair Value of Derivative Instruments

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

September 30, 2011
March 31, 2012
	Derivative Assets	~~Derivative Assets~~									~~Derivative Liabilities~~		Derivative Liabilities
(in millions)	Short-term	~~Short-term~~			Long-term			~~Subtotal~~	Subtotal		~~Short-term~~		Short-term	~~Long-term~~			~~Subtotal~~Long-term			~~Net Assets~~	Subtotal			Net Assets
Cash flow hedges	$	$49	26		$	83		$	34$	52	$	13	$	$1	6		$	19—		$	15$	1		$	51
Economic hedges	47		21		1	3			2448			22	36		2		1	24			—37			11
			47			11			58			35			8			43			15
	96				4				100				37				1				38			62
Netting1	(36		~~(32~~)	)	(1	(8	)		(4037	)	)	~~(32~~	)(36		(8)	)	(1	~~(40~~	)		—(37		)	—
Total	$	$60	15		$	3		$	18$	63	$	3	$	$1	—		$	3—		$	15$	1		$	62
December 31, 2010
December 31, 2011
Cash flow hedges	$	$39	41		$	21		$	43$	40	$	3	$	$2	2		$	5—		$	38$	2		$	38
Economic hedges	24		26		—	1			2724			20	20		—		—	20			720			4
			67			3			70			23			2			25			45
	63				1				64				22				—				22			42
Netting1	(20		~~(20~~)	)	—	—			(20	)	)	~~(20~~	)(20		—)		—	~~(20~~	)		—(20		)	—
Total	$	$43	47		$	31		$	50$	44	$	3	$	$2	2		$	5—		$	45$	2		$	42

1 ~~1Netting~~ 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 cash flow hedge activity as part of accumulated other comprehensive loss:

		Cash Flow Hedge Activity1 Nine Months Ended September 30,
	Cash Flow Hedge Activity1
								Income Statement Location
	Three Months Ended March 31,								Income Statement Location
(in millions)	2012	~~2011~~			~~2010~~2011
Beginning of period derivative gains	$	$34	37		$	~~111~~37
Effective portion of changes in fair value	29		(8	)	2	92
Reclassification to net income			(16	)		(74	)	Operating revenues
Reclassification to earnings	(16		)		(11		)		Operating revenues
End of period derivative gains	$	$47	13		$	~~129~~28

1 ~~1Unrealized~~ Unrealized derivative gains are before income taxes. The after-tax amounts recorded in accumulated other comprehensive loss at ~~September 30~~March 31, ~~2011~~2012 and ~~2010~~2011 were $8 29 million and $79 17 million, respectively.

For additional information, see Note 8—Accumulated Other Comprehensive 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 of $21 million and ~~$1 million~~none during the ~~third~~first quarters of ~~2011~~2012 and ~~2010, respectively, and $1 million and $9 million during the nine months ended September 30,~~ 2011 ~~and 2010~~, respectively, in operating revenues on the consolidated statements of ~~income~~operations representing the amount of cash flow hedge ineffectiveness.

11The effect of realized and unrealized gains (losses) from derivative instruments used for non-trading purposes on the consolidated statements of operations is presented below:



	Income Statement Location	Three Months Ended March 31,
(in millions)	Income Statement Location	2012		2011
Economic hedges	Operating revenues	$	11	$	1
	Fuel	5		6

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~~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:~~ Collateral

		Three Months Ended September 30,					Nine Months Ended September 30,
	Income Statement Location
(in millions)		2011			2010		2011		2010
Economic hedges	Operating revenues	$	(4	)	$	4	$	3	$	—
	Fuel		(3	)		2		1		—

Certain derivative instruments contain collateral deposit requirements. Midwest Generation sells merchant energy and capacity through Edison Mission Marketing & Trading, Inc. (EMMT), which has a below investment grade credit rating. Midwest Generation has cash on hand and may have 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 31, 2012, EMMT had no borrowings outstanding under this revolving credit agreement. Future increases in power prices could expose Midwest Generation to additional collateral postings.

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 September 30, 2011, EMMT had no borrowings outstanding under this revolving credit agreement. Future increases in power prices could expose Midwest Generation to additional collateral postings.

Note 4. Income Taxes

Midwest Generation had an effective income tax rate of 4136% and 3740% for the ~~nine~~first ~~months~~quarters ~~ended~~of ~~September 30,~~2012 ~~2011~~ and ~~2010~~2011, 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~~.

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.

Note 5. Compensation and Benefit Plans

Pension Plans and Postretirement Benefits Other Than Pensions

Pension Plans

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, Midwest Generation made contributions of $112.9 million, and during the remainder of ~~2011~~ 2012, expects to make $310.4 million of additional contributions.

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The following were components of pension expense:

		Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	2012	~~2011~~			~~2010~~2011			~~2011~~			~~2010~~
Service cost	$	$3.6	~~3.3~~		$	23.54		$	~~9.7~~		$	~~8.7~~
Interest cost	2.2		~~2.1~~		2.1	~~1.9~~			~~6.3~~			~~5.9~~
Expected return on plan assets	(2.3		~~(2.1~~)	)	(2.2	~~(1.6~~	)		~~(6.3~~	)		~~(4.8~~	)
Amortization of prior service costs			—			0.1			0.1			0.2
Net amortization	0.5				0.2
Amortization of net loss			—			(0.1	)		0.1			—
Total expense	$	4.0			$	3.5
Total expense		$	3.3		$	2.8		$	9.9		$	10.0

Postretirement Benefits Other Than Pensions

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, Midwest Generation made contributions of $0.52 million, and during the remainder of ~~2011~~ 2012, expects to make $0.16 million of additional contributions.

The following were components of postretirement benefits expense:

		Three Months Ended September 30,					Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	2012	~~2011~~		~~2010~~2011			~~2011~~		~~2010~~
Service cost	$	$0.4	~~0.4~~	$	0.24		$	~~1.2~~	$	~~0.6~~
Interest cost	0.7		~~0.7~~	0.7	~~0.5~~			~~2.2~~		~~1.6~~
Amortization of prior service credit			0.1		(0.2	)		0.2		(0.4	)
Net amortization	0.4			0.2
Amortization of net loss			0.1		0.2			0.4		0.3
Total expense	$	1.5		$	1.3
Total expense		$	1.3	$	0.7		$	4.0	$	2.1

~~Note 6. Commitments and Contingencies~~ 11

Commitments

Fuel Supply Contracts and Coal Transportation Agreements

At September 30, 2011, Midwest Generation had commitments to purchase coal from third-party suppliers at fixed prices, subject to adjustment clauses. These commitments, together with estimated transportation costs under existing agreements, are estimated to aggregate $611 million, which consists of: $128 million for the remainder of 2011, $188 million in 2012, $145 million in 2013, and $150 million in 2014.

Capital Commitments

At September 30, 2011, Midwest Generation had firm commitments to spend approximately $31 million during the remainder of 2011 and $16 million in 2012 for 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.

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Note 6. Commitments and Contingencies

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 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. 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 owner-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 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 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. The obligations under this agreement are not subject to a maximum liability. The supplemental agreement had an initial five-year term with an automatic renewal provision for subsequent one-year terms (subject to the right of either party to terminate); pursuant to the automatic renewal provision, it has been extended until February ~~2012~~2013. There were approximately ~~230~~ 245 cases for which Midwest Generation was potentially liable that had not been settled and dismissed at ~~September~~March 3031, ~~2011~~2012. Midwest Generation had recorded a liability of $5554 million at ~~September~~March 3031, ~~2011~~2012 related to this 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.

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, EME, Midwest Generation and another wholly owned subsidiary of EME entered into tax indemnity agreements. Under certain of these tax indemnity agreements, Midwest Generation, as the ~~lessees~~lessee in the sale-leaseback transactions agreed to indemnify the respective lessors for specified adverse tax consequences that could result from certain situations set forth in each tax indemnity agreement, including specified defaults under the respective leases. Although the Collins Station lease terminated in April 2004, Midwest Generation's indemnities in favor of its former lease equity investors are still in effect. EME provided similar indemnities in the sale-leaseback transactions related to the Powerton and Joliet Stations in Illinois. 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 range of estimated obligation which could be triggered by a valid claim from the lessors. Midwest Generation has not recorded a liability for these matters.

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significant. Due to the nature of these potential obligations, Midwest Generation cannot determine a maximum potential liability 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~~cannot ~~not~~determine ~~recorded~~ a ~~liability~~ ~~related~~range toof ~~these~~estimates ~~indemnities.~~and ~~The~~has ~~overall~~not ~~maximum~~recorded ~~amount~~a ofliability ~~the~~related ~~obligations~~to ~~under~~ these ~~indemnifications cannot be reasonably estimated~~indemnities.

Contingencies

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

~~New Source Review and Other Litigation~~ 12

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 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.

Nine of ten PSD claims have been 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 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 for civil penalties in the remaining PSD claim, but noted that the plaintiffs will be required to convince the court that the statute of limitations should be equitably tolled. The court did not address other counts in the complaint that allege violations of opacity and particulate matter limitations under the Illinois State Implementation Plan and Title V of the CAA. Trial of the liability portion of the case is scheduled to commence June 3, 2013. A motion filed by the plaintiffs requesting that the dismissals be certified as "partial final judgments" capable of appeal, and requesting that the remaining claims be stayed pending such an appeal, is pending.

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~~In May~~New ~~2011,~~Source ~~two~~Review ~~complaints were filed against Midwest Generation in the Northern District of Illinois by residents living near the Crawford~~ and ~~Fisk~~Other facilities on behalf of themselves and all others similarly situated, each asserting claims of nuisance, negligence, trespass, and strict liability. The plaintiffs sought to have their suits certified as a class action and requested injunctive relief, as well as compensatory and punitive damages. In October 2011, the complaints were dismissed for lack of federal jurisdiction. Midwest Generation does not know whether the plaintiffs will appeal the dismissal or file a complaint in state court. Litigation

~~Adverse decisions~~In inAugust ~~these~~2009, ~~cases~~the ~~could~~United ~~involve~~States ~~penalties~~Environmental Protection Agency (US EPA) and ~~remedial~~the ~~actions~~State ~~that~~of ~~could~~Illinois ~~have~~filed a ~~material~~complaint ~~impact~~in onthe 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 ~~financial~~Prevention ~~condition~~of ~~and~~Significant ~~results~~Deterioration (PSD) requirements and of ~~operations~~the New Source Performance Standards of ~~Midwest~~the ~~Generation~~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 ~~cannot~~and ~~predict~~Commonwealth Edison violated certain operating permit requirements under Title V of the ~~outcome~~CAA. Finally, the US EPA alleged violations of ~~these~~certain ~~matters~~opacity orand ~~estimate~~particulate matter standards at the ~~impact~~Midwest onGeneration ~~its~~plants. ~~facilities~~In addition to seeking penalties ranging from $25,000 ~~its~~to ~~results~~$37,500 ofper ~~operations~~violation, ~~financial~~per ~~position~~day, orthe ~~cash~~complaint ~~flows~~called for an injunction ordering Midwest Generation to install controls sufficient to meet BACT emission rates at all units subject to the complaint and other remedies. 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 intervened in the case.

Nine of the ten PSD claims raised in the complaint have been dismissed, along with claims related to alleged violations of Title V of the CAA, to the extent based on the dismissed PSD claims, and all claims asserted against Commonwealth Edison and EME. The court denied a motion to dismiss a claim by the Chicago-based environmental action groups for civil penalties in the remaining PSD claim, but noted that the plaintiffs will be required to convince the court that the statute of limitations should be equitably tolled. The court did not address other counts in the complaint that allege violations of opacity and particulate matter limitations under the Illinois State Implementation Plan and Title V of the CAA. The dismissals have been certified as "partial final judgments" capable of appeal, and an appeal is pending before the Seventh Circuit Court of Appeals. The remaining claims have been stayed pending the appeal. In February 2012, certain of the environmental action groups that had intervened in the case entered into an agreement with Midwest Generation to dismiss without prejudice all of their opacity claims as to all defendants. The agreed upon motion to dismiss was approved by the court on March 26, 2012.

In January 2012, two complaints were filed against Midwest Generation in Illinois state court by residents living near the Crawford and Fisk Stations 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. The complaints are similar to two complaints previously filed in the Northern District of Illinois, which were dismissed in October 2011 for lack of federal jurisdiction. In March 2012, Midwest Generation filed motions to dismiss the cases, which are pending.

Adverse decisions in these cases could involve penalties, remedial actions and damages that could have a material 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 the Midwest Generation plants, or its results of operations, financial position or cash flows. Midwest Generation has not recorded a liability for these matters.

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 a probable amount of approximately $109 million at ~~September~~March 3031, ~~2011~~2012 for estimated environmental investigation and remediation costs for four stations at 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~~could be reasonably estimated. Midwest Generation also has identified stations for which a reasonable estimate cannot be made. 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~~require 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

Developments ~~Cross-State~~during ~~Air~~the ~~Pollution~~first ~~Rule~~ quarter of 2012 include the following:

OnHazardous ~~July 6, 2011, the US EPA adopted the Cross-State~~ Air ~~Pollution~~Pollutant Rule (CSAPR). CSAPR is the final form of a previously proposed replacement for the Clean Air Interstate Rule (CAIR), originally called the Clean Air Transport Rule that was released in 2010. CSAPR establishes emissions reductions for annual sulfur dioxide (SO2) emissions and annual and ozone season nitrogen oxide (NOx) 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. Regulations

CSAPR, like the CAIR, is an allowance-based regulation that provides for emissions trading. Under CSAPR, the amount of actual SO2 or NOx emissions from operations will need to be matched by a sufficient amount of SO2 or NOx allowances that are either allocated or purchased in the open market. In ~~connection~~December ~~with CSAPR~~2011, the US EPA ~~has,~~announced ~~for~~the ~~each~~Mercury ~~phase, established SO2~~ and ~~NOx~~Air ~~allowance~~Toxics ~~allocations~~Standards ~~for~~(MATS) ~~each state and each generating unit subject to the regulation~~rule, ~~and~~limiting atemissions ~~the close~~ of ~~the~~hazardous ~~annual~~air orpollutants ~~seasonal~~from ~~compliance~~coal- ~~period, units must surrender allowances for each ton of SO2~~ and ~~NOx~~oil-fired ~~emitted~~electrical orgenerating ~~face penalties~~units. ~~While~~The ~~trading of allowances is permitted within designated groups of states, the~~ rule ~~provides~~ ~~for~~was ~~penalties~~published ~~against a unit with emissions~~ in ~~excess of its predefined "assurance level," but only if~~ the ~~state~~Federal inRegister ~~which~~on ~~it is located also exceeds its budgeted emissions level. On~~

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~~October~~February 616, ~~2011~~ 2012, ~~the~~and USbecame ~~EPA~~effective ~~announced~~on aApril 16, ~~proposed~~2012. ~~revision~~A tonumber ~~the~~of ~~rule~~parties ~~that~~have ~~would~~filed ~~effectively~~notices ~~eliminate~~of ~~such~~appeal ~~penalties~~challenging in the ~~first phase~~rule.

~~Midwest Generation~~Greenhouse ~~believes~~Gas ~~its~~Regulation current environmental remediation plan developed to comply with the CPS, along with the allowances allocated to it under CSAPR, will be sufficient to comply with the requirements of CSAPR and the US EPA's proposed regulation on hazardous air pollutant (HAP) emissions. In order to achieve compliance, Midwest Generation has begun work to install SO2 controls at certain of its plants.

In March ~~Proposed~~2012, ~~Hazardous~~the ~~Air~~US ~~Pollutant~~EPA ~~Regulations~~ announced proposed carbon dioxide emissions limits for new power plants. The status of the US EPA's efforts to develop greenhouse gas emissions performance standards for existing plants is unknown.

InGreenhouse ~~March~~Gas 2011, the US EPA proposed National Emission Standards for Hazardous Air Pollutants, limiting emissions of HAPs from coal- and oil-fired electrical generating units. This regulation is expected to be finalized by December 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. Litigation

In March ~~Ozone~~2012, the federal district court in Mississippi dismissed, in its entirety, the purported class action complaint filed by private citizens in May 2011, naming a large number of defendants, including Midwest Generation's parent company EME, for damages allegedly arising from Hurricane Katrina. In April 2012, the plaintiffs filed an appeal with the Fifth Circuit Court of Appeals. Plaintiffs allege that the defendants' activities resulted in emissions of substantial quantities of greenhouse gases that have contributed to climate change and ~~Particulates~~ 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.

In September 2011, President Obama announced that the proposed revision to the National Ambient Air Quality Standards (NAAQS) for ozone, which was expected to have set a more stringent standard for primary ozone and a distinct secondary standard to protect sensitive vegetation and ecosystems, was being withdrawn. The ozone NAAQS established in 2008 remains in place, but the implementation process must be completed before the 0.075 parts-per-million standard can be enforced. The US EPA has indicated that it intends to issue initial area designations of attainment, nonattainment and unclassifiable areas across the nation in 2012. States will then be required to develop and submit state implementation plans outlining how compliance with the 2008 NAAQS will be achieved. New primary and secondary ozone standards are expected in 2014.

Water Quality—Clean Water Act

In March 2011, the US EPA 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.

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Parties to the case brought by the Alaskan Native Village of Kivalina against Edison International and other defendants, 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 stay of the appeal has now been lifted and argument before the Ninth Circuit is scheduled for November 2011. Kivalina is seeking damages of up to $400 million for the cost of relocating the village.

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. Edison International was dismissed as a defendant in this complaint in July 2011.

Note 8. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following:

(in millions)	UnrealizedGains on Cash FlowHedges, Net		~~Unrealized Gains on Cash Flow Hedges, Net~~		UnrecognizedLosses andPrior ServiceAdjustments, Net1	~~Unrecognized Losses and Prior Service Adjustments, Net1~~			~~Accumulated Other Comprehensive Loss~~AccumulatedOtherComprehensiveLoss
Balance at December 31, 2010			$	23		$	(26	)	$	(3	)
Balance at December 31, 2011	$	21			$	(38	)		$	(17	)
Current period change	~~Current period change~~8			~~(15~~	)1		1		9	~~(14~~	)
Balance at September 30, 2011			$	8		$	(25	)	$	(17	)
Balance at March 31, 2012	$	29			$	(37	)		$	(8	)

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

Unrealized gains on cash flow hedges, net of tax, at ~~September~~March 3031, ~~2011~~2012, 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 $727 million of unrealized gains on cash flow hedges, net of tax, are expected to be reclassified into earnings during the next 12 months. Management expects that reclassification of net unrealized gains will increase energy revenues recognized at market prices. Actual amounts ultimately reclassified into earnings over the next 12 months could vary materially from this estimated amount as a result of changes in market conditions. The maximum period over which a commodity cash flow hedge is designated is ~~December~~May 31, ~~2013~~2014.

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Note 9. Supplemental Cash Flows Information

			Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	2012		~~2011~~		2011	~~2010~~
Cash paid
Interest	~~Interest~~$	19	$	43	$	$23	51
	Income taxes			8			19

19Accrued capital expenditures at March 31, 2012 were $2 million. Accrued capital expenditures will be included as an investing activity in the consolidated statements of cash flows in the period paid.

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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:

20• 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;


•	volatility of market prices for energy and capacity;


•	the difficulty of predicting wholesale prices, transmission congestion energy demand, and other aspects of the complex and volatile markets in which Midwest Generation participates;


•	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 CAIR or CSAPR (as applicable) and the MATS rule;


•	Midwest Generation's significant cash requirements and its limited ability to borrow funds and access the capital markets on reasonable terms;


•	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 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 ISOs and RTOs;


•	market volatility and other market conditions that could increase Midwest Generation's obligations to post collateral beyond the amounts currently expected, and the potential effect of such conditions on the ability of Midwest Generation to provide sufficient collateral in support of its hedging activities and purchases of fuel;


•	completion of permitting and construction of Midwest Generation's capital projects;


•	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;


•	competition in all aspects of Midwest Generation's business;


•	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;

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~~conditions on~~• ~~the~~effects ~~ability~~ of ~~Midwest~~legal ~~Generation~~proceedings, tochanges ~~provide~~in ~~sufficient~~or ~~collateral~~interpretations inof ~~support~~tax oflaws, ~~its~~rates ~~hedging~~or ~~activities~~policies, and ~~purchases~~changes ofin ~~fuel~~accounting standards; and

~~Additional information~~• ~~about~~general ~~risks and uncertainties~~political, ~~including~~economic ~~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~~conditions. ~~Readers should review future reports filed by Midwest Generation with the Securities and Exchange Commission.~~

~~This MD&A~~Additional ~~discusses~~information ~~material~~about ~~changes~~risks inand uncertainties, including more detail about the ~~results~~factors ofdescribed ~~operations~~above, ~~financial~~is ~~condition~~contained throughout this MD&A and ~~other~~in ~~developments~~"Item 1A. Risk Factors" on page 12 of Midwest Generation's ~~since~~annual report on Form 10-K for the year ended December 31, ~~2010,~~2011. ~~and~~Readers asare ~~compared~~urged to ~~the~~read ~~third~~this ~~quarter of~~entire ~~2010~~quarterly report on Form 10-Q and the ~~nine~~annual ~~months~~report ~~ended~~on ~~September~~Form ~~30,~~10-K ~~2010.~~for ~~This~~the ~~discussion~~year ~~presumes~~ended ~~that~~December 31, ~~the~~2011, ~~reader~~including ~~has~~the ~~read~~information orincorporated ~~has~~by ~~access~~reference, and to carefully consider the ~~MD&A~~risks, ~~included~~uncertainties inand ~~Item 7~~other offactors that affect Midwest Generation's ~~annual~~business. ~~report on Form 10~~Forward-Klooking ~~for~~statements speak only as of the ~~year~~date ~~ended~~they ~~December 31~~are made, ~~2010~~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, 2011, and as compared to the first quarter ended March 31, 2011. 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, 2011.

MANAGEMENT'S OVERVIEW

Midwest Generation ishad a ~~limited~~net ~~liability~~loss ~~company~~of ~~engaged~~$9 million infor the ~~business~~first quarter of ~~operating~~2012, ~~and~~compared ~~selling~~to ~~energy~~net ~~and~~income ~~capacity from its 5,172 MW~~ of ~~coal-fired~~ ~~generating~~$48 million ~~plants~~for ~~and~~the ~~305~~first MWquarter of ~~oil-fired peaking plants~~2011. The ~~profitability~~decrease in earnings of ~~Midwest~~$57 million ~~Generation~~was ~~has~~primarily ~~been~~attributable ~~significantly~~to lower inaverage ~~2011~~realized ~~compared~~energy toprices, ~~2010~~lower ascapacity aprices, ~~result of~~higher ~~lower~~fuel ~~realized energy~~ prices, and ~~higher~~reduced ~~fuel costs~~generation. InReduced ~~addition,~~generation ~~the~~resulted ~~profitability~~from oflower ~~the~~economic ~~Midwest~~dispatch, ~~Generation~~increased ~~plants~~planned ismaintenance ~~expected~~in to2012 beversus ~~adversely~~2011 ~~affected~~and by a ~~decline~~weather anomaly seen in ~~capacity~~March ~~prices~~of ~~and~~2012 ~~higher rail~~when ~~transportation~~unseasonably ~~costs~~warm ~~(due~~weather increased river temperature to ~~the~~levels ~~expiration~~that atimpacted the ~~end~~thermal ofdischarge ~~2011~~limits of athe ~~favorable~~Joliet ~~long-term~~and ~~rail~~Will ~~contract)~~County units. ~~For~~The ~~discussion~~abundance of ~~energy~~low-priced ~~and~~natural ~~fuel~~gas ~~price~~has ~~risks,~~continued ~~see~~to ~~"Market~~result ~~Risk Exposures—Commodity~~in ~~Price~~increased ~~Risk"~~competition ~~and refer~~from tonatural ~~"Market~~gas-fired ~~Risks"~~generating units in ~~Item 1A~~the onmarkets ~~page 20~~in ofwhich Midwest Generation operates, and generation from Midwest Generation's ~~annual~~plants ~~report~~has onbeen ~~Form 10-K~~correspondingly ~~for~~affected. ~~the~~Effective ~~year~~January ~~ended~~1, ~~December 31~~2012, ~~2010.~~a Asfavorable along-term ~~result,~~rail contract that supplied Midwest Generation's ~~may~~fleet ~~incur~~expired ~~net~~and ~~losses~~was inreplaced ~~subsequent~~by ~~years~~a ~~unless~~higher ~~energy~~priced ~~and~~contract. ~~capacity~~Midwest ~~prices~~Generation ~~increase~~expects orthat its ~~costs~~average ~~decline.~~fuel cost ($/MWh) will increase by approximately one-third in 2012.

21At March 31, 2012, Midwest Generation had cash and cash equivalents of $230 million and $500 million of available borrowing capacity under its credit facility maturing in June 2012. There can be no assurance that Midwest Generation will be eligible to draw on its credit facility prior to maturity. Any replacement of this credit line will likely be on less favorable terms and conditions, and there is no assurance that Midwest Generation will, or will be able to, replace this credit line or any portion of it.

~~Table~~Unless energy and capacity prices increase substantially, Midwest Generation expects that it will incur an operating cash flow deficit and operating losses in 2012 and subsequent years. A continuation of ~~Contents~~these adverse trends coupled with the need to retrofit its plants to comply with governmental regulations will strain Midwest Generation's liquidity. In order to retrofit its coal-fired plants, Midwest Generation will need to borrow additional funds or receive additional contributions from EME. Midwest Generation plans to fund operating cash flow deficits through a combination of cash on hand, management of fuel inventories, deferral of operations and maintenance expenses and acceleration of the timing of collections from affiliates. There is no assurance that there will be sufficient liquidity without additional equity contributions from EME.

Highlights of Operating Results

Midwest Generation's net income for the third quarter and nine months ended September 30, 2011 decreased $51 million and $81 million, respectively, compared to the corresponding periods of 2010. The third quarter decrease in earnings was due to lower capacity revenues, average realized energy prices and generation, and a gain in 2010 from the sale of bankruptcy claims against Lehman. The year-to-date decrease in earnings was due to lower average realized energy prices and generation, and a gain in 2010 from the sale of the bankruptcy claims against Lehman.

Cross-State Air Pollution Rule

On July 6, 2011, the US EPA adopted the CSAPR. CSAPR is the final form of a previously proposed replacement for the CAIR, originally called the Clean Air Transport Rule that was released in 2010. CSAPR establishes emissions reductions for annual SO2 emissions and annual and ozone season NOx 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 NOx emissions from operations will need to be matched by a sufficient amount of SO2 or NOx 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 NOx allowance allocations for each state and each generating unit subject to the regulation, and at the close of the annual or seasonal compliance period, units must surrender allowances for each ton of SO2 and NOx emitted or face penalties. While trading of allowances is permitted within designated groups of states, the rule provides for penalties against a unit with emissions in excess of its predefined "assurance level," but only if the state in which it is located also exceeds its budgeted emissions level. On October 6, 2011, the US EPA announced a proposed revision to the rule that would effectively eliminate such penalties in the first phase.

Midwest Generation believes its current environmental remediation plan developed to comply with the CPS, along with the allowances allocated to it under CSAPR, will be sufficient to comply with the requirements of CSAPR and the US EPA's proposed regulation on HAP emissions. In order to achieve compliance, Midwest Generation has begun work to install SO2 controls at certain of its plants.

Environmental Compliance Plans and Costs

During ~~2011,~~the ~~Midwest~~first ~~Generation~~quarter ~~continued its permitting and planning activities for NOx and SO2 controls to meet the requirements~~ of ~~the CPS. Based on its continuing review~~2012, Midwest Generation ~~also~~continued ~~does not expect the US EPA's proposed National 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 continue to~~ develop and implement a compliance program that includes the ~~use~~operation of ~~activated~~ACI ~~carbon injection~~systems, upgrades to particulate removal systems and the use of dry sorbent injection, combined with ~~its~~the use of low sulfur PRB coal, to meet emissions limits for criteria pollutants, such as NOx and SO2 as well as for ~~HAPs~~hazardous air pollutants, such as mercury, acid gas and non-mercury metals. Based on stack tests performed at various Midwest Generation plants, Midwest Generation believes that currently installed activated carbon injection and proposed particulate removal equipment is sufficient to achieve or exceed the mercury standards outlined in the US EPA's existing and proposed rules.

22Midwest Generation has decided to shut down its Fisk and Crawford Stations in September 2012. The shut downs also have been approved by PJM, the regional transmission organization that controls the area where these plants are located. In total, Midwest Generation estimates that 150 to 180 employees will be affected. The timing and amount of severance benefits, if any, will be determined after completion of an ongoing review of personnel based on seniority and other factors. Severance benefits are not required under the existing collective bargaining agreement. Midwest Generation has sold capacity forward through May 31, 2015 for both Fisk and Crawford. However, Midwest Generation has not sold its full capacity forward during those periods. Midwest Generation would expect to cover its capacity obligations associated with the Fisk and

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Crawford units through a combination of improved fleet performance, fleet capacity not previously sold forward and, if necessary, market transactions. In ~~February~~ ~~2011~~connection with the shut down of these stations, Midwest Generation expects to receive a tax deduction equal to its tax basis in the ~~Illinois~~facilities, ~~Environmental~~although ~~Protection~~realization ~~Agency~~of ~~issued~~these ~~construction~~tax benefits may not occur for several years. At March 31, 2012, the tax basis of the Fisk and Crawford Stations were $64 million and $87 million, respectively. Decisions regarding whether or not to proceed with retrofitting any particular remaining units to comply with CPS requirements for SO2 emissions, including those that have received permits, ~~authorizing~~are subject to a number of factors, such as market conditions, regulatory and legislative developments, liquidity and forecasted commodity prices and capital and operating costs applicable at the time decisions are required or made. Midwest Generation may also elect to shut down units, instead of installing controls, to be in compliance with the CPS. Final decisions on whether to install acontrols, ~~dry~~to ~~sorbent~~install ~~injection~~particular ~~system~~kinds ~~using~~of ~~Trona~~controls, and to actually expend capital or ~~other~~continue ~~sodium-based sorbents~~with atthe expenditure of capital will be made as required, subject to the ~~Powerton~~requirements ~~Station's~~of ~~Units~~the 5CPS and 6other applicable regulations. Units that are not retrofitted may continue to operate until required to shut down by applicable regulations or operate with reduced output.

~~Decisions regarding~~Based ~~whether~~on orwork ~~not~~ to ~~proceed~~date, ~~with~~Midwest Generation estimates the cost of retrofitting ~~units~~the large stations (Powerton, Joliet Units 7 and 8 and Will County) using dry scrubbing with sodium-based sorbents to comply with CPS requirements for SO2 emissions, ~~including~~and ~~those~~the ~~that~~associated ~~have~~upgrading ~~received~~of ~~permits~~existing particulate removal systems, ~~remain~~would ~~subject~~be up to ~~a number~~approximately of$628 million. ~~factors,~~In ~~such~~order asto ~~market~~retrofit ~~conditions~~its coal-fired plants, ~~regulatory~~Midwest ~~and~~Generation ~~legislative~~will ~~developments,~~need ~~and~~to ~~forecasted~~borrow ~~commodity~~funds ~~prices~~or ~~and~~receive ~~capital~~additional ~~and~~contributions ~~operating~~from ~~costs~~EME. ~~applicable~~The atcost of retrofitting Joliet Unit 6 is not included in the ~~time~~large ~~decisions~~unit ~~are~~amounts ~~required~~as ~~or made.~~it is less likely that Midwest Generation ~~could~~will ~~also~~make ~~elect~~retrofits tofor ~~temporarily~~this orunit. ~~permanently~~The ~~shut~~estimated ~~down~~cost ~~units~~of retrofitting Joliet Unit 6, ~~instead~~if made, would be approximately $75 million, while the estimated cost of ~~installing~~retrofitting ~~controls~~the Waukegan Station, toif made, would be approximately $160 million. For further discussion related to the impairment policy on Midwest Generation's unit of account, refer to "Critical Accounting Estimates and Policies—Impairment of Long-Lived Assets" in ~~compliance~~Item 7 ~~with~~on page 33 of Midwest Generation's annual report on Form 10-K for the ~~CPS.~~year ended December 31, 2011.

~~Therefore, decisions~~Environmental ~~about~~Regulation any particular combination of retrofits and shutdowns Midwest Generation may ultimately employ also remain subject to conditions applicable at the time decisions are required or made. Final decisions on whether to install controls, to install particular kinds of controls, and to actually expend capital or continue with the expenditure of 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. Pending such final decisions, Midwest Generation plans to continue with any work necessary to comply with issued permits. Developments

For a ~~Liquidity~~ discussion of environmental regulation developments, see "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 7. Environmental Developments."

At September 30, 2011, Midwest Generation had cash and cash equivalents of $333 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. The Midwest Generation credit facility matures in June 2012. Midwest Generation may seek to extend or replace this facility or seek other means of credit support to meet its liquidity requirements. 17

Midwest Generation has not yet committed to the completion of environmental compliance activities for its plants. Additional expenditures for NOx and SO2 controls through 2013 are estimated at $514 million based on an assumption that Midwest Generation would retrofit all units over the compliance period, which extends to 2018 at an estimated aggregate cost of $1.2 billion. 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 to the extent these are available at the time funds are required, obtain funding from EME, or seek debt financing to fund capital expenditures.

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RESULTS OF OPERATIONS

Summary

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

				Three Months Ended September 30,					Nine Months Ended September 30,
	Three Months Ended March 31,
				2011			2010		2011		2010
	2012				2011
Operating Revenues (in millions)	$	233		$	~~366~~$	351	$	~~444~~	$	~~997~~	$	~~1,104~~
Statistics
Generation (in GWh)	~~Generation (in GWh)~~5,339				7,~~957~~470			~~8,449~~		~~20,987~~		~~22,091~~
Aggregate plant performance	~~Aggregate plant performance~~
Equivalent availability	81.1	~~Equivalent availability~~	%		8987.4%0		%	~~91.7%~~		~~80.0%~~		~~79.4%~~
Capacity factor	47.4	~~Capacity factor~~	%		6967.8%0		%	~~70.0%~~		~~62.0%~~		~~61.7%~~
Load factor	58.4	~~Load factor~~	%		7877.1%0		%	~~76.4%~~		~~77.5%~~		~~77.8%~~
Forced outage rate	4.3	~~Forced outage rate~~	%		75.2%1		%	~~5.4%~~		~~5.9%~~		~~6.9%~~
Average realized price/MWh	~~Average realized price/MWh~~$	33.62		$	~~40.05~~$	36.65	$	~~42.09~~	$	~~38.19~~	$	~~40.99~~
Capacity revenues only (in millions)	~~Capacity revenues only (in millions)~~$	49		$	50$	77	$	79	$	~~195~~	$	~~184~~
Average realized fuel costs/MWh	~~Average realized fuel costs/MWh~~$	22.51		$	~~19.43~~$	16.73	$	~~18.08~~	$	~~18.32~~	$	~~17.41~~

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 September 30,						Nine Months Ended September 30,
(in millions)	Three Months Ended March 31,
(in millions)			2011			2010			2011			2010
	2012				2011
Operating revenues	$	233	$	~~366~~	$	$351	~~444~~		$	~~997~~		$	~~1,104~~
Less:
	Unrealized losses			3			16			1			12
Unrealized gains	(4		)		—
	Capacity and other revenues1			(51	)		(104	)		(197	)		(210	)
Capacity and other revenues	(50		)		(77		)
Realized revenues	$	179	$	~~318~~	$	$274	~~356~~		$	~~801~~		$	~~906~~
Generation (in GWh)	5,339			~~7,957~~	7,470		~~8,449~~			~~20,987~~			~~22,091~~
Average realized energy price/MWh	$	33.62	$	~~40.05~~	$	$36.65	~~42.09~~		$	~~38.19~~		$	~~40.99~~

The ~~1A gain~~average ~~from~~realized energy price is presented as an aid in understanding the ~~sale~~operating results of the ~~bankruptcy~~Midwest ~~claims~~Generation ~~against~~plants. ~~Lehman~~Average realized energy price is ~~included~~a innon-GAAP ~~the~~performance ~~three~~measure ~~and~~since ~~nine~~such ~~months~~statistical ~~ended~~measure ~~September 30, 2010~~excludes unrealized gains or losses recorded as operating revenues. This measure may not be comparable to those of other companies. Management believes that the average realized energy price is meaningful for investors as this 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.

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. 18

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Management believes that the average realized energy price is meaningful for investors as this 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 September 30,					Nine Months Ended September 30,
(in millions)	Three Months Ended March 31,
(in millions)			2011			2010		2011			2010
	2012				2011
Fuel costs	$	117	$	~~157~~	$	$126	~~151~~	$	~~390~~		$	~~390~~
Add back:
Unrealized gains (losses)	~~Unrealized gains (losses)~~3			(4	)(1		2)		(6	)		(5	)
Realized fuel costs	$	120	$	~~153~~	$	$125	~~153~~	$	~~384~~		$	~~385~~
Generation (in GWh)	5,339			~~7,957~~	7,470		~~8,449~~		~~20,987~~			~~22,091~~
Average realized fuel costs/MWh	$	22.51	$	~~19.43~~	$	$16.73	~~18.08~~	$	~~18.32~~		$	~~17.41~~

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. This measure may not be comparable to those of other companies. 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

25• 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.

~~Table~~• The capacity factor indicates how much power a unit generated compared to the maximum amount of ~~Contents~~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.

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 from the Midwest Generation plants decreased $7695 million for the ~~third~~first quarter ~~ended~~of ~~September 30~~2012, ~~2011,~~ compared to the ~~corresponding~~first ~~period~~quarter of ~~2010~~2011. The ~~third~~2012 ~~quarter~~ decrease in operating income was primarily attributable to lower ~~energy~~average ~~and~~realized ~~capacity~~energy ~~revenues~~prices, ~~and~~lower acapacity ~~gain~~prices, inhigher ~~2010~~fuel ~~from~~prices, ~~the~~and ~~sale~~reduced ~~of bankruptcy claims against Lehman~~generation. ~~During~~Reduced ~~the~~generation ~~third~~resulted ~~quarter~~from oflower ~~2010~~economic dispatch, ~~Midwest~~increased ~~Generation~~planned ~~sold~~maintenance ~~its~~in ~~bankruptcy~~2012 ~~claims~~versus ~~against~~2011 ~~Lehman~~ and ~~recorded~~ a ~~gain~~weather ofanomaly ~~$24 million.~~seen ~~The decline~~ in ~~energy~~March ~~revenues~~of ~~was~~2012 ~~due~~when ~~to lower~~unseasonably ~~generation~~warm ~~and~~weather ~~lower~~increased ~~average~~river ~~realized~~temperature ~~energy~~to ~~prices,~~levels ~~and~~that impacted the ~~decline~~thermal indischarge ~~capacity~~limits ~~revenues~~of ~~was~~the ~~due~~Joliet toand ~~lower~~Will ~~capacity~~County ~~prices from the RPM auction~~units.

Operating income from the Midwest Generation plants decreased $129 million for the nine months ended September 30, 2011, compared to the corresponding period of 2010. The 2011 decrease in operating income was primarily attributable to lower energy revenues and a gain in 2010 from the sale of the bankruptcy claims discussed above. The decline in energy revenues was due to lower average realized energy prices and lower generation due to the permanent shutdown of Will County Units 1 and 2 at the end of 2010 in accordance with the CPS. 19

Included in operating revenues were unrealized losses from hedge activities of $3 million and $16 million for the third quarters of 2011 and 2010, respectively, and $1 million and $12 million for the nine months ended September 30, 2011 and 2010, respectively. Unrealized losses in 2011 and 2010 were primarily attributable to economic hedge contracts that are accounted for at fair value with offsetting changes recorded on the consolidated statements of income.

Included in fuel costs were unrealized gains (losses) of $(4) million and $2 million during the third quarters of 2011 and 2010, respectively, and $(6) million and $(5) million during the nine months ended September 30, 2011 and 2010, respectively. Unrealized gains (losses) were due to oil futures contracts that were accounted for as economic hedges. These contracts were entered into in 2010 and 2009 to hedge variable fuel oil components of rail transportation costs. Also included in fuel costs were net costs of emission allowances of $1 million and $5 million during the third quarters of 2011 and 2010, respectively, and $3 million and $10 million during the nine months ended September 30, 2011 and 2010, respectively.

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Included in operating revenues were unrealized gains of $4 million and none for the first quarters of 2012 and 2011, respectively. Unrealized gains in the first quarter of 2012 were primarily attributable to natural gas futures contracts that are accounted for at fair value with offsetting changes recorded on the consolidated statements of operations. Unrealized gains also included the ineffective portion of hedge contracts at the Midwest Generation plants attributable to changes in the difference between energy prices at the Northern Illinois Hub (the settlement point under forward contracts) and the energy prices at the Midwest Generation plants' busbars (the delivery point where power generated by the Midwest Generation plants is delivered into the transmission system) resulting from marginal losses.

Included in fuel costs were none and $2 million during the quarters ended March 31, 2012 and 2011, respectively, related to the net cost of emission allowances. Also included in fuel costs were unrealized gains (losses) of $3 million and $(1) million during the first quarters of 2012 and 2011, respectively, due to oil futures contracts that were accounted for as economic hedges. These contracts were entered into as hedges of the variable fuel price component of rail transportation costs.

Other Income (Expense)

		Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	2012	~~2011~~			~~2010~~2011			~~2011~~			~~2010~~
Interest and other income	$	$—	—		$	1		$	2		$	—
Interest income from affiliates	28		27		28	28			83			84
Interest expense	(9		(8)	)	(11	~~(12~~	)		~~(30~~	)		~~(36~~	)
Total other income	$	$19	19		$	1718		$	55		$	48

Income Taxes

Midwest Generation's ~~had an~~ effective ~~income~~ tax ~~rate~~rates ofwere 4136% and 3740% for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, 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."

2720

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LIQUIDITY AND CAPITAL RESOURCES

Available Liquidity

At ~~September~~March 3031, ~~2011~~2012, Midwest Generation had cash and cash equivalents of $~~333~~230 million and a total of $~~497~~500 million of available borrowing capacity under its ~~$500 million~~working capital facility. Midwest Generation's working capital facility matures in June 2012. 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. For further discussion, see "Management's Overview" and refer to "Item 1A. Risk Factors—Liquidity Risks" on page 12 of Midwest Generation's annual report on Form 10-K for the year ended December 31, 2011.

The following table summarizes the status of Midwest Generation's working capital facility at September 30, 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."

Capital Investment Plan

Forecasted capital expenditures through ~~2013~~2014 by Midwest Generation are as follows:

(in millions)	April through December 2012	~~October through December 2011~~		~~2012~~2013		~~2013~~	2014
Environmental1	$	$27	26	$	~~172~~102	$	~~316~~$	311
Plant capital	12		5	47	22		2916
Total	$	$39	31	$	~~194~~149	$	~~345~~$	327

1 ~~1For~~ For additional information, see "Management's Overview—~~Cross-State~~Environmental ~~Air~~Compliance ~~Pollution~~Plans ~~Rule~~and Costs."

~~Environmental~~Midwest ~~capital~~Generation ~~expenditures~~plants' ~~include~~projected ~~$13 million~~environmental ~~for remaining~~ expenditures inwould ~~2011~~retrofit ~~related~~Powerton toUnits 5 ~~selective~~and ~~non-catalytic~~6, ~~reduction~~Joliet ~~(SNCR) equipment~~Units 7 and ~~$501 million~~8 ~~for~~and ~~expenditures~~Will ~~for~~County ~~the~~Units 3 ~~remainder~~and of4, ~~2011 to 2013 to begin to retrofit initial units~~ using dry scrubbing with sodium-based sorbents and upgrading particulate removal systems to comply with CPS requirements for SO2 emissions, ~~assuming~~and ~~all~~the ~~units~~US ~~are~~EPA's ~~retrofitted~~regulation ~~for~~on anhazardous ~~estimated~~air ~~aggregate~~pollutant ~~cost~~emissions. ofDecisions ~~$1.2 billion.~~regarding ~~Midwest~~whether ~~Generation~~or ~~believes~~not ~~that~~to ~~its~~proceed ~~current~~with ~~environmental~~retrofitting ~~remediation~~any ~~plan developed~~particular remaining units to comply with ~~the~~ CPS, ~~along~~requirements ~~with~~for ~~the~~SO2 ~~allowances~~emissions, ~~allocated~~including tothose itthat ~~under~~have ~~CSAPR~~received permits, ~~will~~remain besubject ~~sufficient~~ to ~~comply~~a ~~with~~number ~~the requirements~~ of ~~CSAPR~~factors, ~~and~~such ~~the~~as USmarket ~~EPA's~~conditions, ~~proposed~~regulatory ~~regulation~~and onlegislative ~~HAP emissions.~~developments, Inand ~~order~~forecasted tocommodity ~~achieve~~prices ~~compliance,~~and ~~Midwest~~capital ~~Generation~~and ~~has~~operating ~~begun~~costs ~~work~~applicable toat ~~install~~the ~~SO2~~time ~~controls~~decisions atare ~~certain~~required ofor ~~its plants~~made. ~~Midwest~~Final ~~Generation~~decisions ~~could~~on ~~elect~~whether to ~~shut~~install ~~down~~controls, ~~units~~to ~~instead~~install particular kinds of ~~installing~~ controls, and to beactually inexpend ~~compliance~~capital or continue with the ~~CPS~~expenditure ~~and~~of ~~other~~capital ~~requirements,~~will ~~and,~~be ~~therefore,~~made ~~decisions~~as ~~about~~required, ~~any~~subject ~~particular~~to ~~combination~~the requirements of ~~retrofits~~the CPS and ~~shutdowns~~other itapplicable ~~may~~regulations. ~~ultimately~~Furthermore, ~~employ~~the totiming ~~comply remain~~of ~~subject~~commencing tocapital ~~conditions~~projects ~~applicable~~may atvary from the ~~time~~amounts ~~decisions~~set ~~are~~forth ~~required~~in ~~or made. Accordingly,~~ the ~~environmental~~above ~~expenditures~~table. ~~for~~For ~~Midwest~~additional ~~Generation~~discussion, insee ~~the~~"Management's ~~preceding~~Overview—Environmental ~~table~~Compliance ~~represent~~Plans ~~current~~and Costs."

28Plant capital expenditures for Midwest Generation includes capital projects for boiler and turbine controls, major boiler components and electrical systems.

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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 ~~September~~March 3031, ~~2011~~2012, Midwest Generation had cash and cash equivalents of $~~333~~230 million, compared to $~~295~~213 million at December 31, ~~2010~~2011. Net cash provided by operating activities decreased $5184 million in the first ~~nine~~quarter ~~months~~ of ~~2011,~~2012 compared to the first ~~nine~~quarter ~~months~~ of ~~2010~~2011. The ~~2011~~2012 decrease ~~was primarily~~in ~~attributable to lower~~ net ~~income~~cash ~~and~~provided ~~the~~by ~~timing~~operating ofactivities ~~cash~~was ~~receipts~~primarily ~~and~~attributable ~~disbursements~~to ~~related~~lower toaverage ~~working~~realized ~~capital~~energy ~~items~~prices, ~~partially~~lower ~~offset~~capacity byprices, higher ~~payments~~fuel ~~for~~prices ~~settlements~~and ofreduced ~~derivative contracts in 2010~~generation.

Net cash used in financing activities decreased $5221 million in the first ~~nine~~quarter ~~months~~ of ~~2011,~~2012 compared to the first ~~nine~~quarter ~~months~~ of ~~2010~~2011. The ~~2011~~2012 decrease in net cash used in financing activities was primarily due to ~~$40 million of~~ lower distributions by Midwest Generation to its parent ~~and~~in ~~lower~~2012 ~~lease~~as ~~financing~~compared ~~payments~~to ~~of $12 million~~2011.

Net cash used in investing activities ~~increased~~decreased $1912 million in the first ~~nine~~quarter ~~months~~ of ~~2011,~~2012 compared to the first ~~nine~~quarter ~~months~~ of ~~2010. The~~ 2011, ~~increase was~~ primarily due to ~~$18 million~~ oflower ~~expenditures~~capital ~~in 2011 for investments in future plant improvements~~expenditures.

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Credit Ratings

Overview

Credit ratings for Midwest Generation, EME and EMMT asare ~~of September 30, 2011 were~~ as follows:

	Moody's Rating	~~Standard~~ S&P ~~Poor's~~ Rating	Fitch Rating
Midwest Generation1	~~Ba3~~B2	B+	~~BB-~~CCC
EME2	~~Caa1~~Caa3	B-CCC+	~~CCC~~C
EMMT	Not Rated	B-CCC+	Not Rated

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

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.

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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 and Credit Support for Energy Contracts" in Item 7 on page 3826 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011.

Equity Distributions and Tax Payments

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

	Nine Months Ended September 30,
(in millions)	2011		2010
Equity distributions	$	85	$	125
Tax payments under tax-allocation agreements		8		19
Total payments	$	93	$	144

Key Ratio Affecting Distributions

Set forth below is the key ratio required under the covenants contained in Midwest Generation's credit agreement at ~~September~~March 3031, ~~2011~~2012:

Financial Ratio	Covenant	~~Covenant~~Actual		~~Actual~~
Debt to Capitalization Ratio		Less than or equal to 0.60 to 1		0.13 to 1
Debt-to-capitalization ratio	Less than or equal to 0.60 to 1	0.13 to 1

For a more detailed description of the ~~covenants~~restrictions binding Midwest Generation, refer to "~~Credit~~Equity ~~Facility~~Distributions and ~~Other~~Tax ~~Covenants~~Payments" in Item 7 on page 3627 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011.

Powerton-Joliet Lease Payments

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

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Contractual Obligations and Contingencies

~~Fuel Supply Contracts and Coal Transportation Agreements~~ Contingencies

~~For~~Midwest aGeneration ~~discussion~~has ofcontingencies ~~fuel~~related ~~supply~~to ~~contracts~~the NSR and ~~coal~~other ~~transportation~~litigation ~~agreements~~and environmental remediation, ~~see~~which are discussed in "Midwest Generation, LLC and Subsidiaries Notes to Consolidated Financial Statements—Note 6. Commitments and Contingencies—~~Commitments—Fuel Supply Contracts and Coal Transportation Agreements~~Contingencies."

~~New Source Review and Other Litigation~~ 22

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

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 3928 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011. 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 9 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011. 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 4029 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011.

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 September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in millions)	2012	~~2011~~			~~2010~~2011			~~2011~~			~~2010~~
Non-qualifying hedges	$	$6	(8	)	$	(121	)	$	(7	)	$	~~(18~~	)
Ineffective portion of cash flow hedges	1		1		—	(2	)		—			1
Total unrealized losses		$	(7	)	$	(14	)	$	(7	)	$	(17	)
Total unrealized gains (losses)	$	7			$	(1	)

At ~~September~~March 3031, ~~2011~~2012, cumulative unrealized gains of $1 14 million were recognized from non-qualifying hedge contracts or the ineffective portion of cash flow hedges related to subsequent periods (~~unrealized losses of~~ $2 13 million for the remainder of ~~2011~~2012 and ~~unrealized gains of~~ $3 1 million for ~~2012~~2013).

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 and Cinergy Hubs, all in PJM. In addition, energy hedging transactions may be entered into using natural gas.

32The following table depicts the average historical market prices for energy per megawatt-hour for the first quarters of 2012 and 2011:



	24-Hour Average Historical Market Prices¹
	2012		2011
Northern Illinois Hub	$	27.20	$	34.01


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

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The following table ~~depicts~~sets forth the ~~average~~forward ~~historical~~ market prices for energy per megawatt-hour as quoted for ~~the~~sales ~~first~~into ~~nine~~the ~~months~~Northern ofIllinois ~~2011~~Hub ~~and~~at ~~2010:~~March 31, 2012:

		24-Hour Average Historical Market Prices1
	24-Hour ForwardEnergy Prices1
		2011		2010
	Northern Illinois Hub
Northern Illinois Hub		$	35.39	$	35.02
2012
April		$	23.05
May		23.38
June		25.44
July		29.99
August		30.61
September		23.22
October		22.84
November		23.16
December		26.54
2013 calendar "strip"2		$	29.64

1 ~~1Energy~~ Energy prices were ~~calculated~~determined atby ~~the~~obtaining ~~Northern~~broker ~~Illinois~~quotes ~~Hub~~and ~~delivery~~information ~~point~~from ~~using~~other ~~historical~~public ~~hourly~~sources ~~real-time~~relating ~~prices~~to ~~as published by PJM or provided on~~ the ~~PJM~~Northern ~~web~~Illinois ~~site.~~Hub delivery point.

~~The~~2 ~~following~~Market ~~table~~price ~~sets forth the forward market prices~~ for energy ~~per~~purchases ~~megawatt-hour as quoted~~ for ~~sales into~~ the ~~Northern~~entire ~~Illinois~~calendar ~~Hub at September 30, 2011:~~ year.

		24-Hour Forward Energy Prices1 Northern Illinois Hub
2011
	October	$	26.05
	November		27.27
	December		31.10
2012 calendar "strip"2		$	33.67
2013 calendar "strip"2		$	36.48

Power prices continued to fall in the first quarter of 2012 due to an abundance of low-priced natural gas and the sales volume from the Midwest Generation plants has been correspondingly affected. 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 ~~1Energy prices~~engages ~~were~~in ~~determined~~hedging byactivities ~~obtaining~~for ~~broker~~the ~~quotes~~Midwest ~~and~~Generation ~~information~~plants ~~from~~to ~~other~~hedge ~~public~~the ~~sources~~risk ~~relating~~of tofuture change in the price of electricity. The following table summarizes Midwest Generation's hedge positions for transactions primarily entered into at the Northern Illinois Hub ~~delivery~~and ~~point. 2Market price~~to ~~for~~a ~~energy~~lesser ~~purchases~~extent the AEP/Dayton Hub, both in PJM, and the Indiana Hub in MISO at March 31, 2012 for electricity expected to be generated during the ~~entire~~remainder ~~calendar~~of ~~year.~~2012 and in 2013:

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~~1 inThe ~~hedging~~above ~~activities~~hedge ~~for~~positions ~~the~~include ~~Midwest~~forward ~~Generation~~contracts ~~plants~~for ~~to hedge~~ the ~~risk~~sale of ~~future~~power ~~change~~and infutures ~~the~~contracts ~~price~~during ofdifferent ~~electricity.~~periods ~~The~~of ~~following~~the ~~table~~year ~~summarizes~~and ~~Midwest~~the ~~Generation's~~day. ~~hedge~~Market ~~positions for~~prices ~~contracts~~tend ~~primarily~~to ~~entered~~be ~~into~~higher atduring ~~the~~on-peak ~~Northern~~periods ~~Illinois~~ and toduring asummer ~~lesser~~months, ~~extent~~although ~~the~~there ~~AEP/Dayton~~is ~~and~~significant ~~Cinergy~~variability ~~Hubs~~of ~~(including~~power ~~forward~~prices ~~contracts~~during ~~accounted~~different ~~for~~periods onof ~~the~~time. ~~accrual basis) at September 30~~Accordingly, ~~2011~~the ~~for~~above ~~electricity~~hedge ~~expected~~positions toare benot ~~generated~~directly ~~during~~comparable to the ~~remainder~~24-hour ofNorthern ~~2011~~Illinois ~~and~~Hub inprices ~~2012~~set ~~and~~forth ~~2013:~~ above.

		2011			2012			2013
MWh (in thousands)			3,959			8,206			1,020
Average price/MWh1		$	38.61		$	37.60		$	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.

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Capacity Price Risk

Under the RPM, capacity commitments are made in advance to provide a long-term pricing signal for construction of capacity resources. The following table summarizes the status of capacity sales for Midwest Generation at ~~September~~March 3031, ~~2011~~2012:

																Other Capacity Sales, Net of Purchases2
										RPM CapacitySold in BaseResidual Auction						Other Capacity Sales,Net of Purchases2					AggregateAveragePrice perMW-day
											RPM Capacity Sold in Base Residual Auction
	InstalledCapacityMW			UnsoldCapacity1MW			CapacitySoldMW			MW			Price per MW-day			MW		AveragePrice perMW-day
		Installed Capacity MW			Unsold Capacity1 MW			Capacity Sold MW										Average Price per MW-day		Aggregate Average Price per MW-day
April 1, 2012 to May 31, 2012	5,477			(555	)		4,922			4,582			$	110.00		340		$	98.92		$	109.23
											MW			Price per MW-day		MW
June 1, 2012 to May 31, 2013	5,477			(773	)		4,704			4,704			16.46			—		—			16.46
October 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, 2014 to May 31, 2015	5,477			(852	)		4,625			4,625			125.99			—		—			125.99
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 ~~1Capacity~~ 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. 2Other 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.


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.

Revenues from the sale of capacity from Midwest Generation beyond the periods set forth above will depend upon the amount of capacity available and future market prices either in PJM or nearby markets if Midwest Generation has an opportunity to capture a higher value associated with those markets.

Basis Risk

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, day-ahead prices at the individual busbars of the Midwest Generation plants ~~were~~compared ~~lower~~to ~~than~~ the AEP/Dayton Hub, Indiana Hub (Cinergy Hub) and Northern Illinois Hub bywere anon average oflower 12by 6%, 1higher by 3% and higher by 1%, respectively. During the three months ended March 31, 2011, day-ahead prices at the individual busbars of the Midwest Generation plants were lower compared to 10the AEP/Dayton Hub, Indiana Hub (Cinergy Hub) and Northern Illinois Hub by an average of 11%, 16% and 1%, respectively,. ~~during~~Differences in day-ahead pricing between the ~~nine~~individual ~~months~~busbars ~~ended~~of ~~September 30,~~the ~~2010,~~ Midwest Generation plants generally arise due to transmission congestion ~~in PJM~~.

Coal and Transportation Price Risk

The Midwest Generation plants purchase coal primarily from the Southern PRB of Wyoming. Coal purchases are made under a variety of supply agreements. The following table summarizes the amount of coal under contract at September 30, 2011 for the remainder of 2011 and the following three years:

		October through December 2011			2012			2013			2014
Amount of Coal Under Contract in Millions of Equivalent Tons1			5.0			13.7			9.8			9.8

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

Midwest Generation is subject to price risk for purchases of coal that are not under contract. Prices of PRB coal (with 8,800 Btu per pound heat content and 0.8 pounds of SO2 per MMBtu sulfur content)

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purchased for the Midwest Generation plants fluctuated between $12.35 per ton and $15 per ton during the first nine months of 2011. The market price of PRB coal increased to a price of $15 per ton at September 30, 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. Midwest Generation expects to finalize a new long-term contract for the transport of coal during the fourth quarter of 2011.

Emission Allowances Price Risk

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 "Management's Overview—Cross-State Air Pollution Rule" and "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 as its agent. Sales into PJM accounted for approximately 8186% of Midwest Generation's consolidated operating revenues for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012.

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 June 2012, which exposes Midwest Generation to the risk of earnings loss resulting from changes in interest rates from any borrowings outstanding. At ~~September~~March 3031, ~~2011~~2012, Midwest Generation had no borrowings outstanding.

Regulatory Matters

For a discussion of Midwest Generation's regulatory matters, refer to "Regulatory Matters" in Item 1 on page 9 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 regulatory matters 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:

Dodd-Frank Act

The Commodities Futures Trading Commission and the Securities Exchange Commission had been expected to issue rules and regulations to fulfill the mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act by July 2011. The agencies have announced they intend to complete the issuances in the first half of 2012.

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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 4633 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of market risk sensitive instruments, refer to "Market Risk Exposures" in Item 7 on page 4029 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011. 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~~are effective.

Internal Control ~~Over~~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"~~Note ~~in Item~~ 8. Commitments and Contingencies—Contingencies" on page 9066 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~2011. 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~~2011, except as follows:

New Source Review and Other Litigation

~~Nine~~In February 2012, certain of ~~ten~~the ~~PSD~~environmental ~~claims~~action groups that had intervened in the US EPA's New Source Review ~~litigation~~case ~~have~~entered ~~been~~into ~~dismissed,~~an ~~along~~agreement with ~~claims~~Midwest ~~related~~Generation to ~~alleged~~dismiss ~~violations~~without ~~of Title V~~prejudice all of ~~the~~their ~~CAA~~opacity ~~to the extent based on the dismissed PSD~~ claims. ~~The~~as ~~court~~to ~~has also dismissed~~ all ~~claims asserted against Commonwealth Edison and EME~~defendants. The ~~court~~agreed ~~denied~~upon a motion to dismiss ~~a claim~~was approved by the ~~Chicago-based environmental action groups for civil penalties in the remaining PSD claim, but noted that the plaintiffs will be required to convince the~~ court ~~that~~on ~~the~~March 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 326, ~~2013~~2012. A motion filed by the plaintiffs requesting that the dismissals be certified as "partial final judgments" capable of appeal, and requesting that the remaining claims be stayed pending such an appeal, is pending.

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 sought to have their suits certified as a class action and requested injunctive relief, as well as compensatory and punitive damages. In October 2011, the complaints were dismissed for lack of federal jurisdiction.


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 1812 of Midwest Generation's annual report on Form 10-K for the year ended December 31, ~~2010~~ 2011. 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 4. REMOVED AND RESERVED

ITEM 6. EXHIBITS

Exhibit No.	Description	~~Description~~
31.1	31Certification of the President pursuant to Section 302 of the Sarbanes-Oxley Act.1	~~Certification of the President pursuant to Section 302 of the Sarbanes-Oxley Act.~~
31.2	31Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.2	~~Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.~~
32	32Statement Pursuant to 18 U.S.C. Section 1350.	~~Statement Pursuant to 18 U.S.C. Section 1350.~~
101	~~101~~Financial statements from the quarterly report on Form 10-Q of Midwest Generation, LLC for the quarter ended March 31, 2012, filed on May 2, 2012, formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements tagged as blocks of text.	Financial statements from the quarterly report on Form 10-Q of Midwest Generation, LLC for the quarter ended September 30, 2011, filed on November 2, 2011, formatted in XBRL: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements tagged as blocks of text.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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
MIDWEST GENERATION, LLC(REGISTRANT)
By:	~~By:~~/s/ Maria Rigatti	~~/s/ Maria Rigatti Maria Rigatti Manager and Vice President (Duly Authorized Officer and Principal Financial Officer)~~
	Date:	November 2, 2011
	Maria RigattiManager and Vice President(Duly Authorized Officer andPrincipal Financial Officer)
Date:	May 2, 2012

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MWh (in thousands)

Average price/MWh¹